Supreme Court decision allows operators to get additional rights on existing sites (early)

The Supreme Court has now handed down its decision in the cases of CTIL v Compton Beauchamp; CTIL v Ashloch; and On Tower v AP Wireless II (UK) Limited. The decision allows operators to acquire additional rights in respect of their existing sites.

The background

The Electronic Communications Code (“the Code”) came into force in December 2017, providing a new regime for telecoms operators to acquire and operate new sites. Paragraph 9 of the Code states that:

‘a code right in respect of land may only be conferred on an operator by an agreement between the occupier of the land and the operator’

Code rights can either be granted by a landowner consensually, or the operator can apply to the Upper Tribunal (Lands Chamber) under paragraph 20 of the Code for an agreement to be imposed granting the operator Code rights.

The operators involved in the above cases had installed equipment and begun occupying sites before the Code came into force. They now wanted to acquire rights under the Code using paragraph 20.

The issue

The Court of Appeal had previously decided that operators that were already in occupation could not acquire additional rights under the Code using paragraph 20. This is because the operators were already the “occupier of the land” for the purpose of paragraph 9 of the Code, and it is not possible for an operator to make a legal agreement with itself.

The effect of the Court of Appeal’s decision was that:

• Operators that had existing agreements would have to wait until those agreements expired before they could seek to vary the terms. Part 5 of the Code allows operators or landowners to modify the terms of an existing agreement once the contractual term has expired.
• Operators that did not have any agreement with the landowner but were in occupation were precluded from obtaining any rights under the Code.

The operators in these cases argued that this position was inconsistent with the purpose of the Code and that the fact that the operator seeking rights was already in occupation should be disregarded when considering who the “occupier of the land” was.

The decision

The Supreme Court the found in favour of the operators on this point.

The Supreme Court firstly noted that the word “occupier” has no fixed meaning but takes its meaning from the context in which appears. It then proceeded to consider whether the Code would operate in a way which was more consistent with the government’s stated aims and objectives if the fact that the operator was already in occupation were disregarded when considering who the “occupier of the land” was.

The Supreme Court decided that preventing operators from acquiring additional rights during the term of an existing agreement or preventing operators from acquiring rights altogether on certain sites, was not consistent with the government’s aim that new improvements to digital infrastructure are rolled out across the country swiftly.

It also decided that allowing operators already in occupation to utilise paragraph 20 of the Code was more consistent with the language of the Code overall.

The Supreme Court did, however, draw a distinction between operators acquiring new rights and modifying existing agreements. While operators will now be able to acquire new rights under paragraph 20 of the Code, they will only be allowed to modify an existing agreement in accordance with Part 5 of the Code once the term of the existing agreement has ended.

The impact

There are a number of cases at the Tribunal which are stayed pending this decision being handed down. The operators in those cases will now be able to progress their claims for additional rights.

Landowners need to be aware that operators can now apply for additional rights during the term of existing agreements. There will undoubtedly be disputes as to whether what an operator has requested is strictly speaking an additional Code right or a variation of their existing agreement which is impermissible until the end of the term.

The practical impact of the decision could be regarded as limited given that the Government had already committed to amending the definition of “occupier of the land” following the Court of Appeal decision (among other amendments to the Code). The Product Security and Telecommunications Infrastructure Bill, if enacted, will have a similar effect to the Supreme Court’s decision.

The bill is currently at the Committee Stage in the House of Lords.

Contact a telecoms solicitor

If you would like to find out more about how our Telecoms team can support your organisation, please contact the head of our telecoms team Kary Withers directly, call us on 0800 652 8205 or get in touch online.