Code Powers and what they allow an operator to do

Code Powers are statutory rights that allow an operator to install, maintain and operate electronic communications networks on land. These rights derive from the Electronic Communications Code under section 106 of the Communications Act 2003, as inserted by section 4 of, and Schedule 1 to, the Digital Economy Act 2017, in force in full from 28 December 2017. Code Powers are not automatic. An operator must first apply to Ofcom for Code operator status, demonstrating financial capability, operational competence and technical compliance. Only once Ofcom confers Code Powers does the operator have the statutory right to seek land access for network deployment.

The Electronic Communications Code framework balances two competing interests. Network operators need reliable access to land at predictable cost to build the infrastructure that underpins digital services. Landowners need protection against unreasonable intrusion on their property rights and fair compensation for any loss or diminution in value caused by the network installation. An operator and a landowner negotiate under the procedure in Schedule 3A, and either may apply to the tribunal if they cannot agree.

Eligibility for Code operator status

Code Powers are available to persons providing an electronic communications network or a system of infrastructure made available to providers of such networks. This includes mobile network operators, fibre network operators, and neutral-host infrastructure companies. In practice, any person who needs statutory access to land for the deployment of electronic communications apparatus may apply.

Ofcom must have regard in particular to the benefit to the public of the network or infrastructure system, the practicability of providing it without the Code, the need to encourage the sharing of apparatus, and whether the applicant will be able to meet the liabilities arising from the application of the Code and from its own conduct under it. Ofcom maintains a register of persons with powers under the Electronic Communications Code showing those to whom Code Powers have been conferred. An application for a purely private network used solely for internal purposes is unlikely to succeed, because Ofcom must have regard to the benefit to the public of the network; such networks typically rely on contractual land rights negotiated separately.

Tower companies, subsea cable operators, wireless internet service providers and fibre new entrants appear on Ofcom’s register of Code operators. Code Powers bind the operator to statutory obligations to landowners and to the public. These include bonding or financial security to cover statutory liabilities for the statutory liability period, typically set during construction as a percentage of construction costs and thereafter by reference to annual operations and maintenance costs. An operator that loses Code Powers or fails to maintain required bonding faces enforcement action from Ofcom and may be unable to enforce existing Code agreements.

The section 106 application process

An applicant seeking Code Powers must apply to Ofcom under section 107(1) of the Communications Act 2003, which is the gateway to a direction applying the Code under section 106(3). Before giving a direction Ofcom must publish a notification of its proposal, with its reasons and the period for representations, and must consider the representations made. That period must end no less than 30 days after publication. This consultation allows existing operators and other stakeholders to lodge concerns about the new applicant’s financial strength, operational capability or compliance record.

Ofcom will assess the application against the statutory criteria and issue a decision. If approved, Ofcom will issue a direction conferring Code Powers. Ofcom may restrict a direction by place, by network or by infrastructure system. Separately, every code operator is subject to the conditions and restrictions imposed by the Secretary of State in the Electronic Communications Code (Conditions and Restrictions) Regulations 2003. Common conditions include minimum levels of financial security, regular reporting of compliance, and obligations to share duct or pole infrastructure with other operators.

Ofcom must decide a completed application within six months, except in cases of expropriation. Applicants should budget for this timeline and factor it into network deployment schedules. Once Ofcom issues a direction, the conferral can be challenged by judicial review if the decision is irrational or procedurally defective; otherwise, the applicant has Code Powers for so long as it complies with the conditions attached.

The practical exercise of Code Powers: Negotiation and notices

Once an operator holds Code Powers, it may exercise those rights by negotiating Code agreements with landowners or, if negotiation fails, by serving statutory notices and seeking a Code order from the tribunal. In practice, most operators prefer negotiation. A negotiated agreement is usually cheaper, faster and more stable than tribunal proceedings, and avoids the public and reputational cost of formal dispute.

The negotiation process begins with notice. The operator must serve notice on the landowner setting out the proposed apparatus, the land to be used, the intended use and duration, and the financial terms proposed. The notice must comply with paragraph 20(2) and (2A) of Schedule 3A, which set out its required content, including, since 7 November 2023, information about the availability of alternative dispute resolution and the consequences of refusing to engage in it. The notice must state the landowner’s right to object or propose alternative terms and set out statutory timeframes for response, typically 28 days or such longer period as the parties agree.

The tribunal case law has established strict technical requirements for notices. A notice that fails to comply with the statutory form or that fails to disclose material aspects of the operator’s network plans or the financial basis of the proposal may be treated as invalid by the tribunal. A notice that does not meet the statutory form must be served again, and the operator loses that time. The notice should be checked against the tribunal decisions on notice validity before service.

