In a surprise move, on 13 January the UK government announced plans to update the elderly (and, even to the House of Lords, rather incomprehensible) Electronic Communications Code which deals with the rights of telecoms operators to access public and private land.
Whilst the proposed changes in large part adopt the recommendations of the Law Commission’s report on the current Electronic Communications Code, the timing at the end of a coalition parliament and method (being part of a rather hotch-potch Infrastructure Bill) has come as something of a surprise.
The Government’s intention is to reduce the barriers to infrastructure investment and so expects that operators will benefit, relative to landowners, from the changes.
With thanks and acknowledgement to Warren Gordon, the key issues in the draft are:
- Better drafting. The plain English approach in the new draft is very welcome.
- Clearer interaction with the Landlord and Tenant Act 1954 in relation to seeking to recover possession. The proposed Code amends the 1954 Act to provide that tenancies, the primary purpose of which is to grant Code rights, cannot benefit from the security of tenure rights under the 1954 Act.
- Conferring of Code rights. Code rights are only conferred by written agreement between the occupier and the operator, and the agreement only binds the occupier’s landlord if he agrees to be bound. However, there is a power for the court to impose an agreement by order if: (i) any prejudice caused is capable of being adequately compensated by money; and (ii) the public benefit in access to a choice of high quality electronic communications services, likely to result from the making of the order, outweighs any prejudice. However, an order may not be made if the court thinks that the relevant person intends to redevelop all or part of the land to which the Code right would relate, or any neighbouring land, and could not reasonably do so if the order were made.
- Consideration and compensation. Any court-imposed agreement must deal with the consideration to be paid, being an amount representing the market value of the relevant person’s agreement to confer or be bound by the Code right. The market value is assessed on the basis of the value to the operator of the agreement (note, not to the relevant person such as a landowner) and having regard to the use which the operator intends to make of the land. The court may also order compensation for loss or damage and the legislation sets out the bases for compensation. At the core of the new Code is the change to the wayleave valuation regime, which essentially moves valuation away from pure free market principles by requiring the use of the RICS Red Book. According to the Government’s Impact Assessment, this is expected to lead to a 10% reduction in wayleave payments (such as lease payments) from operators to landowners. It is expected that this will result in landowners’ revenue from wayleave payments decreasing by £30 million per year.
- Interim agreement. The new code allows an interim order to be made, with presumably matters such as compensation decided at a later and fuller hearing.
- Assignment of Code rights/upgrading or sharing use of apparatus. Operators can assign Code rights (although can be required to enter into an authorised guarantee agreement), upgrade or share the use of electronic communications apparatus subject to certain conditions and anti-avoidance provisions.
- Continuation of Code rights and bringing agreement to an end. A site provider who is a party to a Code agreement may bring the agreement to an end by giving a notice to the operator. The notice must state the end date, which must fall no earlier than after the end of 18 months from the day on which the notice was given,and also state the ground on which the site provider proposes to bring the agreement to an end (this includes that the site provider intends to redevelop all or part of the land to which the agreement relates or any neighbouring land, and could not reasonably do so unless the agreement comes to an end). Where such a notice is given, the Code agreement comes to an end in accordance with the notice unless within three months from the day on which the notice is given, the operator gives the site provider a counter-notice, and within three months from the day on which the counter-notice is given, the operator applies to the court for an order. However, if the court decides that the site provider has established the redevelopment or other ground, the court must order that the agreement comes to an end. Otherwise, the court can make one of a number of orders specified in the legislation. The operator may be required to make interim payments. There is also a procedure for changing an agreement, which again may involve applying to court for an order (it appears that there is no equivalent of the existing paragraph 20 “lift and shift” right).
- Removal of apparatus. There are also rights for a landlord to require the removal of apparatus if one or more of five conditions are satisfied, including the apparatus is no longer used for the purposes of the operator’s network; or there is no person with a Code right to keep the apparatus on the land. There is a procedure to enforce removal of the apparatus.
- Not retrospective. The new Code will not be retrospective.
- Code rights. Code rights may be granted to wholesale providers as well as service operators. Existing rights do not become Code Rights if an operator is later granted Code Operator status.
For more (and more learned) detail, see Warren’s update here.