Landowners & telecoms operators: a rapidly shifting balance of power

The introduction of the new Electronic Communications Code in December 2017 was a long overdue update to legislation drafted in a bygone technological era.

Intended to update an ageing regime that was unfit for purpose, the aim of the new Code was to encourage the expansion of network coverage and to ensure that new connections could be made quickly and efficiently whilst protecting the interests of both landowners and telecoms operators.

Has this been the outcome?

Whilst several issues with the previous regime appeared to be resolved by the new Code, many questions have remained and new points of conflict between landowner and operator have since been brought to light. Undoubtedly some previous problems have been resolved, such as the conflict between the Code and the Landlord and Tenant Act 1954, upon which, clarity was extremely welcome. However, there has been a substantial increase in the number of telecoms cases brought before the Upper Tribunal in the last two years.

A few of the most notable recent cases are outlined below:

Interim rights: CTIL v University of London [2018] considered the right of an operator to carry out a preliminary site survey and inspection – a so-called “Multi-Skilled Visit” (MSV). Entry onto a potential site to assess its suitability for hosting electronic communications equipment is a vital first step for operators seeking to establish new sites and increase their network coverage. Despite the lack of express right in the Code for this type of inspection, the Tribunal (and subsequently the Court of Appeal) found that it was an essential requirement for an operator and therefore fell within the ambit of the Code.

Only the occupier may grant Code rights: In CTIL v Compton Beauchamp Estates Ltd [2019] the Tribunal found that only the “occupier” of land may confer Code rights. An operator sought Code rights from the landowner of a site that had previously been leased to another operator. The lease had expired (and was contracted out of the 1954 Act) but the equipment belonging to the first operator remained in situ and in operation, protected from removal by paragraph 21 of the previous Code. The Tribunal held that the first operator remained in occupation of the land with control of the site and that Code rights could only be conferred by or imposed on an occupier of the site. The Tribunal did not have jurisdiction to impose an agreement on a landowner where a third party remained in occupation of the site.

Removal of communications equipment: Evolution (Shinfield) LLP v British Telecommunications Plc [2019] considered a proposed new means of access to a development site. Part of the proposed new access was blocked by an operator’s equipment. The Code contains rights for a landowner to require removal of electronic communications equipment (at the operator’s cost) where such equipment interferes with or obstructs a “means of access” to or from neighbouring land where there is no Code right to obstruct the same. However, the Code rights apply only to a current existing access, not a proposed access. This meant that the operator could not be obliged to pay for the removal of the equipment and that any removal and relocation costs would fall to the landowner.

1954 Act vs the Code: In CTIL v Ashloch and another [2019] the Tribunal confirmed that Code rights could not be imposed where an operator was already in occupation under a 1954 Act protected tenancy. For an operator to obtain a renewal under the Code they must first apply in the County Court for a new tenancy under the 1954 Act. When that new tenancy is close enough to its contractual termination, the operator may give 6 months’ notice using Part 33 of the Code and seek a renewal under Part 5.

Level of compensation payable to a landowner: EE Ltd and another v London Borough of Islington [2019] was the first case that involved the imposition of a lease on a landowner under the new Code. The case confirmed that the Tribunal had jurisdiction to impose an agreement by way of lease (as opposed to wayleave or licence) and that this would bind the parties without need for any further documentation. This was also the first decision on the meaning and effect of the new provisions for consideration and compensation. The revised valuation criteria including the ‘no-network’ assumption will tend to result in lower valuations whenever an agreement is imposed by the Tribunal.

Redevelopment grounds: In the case of EE Ltd and Hutchison 3G UK v Meyrick 1968 Combined Trust of Meyrick Estate Management [2019] the Tribunal held that a landowner had not demonstrated the necessary intention to redevelop as against a claim for Code rights by an operator. The two stage test employed under section 30(1)(f) of the 1954 Act as set out in the cases of Cunliffe v Goodman and S Franses Ltd v Cavendish Hotel (London) Ltd was utilised here. The consistency of approach to redevelopment provides useful clarity for future applications

These cases have provided valuable clarity and resolved some of the ambiguity from the new Code but one cannot fail to recognise that a pattern has emerged. The decisions generally favour the operators over the landowners. This is possibly not surprising given that the Code was intended to improve electronic communications services for the benefit of the public but it may, understandably, be a cause for concern for landowners and developers. Potential Code related issues should now be high on a developer’s list of priorities when surveying a site and both money and time should be set aside to deal with any relocations required to enable construction of the development.

Proposed changes

Advances in technology have meant that operators face ever increasing demands from consumers. To further promote easier, faster expansion of necessary network infrastructure the Queen’s Speech, delivered on 19 December 2019, included a proposal to introduce the Telecommunications Infrastructure (Leasehold Property) Bill. This aims to:

• Roll out faster ‘gigabit capable’ broadband across the UK to achieve nationwide coverage
• Amend Building Regulations to require that all new built homes have ‘gigabit capable’ broadband connections
• Improve access rights for telecoms operators and make it easier for them to install broadband infrastructure where landlords ignore repeated requests for access

The proposed changes will include a quicker, cheaper tribunal application process for telecoms operators. Interim Code rights may be obtained where a service request of an operator has been made and a land owner has repeatedly failed to respond to formal notices from the operator seeking Code rights. Any such interim Code rights will however be granted for a maximum of 18 months. To continue beyond this initial period the operator will need to enter into an agreement with the landlord or apply to the Tribunal using the existing Code provisions.

Whilst we await draft provisions, it will be interesting to see how far the Government extends Code rights in favour of the operators. However, given the ever increasing pressure from the public for more extensive and faster network coverage, it is likely that landowners rights are to be further restricted.