The UK Law Commission has published its report on reform of the Electronic Communications Code following its consultation which ended in October 2012.
The Code regulates the legal relationship between landowners and telecoms operators and allows the acquisition of rights over land, sometimes without the consent of the landowner, for the purposes of housing telecoms apparatus.
This area of law has long been in need of reform and was famously summarised by Lord Justice Lewison as "one of the least coherent pieces of legislation on the statute book". Unnecessarily complex and unclear, one major criticism has been an inability to reconcile Code rights with other statutory provisions (in particular the security of tenure regime for business premises under the Landlord and Tenant Act 1954). Indeed, there is evidence to suggest that the Code, in its current form, is actually making the rollout of electronic communications more difficult.
The Law Commission, a statutory independent body created to keep the law under review and recommend reform where needed, has recommended a complete overhaul of the Code. The proposals, if implemented, will not result in a wholesale change in the law but rather a rewrite of the existing rules in an effort to remove uncertainty. The Commission has also sought to "future proof" its recommendations against changing technology so that any revised Code does not become quickly outdated.
The report makes interesting recommendations in two previously contentious areas. The first concerns valuation: adopting RICS valuation principles to make market value (the price payable to landowners) and compensation (payable to other affected parties, typically neighbours) more easily ascertainable. The second deals with security of tenure for Code operators.
Importing concepts from the 1954 Act, it is proposed that:
- all leases with the principal purpose of installing telecoms apparatus should automatically be disqualified from security of tenure under the 1954 Act;
- operators will instead be given Code rights to keep their apparatus in situ beyond expiry of the contractually agreed term; and
- landowners will be able to recover possession on 18 months' notice provided that they can meet one of the Code's grounds for possession (broadly, persistent or substantial breaches by the operator, an intention to redevelop, or where the operator no longer qualifies for Code rights).
The Commission has stopped short of recommending a right for the parties to contract out of Code rights, which will come as a disappointment to some landowners. However, public policy dictates that there should be a degree of permanence attached to telecoms sites and a contracting-out regime could have led to a predominance of short-term arrangements.
If adopted, the new Code should encourage more landowners to enter into consensual agreements (often in the form of leases) with operators for the installation of telecommunications apparatus, which should result in fewer operators applying to the Lands Tribunal for the imposition of Code rights. Particular advantages are:
- Code rights granted by a lease of more than seven years will be registrable at the Land Registry, giving notice to anyone dealing with the land;
- the codified security of tenure provisions will mean that landowners can enter into fixed term agreements in the knowledge that they can bring these to an end on contractual expiry in certain circumstances; and
- the unfettered right for operators to assign their Code rights (subject to guaranteeing the obligations of the incoming operator) and to share sites (subject to there being no enlargement of the space occupied) should reduce documentation to a single lease or agreement, accompanied by guarantees given on an assignment.
All parties who have had to deal with the existing Code will welcome the proposals in the Law Commission's report. Time will tell whether the Government adopts all of the Commission's recommendations.