Consulting on the Code: what can landowners expect next?

In December 2017, the Electronic Communications Code (Schedule 3A of the Communications Act 2003, as amended by the Digital Economy Act 2017) came into force and has generated a plethora of case law, with varying success for both landowners and operators. Despite intending to be a simplification of previous legislation, the Code has itself been the subject of great criticism by operators and site providers alike.

In January 2021, the government launched a consultation to take another look at the Code, addressing any area that may need further attention. The purpose of the consultation was to inform the government prior to making any legislative changes, and the response released on 24 November 2021 sets out the government’s ambitions in this regard.

We discuss the five key take-home points for landowners following this consultation

1. The valuation principles will not change

The consultation made it clear that the government does not intend to revisit valuation. Valuation was not within the scope of this consultation, and despite being raised in responses as an ongoing issue, the government’s policy remain that the statutory “no scheme” valuation set out in paragraph 24 of the Code will not change. This will be unwelcome news to landowners and site providers, who feel inevitably short-changed by the significant reduction in income from telecoms sites.

2. The automatic right to share and upgrade is a baseline, not a ceiling

Paragraph 17 of the Code provides operators with an automatic right to upgrade and share apparatus provided that such works do not cause more than “minimal adverse visual impact” or place an “additional burden” on the landowner.

Operators have argued that they should be able to contractually agree (or seek imposition of) rights greater than those provided by the Code, including unfettered rights to share and upgrade. This has been met with resistance from landowners, who have argued that rights greater than those set out in the Code should not be imposed. Case law on this point remains unclear but has somewhat favoured the operators’ position more recently. The government’s response also supports the operators’ position, and the Code will be amended in future to make it clear that the automatic rights to upgrade and share are a baseline for negotiations and not a ceiling.

The response goes further. The government intends to introduce an automatic right for operators to upgrade and share apparatus which is currently excluded from paragraph 17, regardless of when it was installed and, for pre-29 December 2003 apparatus, whether or not there is a current Code agreement in place at all. Any contractual leverage that a site provider may have in relation to upgrade and sharing requests will be diminished by this change.

3. Interim arrangements for renewal negotiations

The Code will be amended to allow either party in renewal negotiations to apply for an interim order imposing modified terms, bringing renewal agreements in line with new Code agreements (where interim orders are already available). Practically, this means that where it is anticipated that rent will decrease in a renewal agreement, operators will be able to apply for an order imposing a reduced rent whilst negotiations continue. The scope of interim orders will not be limited to financial terms. Any term of an expired agreement can be modified on an interim basis. The effect is to impose new Code terms retrospectively to existing but expired agreements.

4. Current case law regarding operators in occupation will be changed

Whilst still subject to an appeal, in the cases of CTIL v Compton Beauchamp Estates [2019] and CTIL v Ashloch Ltd and another [2021], the Court confirmed that it did not have jurisdiction to order the imposition of Code rights over land by the landowner where a third party (an operator) was in occupation of that land. This has enabled landowners to somewhat protect themselves against imposition of Code agreements upon renewal of existing agreements.

However, the government has stated its intention to amend the Code such that if an operator is exclusively occupying land, it will be able to obtain Code rights from whoever would be able to grant such rights if the operator was not already in occupation (e.g. the site provider). It will be interesting to see what impact, if any, this has on the outstanding appeals in the above cases.

5. Ignorance is not bliss

Finally, and most importantly, the government has indicated its intention to introduce a faster and cheaper procedure for operators to gain access and install apparatus where a landowner fails to respond to repeated requests. It seems that this will mirror The Telecommunications Infrastructure (Leasehold Property) Act 2021.

So landowners beware – do not ignore contact from operators. Failing to respond promptly could result in an order for a maximum of six years being made against you and without your input on terms.

Contact a telecoms solicitor

If you would like to find out more about our Telecoms team can support your organisation, please contact a member of our specialist telecoms team, call us on 0800 652 8205 or get in touch online.