The Queen’s Speech on 18 May 2015 announced that a new Telecoms Code would be brought before parliament. Having consulted on this for a number of years the Government has set out its proposals. The Government’s aim with the new Code is to ensure continued investment in the digital communications network. It also wants to ensure that the new Code is capable of accommodating changes/advances as they occur. In doing so it has radically overhauled the existing Code, conferring new powers on operators, significantly changing the negotiating position between landowners and operators, and potentially reducing the commercial incentives for landowners to accommodate operators. Below is a summary of the headline points;
Payment for code rights
The Government is proposing that operators pay fees in line with other utility providers. Currently most operators pay a market rent negotiated between both parties. The Government does not consider that going forward land owners should have a share of the economic value created by the services an operator offers, rather that the consideration be valued on a “no scheme” basis. They hope that by changing the valuation approach this will encourage the continued roll out of the network and greater investment.
It will now be possible for operators to upgrade their equipment and share their sites without the permission of a landowner. In addition no value will be attached to these rights. This is a huge change for landowners who have previously been able to restrict sharing arrangements and upgrades and negotiate at arm’s length with the operators for such rights. Landowners may therefore struggle to know exactly what equipment is on their buildings and who owns it. The finer detail of these proposals is awaited.
Contracting out of the new Code will be prohibited. This means that any operator will have the protection of the Code and this will not be capable of being circumvented.
Registration of code rights
Rights under the new Code will not be registrable but will bind successors in title. For operators this gives security. However for landowners when acquiring land, inspections will be very important as otherwise there may be no means of identifying what equipment is on a piece of land, nor who owns it.
The Government’s proposals are a wholesale reform to the existing Code. Of course it is important that the UK remains at the cutting edge of the digital era and that continued investment is fostered. Landowner’s may however consider it unfortunate they have not taken the opportunity to strike a different balance between operators and landowners. It is to be hoped that the landowners do not close ranks and become reluctant to accommodate operators in light of the new powers they will obtain. This would undermine the Government’s intentions.