The Digital Economy Act 2017 introduced a new Electronic Communications Code, intended to improve the Country’s ability to adapt to ever-evolving technologies and to build the necessary infrastructure more quickly. Nevertheless, is the Code fair to landowners? This article explores what the changes to the Electronic Communications Code mean to landowners and operators alike
When and why was the Electronic Communications Code introduced?
The Electronic Communications Code was first introduced in 1984 to provide a statutory basis for telephone companies to place landline telephone equipment on land. Although the Code was subsequently extended in 2003 to cover electronic communications, it was nevertheless widely considered to be outdated, overly complex and generally unfit for purpose in the modern technological age.
The new Electronic Communications Code
The Digital Economy Act came into force on 28 December 2017 and with it came the new Electronic Communications Code. The aim of the new legislation is to future proof ongoing connectivity and facilitate the fast-evolving technologies that are a staple of modern society, such as 4G networking and fibre optic broadband. It is also designed to make it easier for telecom providers to build infrastructure.
What are the key changes to the new Electronic Communications Code?
The new Code introduces a number of key changes:
- Under the new Code, telecoms providers have statutory rights to enable the installation, maintenance and use of telecommunications equipment in order to operate their networks or provide network infrastructure. The new rights of telecoms providers are known as “Code Rights” under the new Code. The key issue is that if a landowner refuses to enter into an agreement with a telecommunications provider, that provider could take the landowner to Court to impose an order that the agreement be entered into.
- Telecom operators now have automatic rights to upgrade apparatus without requiring the agreement of, or making payment to, landowners provided there is minimal adverse visual impact or additional burden on the landowner in question. This change was brought about to speed up the development and rollout of new technologies as soon as they come to market.
- The new Code allows operators the freedom to assign a Code agreement and to share sites with other operators. This flexibility reflects the needs of a rapidly evolving market in which the main operators have already consolidated their sites through joint ventures and site sharing in an effort to reduce operating costs.
- Unlike the old Code, the new Code does not provide expressly for landowners to be able to relocate apparatus.
- The old Code enabled operators to benefit from security of tenure under both the Landlord and Tenant Act 1954 and the Code. That double layer of protection is now removed meaning that where a landowner has a genuine need to recover possession it should be able to do so under the applicable regime. Where the primary purpose of an agreement is to grant Code rights, that agreement will be excluded from the Landlord and Tenant Act 1954 automatically.
- The new Code also replaces the pre-existing regime for terminating telecoms agreements. Landowners will have to serve 18 months’ notice on operators to terminate a Code agreement. The operator will have 3 months from the date of the notice to serve a counter notice stating that it does not want the agreement to come to an end. If the operator serves a counter notice, it then must apply to the Court for an order that the agreement should continue. If no counter notice is served or application made then the agreement will come to an end following expiry of the 18 months’ notice.
- Landowners can expect to receive lower rental payments for having equipment installed on their land, especially where the underlying value of the land is low. This is because the basis of valuation will shift from market value payments to the notion of ‘no-scheme’ value which is based on the underlying value of the land. The calculation now excludes any value attributable to the proposed network use or attributable to the enhanced rights to share use or upgrade equipment and to assume there are other sites the operator could use. In future, therefore, the rent will reflect the value of other possible uses to which the site – typically, only a small area – could be put.
What action can you take if you do not want telecoms equipment on your land?
Ultimately, the telecoms provider will discuss the agreement that it wishes to offer you to install equipment on your land. However, if you refuse to allow the provider to use your land, they can take you to Court. The Court will consider three elements:
- Is the prejudice to you as a landowner adequately compensated by money? You have the right to provide evidence of how the change to the use of your land might affect your livelihood. If the telecommunications provider does not offer payment to compensate this, the Court may rule in your favour.
- Does the public interest in having the telecoms system installed outweigh your prejudice? The telecommunications provider may argue that there is a demand for the service in the area, but if you can prove otherwise, or you live in a remote location, you may be able to argue to the contrary.
- Is the land intended for development? If the telecoms provider installs equipment on your land, you may not be able to develop it. If you have plans to develop the land, you must make this clear to the Court, as it is may refuse the telecommunications provider permission on this basis.
Does the new Electronic Communications Code affect existing agreements?
Elements of the new Code apply to existing contracts but the transitional provisions exclude the reassignment of Code rights and the upgrading provisions from existing contracts. Most new conditions of the new Code will become enforceable when an existing contract is renewed.
Overall, what does the new Electronic Communications Code mean to the economy?
The changes to the Electronic Communications Code strengthen the ability of telecommunication providers and operators to develop new technologies more quickly with less cost. This means that as a country, we will be able to get the most innovative technology faster. However, for the landowners we rely on to provide the space for this equipment to be installed, the deal is less attractive than before, with landowners generally having fewer opportunities to object to, and receiving less money for, use of their land. This change in legislation is a positive move towards a more connected country but the fairness of the new Code to landowners who may be involved is questionable.
If you would like further information on the Code and its impact on new or existing telecoms agreements, please contact our Commercial Property department on 01332 340 211 or CommPropDept@flintbishop.co.uk.