CONTROVERSIAL NEW LEGISLATION TO GOVERN THE RELATIONSHIP BETWEEN MOBILE OPERATORS AND PROPERTY OWNERS

It has been announced that the government is finally going to tackle reforming the Electronic Communications Code - the law which covers equipment used to transmit electronic communications, including mobile phone signals. This announcement follows a number of consultations on the current (and widely-criticised) Electronic Communications Code and the publication last year of a proposed revised code.

BACKGROUND

Mobile operators have been criticised for continuing poor coverage in some areas, but they argue that the current Code - which gives them rights to put equipment onto land including rooftops - works too slowly. They have also been putting pressure on the government to help them reduce costs, in return for investing substantial sums in improving coverage.

The current Code is also disliked by many property owners, who complain about the restrictions they suffer when an operator wants to put equipment onto their land or building. Developers in particular can lose valuable time since it is not uncommon for it to take around 18-24 months to secure the removal of electronic communications apparatus from a site due to the complexity of the legislation.

The government recognised some years ago that the Code - introduced during the privatisation of British Telecom in 1984 - needs to be brought up-to-date to reflect changes in technology and enable quicker roll-out of communications networks. However, the few efforts made during recent years to bring in a revised Code have failed to get off the ground.

This latest announcement signals that this failure may finally be addressed; the government has stated that legislative changes will be taken forward "at the earliest possible opportunity". However, the draft Bill previously published had a number of problems which did not find favour with mobile operators or property owners. There were particular concerns when the previous government tried to rush legislation through Parliament just before the 2015 General Election. Since then, both operators and property owners have called for a considered approach in order to achieve the delicate balance between their interests.

LIKELY CHANGES

From the information published so far, the key changes are likely to be:

  • Retrospectivity: Although there will be certain transitional arrangements, the new Code will not have retrospective effect and therefore should not affect agreements already in place (but will apply to any new agreements which replace them).
  • Contracting out: Parties will not be permitted to "contract out" of the new Code or exclude any of its provisions. However, it is expected that the new legislation will remove the overlap in statutory protection which can currently arise with the Landlord and Tenant Act 1954.
  • Land v apparatus: The government has confirmed that the focus of the Code should be on enabling access to land in order to install communications infrastructure, not enabling access to the infrastructure itself. (The latter is governed by existing regulation, i.e. Communications Act 2003.) Apparatus will therefore not be included within the definition of "land" under the new Code and the intention is that its ownership should not change just because of its attachment to land.
  • Test for imposing rights: It seems likely that the government will change the current test for deciding whether to override a property owner's rights if it will not voluntarily agree to the installation of apparatus. This will probably involve assessing: (i) if the property owner can be compensated for its loss from Code rights being imposed and (ii) whether the loss is outweighed by the public benefit in having access to the relevant services (including a choice of services).
  • Rents: Although the government accepts that property owners should receive "fair payment" for the use of their land (in addition to compensation for any damage/loss of value), it intends to change the valuation approach so that it's based on compulsory purchase principles. This will limit rents by disregarding the value of the land to the operator. This approach reflects the government's decision to prioritise digital communications and its concern that the rents currently paid by mobile operators are significantly higher than for utilities etc.
  • Upgrading/sharing: The new Code will include automatic rights for operators to upgrade and share apparatus without a landlord's consent or extra payment in certain circumstances, in particular where there is "minimal adverse visual impact". This is designed to allow operators to update their networks quickly when new technology becomes available and to make efficient use of infrastructure through sharing.
  • Removal: The latest announcement is rather quiet about changing the procedures for the removal of apparatus, but developers in particular will be hoping that the revised Code offers an improved process. The government's previous proposals allowed for operators to be given 18 months' notice, to allay operators' fears about network security, but included redevelopment as a ground for seeking removal.
  • Lift & shift: The revised Code is unlikely to include the additional "lift and shift" rights currently given to property owners under paragraph 20. In its view, there is no need for these because suitable provisions can be negotiated (or imposed) within any new agreement granted to the operator.
  • Land registration: The government considers that the relationship between the Code and land registration does not require reform and has confirmed its view that Code rights are binding on purchasers of land without any need to register them.
  • Dispute resolution: The government has noted the widespread concerns about Code disputes being resolved in the county courts and has indicated that it will shift dispute resolution to the Lands Chamber of the Upper Tribunal for most issues. It also intends to provide measures to allow early access to sites for operators where the only dispute relates to price.

COMMENT

The existing Electronic Communications Code has caused real practical difficulties for mobile operators and property owners over decades. The government is understandably concerned that the current law is hampering the rollout of technology and limiting the ability of communications services to meet the needs of the digital era. However, there is an important balance to achieve between mobile operators and property owners and it remains to be seen whether the government will take their feedback on board or whether the replacement Code will simply lead to a new set of issues for argument - not to mention further delays in the rollout of technology and increasing costs for both sides.