UK connectivity: Whose line is it anyway?

Developers and landowners are being accused of scuppering widespread connectivity. But given lines of communication around who is responsible for keeping the UK connected, is this fair? The saying goes that if you really want to get to know someone, put them on a slow internet connection. The image of someone battling to get online, revealing their true colours as they become progressively more frustrated, will raise a familiar smile. But the truth is the consequences of poor connectivity are becoming increasingly severe – particularly when it comes to how attractive, and investable, a building or location is considered. Today, digital connectivity is more than just a commodity, it’s a utility. Most of us need it to operate in our daily lives and there are few cases where it would not be considered business critical. On the face of it, you might assume that the will and the drive to improve most countries’ connectivity would be relatively straightforward; in the most cases there are plenty of companies on hand to supply it and few businesses or individuals who don’t want it. But it is becoming clear that, in the UK at least, it is not as simple as installing the hardware required to upgrade buildings and fill connectivity blackspots. “The huge problem we are facing is that we simply can’t deliver what we need to unless landowners let us,” says Belinda Fawcett, director of property and estates at CTIL – a joint venture between Vodafone and Telefonica to manage the network’s sites for both companies. “They want to make it a commercial agreement and charge us so much to install our equipment that is has got to the point where it no longer makes commercial sense for us.” The situation is reaching breaking point. At the end of last year, legislation and the electric communications code (ECC) brought the value of the rents telecoms operators are required to pay landowners to install equipment down in an attempt to ease some of the financial pressure on the supply side. But rather than kick-starting an increase in new contracts, Fawcett says there has instead been almost a complete standstill since the new laws were set out in the Digital Economy Act 2017. Why? Because swathes of landowners are not interested in being paid less to install connectivity equipment and masts. As we risk heading towards a connectivity crisis, there are questions emerging around who should be held ultimately accountable for ensuring the UK does not lose the digital race. Are the country’s developers scuppering our chances of widespread connectivity? Is it up to the service providers to find a way to deliver no matter what? Or should the government intervene and set out clearer guidance to ensure that the current slowdown does not become permanent? Unforeseen consequences When the ECC brought down the rents telecoms operators were expected to pay to landowners to install their equipment, not everyone hailed it as the step in the right direction. Centre for Cities called for a review of the ECC to assess whether the move was more likely to become a barrier to digital connectivity, due to landowners becoming less willing to work with operators installing masts or cells. CTIL’s Fawcett certainly believes the impact is already being felt. “It is right that this should no longer be about income generation for development projects but about connectivity,” she says. “It used to be that landowners would receive something like £30,000 for a mast on a building and of course I can see why they don’t want to lose that. But we can’t afford that now we are rolling out so many sites to make sure the UK is as connected as possible. “We pay a fair price based on the value of the land and we pay for any costs or losses the landowner incurs, but there is no longer a requirement for us to pay the huge rents we were. Basically, ever since that came into force, the market has completely stagnated. “In London, where you would think there would be more support and need for connectivity than anywhere else, there are some local authorities that now have a total moratorium on any connectivity contracts.” She adds that the issue lies more with the developers and property industry than government, stating that the ECC was meant to make the cost of rolling out 23,000 new sites across the UK “feasible”. And she hopes that the industry starts to recognise that the value of these sites and contracts is not based on rental income alone. “The rent is a source of value, but then there is the value they will get from having an exceptionally connected building or portfolio,” she says. “We all know that investors and occupiers today are looking for highly connected buildings. They want 4G and soon they will want 5G. The rent is not the only benefit here. If you invest in digital infrastructure, you will be automatically upgrading your asset.” Mindset change Of course, it is not just about having the right equipment in place – although there can be no denying that without it there is no hope for a truly connected UK. And surely the quality of service offered by each of the country’s network providers – how strong they are in certain areas and how they are tackling blackspots and outages – is nothing to do with the real estate sector? On the contrary, says Paul Carson, head of technical and process innovation at Virgin Media. He firmly believes that when it comes down to the nuts and bolts of connectivity, there is no reason why developers can’t build single telecoms networks into their new schemes that work for all players. “They could create a digital infrastructure where all of the suppliers run back to a single connect room where there is a patch panel for more than one operator,” he says. “There needs to be a mindset change, though. We know that, these days, one of the must-haves in a building is really good connectivity.” This is something the operators sometimes need to contribute to in order to be the preferred provider, but there is an argument that it should be the other way around. “It has all got a bit muddled,” says