The 2017 Telecommunications Code: the effect for operators and landowners
The 2017 Code (“the Code”) replaces the 1984 Code which has been considered outdated for some time now. The new Code was brought in by the Digital Economy Act 2017 and came into force on 28 December 2017. The new Code reflects the need to stay up to date with the modern world and the ever increasing need for access to a solid communications network for both individuals and businesses. However, changes will also have an impact on those landowners where telecommunications equipment is based. Both landowners and operators need to be swotting up on the new Code to consider the impact it will have on existing and new agreements.
The Code governs the grant of “Code Rights” to operators. These include installation of electronic communications equipment and ongoing rights of maintenance, upgrade and renewal, entry to land and carrying out works on land in connection with maintenance and renewal. Electronic communications equipment is widely defined and includes any apparatus for use in connection with an electronic communications network. The Code Rights must be used for the purpose of providing the operator’s network and, if not acquired by entering into a written agreement with a landowner, can be imposed by court order. It is unclear whether specific Code Rights need to be granted in individual agreements or whether operators will automatically be entitled to all the Code Rights by virtue of being granted the overall right to have the equipment on the land.
Assignment and sharing: One of the main changes that landowners should be concerned with in the new Code is that any restrictions on the operator assigning the agreement will be void. This means that operators can transfer their agreement to any other operator without the landowner having a say in the matter. Operators are also free to share use of the apparatus with other operators without consent of the landowner. This means landowners may not know if representatives on site are from the original operator or not.
Upgrading: Operators have a great deal of freedom to upgrade the equipment, which could involve attaching additional equipment. Any attempt to restrict this right in agreements will be void. The only caveat to this is that any changes must have no adverse impact on the physical appearance or no more than a minimal impact and no additional burden must be imposed on the landowner. These conditions are broad and open to interpretation. What is meant by “no more than minimal”, for example, is highly subjective.
Termination: The right to security of tenure under the Landlord and Tenant Act 1954 cannot be excluded from a lease with an operator where the lease is primarily for the grant of Code Rights. Some see this as a benefit as it provides clarity to the position on whether the Code or the 1954 Act regime applies to the agreement. The Code provides that the rights will continue even when the term of the written agreement comes to an end. Where a landowner is looking to include the relevant 1954 Act exclusion, it is worth considering whether the lease is primarily for the grant of Code Rights. If there is any uncertainty, the landowner will want to consider whether it is worth including the 1954 Act exclusion. If the exclusion is included and there is uncertainty, an operator could attempt to dispute this at the end of the lease. This would create unnecessary hassle and costs for the landowner at the end of the lease. There are of course still provisions in the Code dealing with termination of agreements, for example in the event of breaches by the operator or intention to redevelop. In such a case the landowner will need to follow specified notice procedures. This is another main change that landowners should be aware of as the notice period has been extended significantly. Furthermore, removal of apparatus is now dealt with separately to termination. There are set procedures in place for serving notices strictly relating to requiring an operator to remove apparatus.
Valuation: We are seeing operators attempting to reduce the rent agreed in lease negotiations prior to 28 December 2017 where the lease is yet to complete. However, consideration must be assessed as the sum representing the market value of the agreement to grant the Code Rights which is actually beneficial to landowners.
Finally, any attempt to contract out of the Code in a written agreement will be void. Therefore, where any provisions in an agreement conflict with relevant provisions of the Code, the Code will overrule whatever has been agreed in the written agreement.
Landowners need to make sure they fully understand the implications of the new Code before entering into negotiations with operators and, where operators are already in occupation, so they can properly consider the impact of the new Code when making plans for their property.