Corporate law

Electronic Communications Code 2017

What do landowners need to know?

The old Electronic Communications Code was replaced on 28 December 2017. The intention was to simplify the planning procedures for network operators to install and maintain apparatus such as phone masts, exchanges and cabinets on public and private land. Landowners are now facing various practical challenges and are finding that the new code benefits the operator rather than the landowner.  

The new code was designed to make it easier for operators to roll out or upgrade their services, such as the current focus on the rollout of 5G. Operators can now apply to Ofcom to obtain certain rights, allowing them to execute works for which they would have previously needed landlord’s prior consent. As a result, landowners have reported a noticeable loss of control over building works, poorer security, reduced access and difficulty in removing the operators from their property.

What’s changed?

If you are a landowner with a telecommunications agreement in place or are thinking about entering into a telecommunications agreement, there are several things to consider:-

Assignment - operators can now automatically assign their code rights to another operator without the need to obtain a landowner’s consent or provide payment.

Upgrading and Sharing - operators can upgrade or share their apparatus without the landowner’s consent and without having to pay additional rent.

Security of Tenure – under the old code, operators were able to rely on protection under the Landlord and Tenant Act 1954, meaning that the operator had a right to keep its apparatus on the land at the end of the agreement and the right to a new agreement. However, under the new code, the security of tenure provisions under the Landlord and Tenant Act 1954 have been excluded and the new procedures regarding termination should be followed.

Termination – landowners must now give at least 18 months’ notice to an operator in order to terminate an agreement.

There are now four statutory grounds for termination:-

  • substantial breaches by the operator of its obligations
  • persistent delays by the operator in making payment;
  • landowner’s intention to redevelop all or part of the land or any neighbouring land;
  •  the test under paragraph 21 of the code has not been met by the operator, whereby, the operator must meet the two following conditions:-
  •  that the prejudice caused to the landowner can be adequately compensated by money;
  • that the public benefit that is likely to be derived from the making of the order outweighs the prejudice to the landowner, bearing in mind the public interest in access to a choice of high quality electronic communications services.

In a leading case, landowners tried to bypass the grounds for termination under the new code. They claimed that they had an intention to redevelop the land by replacing operators’ existing masts with masts of their own. At the First Tier Tribunal, they were asked: ‘Would the landowner intend to carry out its redevelopment project if the operator was not seeking code rights?’

The tribunal decided that even though there was a reasonable prospect of bringing about the redevelopment proposal, the intention to bring it about was not genuine and the project was simply devised in order to prevent rights from being imposed by the operators. An intention of the landowner to redevelop must be something that is ‘firm and settled’.

 Removal – a reasonable amount of time must now be given to an operator to remove apparatus. Issues arise when a landowner wishes to exercise a break option, as under the new code, the operator has to allocate both time and money for removal. Developers should consider the extended timescales when it comes to making plans for redevelopment and incorporate the new timescales into the development timetable.

 Rental – landowners should be aware that the level of rental paid and any compensation payable by telecoms operators must now be calculated in accordance with the open market value of the land, without the benefit of the telecoms site.  Ultimately, this is likely to reduce the achievable rent. 

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