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01 December 2017

New Telecoms Code coming (very) soon!

Any landowner wanting to remove a telecoms mast or other electronic communications apparatus from its property should take urgent note that the new Electronic Communications Code is expected to take effect by the end of this month. This means that the clock is ticking for termination notices to be served under the existing Code in some circumstances.  If a termination notice is not served before the new Code comes into force, then the landowner risks having to give at least 18 months’ notice, as well as the potential delay of court proceedings to remove the apparatus.

Background

The Digital Economy Act which contains the new Code was passed on 27 April 2017. It is part of the government’s plans to build better digital infrastructure and provide protections for citizens using digital services.

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.

Key parts of the new Code

The key elements of the new Code are:

  • Contracting out: Parties will not be permitted to “contract out” of the new Code or exclude any of its provisions.  However, the 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.
  • 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 (ii) 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 new 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. There has been much debate about how the proposed valuation approach will work in practice, but landowners, occupiers and their advisers will want to consider carefully what alternative non-electronic communications uses their land might have in order to establish what the best market value might be.
  • Upgrading/sharing: The 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: There will be a new process for terminating a Code agreement in order to allow a redevelopment by the site owner, involving 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.  Even once notice is served, the landowner must comply with a further removal procedural under the new Code unless the operator departs voluntarily.  In short, landowners with development ambitions will now need to allow much longer lead-in times for terminating these types of arrangement, particularly as there could also be Court delays as the parties explore their respective rights under the new Code.
  • 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 took note of the widespread concerns about Code disputes being resolved in the county courts and the Code provides for dispute resolution to be moved to the First-tier Tribunal (Lands Chamber) for most issues. 

Comment

The existing Electronic Communications Code has caused real practical difficulties for mobile operators and property owners over decades.  However, there is an important balance to achieve between mobile operators and property owners and it remains to be seen whether the new Code contained with the Digital Economy Act 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 article was written by Emma Humphreys. For more information please contact Emma on +44 (0)20 7203 5326 or emma.humphreys@crsblaw.com 

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