New legislation heralds more change for telecoms

The Product Security and Telecommunications Infrastructure Bill received Royal Assent towards the end of last year.  The new Act includes provisions designed to clarify parts of the Electronic Communications Code, in an effort by the government to try to reduce disputes between property owners and telecoms operators.  Regulations have now been introduced to bring some of these provisions into effect and some significant changes are now on the horizon.

Background

The new Code itself was introduced - somewhat hastily - at the end of 2017.  It has been very much a case of “more haste, less speed” since then, illustrated by the numerous battles between landowners and operators through the Tribunal and higher Courts.  Some of these cases have sought genuine clarification as to the interpretation of the Code, but they also demonstrate the strength of feeling from the landowner community regarding the government’s decision to reduce rents for operators.

Despite the issues which surfaced very early on with the new Code, it is only now that the government has decided to make any substantive amendments to it.  It remains to be seen whether the changes will help to reduce the areas for litigation, or whether the battles will continue or perhaps even increase…

Key amendments

The key changes are as follows:

Introduction of “interim rent”: operators, as well as landowners, will now be able to apply for a decision on the appropriate interim consideration payable for existing Code rights whilst certain Tribunal applications are underway.  (These applications are where parties are looking to renew but modify an existing expired Code agreement or where a landowner has served notice to terminate the existing agreement – under paragraphs 32 or 33 of the Code.)  Previously, this power sat with site providers only and it seems likely that operators will now look to make use of this avenue in the near future given the rent reductions that we have seen imposed by the Tribunal. 

Landlord and Tenant Act 1954: where a “subsisting agreement” falls to be renewed under the 1954 Act and the primary purpose of the tenancy is to confer Code rights, the approach will now be closer to the Code in certain key respects.  In particular, a new section 34A is introduced to set out the appropriate approach to assessing the rent payable under such agreements.  This includes the “no network” assumption introduced by the Code – which has reduced Code rents significantly.  There is also an express assumption that more than one site is available to the operator.  In addition, the 1954 Act now includes provisions for the Court to order a landlord to be compensated for any damage or loss sustained as a result of the exercise of any of the Code rights conferred by the new tenancy.

Increased upgrading and sharing rights: from 17 April, the upgrading and sharing rights introduced for operators under the new Code will be extended to “subsisting agreements” in certain circumstances, which means that they will not just apply to new Code agreements.  Operators will need to display a notice on the relevant land for 21 days about plans to upgrade/share - so landowners may want to consider whether their current inspection regime is sufficient, or whether they should try to include additional notice arrangements.  An operator needs to satisfy certain conditions in order to rely on these rights.  For example, the upgrading/sharing must have “no adverse impact” on the land and must impose “no burden” on any person with an interest in the land.  (Both of these hurdles are slightly higher than the test for upgrading/sharing under new agreements.)  The government is clearly keen to encourage more sharing of apparatus between operators, as the definition of “Code right” was also expanded to cover these arrangements.

Addressing unresponsive occupiers: there is a new procedure for operators to obtain Code rights quickly over certain types of land, where a landowner or occupier fails to respond to repeated notices given by the operator to request access.  However, it should be possible to avoid being subject to these new rights provided that Code notices are acknowledged in writing and/or the recipient confirms in writing whether or not it agrees to be bound by the Code right.

Encouragement of ADR: operators must now consider using Alternative Dispute Resolution to settle disputes before making an application under the Code, if it is “reasonably practicable” to do so.  There is clearly a desire to encourage both sides to engage with this approach, as the relevant Code notices will now explain the availability of Alternative Dispute Resolution and the possible consequences of refusing to mediate.  There is also provision for costs awards in future Tribunal proceedings to reflect “any unreasonable refusal by a party to engage in alternative dispute resolution”.

National security risks: there is a sensible new provision to allow the government to certify that an operator’s application for Code rights would be likely to prejudice national security, defence or law enforcement. “Law enforcement” is defined to include the safeguarding against and prevention of threats to public security.