Reforms on the horizon for the Electronic Communications Code
Controversial new legislation to govern the relationship between mobile operators and property owners
Parliament is currently tackling the reform of the Electronic Communications Code - the law which covers equipment used to transmit electronic communications, including mobile phone signals. The new rules are contained in the Digital Economy Bill and follow a number of consultations on the current (and widely-criticised) Code.
Mobile operators have been criticised for continuing poor coverage in some areas, but they argue that the current Code - which gives them rights to put equipment onto land including rooftops - works too slowly. They have also been putting pressure on the government to help them reduce costs, in return for investing substantial sums in improving coverage.
The existing Code is also disliked by many property owners, who complain about the restrictions they suffer when an operator wants to put equipment onto their land or building. Developers in particular can lose valuable time since it is not uncommon for it to take around 18-24 months to secure the removal of electronic communications apparatus from a site due to the complexity of the legislation.
The government recognised some years ago that the Code - introduced during the privatisation of British Telecom in 1984 - needs to be brought up-to-date to reflect changes in technology and enable quicker roll-out of communications networks. However, previous efforts to achieve this have failed due to the difficulties in achieving a balance between the interests of Code operators and landowners.
Digital Economy Bill
The Digital Economy Bill which is currently making its way through Parliament includes a revised Code and there a number of key points to note from its contents:
• Retrospectivity: Although there will be certain transitional arrangements, the new Code will not have retrospective effect and therefore should not affect agreements already in place (but will apply to any new agreements which replace them).
• Contracting out: Parties will not be permitted to “contract out” of the new Code or exclude any of its provisions. However, the new legislation aims to remove the overlap in statutory protection which can currently arise with the Landlord and Tenant Act 1954, although this will depend upon establishing the “primary purpose” of the relevant agreement.
• Land v apparatus: The government has confirmed that the focus of the Code should be on enabling access to land in order to install communications infrastructure, not enabling access to the infrastructure itself. (The latter is governed by existing regulation, i.e. Communications Act 2003.) Apparatus is therefore not included within the definition of “land” under the new draft Code and the intention is that its ownership should not change just because of its attachment to land.
• Test for imposing rights: The new test for deciding whether to override a property owner’s rights if it will not voluntarily agree to the installation of apparatus will involve assessing: (i) whether the property owner can be compensated by money for the prejudice arising from Code rights being imposed and (iiI) whether the prejudice to the property owner is outweighed by the public benefit in having access to the relevant services (including a choice of services).
• Rents: The draft Code aims to restrict rents by providing that no account should be taken of the value of the land to the operator. This approach reflects the government’s decision to prioritise digital communications and its concern that the rents currently paid by mobile operators are significantly higher than for utilities etc.
• Upgrading/sharing: The proposed new Code includes automatic rights for operators to upgrade and/or share apparatus without a landlord’s consent or extra payment in certain circumstances, in particular where there is “minimal adverse impact” on its appearance. The change(s) must also impose “no additional burden” on the landlord. This new flexibility is designed to allow operators to update their networks quickly when new technology becomes available and to make efficient use of infrastructure through sharing.
• Renewal: The revised Code includes provisions for renewing existing Code agreements. These are similar to the process under the Landlord and Tenant Act 1954 and aim to give certainty whilst the parties’ negotiations are progressing.
• Removal: The draft Code includes a new process for terminating a Code agreement in order to allow a redevelopment by the site owner, although it also introduces an 18 month notice period in order to allay operators’ fears about network security. This period will also apply where a landlord wishes to terminate the agreement because of an operator’s “substantial breaches” and/or persistent delays in making payments due under the agreement.
• Lift & shift: Although the new Code includes a process to seek changes to the terms of an existing Code agreement, there are no express “lift and shift” rights equivalent to those available to landowners under paragraph 20 of the current Code. Suitable provisions should therefore be included within any new agreement granted to a Code operator.
• Dispute resolution: The government has noted the widespread concerns about Code disputes being resolved in the county courts and the draft Code provides for dispute resolution to be moved to the Lands Chamber of the Upper Tribunal for most issues.
The existing Electronic Communications Code has caused real practical difficulties for mobile operators and property owners over decades. The government is understandably concerned that the current law is hampering the rollout of technology and limiting the ability of communications services to meet the needs of the digital era. However, there is an important balance to achieve between mobile operators and property owners and it remains to be seen whether the replacement Code contained with the Digital Economy Bill will simply lead to a new set of issues for argument - not to mention further delays in the rollout of technology and increased costs for both sides.
This briefing was written by Emma Humphreys and Clare Fleming, for more information please contact Emma on +44 (0)20 7203 5326 or email@example.com or Clare on +44 (0)20 7203 5043 or firstname.lastname@example.org
News & Insights
Real Estate and Construction Newsletter – December 2017
Welcome to our December newsletter, bringing you legal insight into issues facing the property industry.
Whose light is it anyway? Releasing rights of light reaches the High Court
Our property litigation experts explore rights of light issues in respect of landlords and tenants.