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Talking sense? Key changes to the Electronic Communications Code

The Digital Economy Act 2017 received Royal Assent just before the recent general election. Among other things, it includes a new Electronic Communications Code (“New Code”) to replace the current regime under the Telecommunications Act 1984 (“Old Code”). The Code is not yet in force and the government has not confirmed a date to implement it.

The Old Code provides security of tenure for telecommunications operators in relation to agreements with landowners that allow the operators to place telecommunications apparatus on the landowners’ land. Such agreements may be made consensually or by the operator applying to court for an agreement to be imposed on the landowner.

The Old Code has been criticised for being poorly drafted, leading to uncertainty and litigation, and not taking account of other regimes (such as the security of tenure provided to business occupiers by the Landlord & Tenant Act 1954). The New Code is intended to provide a clearer framework for operators and landowners and to improve investment into communications infrastructure.

Six key points

1. Rent / Agreement fee

Under the Old Code, the rent for telecommunications agreements is often weighted in the landowner’s favour. However, under the New Code, the rent will be determined by reference to an unbiased open market rent. This may have the effect of depressing rents.

2. Part II Landlord and Tenant Act 1954 (“1954 Act”)

Agreements made under the New Code are now excluded from protection by the 1954 Act. Previously, where a telecommunications agreement was also a lease, the occupier could benefit from dual security of tenure under the Old Code and the 1954 Act, unless the agreement was specifically contracted out of the 1954 Act. This could make it difficult to terminate telecommunications agreements, and lead to confusion over the correct procedure to follow and the timing of termination. Under the New Code, the operator’s rights are determined solely by reference to the New Code.

3. Contracting out

It will not be possible to contract out of the security of tenure provisions in the New Code, so all operators will benefit.

4. Assignment, upgrading and sharing apparatus

a. Operators will be able to assign the agreement without the landowner’s consent and any provisions which prevent this will be invalid. However, the landowner can require the old operator to guarantee the obligations of the new operator as a condition of an assignment.

b. The operator can upgrade their equipment or share their equipment with another operator without getting the landowner’s consent if:

i) the works will have no more than a minimal adverse effect on the appearance of the apparatus; and

ii) there will be no additional burden on the landowner (including additional loss or expense).

c. Both of these changes will restrict the landowner’s ability to extract additional value from the agreements and make them more flexible for operators.

5. Land registration

New Code agreements will not have to be registered at HM Land Registry. This may cause practical difficulties for landowners/purchasers of land in keeping track of which parcels of land are bound by New Code agreements.

6. Old Code agreements

The New Code will convert agreements under the Old Code to New Code agreements subject to some exceptions and modifications for such agreements.

Practice points

It is important that both landowners and telecoms operators are aware of the differences and changes between the Old Code & the New Code. Whilst the New Code is not in force yet, it may be possible to take steps now so that any new telecoms agreements will not need to be entirely overhauled to comply with the New Code.

James Walters. Solicitor 

Published: 24 June 2017

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James Walters