Plum prepared a report appraising proposals from the Law Commission for a new Electronic Communications Code. This Code will provide the legal framework within which communications providers with code powers can acquire rights to install and operate electronic communications in, on, or over, land.  Plum’s report shows how a small number of these proposals would seriously disrupt the functioning of the wireless infrastructure provider market.

These proposals, which appear to be designed to deal with any problems which might arise in market transactions between passive landlords and code operators, could have a significant impact on the conditions under which the independent wireless infrastructure providers provide infrastructure services to mobile operators. In combination they could enable mobile operators to share facilities on the sites of the independent wireless infrastructure providers without needing to pay additional fees. This would undermine the business model of the independent wireless infrastructure providers by substantially reducing their revenues.

Faced with such a prospect we would expect the independent wireless infrastructure providers to attempt to recover lost profitability through one or more of the ways shown below:

• Raise prices and transfer risks to mobile operators
• Offer less flexible terms to mobile operators
• Reduce future investment
• Close existing marginal sites

Such changes would affect the functioning of the market for wholesale infrastructure provision and would not be in the public interest.  To avoid damage to the public interest the legislation of the new Code should allow independent wireless infrastructure providers and mobile operators to negotiate new agreements purely on commercial terms.