The telecoms code: Was it worth the fuss?

January 30, 2019

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The Electronic Communications Code aims to clarify the relationship between telecoms operators and the landowners who host their apparatus. Justine Ball associate and telecoms specialist at law firm Shakespeare Martineau, examines the impact of the latest version

It has now been just over a year since the new Electronic Communications Code was introduced and landowners have been raising some pressing concerns. While the code was initially intended to clarify and regulate relationships between Ofcom-approved telecoms operators and the landowners who site their apparatus, certain provisions have placed the latter in a precarious situation.

This has left both operators and landowners wondering how the code has been clarified, how this has changed landowners’ rights and what they can do to abate any potentially negative effects of the new legislation.

The original Electronic Communications Code was introduced in 2003 but was widely viewed as a muddled, confusing piece of legislation, which failed to offer either party any real clarification over their position. Considering this, and in light of the government’s objectives surrounding nationwide super-fast broadband implementation, the new code was introduced on 28 December 2017.

In terms of clarity, there is no denying that the new code has taken a big step in the right direction. It offers a framework that regularises relationships and clearly outlines the rights that operators do and do not have when it comes to occupying private land. However, with this clarification, it has also raised a number of potential headaches for landowners.

One reason for this is the inclusion of a valuation methodology in the code, which determines how much rent operators should be charged. Previously, costs were based on market valuations and private agreements, with no clear set of principles.

It was estimated that the new provisions relating to valuing rent under the new code would decrease rents by around 40% but in actual fact, the changes have seen rents plummet to a far sharper degree.

For instance, some leases previously worth £30,000 per annum are now scraping just £200 for the entire lease term. This has caused a great deal of concern amongst landowners and brought a number of negotiations to a standstill. It has also made those landowners who are currently not in an agreement more hesitant to engage with operators with regards to future deals.

With this in mind, it is unsurprising that landowners are nervous when they receive “access letters” from operators, asking for “confirmation” to access and survey their land and/or to impose a new telecoms lease upon them.

It is crucial to seek advice promptly – operators are entitled to serve a notice requesting access but are not automatically entitled to it. Similarly, a strict procedure has to be followed before an operator is entitled to access land or can seek to impose a new telecoms agreement upon a landowner. Therefore, landowners should not assume that they must comply with operators’ requests without challenge.

Beyond this, perhaps the most pressing headache to have arisen from the new code is the longer period of notice required to be given to an operator before they are expected to vacate a site. The new code requires 18 months’ notice be given, one of the longest periods of statutory notices for commercial leases in the UK.

This makes sense from an operator’s perspective as it provides them adequate time to identify an alternative site, complete suitability assessments and install the apparatus, but for landowners it can seriously hamper any plans to redevelop the land.

However, it is not all doom and gloom for landowners and there are in fact a number of potential workarounds, meaning they may be able to avoid serving such a lengthy term of notice.

First and foremost, it is important to understand the exact terms of any current agreement, as some may not actually be covered under the new code. Instead, some agreements may be covered by the Landlord & Tenant Act 1954, under which only a six to 12-month notice is required.

There are also other grounds for termination which can be relied upon under that act, such as requiring the land for its own business usage. Further, the wealth of case law behind the Landlord & Tenant Act 1954 means that outcomes are more predictable than under the new code.

If the agreement does come within the remit of the new code then there could still be avenues to explore. For instance, the transitional provisions in the code stipulate that should an agreement come to an end between 28 December 2017 and 27 June 2019, the landowner may only have to give notice equivalent to the time between the code’s introduction and the agreement’s end (with a minimum of three months).

For example, if an agreement came to an end in January 2018, the landowner would only have to serve three months’ notice; if it came to an end in December 2018, they would have to serve 12 months, both far more manageable options.

Alternatively, landowners should consider that operators are always more likely to agree to vacate a site if they have a viable alternative site lined up. If a landowner is able to offer an alternative placement for the apparatus, perhaps at a peripheral location on the same land or on neighbouring land, this is likely to ensure a swifter vacation.

The new code has introduced the concept of “Interim Code Agreements”, to be utilised for precisely this scenario. These agreements allow operators to hold a temporary base on a shorter contract, while landowners are afforded the opportunity to give only one month’s notice at the expiry of the agreement for the operator to vacate.

However, this process is driven by the operator and any agreements must be granted by the tribunal. This is because the operators are, in effect, agreeing to give up their right to receive an 18-month notice.

Therefore, these are only viable following thorough negotiations and most likely where operators are given long-term assurances of rehousing on an alternative site. If this is possible, these agreements can be an effective stopgap, allowing for the best of both worlds for operators and landowners with redevelopments in the pipeline.

Any landowners who are unsure of exactly where they stand with regards to the new code and their rights should consult their advisers as early as possible. By sending their advisers a copy of the relevant telecoms agreement, they can assess what grounds there may be for any planned termination and what the timescale is likely to be. For any landowners looking to enter a new agreement, engaging an experienced telecoms valuation specialist will best position them to broker a good deal.

What the new code has offered landowners in clarification, it would seem to have taken away in practical measures and immediate rights in their relationships with operators. However, by assessing all available options, engaging in thorough negotiations and running through any current or proposed agreements with key advisers, landowners can ensure that their land truly does remain their own.