During the negotiation phase, landowners should take independent legal and valuation advice before responding to a notice. The response sets the tone for negotiation and the quality of the response determines the landowner’s negotiating position. A poorly drafted response that fails to identify specific objections or to propose realistic counter-terms weakens the landowner’s position if the dispute later goes to tribunal.

Paragraph 20 and the tribunal route

Paragraph 20 of Schedule 3A sets out the conditions under which an operator may impose a Code agreement on a non-consenting landowner by applying to the First-tier Tribunal (Property Chamber). The test is in paragraph 21. The tribunal may make an order if, and only if, both conditions are met: the prejudice caused to the landowner by the order is capable of being adequately compensated by money, and the public benefit likely to result from the order outweighs that prejudice. In weighing the second condition the tribunal must have regard to the public interest in access to a choice of high quality electronic communications services. The tribunal may not make an order at all if the landowner intends to redevelop the land or neighbouring land and could not reasonably do so if the order were made. Before applying, the operator must have served a notice under paragraph 20(2) and waited 28 days or received a refusal, and must have considered alternative dispute resolution where that is reasonably practicable.

From 6 April 2024, Code proceedings in England and Wales may be brought in the First-tier Tribunal (Property Chamber). The restriction that required them to be commenced in the Upper Tribunal (Lands Chamber) was removed on that date by the under the Electronic Communications Code (Jurisdiction) (Amendment) Regulations 2023 (SI 2023/1220). Case law developed by the Upper Tribunal remains authoritative and is applied by the First-tier Tribunal.

The tribunal does not automatically grant a Code order simply because these conditions are technically met. The tribunal will examine the merits of the operator’s proposal in detail, assess the strength of the public benefit case, and consider whether the landowner’s objections are well-founded or merely obstructive. An operator that cannot meet the paragraph 20 threshold must return to negotiation or modify its proposal.

The First-tier Tribunal (Property Chamber) and the Upper Tribunal (Lands Chamber) have concurrent jurisdiction over paragraph 20 proceedings in England and Wales following amendments made by The Electronic Communications Code (Jurisdiction) (Amendment) Regulations 2023. The tribunal will hear oral evidence, including expert evidence on valuation and technical evidence on network design and feasibility. The tribunal decisions are binding on parties and establish precedent for future cases.

Valuation of Code agreements: the no-scheme basis

The Digital Economy Act 2017 changed the valuation basis for Code agreements. Before 2017, operators paid rent under wayleave agreements valued on an open market basis, reflecting what a willing buyer and a willing seller would agree if the Code did not exist. The 2017 reforms substituted a “no-scheme” valuation basis, which reduces the compensation payable to landowners.

The Code separates two payments. Consideration under paragraph 24 is the market value of the landowner’s agreement, assessed on the assumption that the right does not relate to the provision or use of an electronic communications network. Compensation under paragraph 25 is separate and covers loss or damage sustained as a result of the exercise of the code right, not the hypothetical value of the land if the network did not exist. The tribunal has consistently held that landowners are not entitled to share in the benefits created by network coverage. Compensation is calculated by expert evidence reflecting the loss of use, impact on rental value, impact on future development or sale value, and cost of reinstatement. Evidence of other telecoms transactions has to be adjusted to the statutory assumptions before it can assist, because the valuation assumes a right that does not relate to an electronic communications network.

Operators pay substantially less to secure land access. Landowners receive less than the pre-2017 market-value wayleave model produced. A landowner is not entitled to market value compensation under the Code, and a refusal to accept no-scheme terms on that ground will fail at the tribunal. An advisor acting for a landowner should say so at the outset.

The PSTI Act 2022 reforms: interim rights and consideration

The Product Security and Telecommunications Infrastructure Act 2022 introduced substantial amendments to the Electronic Communications Code, commenced in stages between February and November 2023. These reforms were designed to support faster broadband and 5G rollout by giving operators additional statutory tools and by clarifying landowner protections.

One important innovation is the expansion of interim rights. Previously, paragraph 35 of Schedule 3A allowed only the site provider to apply to the tribunal for an order specifying interim consideration pending final determination of a renewal or modification application. The PSTI Act 2022 now permits either party to apply for interim relief, including changes to financial terms, with effect backdated to the date of application. This creates new tactical opportunities for both operators and landowners in renewal negotiations.

