‘Not-Spots’: if the networks won’t fill them, should Lib Dems try to force them to?

It’s mid-June and the time for London Technology week, a showcase for technological innovation. 5th generation mobile phones are almost upon us and along with the promise of blazingly fast mobile download speeds comes a renewed call for mobile phone operators to improve the rural coverage of their networks. In a conference sponsored by technology thinktank Cambridge Wireless, industry players gathered to discuss the issue in the high tech ambience of the Digital Catapult on the Euston Road.

Large areas of the UK, especially Scotland, still do not receive good quality mobile coverage. A report published earlier this year by Ofcom, the official body that regulates communication, found that 30% of the UK’s landmass lacks coverage from at least one of the ‘big four’ mobile networks, increasing to 60% in Scotland. Worse, there are many so-called ‘not-spots’ where there is no coverage at all. As one speaker explained to the assembled audience, planning rules don’t help: the UK has one of the most stringent height restrictions in the world for mobile phone masts, greatly limiting the coverage area each mast can provide.

Worried about the continuing ‘digital divide’, Ofcom proposes that new licences to operate networks should come with an obligation to provide 92% coverage of the UK landmass. They claim that this will benefit rural communities that otherwise would miss out if operators determined coverage on purely commercial considerations. This has powerful political support from lobbying groups such as the Countryside Alliance, and the 2017 Liberal Democrat manifesto committed to improving rural mobile coverage. I believe these calls are misguided and will create social injustices while reducing the quality of mobile networks in the UK, thus directly harming our economy.

There is no doubt that improving coverage in a rural area does indeed benefit the local economy since individuals and businesses that rely on good mobile and internet can occupy properties they would not have previously considered. This attracts more affluent persons to low-cost rural areas, providing them with improved lifestyle opportunities, and creating a demand for local services.

However this comes at a huge cost to the rural poor. At present ‘not-spots’ are inhabited by people who on the whole have managed to adapt their lifestyle to the restricted communications possibilities, albeit at a relatively low level of economic activity. An Ofcom report from the consultancy Illuminas recounts that people who live in remote rural spots without mobile coverage are very old-fashioned; they make arrangements in advance and stick to them. It is partly this ability of residents to function without mobile phones that makes it unprofitable to extend existing coverage. When ‘not-spots’ are removed, incomers attracted to the area need accommodation, but in rural areas housing and offices tend to be in very limited supply. An influx of well-paid workers or affluent retirees seeking the rural lifestyle will cause property prices to rise via the law of supply and demand. The hardest hit will be existing tenants of low-cost rural properties, for whom rents may become unaffordable. In the face of price competition they must either move to cheaper locations, downsize, or learn new skills.

The displacement of workers in lower value jobs by those in higher value jobs can be a natural and desirable result of market-driven economic development. Ropemaker Street is in the heart of the City of London, and despite its name there are no longer any ropemakers to be seen. As economies develop and technology progresses, more valuable activities displace old ways of working.

But the drive to extend mobile coverage is nothing to do with market forces or emerging technologies. It is a political project. Coverage obligations are imposed on reluctant network operators who see no business case for it and would rather spend the money on improving service to existing customers. Extending coverage is costly: the cost of installing just one new mobile phone mast can easily exceed £100K. Like other companies, network operators compete on the financial markets for funds and must provide a competitive return to their investors. Spending money on unprofitable rural coverage forces them to reduce spending in areas that are not subject to legal obligations. In practice other spending suffers, such as new product innovation or improved services to less profitable (and probably poorer) areas. Overall, the UK will end up with lower quality mobile phone networks than its competitors and the economy will suffer.

By obliging network operators to build loss-making rural coverage, our party would be enlisting telecom companies into a social engineering project to displace traditional low productivity rural tenants with wealthier incomers. The biggest winners will be landowners with large rural holdings such as the Duke of Buccleuch, whose 240,000 acres are the most extensive private landholdings in the UK. Rural landowners will benefit from the opportunity to rent or sell their property at higher prices, but this will be at the expense of the wider economy, the majority of the UK’s mobile phone users and the rural poor.

