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The new Telecoms Code – is it an upgrade?
Real Insights - Property Update

Real Insights - Property UpdateIssue 24 | December 2017

Date
07 December 2017

Johnny Kelly Managing Associate, Professional Support Lawyer

The new version of the Telecoms Code (full name: Electronic Communications Code) is expected to come into force this month – although the exact date had not been confirmed when we went to press.


The new Telecoms Code – is it an upgrade?

The new version of the Telecoms Code (full name: Electronic Communications Code) is expected to come into force this month – although the exact date had not been confirmed when we went to press. 

The current version dates from 2003, so is no longer fit for purpose. The new code aims to improve network coverage by increasing investment in digital infrastructure.

Some aspects of the new code will apply to existing wayleave agreements, while others will apply only to new agreements.  As before, parties to an agreement generally won't be able to contract out of the code. 

The new code includes five key changes:

  1. Termination

A landowner can still serve notice to terminate an agreement.

The crucial difference is that, under the new code, the landowner must give the operator 18 months' notice, dramatically longer than the 28 days previously required. This new period will broadly apply to existing agreements, as well as new ones, with some exceptions.

The operator will now have three months to serve a counter-notice, and a further three months to start court proceedings. The court will order apparatus to remain if satisfied that any prejudice can be adequately compensated in cash and is outweighed by the public benefit. 

The court may order the termination of the agreement if the landowner intends to redevelop and could not reasonably do so if the apparatus were allowed to remain.

  1. Compensation reduced?

If the court imposes a telecoms agreement on a landowner, it will (as before) order the operator to pay for this. 

Under the new code, the basis for calculating the compensation is expected to produce lower valuations than under the old code. Parties will still aim to negotiate the amount, but with one eye on what would be payable under the code, so this is likely to reduce payments to landowners.

  1. Sharing and upgrading allowed

An operator will automatically be able to share or upgrade its equipment without the landowner's consent and without any additional payment, provided:

  • there is minimal adverse visual impact; and
  • this does not have an adverse effect on the landowner's enjoyment of the property.

This change applies only to new agreements entered into after the revised code comes into force.

  1. Assignment without consent

An operator will be able to assign an agreement covered by the new code to another licensed telecoms operator, without the landowner's consent.  

This change also applies only to new agreements. The agreement cannot restrict this right, but can require the assignor to guarantee the obligations of the assignee. 

  1. Landlord and Tenant Act 1954 overlap

The current overlap between code rights and the 1954 Act is to be removed. At present, some telecoms leases are protected both by the 1954 Act and by the code. So a landowner has to serve two separate notices (which sometimes conflict) and go through the termination procedures under both regimes.

Under the new code, any tenancy which has code rights as its primary purpose will be automatically excluded from the security of tenure provisions of the 1954 Act.

Practical effect?

There is a perception that the new code shifts the balance away from property owners and towards telecoms operators. This has led to the new code coming under criticism in some quarters, and it will undoubtedly make it more difficult for landowners to remove telecoms operators from their land. 

Although most people would be in favour of improved mobile coverage and broadband coverage, will the new code actually succeed in delivering this?