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Landlords, operators and the inherent tension in the Electronic Communications Code 2017

View profile for Susie Prowse
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With mobile connectivity an increasingly critical part of modern life and business, the Electronic Communications Code both replaces the 1984 Telecommunications Code, and aims to facilitate the expansion of the mobile phone network, particularly the roll out of its latest and fastest iteration, 5G.

It may however have inadvertently created an inherent tension, which could work against that very aim.

It is worth noting that the new Code only applies to agreements entered into after the 28th December 2017, and some of its key points are as follows:

Rent

When settling the level of rent in new code agreements, the parties must assume a “no scheme” world.

In short, you ignore the importance of the apparatus or location to the operator, and just value the land that is to be occupied. 

In the recent case of EE Limited vs Islington LBC, the court underlined that the rent would in practice be relatively nominal, as would any compensation. 

Upgrades, Sharing and Assignment

Operators are to be free to upgrade their apparatus, share the site with other operators, and assign their agreements, without landlord's consent. 

Anything that endeavours to circumvent this is void. 

Lift & Shift

There are no longer any statutory lift and shift provisions, so those must be dealt with expressly in the relevant agreement.

Termination

A code agreement can only be terminated on statutory grounds (which includes redevelopment), and after at least 18 months’ notice. 

Clearly there will be a need to factor in a much longer lead in a period for redevelopment.

So where is the inherent tension in all that?

There is a push from operators and the Government to increase mobile phone coverage, and to roll out 5G.

However, with the reduced rents, and limited compensation, alongside a more involved process for securing vacant possession, coupled with the fact that 5G requires more apparatus than the current network, there is considerably less incentive for landowners to take on new agreements or to renew existing ones. 

If landlords aren’t commercially incentivised, then why not push back, and force the operators to pursue the matter through the Tribunal or the Courts?  Some landlords are certainly taking that approach or a variation of it.  See for example the recent case of Cornerstone Telecommunications Infrastructure Ltd v The University of London where the University of London flatly refused Cornerstone access to the roof of one of its properties to assess its suitability for new apparatus.  The operator won that case, but clearly having to regularly litigate to achieve roll out will be somewhat of a drag on the process! 

We anticipate more cases of that ilk in the coming months and years.

In the interim land owners should be alive to the potential implications of new, or renewal, agreements with operators.

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This guide is for general information and interest only and should not be relied upon as providing specific legal advice. If you require any further information about the issues raised in this article please contact the author or call 0207 404 0606 and ask to speak to your usual Goodman Derrick contact.