BT is facing a potentially massive increase in the fees it pays for the right to have its telephone cables traverse London's river Thames.
Under an open ended contract signed more than 80 years ago, Britain's telecoms giant pays just a few hundred pounds per year for a license that should today cost the company many thousands of pounds.
However, the river's owner, the Port of London Authority (PLA), recently unearthed the ancient document and immediately terminated it, leaving BT seeking a renegotiation. BT will have to see how many cables the contract affects and negotiate a new deal - which it could find expensive.
The cost of running cables over private land, called wayleave, is closely guarded by telecoms companies, but industry sources say land owners can receive between #5,000 and #30,000 a year for hosting a major telephone cable or transmitter mast.
BT says a single telephone pole on private land costs BT just #5.65 per year, but cabling can cost #6 per metre.
"If we have a lot of apparatus on their land it's going to be thousands of pounds," admitted Norman Templeman, network regulatory advisor at BT.
Drafted in 1917, the elderly contract - seen by VNU Newswire - between the PLA and the then postmaster general, Albert Illingworth MP, gave BT the right to install and maintain cables for just #410 per year.
This is just one of a number of cases where property owners are trying to increase the payments they receive from telecoms companies to run cables, or site transmitters, on their land.
BT says land owners are becoming increasingly greedy. However, the PLA says updated contracts are essential for land owners as telecoms companies lay more and more cables across Europe.
BT spends a lot of money on wayleave, according to Templeman, and the figure - which he cannot disclose - is increasing every year.
"More and more people are becoming more aware of the value of their land and are becoming greedy," said Templeman.
BT holds regular meetings with the National Farmers Union and the Country Landowners Association to update wayleave pricing structures. No such meeting is held with the PLA.
"The BT deal is needed so next time they go into partnership with someone and lay cable along the river bed, they don't do it on a #400 a year deal," said Jim Packman, telecoms engineer at the PLA.
He says the PLA is battling with a number of telecoms operators over wayleave and is keen to revise outdated contracts.
Price hikes could deter operators from using the Thames as a new route for cables into the UK capital. In Paris, MCI Worldcom recently laid 200km of optical fibre along the river Seine, through the heart of the city.
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