The agreements between landowners and telecommunication service providers such as broadband, cable and landlines already created a significant burden on landowners even before the introduction of the new Electronic Communications Code (the Code) which came into force on 28 December 2017. The Code further strengthens the position of telecommunications operators and introduces a number of significant changes. The three key points that landowners need to be aware of are:
1. Rent – The new ‘no scheme’ valuation method will value the land based on its value to the landowner without the presence of the telecommunication equipment, rather than the operator. This is expected to reduce the rents received by landowners.
2. Upgrading & sharing equipment – Operators are now free to share their equipment with other operators or upgrade their equipment without the landowners consent (provided two preconditions are met). This prevents the practice which occurred under the previous regime where landowners would charge a site sharing fee for additional operators sharing a site or would negotiate an increased rent when additional equipment was added to a site.
3. Assignment – The Code provides that any terms in agreements that restrict operators from assigning their agreement to another operator will be void. The only exception to this is a requirement on the assignor to provide a guarantee agreement. This means that landowners no longer have any control over the choice of assignee, even where the proposed assignee is of limited financial standing.
As it is not possible to ‘contract out’ the provisions of the new Code, landowners entering into new arrangements with operators need to be cautious of the powers over their land that they will be granting to the operator and any landowners with existing telecommunications equipment on their land should be prepared for less beneficial arrangements going forward.