The Electronic Communications Code regulates the relationship between landowners and network operators in relation to the installation and maintenance of telecoms infrastructure.
The Code came into force in 1984 and over the years it has slowly evolved, but it has not kept pace with developments in technology. It has been decided that the Code needs an overhaul and the Digital Economy Act 2017 contains a new version of the Code, which should be brought into force by statutory instrument later this year.
The new Code is not retrospective and will only govern new telecommunication equipment agreements entered into after it comes into force.
The main focus of the Code is to bring the telecommunications industry in line with other utility providers. The aim is to give telecommunications operators similar statutory rights relating to access onto private land for the installation and maintenance of equipment and in relation to rents payable to private landowners. The key changes are as follows:
No contracting out of the Code
Parties are no longer permitted to make private agreements capable of excluding Code provisions. This contrasts with current telecommunication agreements which often contain provisions to exclude parts of the Code that might fetter a landlord’s ability to improve or develop its property.
Security and the termination of agreements
It has finally been confirmed that the security of tenure provisions in the Landlord and Tenant Act 1954 will not apply to leases of land for telecommunications equipment. That does not mean to say that it is easy for a landowner to terminate and oblige an operator to remove their equipment once it has been installed, in reality all that has changed is that there is now clarity in the procedures to be followed. The new Code introduces termination procedures which largely mirror the rights and rules contained within the Landlord and Tenant Act 1954.
Should any disputes arise, however, then the resolution procedure will be moved to specialist tribunals rather than the existing court system. It is hoped that this will speed up any disputes and ultimately reduce costs.
Removal of controls on upgrading apparatus
Operators will be afforded rights allowing them to upgrade and/or share infrastructure. The previous Code made this difficult, which provided the landowner with the opportunity to increase rents and potentially negotiate new terms. These new rights cannot be excluded in the written agreement.
New rights to assign agreements
Under the new provisions operators can now freely assign agreements to other operators with a view to helping the networks expand and improving accessibility to end users. However, landlords can stipulate in their Code agreements that a guarantee agreement (similar to an Authorised Guarantee Agreement) is provided by an outgoing operator on an assignment.
The new Code looks to introduce a new regime relating to rents payable to private landowners. These will be assessed on a “no-scheme” basis, the same as used for compulsory purchases; valuation will assess the value of the land to the landowner rather than the operator. This is likely to have the effect of greatly reducing the rents that landowners might expect to receive.
The likely reduction in rents combined with the rights of operators to upgrade equipment and assign agreements to other operators without landlord’s being able to require rents to be renegotiated in return for their consent, means that landowners are likely to find telecommunications leases less profitable. This brings the position of operators more in line with other statutory undertakers in relation to rents.
Should a landowner be opposed to an operator installing equipment on their land then the operator will have similar rights to other statutory undertakers, meaning that they can apply to the tribunal, compelling the landowner to agree. The operator can run a public interest argument in order to ensure that services and accessibility to them are maintained and indeed improved. Similar rights under the old Code were rarely exercised by operators. It remains to be seen whether greater reliance will need to be placed on these in future. It may be that landlords are reluctant to enter into new telecommunications agreements once the rental incentives and a landlord’s ability to control the amount of apparatus on their land are reduced by the new Code.
Operators will also be afforded new rights in order to allow access to the property, even before the valuation stage has been completed. This would only apply in exceptional circumstances however, but it is a clear extension of the powers afforded to operators.
Ultimately it is clear that the landowners’ rights and position will be weakened by the new Code. The Code is in line with the Government’s drive and desire to improve services, networks and the accessibility of technology to the general public and businesses. It will afford telecoms operators the same power and ability to operate as other statutory undertakers. However, given the fact landowners may be more reluctant to freely negotiate telecoms agreements that will be bound by the new Code provisions, it remains to be seen whether it will actually have the desired effect.