Separately, and since the Code was inserted in 2017, paragraph 30 continues a code agreement in force after the date on which the right would otherwise have ceased. An operator that fails to secure a renewal agreement before the existing Code agreement expires may rely on the Code’s automatic renewal provisions to continue operating on the same terms pending final determination of a new agreement. This protection prevents operators from losing Code rights through administrative oversight and provides breathing space for negotiation or tribunal proceedings. The practical effect is that expiring Code agreements rarely lead to immediate loss of access.

Towercos and Code Powers

Tower companies that provide shared site infrastructure to multiple MNOs hold Code Powers in the same way as operators building their own networks. The Code applies to towercos with no qualification or exemption. A towerco that provides duct or pole access to MNOs may need Code rights to secure access to the properties where the shared infrastructure is located.

In practice, towercos often exercise Code Powers alongside contractual rights. A towerco may have a contractual right to install a tower at a particular location, with that right derived from a ground lease or similar arrangement, and may also seek Code operator status to ensure it has statutory backing for the exercise of those rights. The combination of contractual and statutory rights provides security against future disputes with landowners.

Code Powers and planning permission

Code Powers and planning permission are separate regimes, with different decision-makers and different purposes. An operator may have valid Code rights to install apparatus but still require planning consent. Conversely, planning permission does not confer Code rights: an operator that has obtained planning permission for a tower at a particular location still needs either the landowner’s agreement or a Code order to exercise Code rights over the land.

An operator may apply for planning permission before serving Code notices or after, and the sequence depends on the project. An operator that leaves planning to one side faces delay and the cost of rework. Planning authorities have rejected proposals that had underlying Code rights, forcing operators to modify their network design or abandon locations. The cost of rework can be substantial.

An operator should take early planning advice on the specific location and proposed apparatus type. Some apparatus types (such as small cells on existing poles) may be permitted development under planning rules and require no formal consent. Others require full planning permission. Some locations have local planning constraints or conservation area designations that create risk. A conversation with the local planning authority at the outset, before Code notices are served, can save months of rework.

Wayleave agreements versus Code agreements

Wayleave agreements predate the Code. They are voluntary agreements between an operator and a landowner for the installation of apparatus, typically granted on an annual or renewable basis and terminable by notice. A wayleave gives the operator no statutory rights; if the landowner refuses to grant a wayleave or terminates an existing wayleave, the operator has no override.

Code agreements, by contrast, are statutory agreements that an operator can impose on a non-consenting landowner by tribunal order under paragraph 20. Most new network builds use Code agreements as the legal basis for infrastructure access, particularly where the operator anticipates possible landowner objections or where the land is geographically strategic and the operator does not want to be dependent on the landowner’s continued consent.

In practice, operators often continue to use wayleave agreements for locations where negotiation is straightforward and the operator has a good relationship with the landowner. Wayleaves may be faster to negotiate than Code agreements because they avoid formal notice procedures. But a landowner can terminate a wayleave; an operator with a Code agreement cannot be removed by the landowner (though the landowner can apply to the tribunal for termination on the Code’s terms).

The valuation methodology differs. Wayleaves are typically valued on a market basis; Code agreements on a no-scheme basis. This creates an incentive for operators to push existing wayleave holders toward Code agreements where the operator can demonstrate that the Code agreement value (on a no-scheme basis) is lower than the wayleave rent. Some landowners resist this conversion and defend their existing wayleaves. Disputes over conversion often go to tribunal where the operator seeks a Code order to replace the wayleave.

Practical triggers for instructing legal advice

Operators should instruct Code advice at the earliest stage of network planning, before Code notices are served. Early advice on application for Code operator status, on the requirements for compliant notices, and on the sequence of Code and planning processes will save cost and delay.

Landowners receiving Code notices should instruct immediately. Code notices establish statutory timeframes for response, and the quality of the response determines the landowner’s negotiating position. A landowner that fails to respond within the statutory period loses important protections.

Operators that have served Code notices and received landowner objections should instruct before escalating to paragraph 20 proceedings. Paragraph 20 proceedings are expensive and carry material risk of tribunal judgment against the operator if the tribunal finds that the operator has not made a genuine attempt to reach agreement or that the public benefit case is weak.

Acquisition due diligence on land with existing Code agreements should always include legal review. The commercial value of land depends entirely on the scope and duration of the operator’s Code rights. An acquiring party that does not understand the Code agreement, and the circumstances under which the operator can compel variation or renewal, may discover post-acquisition that ownership comes with material restrictions on use.

