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03 January 2019

The new Electronic Communications Code – A year on

The new Electronic Communications Code – which governs the relationship between property owners and those who run communications networks through masts, cables, etc – has now been in force for just over a year. Unlike under the old Code, it is clear that the operators have been keen to test its reaches and the implications for property owners are starting to become clear.

The key consequence of the new Code seems to be the “stagnation” of the market for new mast sites. This has resulted partly from landowners’ dislike of the changes introduced by the new Code but also from the aggressive approach taken by some operators in seeking to apply them. In Cornerstone Telecommunications Infrastructure Ltd v University of London [2018] UKUT 356 (LC); [2018] PLSCS 188, the letter from the operator’s solicitors which invited the university to enter into a “non-negotiable” Code agreement was described by the Upper Tribunal (Lands Chamber) (the UT) as a “rough wooing” with an “imperative and threatening” tone.

The current difficulties being experienced by operators under the new Code clearly fly in the face of parliament’s desire to facilitate the roll out of world-class digital infrastructure in the UK, including for 5G. The results of these difficulties are also causing problems for property owners who wish to redevelop their buildings as they now face even greater delays in removing communications apparatus because of the lack of alternative sites available for its relocation.

Striking a balance

There is, of course, a real difficulty for our economy and society here in trying to achieve the right balance between the increasing demands for better connectivity (including from many tenants) with the need for flexibility in the use of buildings and their redevelopment. The new Code has brought even more potential headaches for landowners, particularly those who have redevelopment intentions for their property in the future but whose plans are at an early stage. There are also concerns about operators proposing new rents at extremely low levels, using the new “no scheme” valuation criteria.

Operators appear to be willing to pursue these rents – as well as their Code rights – much more assertively than they did under the old Code. This partly reflects the jurisdiction given to the UT for many Code matters and its obligation to determine certain Code applications within six months. It is clear from the UT’s early decisions in applying the new Code that it recognises the wind of change brought in by parliament and is willing to blow it forcefully through property interests. This approach seems likely to continue into 2019.

Public interest

In the recent case of EE Ltd and another v Islington London Borough Council [2018] UKUT 361 (LC); [2018] PLSCS 191, the UT noted that a property owner who is “deprived of the right to do as they wish with their own property and made to accept a price that is lower than they would like… can be said to have sustained an infringement of their property rights which is prejudicial”. Nonetheless, it accepted the need to impose agreements in this way because of the public interest in having high quality communications services available.

In EE, concern for the public interest in avoiding a break in mobile coverage allowed operators to secure interim rights to relocate their apparatus to a new site despite fairly limited evidence in support of their application. The UT was satisfied that money would be adequate compensation for any prejudice caused to the landlord by the imposition of the order and rejected the suggestion that the works would cause prejudicial disruption to the occupiers of the flats within the building. It also made it clear that an operator only needs to produce modest proof that it has satisfied the tests set by the Code in such applications, which may be determined even without a hearing.

In addition to demonstrating the force of the new Code, the case was a lesson to landowners about the importance of taking a careful approach to negotiations. For the London Borough of Islington, its open willingness in prior negotiations to accept the principle of having communications apparatus on its land – with the only dispute being the question of the relevant rent – encouraged the UT to approve the operators’ application for interim rights, on the basis that it only remained for suitable financial terms to be determined.

What next?

Operators also secured a positive outcome in Cornerstone, where the UT found that a right of access for surveying purposes is a “Code right” under the new Code. This may not change much on the ground for now, but greater access powers could be on their way following the government’s recent consultation on proposals to amend the new Code. These would allow operators to force access against uncooperative landowners where a service request is made by a tenant, using a magistrates’ court-issued warrant of entry.

No doubt, Code operators will be keen in 2019 to build on their recent victories and perhaps use their difficulties in securing new sites to try to obtain more enhanced rights from the government. Many property owners will hope that further UT decisions will provide improved clarity on the operation of the new Code and perhaps even some reassurance concerning the balance to be struck between the parties’ interests here.

What are Code rights?

The “Code rights” that may be granted or contained in a court-imposed Code agreement include rights for an operator, where apparatus is used in providing an electronic communications network, to:

  • install apparatus on land;
  • carry out works for or in connection with the installation of apparatus on land; and
  • enter land to inspect, maintain, adjust, alter, repair, upgrade or operate any electronic communications apparatus on the land.

This article was written by Emma Humphreys and Clare Fleming. For more information please contact Emma on emma.humphreys@crsblaw.com or +44 (0)20 7203 5326 or Clare on clare.fleming@crsblaw.com or +44 (0)20 7203 5043.

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