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Hand over mobile operators' fines for councils to spend on boosting digital connectivity, says LGA

Money from fines given to mobile operators for poor customer service or coverage should be handed over to local areas to boost connectivity, council leaders say

The telecommunications regulator, Ofcom, has levied fines of millions of pounds on mobile operators over the past three years for breaches of its rules such as incorrectly billing customers and the poor handling of complaints. The Government’s new Digital Economy Act, which is currently coming into force, will also give Ofcom new powers to fine operators up to 10 per cent of their gross revenue if they breach licencing obligations to improve mobile coverage.

Currently, cash from fines levied on mobile operators goes straight to the Treasury - with no guarantee it will be spent on improving the country’s digital connectivity.

The Local Government Association, which represents more than 370 councils in England and Wales, is calling for this money to be handed over to local areas to support efforts to help residents and businesses access increasingly vital digital infrastructure.

It comes as only 61 per cent of rural premises receive outdoor 4G coverage from a single operator compared to 94 per cent in towns and cities. That drops to 28 per cent for indoor coverage compared to 82 per cent in urban areas.

The Government has pledged to extend mobile coverage to 95 per cent geographic coverage of the UK by 2022 and have the majority of the population covered by a 5G signal by 2027. As part of this, it has set out proposals to require councils to draft new planning policies setting out how high quality digital infrastructure would be delivered in their areas.

The LGA said councils are ready to play a key role in ensuring the right infrastructure is in place to provide fast and reliable digital coverage – provided they are given adequate funding. This is needed to support the potentially complex work that will be required to trial new ways of working and to encourage providers to join up when they dig up local roads and to share mobile infrastructure.

Local authorities have been pivotal in extending digital connectivity to households through the Superfast Broadband Programme. Many councils are aiming to beat the Government’s national target of 95 per cent coverage of premises by December 2017. Councils are also working to find solutions to extend provision to those in the final five per cent.

At its Annual Conference last week, the LGA launched a new report ‘Growing Places’ which includes measures needed to ensure all residents and businesses across the country can access fast and reliable digital connectivity.

These include the need for the Government to prioritise the trial of 5G in rural areas, work towards developing universal standards for mobile data and ensure the Broadband Universal Services Obligation guarantees upload as well as download speeds.

Cllr Mark Hawthorne, Chairman of the Local Government Association’s People and Places Board, said:

“Good digital connectivity is a vital element of everyday life for residents and can help them cut household bills, shop online for cheaper goods, stay in touch with distant relatives, access their bank accounts and even run their own businesses. As central and local government services increasingly become ‘digital by default’, more people will need to have faster and more reliable speeds, wherever they are.

“Despite having experienced significant funding reductions, councils are leading the way to expand high-quality internet access to as many as possible and are investing in the digital infrastructure essential to Britain’s long term economic success.

“Extending excellent mobile coverage across the country is key to ensuring all residents have access to 21st-century digital connectivity. Councils have been at the forefront of work to roll out Superfast Broadband and are ready and willing to play an important role in helping to facilitate the provision of ubiquitous 4G coverage on behalf of residents and businesses.

“If a new duty is imposed on planning authorities to set out how they will help deliver digital infrastructure it must be accompanied by funding to pilot new local models for facilitating the deployment of these networks. Rather than fines levied on mobile operators going straight to the Treasury, it would be far better for councils to be able to use the money to boost local efforts to ensure everyone has access to fast and reliable digital connectivity.”

Note to editors

The LGA’s Annual Conference took place between July 4 – July 6 at the International Convention Centre, Birmingham. Over the three days a packed agenda saw a variety of speakers, including Communities Secretary, Sajid Javid, the newly elected Mayor of the West Midlands Combined Authority, Andy Street, Chief Executive of NHS England, Simon Stevens, the Rt Hon Ann Widdecombe DSG, Writer and Broadcaster and Gunn Marit Helgesen, President of the Norwegian Association of Local and Regional Authorities (KS).

The full agenda and further information is available here

Growing places – building local public services future

A 5G Strategy for the UK

Comparing mobile service quality

Ofcom Interactive Data Dashboard with coverage statistics

Ofcom powers to fine regulators via the Digital Economy Act 2017

The Act has granted Ofcom powers to fine operators up to 10 per cent of their "relevant amount of gross revenue", which it said should not exceed £20,000 per day. The measures will provide Ofcom with a tool to help secure compliance with licence conditions in cases where the alternative is to revoke their licence. For example, if a mobile operator failed to meet a coverage obligation in its licence, it might be a worse outcome for consumers to revoke the licence than to leave the licence in place.

The Digital Economy Act 2017

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