Carson. “The value doesn’t seem to be appreciated, which is strange given how crucial we all know connectivity is. With all other utilities – gas, water, electric – the rules are different. With connectivity it is unclear who should take ownership of that particular service.” No silver bullet So do Fawcett and Carson both have a point that many of the barriers to connectivity stem from the real estate side of the equation? Cluttons’ head of telecoms, John Gravett, thinks so, and he urges the real estate sector to take responsibility for its shortfalls. “There does need to be more understanding,” he says. “And it should be an understanding that focuses on what is in the property industry’s gift to get sorted. By that I mean knowing what is required within a building to deliver the infrastructure necessary for digital connectivity – whether that’s the plant room or whether there is roof space available. “This is the key information, rather than the complex ins and outs of the tech itself. The property industry’s role here is about facilitating the tech and giving it the foundation and infrastructure it so desperately needs. “We can’t just keep parking tech issues at the IT director’s door – managing Office 365 is not the same as getting a building well connected and doing an occupier strategy. A knowledge gap has occurred and we need to backfill that if people want to get returns. And we all know that returns drive decisions in real estate.” William Newton, president and EMEA managing director of WiredScore, says it comes down to better partnering – across the board. “There is no silver bullet to great digital connectivity. But what’s clear is that landlords, internet service providers and other telecom stakeholders need to be much more proactive in partnering from a technical perspective and understanding what each other is looking to achieve. “This, in tandem with consistent government regulation, will create a much more streamlined process that greatly improves the lived experience of tenants.” Holistic approach As for government involvement, it estimates that its superfast broadband programme to roll out high-speed internet across the country – backed by an initial £530m of public funding – has increased turnover for businesses by a combined £9bn per year since 2012. But Centre for Cities would still like to see more steps being taken to enable the private sector to provide better digital infrastructure as developers need to ensure that their buildings are designed to take advantage of existing digital infrastructure. That could mean providing ducting for occupiers to put in the fibre themselves cheaply and easily, or by ensuring the building is well connected with mobile masts in the area. And that, as Fawcett has made clear, is where so many of the country’s current connectivity problems lie. It is all well and good to agree to the equipment and embrace the new mindset. But without a shift in focus away from historic commercial gains towards a more holistic approach to digital connectivity, chances are we could suffer from a fault on the metaphorical – and literal – lines of communication for a long while to come. Collaborate for best-in-class connectivity Sanjaya Ranasinghe, technical director, WiredScore Long gone are the times when occupiers were solely responsible for providing the connectivity for their workforce. A noticeable shift in the management style of offices is under way and is encouraging landlords to put a greater emphasis on the service they provide to their occupiers throughout the tenancy. As part of this shift, landlords recognise that providing best-in-class connectivity services will enable them to offer office spaces that will respond to the ever-evolving digital requirements of customers now and in the future. To achieve this aim landlords must collaborate with other stakeholders – including internet service providers and the public authorities. You only need look at Derwent London’s Wired-certified Platinum White Collar Factory in Old Street, EC1. In a location often criticised for its poor broadband service, Derwent London’s commitment to connectivity has made White Collar Factory one of the most sought-after office buildings in London. This success was the result of a coordinated connectivity approach. Integrating universal communication chambers, a concept pioneered by the City of London, led to reduced street works and build cost for the landlord and ISPs, which in turn supported them installing fibre services in the building before occupiers signed up. This made it possible for Derwent London to provide occupiers with high quality, resilient connectivity services with minimised set-up times at a competitive price. With that in mind, landlords should keep an eye out for initiatives led by these stakeholders. For example, the government has recently committed to support a full fibre roll-out across the UK. This investment will increase the number of ISPs that can serve a property and allow landlords to further assist occupiers in getting high quality service. By engaging with numerous ISPs and incentivising them to pre-emptively service their assets, landlords will empower the occupiers to get set up quicker, as well as negotiate the best deal for their connectivity requirements. Occupier connectivity requirements are about to go way beyond connecting to the internet, with innovations such as 5G, the internet of things, and smart building technologies due to become part of business-as-usual within the next 10 years. These all depend on a solid digital infrastructure within buildings. As the foundation for this, landlords need to implement converged fibre networks in their buildings to ensure they are future-proofed. In an environment where the occupier focus is central to success in commercial property, landlords must leverage their relationships with other stakeholders to enable availability of best-in-class connectivity to their occupiers. Main image © Mode/Rex/Shutterstock To send feedback, e-mail emily.wright@egi.co.uk or tweet @EmilyW_9 or @estatesgazette