Proposed Changes to the Electronic Communications Code: What you need to know

The Government is proposing to modify the 2017 Electronic Communications Code. In this article we summarise the key points of interest.

17 March 2022

On 24 November 2021, the Government published its response to the 'Access to Land: consultation on changes for the Electronic Communications Code' ('the Consultation') along with the initial draft of the Product Security and Telecommunications Infrastructure Bill ('the Bill'). Part 2 of the Bill provides for various modifications to be made to the 2017 Electronic Communications Code ('the Code') and associated legislation.

The response to the Consultation is unsurprising, in that responses to the questions posed appear to have largely followed party lines. Operators generally supported wider rights, quicker, more flexible procedures and less formal requirements, with site providers favouring an enforceable code of practice for operators, more certainty in relation to ongoing agreements and no further expansion of operators’ rights. As noted in the Bill’s 24 January 2022 briefing paper, this has resulted in opposing views on the proposed changes.

As a result of the consultation outcome, the Bill provides for a wide range of legislative changes. Whilst these are not yet technically law, the Bill is due to complete the committee stage by 29 March 2022 and it seems likely that many of these changes will be implemented in the upcoming months.

The proposed changes are considered in more detail in the table below:

 

Current Position

Modification

Consequences

Harmonisation of renewal processes under the Code and the Landlord and Tenant Act 1954

  •  There are different procedures for renewing agreements governed by the Code and subsisting agreements protected by the Landlord and Tenant Act 1954 (the '1954 Act').
  • Where a subsisting agreement is protected by the 1954 Act, it must be renewed under the 1954 Act.
  • There are differences between the 1954 Act renewal process and the Code renewal process (including which assumptions apply and the venue for the renewal).
  • The differences between the Code and 1954 Act renewal processes will be substantially removed.
  • The 1954 Act will be amended to adopt the Code valuation assumptions for telecoms leases.
  • The Tribunal rather than County Court is to hear renewals of subsisting agreements under the 1954 Act.
  • Simplifies what is an unnecessarily complicated position.
  • Some circumstances where the modification to the 1954 Act assumptions will reduce the rent on 1954 Act renewal leases.

Clarification of Sharing Rights

  • The right to share is not a standalone Code Right.
  • Operators have an automatic right to share apparatus, which can be subject to only limited restrictions.
  • There is uncertainty as to the extent to which the Tribunal could impose wider rights to share apparatus.
  • Introduction of additional standalone Code Rights to share apparatus and to access land in connection with sharing.
  • The statutory purpose behind the Code is to be amended to include operators enabling the provision of other operator’s networks.
  • An operator under a Code Agreement can permit a sharer to exercise rights under that Code Agreement.
  • Helpful to operators, particularly Passive Infrastructure Sharers, whose business model relies on a wide-ranging ability to share apparatus.
  • Concerning for site providers faced with operators being granted unlimited rights to share or upgrade apparatus located on their land.

Grant of Code Rights over operator occupied site

  • Code Agreements cannot be imposed on a landowner who is not in occupation of the relevant site, including where the site is occupied by an operator.
  • This position poses significant issues for some operators, particularly those holding over under a tenancy at will.
  • There is considerable litigation on this point including pending appeal to the Supreme Court.
  • Where a site is occupied by an operator, code rights will be able to be imposed on a non-occupier exercising powers of management or control over that land.
  • In the absence of such a person, code rights will be able to be imposed on a person whose interest in the land would be prejudicially affected by the exercise of those rights.
  • Will clarify a problematic aspect of the Code.
  • Deprives site providers in certain circumstances of leverage they were able to exercise under the Code (as previously interpreted by the Tribunal and Court).

Unresponsive Land Owners

  • No separate process under the Code to impose agreements on unresponsive land owners.
  • Process introduced in 2021 to impose agreements on non-responsive owners of buildings in multiple residential occupation not yet in force.
  • Rights will be able to be imposed on an unresponsive land owner if a prescribed notice process is followed.
  • Only applies to the installation of apparatus over or under (but not on) bare land.
  • Will assist operators with installing lines over or under land in rural areas.
  • Site providers and/or managers of bare land should be on the alert for notices from operators.

Sharing/Upgrading Rights of pre-Code underground apparatus

  • The automatic right to share and upgrade apparatus does not apply to agreements pre-dating the Code.
  • The controls on sharing and upgrading which are in place in subsisting agreements can still be enforced by site providers.
  • Proposed introduction of limited automatic rights to upgrade and share apparatus to apply retrospectively to subsisting agreements.
  • Limited to underground apparatus.
  • Limited to where no adverse impact on the land and will impose no burden on the other party to the agreement.
  • Specific notice procedure to follow.
  • Similar process for upgrading and sharing apparatus where there is no agreement but the apparatus was installed before 29 December 2003.
  • Should assist fixed line operators in entering into sharing rights under pre-existing apparatus.
  • Owners and managers of land subject to pre-Code agreements concerning underground apparatus should be on the alert for such notices.

Changes to Pending Code Agreements

  • During application to renew or modify an expired Code Agreement, the Tribunal can determine the consideration payable pending the determination of the application.
  • No modification of other terms pending the outcome of the proceedings.
  • The Tribunal will be able to modify other terms of the agreement pending the outcome of the proceedings.
  • When doing so the Tribunal must have regard to all the circumstances of the case.
  • Will allow operators to seek to impose their current standard terms on site providers pending the determination of proceedings.
  • Site providers resisting modified terms proposed by operators should be aware that they may be subject to these terms pending the outcome of proceedings.

Alternative Dispute Resolution (ADR)

  • There are no specific provisions within the Code to encourage the use of Alternative Dispute Resolution (ADR).
  • The Tribunal has shown its willingness to impose costs sanctions on parties which it perceived to have behaved unreasonably in proceedings.
  • Introduction of various measures to encourage the use of ADR, with the onus being on the operator.
  • Operators will be required to consider the use of ADR before applying to the Tribunal.
  • Notices served by operators must note the availability of ADR and explain the consequences of refusing to engage in ADR.
  • Reminder of the importance of ADR in disputes.
  • Operators need to update their standard form notices.

Code of Practice

  • OFCOM is under a statutory duty to provide a Code of Practice.
  • The Code of Practice will address the handling by operators of complaints.
  • Operators should be aware that there will be further guidance on handling complaints.

Key contact

Chris Preston

Chris Preston Partner

  • Real Estate Disputes
  • Real Estate
  • Real Estate Development

Subscribe to news and insight

Burges Salmon careers

We work hard to make sure Burges Salmon is a great place to work.
Find out more