Site providers and the Code: What you need to know

The Electronic Communications Code (the Code) governs telecoms operators’ rights to install and use apparatus on UK land. It aims to increase and improve connectivity across the country. 

As a landowner or developer, you should understand operators’ rights under the Code. Agreements governed by the Code (which may include familiar property agreements such as leases and wayleaves) are subject to additional protection to those outside of the Code. If you own or occupy land or buildings on which an operator’s electronic communications apparatus is situated, you may be a site provider under the Code. 

Overview of the Electronic Communications Code

The Code introduced processes which telecoms operators can use to acquire and protect wide‑ranging rights to support network rollout, including rights to access land, install apparatus, and upgrade and share equipment.

When an operator approaches you to enter into a Code agreement granting them rights over your land, they usually provide a draft standard-form agreement.  They may have previously approached you to negotiate heads of terms, and they may request access to the property for a survey to assess its suitability for their equipment. Various individuals with telecommunications expertise may attend such surveys and these are known as Multi-Skilled Visits or MSVs.

If the operator has served you with a statutory notice under the Code and no voluntary agreement has been entered into within 28 days, the operator may apply to the Property Chamber of the First-tier Tribunal (the specialist court responsible for certain property matters, including Code applications) for Code rights to be imposed. 

In order to impose Code rights on you, the Tribunal must be satisfied that:

1. any prejudice caused to you by the right being imposed is capable of being adequately compensated by money; and
2. that the public benefit likely to result from the right being imposed outweighs the prejudice caused to you.  In this context, “public benefit” primarily means access to a choice of high-quality electronic communications services.

This is known as the paragraph 21 test. 

Additionally, the Tribunal cannot impose Code rights if you can show that you intend to redevelop the land or neighbouring land and could not reasonably do so if the rights were imposed.

Because of the operators’ ability to impose Code rights and the provisions within the Code limiting the payments which will be made to site providers, agreements granted or imposed under the Code are generally more operator friendly and provide much lower rent than those granted before 2017.

This can feel onerous to site providers. 

Common Misconceptions

Misconception 1: Can’t I just say no?

Refusing to enter into agreements with operators can result in you becoming embroiled in costly Tribunal proceedings.

Whilst operators will generally agree to concessions where they can be convinced these are necessary for the land in question, they are usually reluctant to depart from their standard terms. Where the Tribunal has previously decided that operators should have the benefit of certain rights, it can be particularly difficult to negotiate concessions from these rights.

Where parties cannot agree, the Tribunal may impose Code rights on the terms it thinks fit.

In practice, if you fail to engage with the operator, this will often result in greater cost and less favourable terms in any agreement.

Misconception 2: Won’t they take over my land?

Site providers are often understandably concerned by the broad scope of the rights sought by operators in their standard term agreements and fear a loss of control over their land. However, by negotiating the terms of an agreement and demonstrating why the operator’s rights need to be more limited for the land in question, you can retain such control as is necessary over the operators’ use of your property. Where you are likely to carry out works in the vicinity of the site during the term, we often recommend including a lift & shift clause, which enables you to request that the operator relocates its equipment within your site in certain circumstances.

Misconception 3: My tenant can’t grant the rights, can they?

This will depend on the circumstances. Code rights generally need to be granted by the occupier of the property. However, the Tribunal can also order that others with an interest in the land are bound by a Code agreement. It is possible that an operator will approach the tenant/occupier, the landlord or both to enter into a Code agreement.

Careful consideration should be given to the ownership structure and any tenancy obligations before agreeing to enter into a Code agreement, and you should bear in mind that your tenants/landlord may be approached directly by the operator.

Misconception 4: What’s the problem, its only a 10-year term…

The Code rights will not automatically expire at the end of the lease term and will instead continue until terminated using the statutory termination procedure in the Code. This requires you to give at least 18 months’ notice and make out one or more of the statutory termination grounds. The operator can challenge the grounds for termination and apply to the Tribunal to impose a new agreement.

Interim Code rights only apply for a specific period or until the ocurrence of a specific event, but they cannot be agreed consensually with operators and instead must be imposed by the Tribunal. They are usually imposed for a short time and are often used to facilitate access for MSVs.

Misconception 5: But it’s an old lease…

Agreements predating December 2017 (when the Code came into force) are subject to transitional provisions which apply many of the provisions of the Code. It is important to carefully consider which statutory regime might apply to such an agreement, especially if you intend to terminate it, as the process will differ depending on whether or not the Code applies. Where the Code applies to an agreement, timescales for termination and removal of equipment could exceed two years and should be factored into any development programme.

If You’re Approached

Our specialist Code team has extensive experience negotiating Code agreements. If you receive an approach from an operator requesting a new Code agreement, or aiming to renew an existing lease relating to telecoms equipment, we can advise on the terms and on the prospects of resisting or terminating such agreements.

If you receive any notice under the Code, you should seek legal advice as soon as possible. Notices are time-sensitive and, if no response is received, may lead to costly Tribunal proceedings.

Please reach out to Caroline Hickey, Rob Bailey, or Perry Swanson for further information or advice.

Next Time…

Look out for our next article: Valuation: Rent vs Consideration in Telecoms Agreements