Code disputes involving upgrades, technology migrations or shared infrastructure arrangements require specific advice on whether existing Code rights cover the proposed works or whether fresh Code negotiations are required. Where the existing rights do not cover a new apparatus type or a new use, the operator needs a fresh Code agreement, by negotiation or by application to the tribunal.

Tribunal case law and its practical importance

Since 2017 the Upper Tribunal (Lands Chamber) has developed a substantial body of precedent on the Code, and since April 2024 the First-tier Tribunal (Property Chamber) has added to it. This case law addresses technical compliance (what constitutes a valid notice, what the operator must disclose, what the tribunal will infer from defective procedure), valuation methodology (how to apply the no-scheme basis, what evidence the tribunal will accept, how to approach shared access arrangements), and the paragraph 20 threshold (what counts as “genuine attempt to reach agreement”, what “unreasonableness” means, how the tribunal balances public benefit against landowner loss).

An operator or landowner negotiating Code rights has to work from the case law as well as from Schedule 3A, which sets the framework and leaves the detail to the tribunal. Disputes over valuation, notice compliance, the scope of Code rights, and the grounds for tribunal intervention are resolved by reference to precedent. The tribunal has already rejected many of the arguments that arise in Code negotiations.

Case law knowledge is particularly important in valuation. The tribunal has given detailed guidance on valuation methodology, the types of evidence it will and will not accept, and how to approach particular scenarios (such as shared access arrangements or upgrades to existing installations). This guidance materially affects the commercial position of both operator and landowner and should shape negotiating strategy.

Bonding and financial security requirements

An operator holding Code Powers must ensure that sufficient funds are available to meet the liabilities specified in regulation 16 of the Electronic Communications Code (Conditions and Restrictions) Regulations 2003, which are street-works liabilities to highway, street and responsible authorities and other undertakers, the cost of making good damage caused by installation or removal, and the cost of removing redundant apparatus from a street. The operator assesses the quantum itself and certifies annually to Ofcom on 1 April, and at least two weeks before it first exercises Code rights, that sufficient funds are available, enclosing any insurance policy, bond or guarantee relied on. Where Ofcom is not satisfied it may direct the operator to take steps to secure sufficient funds. Once the network is operational, bonding shifts to an assessment of annual operations and maintenance costs. An operator that fails to maintain required bonding is in breach of its Code Powers and faces enforcement from Ofcom and potential claims from landowners.

Bonding arrangements are material to financing and investment. Financiers and investors will assess the bonding burden as part of due diligence. An operator that underestimates bonding requirements or that fails to budget for ongoing bonding costs may face financial stress. Conversely, a landowner considering enforcement against an operator can assess whether the operator’s bonding is sufficient to cover the landowner’s potential claims.

FAQs

What is the difference between a wayleave and a Code agreement?

Wayleaves predate the Electronic Communications Code. They are agreements between an operator and a landowner for the installation of apparatus, typically granted on an annual or renewable basis and terminable by notice. A wayleave is a voluntary agreement; the landowner can refuse to grant one and the operator has no statutory override. The current Code, inserted as Schedule 3A to the Communications Act 2003 by the Digital Economy Act 2017 and in force from 28 December 2017, provides a statutory mechanism at paragraph 20 for imposing Code agreements on non-consenting landowners. In practice, most operators still use wayleaves for new installations where they can negotiate agreement; Code agreements become relevant where negotiation fails or where an existing wayleave is being replaced. The valuation methodology is different: wayleaves are typically valued on a market basis; Code agreements on a no-scheme basis.

Can an operator compel me to accept a Code agreement without my consent?

Yes, but only if the operator meets the conditions in paragraph 20 of Schedule 3A. The tribunal may impose an agreement only if two conditions are met: the prejudice the order causes you is capable of being adequately compensated in money, and the public benefit likely to result from the order outweighs that prejudice. It may not make an order at all if you intend to redevelop the land or neighbouring land and could not reasonably do so if the order were made. If the operator can satisfy these conditions, it can apply to the First-tier Tribunal (Property Chamber) for a Code order imposing the agreement. This is not automatic; the Tribunal will examine the operator’s proposal and your objections. Many operators do not pursue paragraph 20 if they cannot make a compelling case for public benefit.

How is the compensation for a Code agreement calculated?

The Code requires compensation to reflect the loss or diminution in value of your land caused by the operator’s installation. The tribunal case law has established that this is a “no-scheme” valuation: the consideration is assessed on the assumption that the right does not relate to an electronic communications network, so it does not capture the value the network itself creates. Relevant losses include loss of use of the land, impact on its rental value, impact on future sale value if the installation restricts future development or use, and cost of reinstatement. The compensation does not include notional value from network coverage. Valuation is typically determined by expert evidence.

