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Access and other rights for Operators under the new Electronic Communications Code

  • United Kingdom
  • Education - Briefings

05-02-2019

The new electronic communications code (“the New Code”) came into force on 28 December 2017. It replaces the previous version of the code set out in Schedule 2 to the Telecommunications Act 1984 (“the Old Code”).

The New Code will have a significant impact on the relationship between landowners/occupiers and 'operators' (the licensed providers of electronic communications services) and agreements relating to telecoms apparatus on land or buildings throughout the UK. The New Code is therefore relevant to education institutions and we have already seen examples of operators proactively taking advantage of the new code rights to gain access to estates in order to assess their suitability for new installations.

Indeed the first substantive decision on the New Code involves an education institution. In Cornerstone Telecommunications Infrastructure Ltd v The University of London [2018], the Upper Tribunal has held that an operator was entitled to temporary access to premises to determine their suitability as a possible site for equipment.

 The New Code is intended to clarify the law, give operators clearer rights, greater flexibility in enjoying those rights and to facilitate the sharing of network apparatus. It is fair to say that the new provisions strongly advantage the operators as opposed to the landowners.

What is the Electronic Communications Code?

The Code regulates the legal relationships between landowners and certain network operators. It gives rights to the providers of these networks to install and maintain apparatus in, over and under land. These are known as code rights.

Those code rights apply to the physical equipment that supports the operator’s network which comes in a variety of forms: fibre optic cables, equipment cabinets, mobile phone antennae and masts, to name only a few.

Why is there a new code?

Growth in the mobile phone industry has been dramatic by virtually any measure with enormous investment in network expansion and upgrades in recent years. Demand for data usage and consumer demand for digital technologies continues to grow. The ability of operators to easily upgrade apparatus and infrastructure to reflect changes in technology has been a major factor influencing the reforms. The Government wanted to reform the Old Code to put in place modern regulation which fully supported the rollout of digital communications infrastructure.

The Old Code was also in desperate need of reform due to being outdated, complex and difficult to apply. The real problem for landowners and occupiers has been in recovering possession of land from an operator and in the interface between the Old Code and the separate form of security of tenure under the Landlord & Tenant Act 1954. The two simply did not fit together. The Old Code also lacked clarity around how to assess payments for the grant of rights, enforcing the termination of those rights and a swift and effective route to resolving disputes.

Clarifications under the New Code

Interaction with the Landlord & Tenant Act 1954

The security of tenure provisions under the 1954 Act will not apply to any agreement between a landowner/occupier and an operator where the primary purpose is to grant code rights.

The reforms mean the operator will only benefit from one form of security of tenure under the Code, addressing both the consensus that dual protection is unnecessary and the incompatibility between the two regimes.

Formalities

The New Code requires a greater degree of formality to any arrangements between landowner/occupier and operator. Any agreement must now be in writing and signed by or on behalf of landowner/occupier and operator, and must state its duration and any notice period. Hopefully this will result in fewer “inadvertent” agreements being entered into by landowners/occupiers with long term ramifications and more far-reaching and durable rights than anticipated by the owner or occupier of the land.

New rights for the operators

An automatic right for operators to assign code agreements

Any provision in a code agreement will be void to the extent that it purports to prevent or limit the assignment of the agreement to another operator, or make such an assignment subject to the fulfilment of conditions. The only exception to this is that a code agreement can still require that the outgoing operator guarantees the incoming operator's performance of the code agreement. This guarantee can only extend to the immediate incoming operator.

An automatic right for operators to upgrade or share apparatus

If the two conditions set out below can both be satisfied, an operator will be able to upgrade apparatus and share its use with another operator, notwithstanding any term of the code agreement:

1. the upgrade or sharing of apparatus should have no adverse impact, or more than a minimal adverse impact, on the appearance of the apparatus; and

2. the upgrade or sharing of apparatus should not impose any additional burden on the landowner.

An “additional burden” includes agreeing that the upgrade or sharing of apparatus:

(a) has an additional adverse effect on the other party’s enjoyment of the land; or

(b) causes additional loss, damage or expense to that party.

The automatic right to share includes the right to carry out works to enable the sharing. How those concepts are to be judged and tested is likely to be quite difficult in practice.

“No scheme valuation”

The New Code will make major changes to the way land is valued. In circumstances where a code agreement is imposed upon a landowner/occupier or where the court is required to specify terms, valuation of the compensation will be on the basis of market value - adopting the wording and definitions used in the “Red Book” RICS valuation standards - modified to include certain assumptions.

Land will be valued on a “no scheme” basis by reference to compulsory purchase principles - rights valued on the basis of their value to the landowner rather than on the basis of the value to the operator and tied to future use as a telecoms site. This could make a substantial financial difference. Rents will, in effect, be regulated and we expect that this approach will favour operators.

Termination and removal under the New Code

One of the most important and contentious areas under the Old Code was the provisions concerning the removal of apparatus. There are new provisions governing how a code agreement can be brought to an end and apparatus then removed.

There is a two-stage process under which an order ending the relationship does not give an instant right to possession. There is a separate process to follow for removing apparatus.

The first part of this process requires a landowner/occupier to give notice to the operator citing the grounds on which the code agreement should come to an end and the end date. At least 18 months' notice is required. The New Code sets out four grounds upon which the site provider can rely (and these include substantial breaches of the agreement by the operator, persistent delay in paying rent and an intention to redevelop by the landowner).

Upon receipt of the notice the operator then has three months to give counter-notice stating that the operator does not want the agreement to come to an end. Within three months of the date of any counter-notice the operator must apply to the Court. If the landowner/occupier makes out its ground of opposition then the Court can order the code agreement is at an end.

Having secured the right to require the removal of apparatus, a landowner/occupier must then give notice to the operator requiring removal of the apparatus and the making good of the land within a reasonable period of time.

Dispute resolution

In order to ensure more effective and speedier dispute resolution, the forum for almost all disputes under the New Code will be the Lands Chamber of the Upper Tribunal. There will be a move away from the ordinary Court system.

Impact on existing agreements

The reforms, as a whole, will not have retrospective effect. The New Code sets out transitional provisions. Those provisions apply the New Code to subsisting agreements, but subject to modifications, for example, the new automatic rights to assign, upgrade and share do not apply.

The transitional provisions provide that a more limited range of code rights apply to subsisting agreements rather than the wider range of rights under the New Code and alterations are made to the new provisions relating to the termination and modification of agreements.

Looking forward

There will inevitably be a period of uncertainty as the New Code settles down into practice and is applied in the real world.

In the 2018 case, the Upper Tribunal decided that “code rights” included preparations, such as the carrying out of site surveys, and that to gain interim rights, the operator need only show that it has a “good arguable case” to apply for permanent rights. Interim rights (for a specified period or until the occurrence of a specific event) could be requested independently and need not be a precursor to permanent rights.

In addition, the government consultation “Ensuring tenants’ access to gigabitcapable connections” proposes amendments to the New Code which would allow operators to be granted temporary access to let property where tenants were requesting an electronic communications service, but the landlord was refusing to engage with the operator in relation to the grant of a wayleave agreement. It is suggested that this temporary access would last until the landlord and the operator had signed a negotiated wayleave agreement between them. The closing date for comments to the consultation was 21 December 2018.

Both case decision and consultation emphasise the New Code’s “public service” aim of the provision of electronic communications for all. As the first substantive decision under the New Code, the case gives an early indication of the Upper Tribunal’s practical application of the New Code and it giving weight to the underlying objective of the speedy and economical delivery of communications networks in the public interest.

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