Digital Economy Bill — House of Lords, 2017-02-22
Topic: Technology
Christopher Suenson-Taylor (Labour, Centre-left): My Lords, I thank the Minister and his team, especially Kellie Hurst, for meeting and looking at the difficulties around the communication code. The meetings were indeed very constructive, focusing on the issue of value. I am grateful to the Minister for his introductions to the amendments today and for his kind words In Committee, we wondered how far this code got the balance correct between property rights and the public benefit. We all recognised the public interest in accessing modern communication channels at as low a price as possible. The Government finalised their position, after representations from operators, to a further qualified use of market value, which resulted in a clouded understanding that might not have been helpful but for this clearer use of language now proposed. In references to the new code as being on a no-scheme basis, there had been interpretations that this imported a compulsory purchase compensation basis that gave rise to general misapprehensions about the code by parties with a compulsory purchase experience. The code is now clearer that value is based on agreement as reflected by market value, qualified by the public interest in references to a no scheme basis in that the disregard is of the use of the rights for the electronic communications network Amendments 6 and 7 are clarifications to new paragraph 13 in Schedule 1, as prompted by the noble Lord, Lord Foster, and technical corrections are to new paragraph 15 Amendments 8, 9 and 10 to new paragraph 23 are the pertinent amendments, with further clarifications in Amendments 11 and 12 to new paragraph 63, which now makes clear that the core principle remains that the consideration is to be assessed as the market value of agreement conferring the code rights. It is not compensation for loss. That is then further defined in new paragraph 23(2) in Schedule 1 and interpreted and qualified in proposed new sub-paragraph (3A) As the Minister said, proposed new sub-paragraph (3A), regarding market value, makes four assumptions that clear up the misapprehensions and misunderstandings brought to us and considered in Committee. Assumption 1 recognises that the code right is within the agreement and that everything under it is relevant, save the intended function for a network. Assumption 2 reflects the Government’s policy that the operator’s freedom to assign the agreement and its qualified freedoms to upgrade or share apparatus are to be disregarded. Following these two disregards, assumption 3 affirms that the code right in question is otherwise to be assessed as it is in the real world and not some hypothetical one. Assumption 4 follows the Law Commission’s report and recent government policy in assuming there is more than one suitable site available as a means to exclude perceptions of ransom value brought forward by operators, even though the definition and interpretation of market value excludes ransom value Amendments 11 and 12 translate what I said above to new paragraph 63 in Schedule 1 concerning Crown land, and Amendment 13 is a technical correction of new paragraph 94. We will all be grateful that there has been a lot of proofreading and for Amendments 15 and 16 regarding the transfer of duties to the Scottish Government. We are also very grateful that the Minister listened to the concerns we raised in Committee and, in re-examining the situation, recognised that improvements could be made. We are in agreement with the amendments and, like the Minister, I am grateful to the Royal Institution of Chartered Surveyors and the Central Association of Agricultural Valuers for their technical expertise, which helped to recognise misapprehensions and clarify our drafting. These amendments make a massive improvement It could be said that with these improvements there should be fewer disputes and therefore fewer problems concerning the code of practice to be drawn up between operators and site owners. Granted that this may well be the case, and that the Minister said in Committee that the large superstructure of an adjudicator’s office and staffing may be costly, cumbersome and unnecessary, anxieties nevertheless remain. Wide experience in other areas operating under a code of practice is that, where there is a wide disparity between the relative economic strengths of parties involved in an activity, market power tends to lead to abuses against the smaller party with the use of unfair practices and a transfer of business risk. As Ofcom is a regulator with little or no experience or much expertise in this area, Amendment 14 proposes that it appoint an expert independent adjudicator to rule on disputes brought under the code of practice It would be an error to assume that the new regime will immediately work without there being a hitch or problem in the operation of the new code. Parties acting under it must recognise that any code of practice has to be abided by and has teeth with which to enforce compliance, and must have confidence that they have recourse should they consider the code to have been breached. I welcome the Minister’s assurance in this respect.