Open-access content
Monday 3rd June 2013
An outdated law allowing telecoms companies to put equipment on to sites against the wish of tenants is due to be updated, explains Jane Fox-Edwards.
23 May 2013
This gave licensed telecoms operators powers to install and retain equipment on land, even where the landowner might object. This coincided with the privatisation
of the telecommunications industry. The primary objective of the code was to enable operators to develop networks and encourage competition.
The first mobile phone call was made on 1 January 1985. Less than 30 years later, the
UK's electronic communications market is worth over £35 billion. It is perhaps not surprising that the code is no longer fit
for purpose and is seen as one of the barriers to achieving the government's target to roll out superfast broadband across the UK by 2015. Following extensive consultation, the Law Commission has recommended substantive changes.
The current position
The code broadly provides the following rights to Ofcom-licensed operators:
There are special rules covering tidal waters, 'linear obstacles' (basically railways and canals)
and street works. Importantly, it is not possible to contract out of the code.
The vast majority of masts and other equipment is installed under a consensual lease or licence arrangement. However, site providers are rightly nervous that the code, regardless of the terms of any agreement, allows the operator to delay any proposed development. This is particularly problematic if the operator is also protected by the Landlord and Tenant Act 1954.
The proposed changes
The Law Commission sensibly recommends starting again. The central theme is to try and balance the competing interests of landowners, operators and the public. The main proposals are:
Compulsory purchase rights - these still apply, unless the landowner can show an intention to develop the land. Compensation should be based on market rates with no ransom value.
Termination rights - Operators will get protection under the 1954 Act or the code, but
not both. Security rights will be simplified and put the onus on the operator to take action to protect its right to remain. It seems the position on contracting out will not change.
Rights to assign, share and upgrade - Landlords often prohibit the operator from assigning rights, sharing equipment or upgrading without landlord's consent. This gives those landlords an opportunity to hold the operator to ransom when advances in technology or consolidation of the industry require those things to happen. The Law Commission proposes that assignment and sharing should be automatically permitted, regardless of the terms of any agreement to the contrary.
Upgrades should be permitted without the site provider's consent, provided the alteration is not visible externally and does not impose any further burden on the site provider.
How does the code currently affect occupiers and landowners, and what would the proposed changes mean?
As landlord/freeholder -
Allowing operators on to one's land can be a useful way of securing income from otherwise dead space. You may already have agreements in place with operators for rooftop masts or underground cables. Their rights to assign/share with other operators depend on the terms of those agreements, but there may be opportunities for you to require payment in return for consenting to any changes.
Be aware that the security rights under the current code may delay your ability to remove the equipment. It is too early to say what impact the proposed reforms would have in the absence of a draft bill, but it is clear that they will not be retrospective. This means any current agreements will remain as drafted, but it may become easier to remove operators in future.
As occupier/leaseholder wanting to enter into a supply agreement with an operatorIt is very likely that you will need operators to provide a supply for your operational needs, either by way of a wayleave or licence. It is common for landlords to be nervous of permitting this because of the danger that an operator will gain code rights, and therefore be able to stay in situ after you have vacated, preventing them from dealing freely with their property.
Generally the landlord's fears are unfounded: in practice, if an operator is simply supplying one customer, it will have no interest in remaining in situ after that customer no longer needs its service.
Nevertheless, the perceived problem can delay landlord's consent. The proposed changes may make it easier to persuade a landlord that they have nothing to fear by giving consent to the operator's cabling/equipment coming into your space.
Conclusion
The next step is for production of a draft bill. While Law Commission reports often end up nestling in the long grass, this does seem likely to be pushed through parliament as there is the political will (and economic need) to do so.
In 1984, the government enacted what is now called the Electronic Communications Code.
This gave licensed telecoms operators powers to install and retain equipment on land, even where the landowner might object. This coincided with the privatisation
of the telecommunications industry. The primary objective of the code was to enable operators to develop networks and encourage competition.
The first mobile phone call was made on 1 January 1985. Less than 30 years later, the
UK's electronic communications market is worth over £35 billion. It is perhaps not surprising that the code is no longer fit
for purpose and is seen as one of the barriers to achieving the government's target to roll out superfast broadband across the UK by 2015. Following extensive consultation, the Law Commission has recommended substantive changes.
The current position
The code broadly provides the following rights to Ofcom-licensed operators:
- An entitlement to apply to court to install, maintain and keep electronic communications equipment on land even where the landowner refuses consent. If allowed, compensation is payable, but the basis on which this should be fixed is open to debate ('compulsory purchase' rights)
- Rights to remain at the end of any contractual term, subjecting the site provider to a long-winded process of notices and court proceedings to remove the equipment and even then the operator could seek a right to remain ('security' rights)
There are special rules covering tidal waters, 'linear obstacles' (basically railways and canals)
and street works. Importantly, it is not possible to contract out of the code.
The vast majority of masts and other equipment is installed under a consensual lease or licence arrangement. However, site providers are rightly nervous that the code, regardless of the terms of any agreement, allows the operator to delay any proposed development. This is particularly problematic if the operator is also protected by the Landlord and Tenant Act 1954.
The proposed changes
The Law Commission sensibly recommends starting again. The central theme is to try and balance the competing interests of landowners, operators and the public. The main proposals are:
Compulsory purchase rights - these still apply, unless the landowner can show an intention to develop the land. Compensation should be based on market rates with no ransom value.
Termination rights - Operators will get protection under the 1954 Act or the code, but
not both. Security rights will be simplified and put the onus on the operator to take action to protect its right to remain. It seems the position on contracting out will not change.
Rights to assign, share and upgrade - Landlords often prohibit the operator from assigning rights, sharing equipment or upgrading without landlord's consent. This gives those landlords an opportunity to hold the operator to ransom when advances in technology or consolidation of the industry require those things to happen. The Law Commission proposes that assignment and sharing should be automatically permitted, regardless of the terms of any agreement to the contrary.
Upgrades should be permitted without the site provider's consent, provided the alteration is not visible externally and does not impose any further burden on the site provider.
How does the code currently affect occupiers and landowners, and what would the proposed changes mean?
As landlord/freeholder -
Allowing operators on to one's land can be a useful way of securing income from otherwise dead space. You may already have agreements in place with operators for rooftop masts or underground cables. Their rights to assign/share with other operators depend on the terms of those agreements, but there may be opportunities for you to require payment in return for consenting to any changes.
Be aware that the security rights under the current code may delay your ability to remove the equipment. It is too early to say what impact the proposed reforms would have in the absence of a draft bill, but it is clear that they will not be retrospective. This means any current agreements will remain as drafted, but it may become easier to remove operators in future.
As occupier/leaseholder wanting to enter into a supply agreement with an operatorIt is very likely that you will need operators to provide a supply for your operational needs, either by way of a wayleave or licence. It is common for landlords to be nervous of permitting this because of the danger that an operator will gain code rights, and therefore be able to stay in situ after you have vacated, preventing them from dealing freely with their property.
Generally the landlord's fears are unfounded: in practice, if an operator is simply supplying one customer, it will have no interest in remaining in situ after that customer no longer needs its service.
Nevertheless, the perceived problem can delay landlord's consent. The proposed changes may make it easier to persuade a landlord that they have nothing to fear by giving consent to the operator's cabling/equipment coming into your space.
Conclusion
The next step is for production of a draft bill. While Law Commission reports often end up nestling in the long grass, this does seem likely to be pushed through parliament as there is the political will (and economic need) to do so.