The new Electronic Communications Code: Should landowners be concerned?
As the Government seeks to keep up with an ever-evolving telecommunications industry, the new Electronic Communications Code introduces a set of 'Code Rights' and regulations to provide greater freedom to operators to improve their networks.
Whilst the rapidly advancing changes in telecommunications technology provides a host of benefits across industries and users, it brings with it challenges for landowners and farmers. The Digital Economy Act 2017 introduces a new Electronic Communications Code ("ECC"), replacing the old ECC contained in the Telecommunications Act 1984 and creating the concept of 'Code Rights'. The new ECC's aim is to, among other things, make it easier for telecommunications operators to roll out infrastructure (such as phone masts, exchanges and cabinets) on public and private land. It seeks to address operators' claims that they are unable to improve their services as landlords are, allegedly, holding them to ransom. With the ECC's imminent implementation into law, landowners should be aware of the changes and how they could be affected.
Under the new ECC, Code Rights are conferred on operators to assign, upgrade and share sites irrespective of lease terms, coupled with unlimited access to sites. Landowners will no longer have the ability to bring in extra income from each additional piece of apparatus or site sharing arrangement. Also, the new ECC removes the opportunity for landlords to negotiate new terms with an operator in the event that it assigns its rights in the equipment and lease.
Recovering land from operators
A notice procedure will be brought into effect by the new ECC where a landowner wishes to terminate an agreement, requiring an 18-month notice period (or longer if the contract requires this) stating why it is being given. Operators then have a three month period to give a counter-notice for admitting or contesting the notice.
Court can impose an agreement
In certain circumstances the courts have the power to impose an agreement between a landowner and an operator, with specific provisions governing the way in which the rent valuation is determined.
Dispute resolution procedure
The new ECC confers a range of powers to the court to expedite the litigious procedure in the event that landowners refuse consent to the installation of equipment on their land, or dispute the amount of compensation they are to receive in circumstances in which the court imposes an agreement between the landowner and operator.
Operators not able to rely on 1954 Act (Security of Tenure Provisions)
Any agreement, including a licence or lease, which is primarily for conferring Code Rights, will no longer have protection as a business tenancy under the Landlord and Tenant Act 1954 Security of Tenure provisions, but will benefit from the restrictions on termination within the new ECC removing uncertainty between the two.
The new ECC will only take effect in law when the Secretary of State makes regulations giving its effect and will not apply retrospectively to existing contracts between landowners and operators.
Issues for landowners
- The valuation of landowners' land for rent purposes will now be assessed on the value to the landowner, not the operator, meaning landowners will no longer be able to negotiate the rent on the benefit of operators' conferment of Code Rights.
- Operators may try to terminate existing arrangement leases with landowners to take advantage of the more favourable provisions and Code Rights in the new ECC.
- Landowners will not be able to contract out of the Code.
- The new notice procedure will likely bring delays to landowners seeking vacant possession for development.
Although a date has yet to be announced for the issuing of these regulations, it is clear that the new ECC will make negotiations more complex for those with telecommunication installations on their land.