On Tower v AP Wireless: ECC Renewal Rights and the Assignee Operator

ByRob Bratby Posted on Telecoms Regulation

On Tower v AP Wireless ECC renewal rights Court of Appeal 2026 Bratby Law Telecoms Regulation

On 3 February 2026, the Court of Appeal handed down judgment in On Tower UK Ltd v AP Wireless II (UK) Ltd [2026] EWCA Civ 43, settling a question that had divided the First-tier Tribunal and the Upper Tribunal. An operator that has been assigned only the benefit of a Code licence agreement is a “party to a code agreement” within paragraph 33 of the Electronic Communications Code (the “Code”). Benefit alone is sufficient to access ECC renewal rights under Part 5. The decision simplifies renewal route analysis for towercos, digital infrastructure funds, and any operator holding Code rights through assignment.

The Electronic Communications Code: Part 4 and Part 5

The Electronic Communications Code is set out in Schedule 3A to the Communications Act 2003, inserted by the Digital Economy Act 2017 and amended by the Product Security and Telecommunications Infrastructure Act 2022 (PSTIA 2022). It grants designated operators statutory rights to install and maintain electronic communications apparatus on public and private land. Code Powers form a core part of UK telecoms regulation and are central to the commercial viability of towerco and digital infrastructure businesses.

Two routes govern Code agreement rights. Part 4 of the Code (paragraphs 20 to 29) covers new agreements. An operator seeking new Code rights must satisfy the two-part test in paragraph 21: the public benefit of the proposed agreement must outweigh any prejudice to the site provider, and that prejudice must not be disproportionate to the public benefit. Part 4 requires the operator to establish entitlement from the ground up and is the harder route.

Part 5 (paragraphs 30 to 35) covers the renewal of existing Code agreements. Where an existing agreement has expired or is about to expire, either party can serve notice under paragraphs 31 or 32 and apply to the First-tier Tribunal (Property Chamber) under paragraph 33 for a new or modified agreement. Part 5 does not require the operator to satisfy the paragraph 21 test afresh. The operator in situ is the starting point; the site provider must justify any departure from existing terms.

Part 5 is accordingly the preferred renewal route for operators with existing agreements. The question in this case was whether operators that held Code rights through assignment of a licence, rather than as the original party to the agreement, could access Part 5 at all, or were confined to the harder Part 4 route.

The Court of Appeal’s Ruling: Benefit Alone Suffices

Benefit alone is sufficient to qualify an assignee operator as a “party to a code agreement” for the purposes of paragraph 33. This was the unanimous holding of the Court of Appeal (Newey, Holgate and Foxton LJJ), overturning the Upper Tribunal’s additional burden requirement and confirming the original First-tier Tribunal decision in favour of On Tower.

The dispute arose across three sites in Sandbach, Cheshire and Darlington, County Durham, where On Tower UK Ltd held Code rights through assignments of licences originally granted to other operators. AP Wireless II (UK) Ltd (“APW”), as site provider, contended that On Tower lacked the burden of the original licences and therefore could not be a “party to a code agreement” within paragraph 33. On APW’s argument, On Tower would be confined to Part 4 for any renewal.

The First-tier Tribunal (Judge D Jackson) held that benefit was sufficient. The Upper Tribunal (Fancourt J, [2024] UKUT 263 (LC)) held that burden was also required, but that an assignee could satisfy the burden requirement by assuming primary responsibility for the agreement’s obligations, including by indemnifying the assignor rather than covenanting directly with the site provider. APW appealed to the Court of Appeal on the basis that only a direct covenant with the site provider would suffice.

The Court of Appeal rejected that argument. Code licences are personal contracts: as a matter of contract law, only the benefit of a licence can be assigned; the burden cannot pass to an assignee without the site provider’s consent and a fresh agreement. A rule requiring assignees to also carry burden would therefore deprive every assignee operator of Part 5 renewal rights, since it is legally impossible for an assignee under a licence to take on the burden of that licence without the site provider’s co-operation. Newey LJ stated at paragraph 63 of the judgment:

“Parliament was aiming to ‘make it easier for communications providers to deploy and maintain their infrastructure’ and, more specifically, to enable operators exercising code rights conferred by expired agreements to continue to do so. Treating the operator who is now exercising the code rights in question as a ‘party to [a code/the] agreement’ within the meaning of Part 5 serves those aims.”

Newey LJ, On Tower UK Ltd v AP Wireless II (UK) Ltd [2026] EWCA Civ 43, [63]

The Court also noted that site providers would prefer operators to be confined to Part 4, in part because Part 4 does not include an equivalent to paragraph 35 of the Code. That preference does not reflect what Parliament intended. The Court dismissed APW’s appeal and confirmed the FTT’s decision on the narrower benefit-alone basis, without endorsing the Upper Tribunal’s indemnity analysis.

Impact on Towerco M&A and Infrastructure Due Diligence

For towercos and PE funds investing in digital infrastructure transactions, this decision removes a specific diligence risk that had existed since Fancourt J’s Upper Tribunal judgment in 2024. Part 5 ECC renewal rights are now available to any entity holding a valid assignment of a Code licence, without needing to demonstrate that it also assumed the burden of the original agreement.

In practice, due diligence on Code licence renewal rights in a towerco acquisition now proceeds in two steps. First, confirm chain of title: is there a valid assignment of the benefit of each Code licence in the portfolio? Second, confirm the agreement is subsisting: has it been surrendered, novated, or replaced by a new agreement? If both questions are answered, Part 5 renewal rights follow. The further question of whether the towerco had assumed primary responsibility through an indemnity arrangement no longer gates the analysis.

For portfolios of subsisting agreements (those in force on 28 December 2017 when the Code came into effect under the Digital Economy Act 2017), this is of particular relevance. Many subsisting agreements were transferred multiple times before and after the Code commenced, each transfer conveying benefit only. This decision confirms that operators holding those agreements through chains of assignment have clear Part 5 renewal routes without retrospective documentation.

On the sell side of a digital infrastructure transaction, the decision also forecloses a negotiating position that site providers had used to create uncertainty about an assignee’s renewal route. Following On Tower, that argument is no longer available.

For advice on Code licence portfolio analysis in digital infrastructure acquisitions, see our guidance on regulatory due diligence and deal structuring and negotiation.

Viewpoint

The Court of Appeal’s decision is correct and the purposive approach is well-established. The Supreme Court confirmed in Cornerstone Telecommunications Infrastructure Ltd v Ashloch Ltd [2021] UKSC 5 that the Code must be read in light of Parliament’s objective of facilitating infrastructure deployment. On Tower applies that principle to a question the Code left unanswered, and does so consistently with the statute’s structure.

One distinction warrants attention. This judgment resolves the renewal route question, not the renewal terms question. Under paragraph 34 of the Code, the Tribunal has wide discretion when ordering a new agreement, including as to the consideration payable. A Part 5 renewal does not guarantee continuity of financial terms. Infrastructure funds valuing Code licence portfolios on the basis of current rent passing, without modelling the risk of Tribunal-set terms on renewal, are making a separate assumption that this decision does not address.

In our experience advising on Code rights in transactions, the renewal route question and the renewal consideration question are consistently conflated when they require separate analysis. On Tower closes the first. The second remains live, site by site.

Key Sources

For advice on Electronic Communications Code rights, Code licence portfolio analysis, or digital infrastructure transactions, contact Rob Bratby at Bratby Law.

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Telecoms | Data | Payments | Founder, bratby.law | Fractional General Counsel | Chambers-ranked telecoms lawyer

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