Summary and implications

Finally it has been announced that the legislation that deals with telecommunications apparatus and property (the Electronic Communications Code (the Code)) is to be reviewed by the Law Commission.

  • The Code has been criticised greatly by landowners’ lawyers over the years not just because of its confusing drafting but due to the uncertainty it creates.
  • It is not yet known whether the changes to the Code will benefit land owners but the initial feedback is positive.
  • No matter what happens to the statute, the mobile network is under pressure and it is clear that operators need different types of sites to keep up with the demand for mobile internet.

We attended this year’s RICS Telecoms Forum Conference, held last week and this Briefing reviews:

  • the views from that conference;
  • the current position under the Code;
  • the prospects for change to the Code.

Timeline for change

After many years of frustration with the poorly drafted and arguably “operator biased” Code, it was announced in July 2011 that the Law Commission will review the drafting and the method by which disputes between land owners and operators are resolved under the Code.

In the recent case of Geo Networks v Bridgewater Canal Co [2010] EWHC 548 (Ch) Lewison J gave a scathing review of the Code:

“The Code is not one of Parliament’s better drafting efforts. In my view it must rank as one of the least coherent and thought-through pieces of legislation on the statute book.”

Work has begun on the review of the Code and a consultation paper is expected in autumn 2012 with the hope that the Law Commission will publish its recommendations in spring 2013. Various representatives from the industry (including the members of the Law Commission) discussed in depth the ramifications of the Code and the changes required last week at the RICS Telecoms Forum Conference 2011.

The current Code position

Landowners must be careful as the operator’s powers under the Code apply as soon as any telecoms apparatus (such as masts, broadband cables and antennae) is installed upon a property with the permission of the landowner – whether or not there is a written agreement in place between the parties.

Paragraph 21 of the Code provides that landowners cannot enforce their right to require the removal of telecoms apparatus without first going through Code procedures. The operator’s right under the Code to retain its apparatus on land and buildings continues whether or not the term of a telecoms lease or an agreement relating to the apparatus has come to an end. In order to remove the telecoms apparatus the landowner must serve a notice on the operator. The operator has the right under the Code to serve a counter-notice protecting its right to retain the apparatus. Once a counter-notice has been served, if the landowner cannot negotiate with the operator, the only way to secure removal of the apparatus is via the courts. The court’s decision will be based on, among other things, whether the apparatus is required for the public network.

Paragraph 20 of the Code allows landowners to serve a notice on an operator where it is a necessity that the apparatus is removed to enable an alteration or a development of the property. Again the operator has the right to serve a counter-notice and the landowner will have to go to the courts to enforce their right if a counter-notice is served. The court will again, among other things, look at whether the removal of the apparatus will affect the public network but they will also consider the evidence as to whether the removal of the apparatus is necessary. While a court may decide in a landowner’s favour, going to court is expensive and can cause considerable delay and uncertainty to any development plans for the property.

The Code includes provisions precluding parties from contractually agreeing to “contract out” of certain parts of the Code (including paragraph 21). We recommend that drafting is included in any telecoms agreement whereby the parties agree that the operator will not serve a notice under paragraph 20 of the Code. The Code does not contain wording that precludes “contracting out” of paragraph 20. If it is necessary for the apparatus to be removed for alteration or development of the property we believe that if telecoms agreements include our drafting a landlord will not need to rely on the courts to remove the operator’s apparatus. Our drafting has not been tested in the courts but at the conference the speaker on the Code confirmed that he believed such innovative drafting would work.

How will the Code change?

It is not yet clear what stance the Law Commission will take and which parts of the Code will be amended. Landowners are hoping that the revised Code will include clear drafting to allow the parties to “contract out” of the security provisions in a similar way that tenants can for business leases under the Landlord and Tenant Act 1954.  

The operator’s representatives at the conference made it clear that they too are keen that the Code is reviewed. Their hope is that the statute will be amended to give them powers similar to those of the main utility companies. The COO of Geo Networks argued that the Code and the legislation behind it should mirror the Electricity Act. Such amendments to the Code would result in a greater ability for the operators to demand access to property, pay less for it and pay lower damages and losses caused by the installation.

The consensus in the room was that any amendments to the Code would be more likely to concentrate on the drafting issues, the notice procedure and the confusing security issues.

Industry update

In our previous briefings we have reported on the industry’s opinion as to whether more property telecoms sites will be needed in the future. In 2010 the message from the operators was that they no longer needed all the sites that were commissioned and they would pick and choose the sites that suited them best. This has happened to an extent but the market has shifted again.

The message this year is that mobile internet usage is putting the networks under far greater pressure than the operators had foreseen and that they will need many telecoms sites to stop the networks from imploding. The mast network remains important for the telephonic function but now data centres and “cloud” farms are required to cope with the volume of net-based information. It has also been suggested that many, many more smaller cell sites boosting the networks will be required.

What next?

Unfortunately, we do not have a crystal ball and cannot see whether the Law Commission will radically change the Code but it is clear that there is finally some momentum in favour of landowners. In the meantime, the Code still subsists and due to market requirements there will be a significant number of telecoms agreements that will need to be entered into prior to the reform. We recommend that any telecoms heads of terms are carefully reviewed and our drafting regarding the removal of the apparatus is included in any documentation.