Mobile technology is one of the fundamental building blocks of the country’s digital infrastructure. At the moment, the relationship between landowners and telecoms operators is governed by a Code originally drawn up in 1984 and which, most commentators agree, has long outlived its usefulness given the huge advances in digital technology in the intervening years. In order to incentivise telecom operators to invest in the mobile network, the government has agreed to update the Code as part of the Digital Economy Bill due to be enacted in early summer.
Most of the rights which the existing Code confers on operators are being retained but there is one major change which will affect landowners – the price the operators will pay for renting the land on which their equipment sits. The new Code proposes the introduction of a valuation scheme whereby the value of land is assessed on its value to the landowner rather than to the operator, similar to the system used by utility providers. This means that landowners with a contract under the new Code will not only be paid considerably less rent for having the mobile equipment on their land, they will also not benefit from additional payments from other operators sharing the site.
Other changes include:
- Operators will have a new automatic right to upgrade, and to share apparatus with other operators, without giving landlords options to negotiate new terms or charge extra. This means that landowners will have no say on the size or amount of equipment installed.
- Landowners and operators cannot opt out of the provisions of the Code.
- The Code will not be retrospective and will only apply to contracts after the law has been enacted. Transitional arrangements will be put in place when existing contracts come up for renewal.
- The Code confers rights to enter land for the purpose of maintaining, installing, upgrading and operating equipment.
- The Landlord & Tenant Act 1954 will not apply to agreements under the new Code.
The new Code is expected to come into force once Ofcom has completed its consultation on the proposed code of practice, standard terms and template notices, and amended them accordingly. The consultation period ends on 2 June and the new Code is likely to be operational shortly afterwards. In light of this, if you are proposing to enter into a new arrangement with a telecoms provider you may wish to consider very carefully whether this is something you wish to proceed with. If you already have a lease in place with a telecoms provider which is due for renewal then we strongly recommend seeking legal advice in order to understand the full impact of the new Code on you.
There is also little comfort for landowners wishing to terminate contracts, or not enter into them in the first place as a result of the changes. If an operator deems a particular site is necessary to maintain the network, they can still compel a landowner to agree to terms via a court order. The government has made it clear that the country’s digital infrastructure is too important to be subject to the vagaries of the market which is why the operators have landowners over a barrel.