The new Electronic Communications Code came into force on 28 December 2017.
The intention behind the new Code is to introduce a range of measures to make it easier for telecoms operators to roll-out infrastructure. The Code therefore gives telecommunications operators statutory rights to enable the installation, maintenance and use of telecoms equipment in order to operate their networks or provide an infrastructure network. Such rights are known as “code rights” under the new Code.
As under the previous Code, operators can acquire Code rights by either entering into an agreement with a landowner or by serving notice on a reluctant landowner and then applying to the court for an order imposing an agreement. The court will make such an order where it considers that: (1) the prejudice caused to the landowner can be adequately compensated by money; and (2) where the public benefit outweighs the prejudice to the landowner (taking into account “the public interest in access to a choice of high quality electronic communications services”). However, the court cannot make such an order where the landowner intends to redevelop and would not be able to do so if the order were granted.
We set out below the key changes from the previous Code and key points to note.
- No contracting out: Any terms in agreements that are contrary to the provisions of the Code are not enforceable;
- Upgrading and sharing: Operators may upgrade equipment and/or share their sites with other licenced operators without landowners’ consent, if the changes to the equipment have no more than a minimal adverse impact on its appearance and no additional burden is imposed on the landowner;
- Assignment: Operators may assign their rights without landowners’ consent save that a landowner may require the outgoing operator to guarantee the incoming operator’s obligations;
- Consideration: The consideration granted to a landowner where a court imposes an agreement is based on the market value of the land on a “no scheme” basis (i.e. ignoring the value of having the telecoms equipment on the site and the Code rights that attach to it). The current view in the market is that this will lead to lower rents/fees for landowners;
- Statutory continuation rights: Telecoms leases will be outside of the scope of the Landlord and Tenant Act 1954, but operators continue to have separate statutory continuation rights under the Code.
- Termination: Agreements between landowners and operators can provide for early termination of an agreement but landowners also need to consider an operator has statutory continuation rights under the Code. Regaining possession of a site is unlikely to be as simple as serving a contractual break notice. Instead, landowners will have to follow two separate processes set out in the new Code in order to (i) remove the Code rights and (ii) remove the apparatus itself. This is likely to take around two years, as the landowner’s notice to remove the operator must give at least 18 months’ notice and can only be served if one of a specified number of grounds for termination applies;
- Who is bound by agreement: It appears to be the case that an agreement entered into by a tenant will not bind the freeholder (although the freehold owner could find itself the subject of a court-ordered agreement if the operator does not want to leave the site on termination of that agreement);
- Who can benefit from Code rights: Code rights can now be conferred not only on an operator but also on a person who provides infrastructure services for operators. Under the new Code an operator may apply to the Court for the grant of “interim code rights” for a specific period of time or until the happening of a specified event; and
- Existing agreements: Agreements entered into when the previous Code was in force now need to be read in conjunction with the transitional provisions in the new Code as these have modified the operation of the some of the provisions of the old Code.
Ben Rogers (Legal Director), Rob Shaw (Senior Associate) and Jane Summerfield (Professional Support Lawyer) – DLA Piper UK LLP