The UK Government has stated a clear ambition for the UK to be a global leader in the next generation of mobile technology.
The Digital Economy Act 2017 introduces a new legislative framework to address the requirements of both businesses and individuals that demand connectivity in their daily lives.
The new legislation will radically overhaul the Electronic Communications Code, which governs the relationship between landowners and mobile network operators.
Gillian Cowie, telecoms lawyer at Wright, Johnston & Mackenzie LLP, explains the main changes that landowners and operators should be aware of introduced by the Act.
Operators’ rights
This substantial change means that operators will be permitted to assign, automatically upgrade and share apparatus with another operator. While previously landowners could potentially earn extra revenue from site sharing, the new Code will allow operators to share the apparatus at no extra cost. If an agreement contains provisions that limit or prevent assignation, upgrading or sharing, such provisions will be void.
The provisions are however subject to conditions including such upgrading or sharing having no adverse impact (or no more than minimal adverse impact) on the site’s appearance, and the upgrading or sharing is not to impose an additional burden on the landowner.
Court has power to impose agreements
The rights afforded to operators have been strengthened in the revised Code to boost investment in Communications Infrastructure. Telecoms operators can apply to the court to impose an agreement between the landowner and the operator to confer a code right on the operator (ie. to create an agreement using statutory powers rather than by agreement between the parties).
The Court may make an order if both of the following conditions are met:
- If the prejudice to the landowner can be adequately compensated by money; and
- Will the public benefit outweigh the prejudice to the landowner. In deciding this condition, the court must have regard to the public interest in access to a choice of high quality electronic communications services.
Land valuation
In circumstances where an agreement is imposed by the court, the rent or consideration for possessing the land is to be calculated on the basis of market value.
The Code contains detailed provisions for assessing the market value, and it is to be calculated on the value of the right to the landowners and not relating to the provision or use of an electronic communications network.
Some believe this is an attempt to re-create a compulsory purchase system as used for other utilities and may result in reduced rents. Others are of the view that landowners will not see their rents reduced and in fact, rent will actually increase. What will actually happen in practice and how this will affect landowners remains to be seen.
Termination
The new Code contains new provisions in respect of termination which arguably will make it more difficult for a landowner to terminate an agreement.
Landowners must give 18 months notice to the operator stating the statutory grounds for ending the agreement and providing a specific date for terminating the lease. The specific statutory grounds must include: substantial breaches by the operator of its obligations, or persistent delays in making payments, or an intention to redevelop. As per the existing Code, operators have the ability to submit a counter notice.
Linked to this is the physical removal of the electronic communications apparatus from the Communication Site. Landowners are the only party who can request the removal of the equipment by issuing a notice on the operator. Importantly, landowners must give operators a “reasonable” period of time to remove apparatus.
Landowners should also be aware that this legislation also makes significant changes in dealing with disputes, the intention being the current inefficient dispute resolution process will be replaced with a more coherent system.
Transition
While the new Code will not apply retrospectively, there are complex transitional measures and the new Code will phase in provisions that over time will apply to both existing and new agreements. From the landowners’ point of view, the important point to note is that the new code will only apply in its entirety to agreements entered into after the Digital Economy Act comes into force.
Gillian Cowie is a partner at Wright, Johnston and Mackenzie and heads up the firm’s Telecoms Sector Group, a knowledgeable and experienced team who provide specialist advice and expertise to operators, network infrastructure providers and landowners. If you would like more information please get in touch: gzc@wjm.co.uk
How the new Code will be used in practice is unknown, however the Government has put a new legislative framework in place with the intention of promoting the UK as a serious global player in the telecoms industry.
The reforms mentioned are designed to enhance the economy and boost business, particularly in rural areas, by strengthening the rights afforded to operators. The legislation does contain conditions to protect the position of landowners, so advice should be sought at an early stage.
Wright, Johnston & Mackenzie’s knowledgeable and experienced team can provide specialist advice to operators, network infrastructure providers, and landowners in relation to telecommunication network infrastructure.