* David Cooper is a member and constituency treasurer of the Newbury Liberal Democrats and has been a party activist for over a decade. He is also secretary of Libdem ALTER (Action for Land Taxation & Economic Reform). The views expressed are his own.

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12 Comments

  • Phil Beesley 21st Jun '18 - 1:35pm

    There is also a debate going on between Ofcom, BT and other service providers about basic services like POTS, Plain Old Telephone Service. It is proposed that we get rid of our POTS phone and replace it with a VOIP (Voice over IP) one. Surplus associated copper lines might be used for other things. One problem is that many copper lines aren’t very good, maybe not good enough for VOIP at the moment. A suggested time frame for change is “by 2025”.

    By 2025, it is proposed that all premises will have a wired link — copper or fibre — adequate for VOIP calls. The proposal requires a lot of rewiring. All UK homes will thus have a high speed wired connection.

    It’s confusing, isn’t it? We have MPs yacking about broadband blackspots whilst telecoms firms are creating new service standards…

    Disclosure: I do not and have never worked for a telecoms company.

  • The displacement of workers in lower value jobs by those in higher value jobs can be a natural and desirable result of market-driven economic development. Ropemaker Street is in the heart of the City of London, and despite its name there are no longer any ropemakers to be seen. As economies develop and technology progresses, more valuable activities displace old ways of working.

    I think you haven’t thought this through.

    I think what you meant was that whilst it is desirable to have people engaged in more valuable activities, such displacement is only of value if those engaged in the low-value activities also benefit. Otherwise, the displacement only results in the creation of an underclass.

    The biggest winners will be landowners with large rural holdings such as the Duke of Buccleuch, whose 240,000 acres are the most extensive private landholdings in the UK.
    This raises the question as to whether we should be subsidising something wealthy landlords to do something they could be doing for themselves, particularly when such landlords had no problem finding the £1m to build a wind farm and garner their ‘fair’ share of public largess.

    Personally, I think we should maintain the focus on achieving (near) universal fixed-line broadband (which in rural areas will mean fibre-optic), once this is in place, it is a relatively simple and cheap job to hang a 3/4/5G box on the side of a house/barn/lamppost/telegraph pole…

  • David Cooper 21st Jun '18 - 6:23pm

    @Roland
    Why should society pay for universal fixed-line broadband in Rural areas? Exactly the same arguments apply as in the case of Not-Spots. As you say, wealthy landowners can pay for this themselves.

  • @David – Firstly, we shouldn’t forget that the government has moved online, as witnessed today where EU citizens will be expected to complete an online form. So it has an obligation to make access readily available. Which the government is largely doing already and has had a programme in place since circa 2012…

    Also as Phil Beesley has noted, subject to Ofcom engaging brain and for once doing the right thing, BT has committed to providing universal access (that exceeds Ofcoms minimum service-level) by 2025. The cost of which being met in part by long-term investment and in part by significant cost reductions arising from not having to maintain the largely copper-to-the-home POTS infrastructure.

    Whilst there has been talk about using radio for some of the rural locations, to achieve the governments mandated minimum speed (so 4/5G required), you are having to install the mast just down the road from the home; in which case it is just simpler and cheaper to run the cable all the way the house, particularly as in these locations it is likely the mast will be only serving a couple of homes.

    Additionally, fixed-line primarily serves ‘home’, not business premises… With mobile there is no such distinction, thus with fixed line, if I want telecoms to a disused cattle shed (that I wish to convert into offices) then I have to pay, with mobile, got a mobile signal (through universal coverage) telecoms are practically free. Hence I suggest with mobile there is a much greater subsidy to landowners than there is with fixed-line.

    With respect to mobile notspots – I would much rather we focus on areas where people can reasonably expect service, for example on the platform at Stratford International. Also with a focus on mobile, as some have already reported in various technology forums, some builders (of new homes) are not including fixed line telecoms because their development has ‘good’ mobile coverage, failing to appreciate that 20 homes can’t simultaneously watch the world cup in 4k over 4G from the same mast.

