Access to communications networks is fast becoming an essential part of everyday life, meaning that it is vital to have a suitable statutory framework to govern and support the provision of electronic communications services.
The pre-existing Telecommunications Code, which has been in place since 1984, has struggled to keep up with rapid advances in technology in the digital market. Therefore, it was replaced on 28 December 2017 with a brand new Code, the Digital Economy Act 2017, designed to support the rollout of a robust and sustainable telecommunications network throughout the UK. The aim is that this new Code will promote network connectivity, expand coverage and take into account the legitimate interests of all parties.
The new Code applies in full to all telecoms agreements completed after 28 December 2017 and in a modified form to telecoms agreements already existing on that date. It expands on the rights already granted to telecom operators, and has corrected the omission in the old Code by granting operators the right to connect to a power supply.
The Code also makes a number of material changes to the pre-existing code:
The rent paid by the telecoms operator will be based on “market value” as defined by the Code. Under that definition, “real world” factors such as the availability of potential sites and the potential profitability of the site for the operator have been specifically excluded. This is likely to have the effect of significantly reducing the rent payable by operators especially where the underlying value of the land is low. The position may be rosier for landowners whose underlying land value is high or where there is development potential.
ASSIGNMENT, SHARING AND UPGRADING TELECOMS KIT
As part of the reform of the existing Code, the government viewed the ability for operators to upgrade and share telecoms kit as vitally important to ensure the provision of widespread network coverage. Accordingly, the new Code grants operators the power to upgrade and share their telecoms kit, so long as certain (limited) conditions are met. This is an automatic right granted to operators; it does not need to be included in the relevant agreement or conferred by the court
SECURITY OF TENURE
The Digital Economy Act has amended the Landlord and Tenant Act 1954 to specifically exclude a tenant with Code rights from security of tenure under that Act. This is a real benefit for landowners who, rather than having to run 1954 Act and Code proceedings in parallel, will only need to prove a ground of termination under one statutory regime. The right for telecoms operators to remain in occupation, however, is preserved in the new Code.
TERMINATION AND REMOVAL
Arguably this is one of the biggest changes introduced by the new Code. Under the old Code, landowners were required to give operators just 28 days’ notice if they want to terminate a Code agreement. The new Code requires a much longer notice period – operators must be given 18 months’ notice just to terminate a Code agreement. In addition, in the new Code termination is not the same as removal, and landowners must serve a further notice specifying a “reasonable” period for removal of the apparatus from the site in question.
Overall, the new Code will inevitably give rise to considerable uncertainty, so it is crucial that landowners take the time now to take stock of which operators are in occupation of their properties and any planned/potential developments in the pipeline to consider the impact of the new Code.
For any advice call our Commercial Team on 0800 088 6004.