New Electronic Communications Code

Posted by Matthew Bell on
Exponential development in the technology sector and consequent consumer demand to always be connected has led to increased pressure on the government to update the Electronic Communications Code (the "Code") which was originally enacted in 1984.

The new Code, which will come into force on 28 December 2017 as part of the Digital Economy Act 2017, aims to place the provision of data and broadband at a similar level of importance to other utilities.

As the Minister of State Culture and the Digital Economy, Ed Vaizey, has stated, the Code proposes to acknowledge the economic benefit for all of society from investment in digital infrastructure whilst also balancing it with the rights of landowners.

Provisions of the Code that stakeholders should be aware of:

Installation of masts

Masts can be installed by voluntary agreement or by court order. If a landowner refuses the approach of a telecoms provider, the provider may apply to the court and the court can impose an agreement if it believes that:

  1. The prejudice caused can be adequately compensated by money.
  2. The public benefit likely to result from the order outweighs the prejudice to the relevant person.

Landowners are protected if the court believes that the landowner is to develop its land, part thereof or neighbouring land and an order would prevent the landowner from doing so.

Rents

The new Code aims to prevent 'ransom rents'. Whereas previously landowners could hold telecoms providers to ransom and demand much higher rents for allowing them to place masts on their land, the consideration for use of the land will now be based on the underlying value of the land. The thought process behind this new provision is that landowners should be compensated for use of their land but that they should not be able to profit from an increase in public demand for data.

Maintaining and upgrading

The new Code grants automatic code rights to providers to enter onto land to maintain and upgrade masts and other equipment. The aim here is to facilitate inevitable development to the equipment as technology progresses by removing the need to enter into agreements with landowners which might result in high rents and/or premiums. This is subject to any works causing minimal adverse visual impact on the land.

Assigning Code rights

Under the Code, operators may automatically assign or share Code rights without requiring landowner's consent. This may be of concern for landowners as they will have less control over who occupies their land than under the old Code. A prudent landowner may seek to oblige an operator to provide it with details of any assignment or sharing arrangements in any agreement so it can remain advised as to what is happening on its land.

Ending an agreement and removing equipment

If an operator is in breach of its agreement with the landowner and the landowner wishes to bring the agreement to an end and remove the apparatus, the landowner must first service notice on the operator specifying a termination date (18 months from the date of the notice). The notice must also state the ground on which the agreement should end, including substantial breaches of the agreement, persistent delay in paying rents or an intention to redevelop the land.

The telecoms provider may then allow the agreement to end or serve a counter-notice within three months and apply for a court order.

If the agreement comes to an end, the landowner can then require the removal of the apparatus from its land if one or more of several conditions are met. These include the agreement coming to an end under the operation of the code as explained above.

Landlord and Tenant Act 1954

The Code provides (in relation to leases granted after the Code comes into force) that where the primary purpose of a lease is to grant Code rights then the security of tenure provisions of the Landlord and Tenant Act 1954 will not apply. This means that a lease cannot benefit from both security of tenure under the Landlord and Tenant Act 1954 and the protection of the Code.

What will the Code achieve?

The new Code aims to satisfy consumer demand by paving the way for telecoms providers to expand without being strong-armed by landowners. Operators are likely to be happy with the new levels of protection the Code provides and which are likely to lead to impact on income and control over land for landowners. This may well put off landowners from willingly entering into agreements but this is counter-acted by a new streamlined process of obtaining a court order to impose agreements. The government is clearly trying to react to significant pressure to rapidly improve data coverage and at the same time not encroach unfairly on the rights of landowners.

About the Authors

Matthew is a Senior Associate in the Real Estate department. Matthew specialises in commercial property matters, with a particular emphasis on retail occupiers and their estate requirements.

Matthew Bell
Email Matthew
020 7014 5283

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Oliver is a Trainee Solicitor in the Real Estate team in London.

Oliver Waxman
Email Oliver
0207 8145 458

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