  • One other point; the 5G frequency auctions have finished, any attempt by Ofcom and the government to change the service obligations are highly likely to be successfully challenged in the courts.

  • I very much hope that Mr Cooper, who lives in the comfortable South East, never has the misfortune to suffer a heart attack in the Highlands of Scotland and needs assistance, or having decided to move there, somehow needs to apply for Universal Credit on line….. Or given he appears to support undiluted market forces….. Attempts to set up a small business with all that that entails in attempting to win sales and submit vat returns….

    To be frank his post is one of the most unworldly items I have read on LDV.

  • David Cooper 22nd Jun '18 - 10:08am

    @David Raw
    (1) If I moved to the Highlands of Scotland, I would take personal responsibility for the lifestyle changes this entails. I would certainly not expect other people to shell out in order to satisfy my desire for better broadband service while I enjoy the rural lifestyle .
    In the case of the poor who need access to universal credit, as I explained in the main article better coverage is a two edged sword since rents increase.
    (2) Regarding safety, I routinely go walking in areas of no coverage and take sensible precautions (such as letting people know where I am going), rather than relying on 100% coverage in case things go wrong.
    (3) I live in West Berkshire where there are plenty of coverage gaps and far from universal high speed broadband. If I set up a business I would check this out.
    Frankly, it seems that taking responsibility for their own decisions is an alien idea to many people.

  • David Cooper 22nd Jun '18 - 12:33pm

    @Ian Sanderson
    (1) There is a case for regional subsidides provided by the taxpayer, but the subsidies must be carefully designed so they actually achieve useful social aims rather than enriching landowners by making their landholdings more attractive. In the case of subsidies for broadband/mobile coverage (or statutory coverage obligations) the beneficiaries are unlikely to be the rural poor.
    (2) Those who already live in remote poor coverage areas have already adapted (see Ofcom report). If you choose to move to such an area that is your personal decision and there is no reason other people should pay to alleviate the consequences.

  • @David Cooper – Your comment concerning “Those already living in poor coverages” applies just as much to those living in West Berkshire… So are you saying the coalition government was wrong to embark on the BDUK program in 2012, and that Ofcom are wrong to ratchet up the minimum acceptable service level?

    Also I think you haven’t fully thought through your comment “Those who already live in remote poor coverage areas have already adapted”, the Ofcom report just notes that people have adapted to the absence of decent telecoms to the extent “they barely recognize them as adapted workarounds”, exactly the same can be said about those who live in areas of decent telcos and have become adapted/accustomed to having decent telecoms. The only difference is their reaction when presented with the opposite situation: someone from a poor telecoms area, appreciates the decent telecoms, whereas someone from a decent area, tends to complain loudly when walking the countryside around say Newbury and encounter a not spot.

    Re: ” A report published earlier this year by Ofcom, the official body that regulates communication, found that 30% of the UK’s landmass lacks coverage from at least one of the ‘big four’ mobile networks, increasing to 60% in Scotland.”

    The report you are referring to is: Connected Nations 2017
    For some reason the article links to the Improving Mobile coverage: Proposals for coverage obligations in the award of the 700 MHz spectrum band

    Finally, we shouldn’t forget that currently the government is committed to migrating the ‘blue light’ services off the purpose built Tetra/Airwave mobile network onto EE’s 4G network. One of the challenges it faces is that the Airwave network has a much larger geographic coverage than any of the ‘G’ networks, so EE is having to invest in geographical coverage. Given underneath the 4 big mobile networks there are only two physical networks, the question is: whether, given all networks will ultimately benefit from EE’s investment, the costs of additional coverage should be borne by EE or by all the operators. Thus by placing a coverage caveat on the 700 Mhz spectrum, Ofcom are encouraging the operators to work together.

  • Sorry, didn’t double check my usage of HTML tags in my comment.

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