Telecoms: legal implications of the Electronic Communications Code

Cracking the code

20 April 2017

Thekla Fellas gives an update on the new Electronic Communications Code and its legal implications

The Digital Economy Bill, which contains the new Electronic Communications Code, is now nearing Royal Assent. It seems unlikely that there will be any major revisions to the new code, so the current version is probably very close to the final form.

There have already been some amendments to the draft code; however, many will feel disappointed that some key concerns for stakeholders have not been addressed.

The key amendments

Part 1: Code rights

The definitions in part 1 have been revised, so the right to ‘keep’ apparatus ‘installed’ on, under or over the land has been listed as a separate and distinct right.

Part 6: Neighbouring land

A new section on the rights of neighbouring landowners and occupiers to require removal of electronic communications apparatus has been added at paragraph 37.

The neighbouring landowner or occupier has the right to require removal if 2 conditions are met:

  • if the exercise by an operator of a right mentioned in paragraph 13(1), on rights of access in relation to the apparatus, interferes with or obstructs a means of access to or from neighbouring land; and
  • the landowner or occupier of the neighbouring land is not bound by a code right in paragraph 3(h) on code rights, entitling an operator to cause interference or obstruction.

The right to require operators to disclose information has been extended to include neighbouring landowners or occupiers in respect of access to the neighbouring land as well.

Part 6: Enforcing removal of apparatus

There are also new provisions relating to third parties who have rights to require removal of electronic communications apparatus other than under the code.

The third party must serve notice in accordance with paragraph 89, notices given by persons other than operators. if the operator serves a counter-notice within 28 days then the third party can make an application to court. If a counter-notice is not served then the third party is entitled to enforce removal of the apparatus.

A new paragraph 41 has also been added to deal with the alteration of apparatus in consequence of street works. Likewise added is a new right to make a separate application for restoration of land, which applies to circumstances where

‘the condition of the land has been affected by the exercise of a code right and restoration of the land … does not involve removal of electronic apparatus from any land’.

The relevant person exercising that right must not for the time being be bound by the code, would have to serve notice in accordance with paragraph 89, on notices given by persons other than operators, and must specify in the notice a reasonable period within which the operator must complete the works. The relevant person will have the right to apply to court for either an order to restore the land, or an order recovering the costs of restoring, if within 28 days agreement has not been reached with the operator on either of the following:

  • whether the operator will restore the land to its condition before the code right was exercised; or
  • at what point the land will be restored.

Code transitional provisions

Existing agreements

The definition of ‘existing agreement’ has been widened to include an agreement for purposes of paragraph 2 – right to execute works etc. – and paragraph 3 – obstructing of access – of the existing code, and not merely paragraph 2(1).

The limitation of code rights for existing agreements has consequently been amended to limit existing paragraph 3 code agreements as well.

Termination and modification of existing agreements

The termination and modification provisions under paragraph 5 of the new code – which, among other things, imposes new continuation of agreement provisions – will not apply to existing agreements when either of the following applies:

  • they are within the security of tenure provisions of the Landlord and Tenant Act 1954; or
  • they are outside the security of tenure provisions of the 1954 act, but the primary purpose of which is not to grant code rights.

Amendments of particular enactments

Landlord and Tenant Act 1954

Schedule 3 Part 2 of the bill proposes to amend section 43 of the 1954 act to exclude new code agreements from the security of tenure provisions of that act by inserting the following subsection to section 43:

‘(4) This part does not apply to a tenancy –

‘(a) the primary purpose of which is to grant code rights within the meaning of Schedule 3A to the Communications Act 2003 (the electronic communications code), and

‘(b) which is granted after that Schedule comes into force’.

Landlord and Tenant Act 1987

Schedule 3 Part 2 of the bill also proposes to exclude a code agreement from the definition of a relevant disposal, for purposes of tenants’ right to first refusal, by adding into the list of disposals that are not relevant disposals in section 4(2) a new subparagraph (db):

‘The conferral of a code right under Schedule 3A to the Communications Act 2003 (the electronic communications code)’.

Outstanding issues

Unfortunately the opportunity was not taken to address some of the key concerns, such as the following.

Definition of land

Land is still defined as excluding electronic communications apparatus. The definition of ‘electronic communications apparatus’ includes structures designed or adapted for use in connection with the provision of an electronic communications network.

As a building is a structure, then a lease of one adapted for the use of an electronic communications network potentially may not give rise to rights under the new code.

Assignment of rights and power to share or upgrade

The draft bill still provides that any agreement will be void to the extent that it attempts to prevent, limit or impose conditions on the ability to assign, share or upgrade apparatus.

Ability to contract out of the code

The draft bill still provides a blanket restriction on contracting out. As such, secure and blue-light landowners will be subject to the code, and will therefore have concerns about the ability to control access to their secure sites.

Likewise, in respect of school or hospital sites where there are vulnerable users and occupiers, the inability to restrict access to operators and their contractors will be of concern.

Consideration and compensation

Under the new code, compensation will be based on compulsory purchase order values.

RICS comment

RICS has been working closely with the Department for Culture, Media and Sport (DCMS) on the aspects of the Digital Economy Bill that relate to the Electronic Communications Code. The code is central to enabling the deployment of broadband and wifi connectivity in the UK and has seen major consultation with the law commission and subsequent overhaul in recent years.

RICS has been advising DCMS expert staff on the code’s integration into the bill as well as certain key professional practice and technical issues such as land valuation, compensation and consideration (paragraph 23). These aspects of telecommunications site valuation and related issues have been a difficult area, but we believe that through collaboration with other bodies, especially the Central Association of Agricultural Valuers (CAAV), we have found a potentially equitable solution.

On the issue of urban connectivity, RICS has collaborated with the City of London Corporation’s infrastructure group, the Law Society and others on the formulation of a new standardised wayleaves legal document (see Well connected). This should dramatically speed up the connection of new urban developments to superfast broadband and smooth the relationship between building owners and providers of telecommunications services and infrastructure.

RICS has also engaged with organisations such as the CAAV, National Farmers Union and the Country Land and Business Association along with the telecoms operators Mobile Broadband Network Limited and Cornerstone Telecommunications Infrastructure Limited to discuss greenfield telecommunications sites and the potential for standardisation of lease agreements.

James Kavanagh is Director of RICS Land Group

Thekla Fellas is head of the Real Estate Litigation team at Fladgate LLP

Further information

Download a complete “Telecoms: legal implications of the Electronic Communications Code” PDF