The New Electronic Communications Code: what landowners need to know

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Jade Brooks, Associate in the Dispute Resolution team at Blaser Mills Law, takes us through the legislation governing the relationship between operators and landowners.

Since 1984, the relationship between electronic communications network operators and site providers in the UK has been regulated by an Electronic Communications Code (“the Old Code”), which has underpinned agreements for operators to host and maintain communications equipment on both public and private land and property.

However, since the Old Code first came into force, vast changes have taken place in digital communication. With an ever-increasing reliance on technology, telecommunications infrastructure networks, such as mobile telephone and internet (including 5G), have become vital necessities for business and modern day living.

Recognising that the Old Code was out of date, did not meet modern requirements and was overly complex and difficult to interpret, a new Electronic Communications Code [the New Code] was brought into force in December 2017 to clarify and simplify the law and give operators more clear and flexible rights.

The New Code heavily favours operators and, as we approach three years since it came into effect, it is crucial that landowners fully understand the key changes and how they could be impacted.

What is the New Code and what does it mean?

The New Code regulates the relationship between landowners and operators and grants operators statutory rights to install, operate and maintain electronic communications apparatus including telephone masts, on public and private land.

It applies to all agreements entered into between an operator and a landowner from 28 December 2017, but will also apply to many agreements that were already in existence prior to this date, as the New Code contains transitional provisions that could impact on the renewal or termination of an existing agreement.

The Upper Tribunal has the power to impose a Code Agreement on a landowner against their will if they can recover compensation to account for the detriment caused by the installation of electronic communications apparatus, and if the operator can meet the ‘public benefit test’ and show that a prejudice to a landowner is outweighed by the greater public benefit from having the apparatus on site.

As a result of the New Code, there has been a decline in the market for new mast sites. Compared to the numbers under the Old Code, not many have entered into agreements under the New Code due to concerns and uncertainty about the changes introduced, many of which are yet to be addressed by the Upper Tribunal, and a perceived aggressive approach taken by some operators.

What are the issues for landowners to consider?

There are several issues for landowners to be aware of when it comes to the New Code:

Reduction in rent and increase in costs

Firstly, the New Code has severely impacted and limited landowners’ ability to charge premium prices for the operator’s use of their property. Rents are assessed on a ‘no network’ assumption and are based on the market value of the land without considering the value of the site to the operator. Typically, the sites in question are small areas which hold little value to the landowners as bare land and have few other suitable uses, and rents paid and compensations awarded have reduced significantly under the New Code.

Sharing and upgrading of equipment

The New Code also means operators can share their equipment and assign their code rights to other operators, and this could pose an issue when it comes to terminating and removing an operator’s equipment. In addition, subject to very limited conditions, operators no longer have to seek landowner consent to upgrade or share their apparatus. This prevents a landowner from earning extra income for new or additional operator users or for additional pieces of apparatus, which could become a significant issue with the introduction of 5G.

The complicated termination process

Furthermore, terminating a New Code Agreement is not a straightforward process and a minimum of 18 months’ notice must be given to the operator to terminate under the New Code, regardless of whether the contractual term is less or even if it has expired. On giving notice to terminate under the New Code, a landowner may have to issue a separate notice terminating the contractual term and, on giving notice, they must specify one of the limited statutory grounds for removal, which could be difficult to evidence.

The statutory grounds for removal include substantial breaches by the operator of its obligations under the Code Agreement, persistent delays by the operator in making payments due under the Code Agreement, if the site provider plans to develop and could not reasonably do so without termination, and if the operator is no longer entitled to the agreement because financial compensation is not adequate to overcome any prejudice to the landowner and the public benefit test.

Removing an operator’s apparatus

Finally, once a Code Agreement is terminated, a landowner still does not have a right to remove an operator’s apparatus and a further procedure must be followed to require the operator to remove their equipment before a landowner will get vacant possession of its site.

When to seek external advice

The New Code is somewhat convoluted, and the changes come at a significant price to landowners who are likely to see a reduction in their income from and control over affected sites.

Any landowners unsure about how they could be affected should seek guidance from a qualified legal expert who will be able to advise on a wide range of issues under the New Code, from the terms of agreements and defences to any imposition to the termination of a Code agreement and/or removal of electronic communications apparatus.

Crucially, if approached by an operator, landowners must act quickly in obtaining legal advice.

Jade Brooks is an Associate in the Dispute Resolution team at Blaser Mills Law. She specialises in all aspects of Commercial and Civil Litigation, including contractual disputes, intellectual property disputes and disputes involving Directors, Shareholders or Partners.