What happens if my Code agreement expires or the operator wants to upgrade the installation?

If the agreement expires, the operator can either seek your agreement for renewal on the same or different terms, or apply to the First-tier Tribunal (Property Chamber) under paragraph 20 if you refuse. If the operator wants to upgrade the installation, the treatment depends on the scope of the upgrade. A minor upgrade (replacing existing apparatus with similar apparatus) may be achievable within the existing Code agreement. A material upgrade (increasing the footprint, adding new apparatus types, or changing the installation’s character) typically requires fresh Code rights negotiation, as though the operator were installing apparatus for the first time.

Can a Code agreement restrict my use of my own land?

Yes. A Code agreement confers rights of access, installation and maintenance on the operator. The agreement will specify the area over which the operator has rights and may restrict your use of that land. You cannot use the land in a way that interferes with the operator’s rights or damages its apparatus. However, the Code regime permits you to continue ordinary use of the land if it does not interfere with the installation. Disputes often turn on what “ordinary use” means in the context of the specific land.

Representative experience

Recent and representative matters include:

• Advised a national fibre operator on the exercise of Code rights under the reformed Electronic Communications Code, including paragraph 20 agreements for multi-dwelling unit access.
• Negotiated wayleave and access agreements for a subsea cable operator’s landing station and terrestrial route, addressing Code rights, planning consents and landowner objections.
• Advised a property developer on the interaction between Code operator rights and development lease covenants, including the scope of the apparatus removal obligations in Part 6 of the Code.
• Acted for a rural broadband provider in securing access to highway land and agricultural crossings under the Code, coordinating with Highways England and local authorities.

Related telecoms regulation pages

Other telecoms regulation pages:

Am I regulated?
Ofcom General conditions of entitlement
SMP regulation and market reviews
Numbering
Spectrum
Lawful intercept and the Investigatory Powers Act 2016
Telecoms Security
Ofcom Licence Fees
Ofcom: Advice for Operators, Investors and Platforms
Interconnection regulation
Complaints and investigations
Connected Vehicles and IoT Regulation
EU Digital Networks Act

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Frequently asked questions

What are Code Powers?

Code Powers are statutory rights granted by Ofcom under Schedule 3A to the Communications Act 2003, enabling operators to install, maintain and operate electronic communications networks on land.

Do I need Code Powers to deploy a fibre or mobile network?

Not as a matter of law. An operator can deploy on contractual rights, and street works can be carried out under a street works licence. Code powers matter where an operator needs to work in the highway as of right, or to compel access when a landowner will not agree.

Do neutral-host or wholesale providers require Code Powers?

Yes. Providers offering infrastructure to third parties typically require Code Powers if they need access to public or private land.

Do private or campus networks require Code Powers?

Not usually. Private networks used solely for internal purposes may rely on contractual land rights.

How does Ofcom assess a Code Powers application?

Against the matters in section 107(4) of the Communications Act 2003: public benefit, practicability without the Code, the need to encourage apparatus sharing, and the applicant’s ability to meet Code liabilities.

What bonding or guarantee is required for Code Powers?

Operators must ensure sufficient funds are available for the liabilities specified in regulation 16 of the Electronic Communications Code (Conditions and Restrictions) Regulations 2003, principally street-works and apparatus-removal liabilities owed to highway and street authorities. The liability period runs from a relevant event, such as insolvency or ceasing to provide the network, to its third anniversary. The operator assesses the amount and certifies it to Ofcom annually.

How do Code upgrade and sharing rights work?

Paragraph 17 allows an operator with a code agreement to upgrade or share apparatus without the landowner’s consent, but only where the change has no more than a minimal adverse impact on the apparatus’s appearance and imposes no additional burden on the other party. For apparatus installed under land before 29 December 2003, and for agreements subsisting when the Code came into force, the test is stricter: no adverse impact on the land, no burden on any person with an interest in it, and 21 days’ notice fixed to a conspicuous object on the land. None of these rights includes a right to enter the land.

What happens if agreement with a landowner cannot be reached?

Operators may seek a Code agreement through the First-tier Tribunal (Property Chamber).

What liabilities do Code operators have when apparatus is removed?

Liabilities include reinstatement obligations and compensation for loss or damage.

How do Code Powers affect transactions or financing?

Investors assess Code compliance, bonding arrangements and the enforceability of land access rights as part of due diligence.