The new communications code

Connected or still on hold?

The Digital Economy Act 2017 (the “New Act”) has brought a much needed revision to the archaic and overcomplicated Electronic Communications Code 1984 (the “Old Act”). The New Act will balance the rights and obligations of the telecoms companies with those of the landowners on a number of issues which the Old Act was either silent or unclear about.

The following highlights were unveiled:

Plot Sharing

The telecom operators are now able to assign code agreements to other operators without the need to consult the landowners. This is a welcome change for the operators as it offers greater flexibility.

A significant loss to landlords is that they lose control of the assignment process and their ability to request guarantees from the outgoing operator.

Equipment

The operators are granted the right to upgrade their equipment without any obligation to notify the landowner. This right is conditional on the following requirements:

1. The upgrade will have little to no adverse impact on the appearance of the apparatus; and
2. The agreement will not have any negative burden onto the servient land.

This allows the operators to modernise their network for the public benefit, but it is evident that the arbitrary nature of the first condition could cause disagreement from the landowners resisting such works.

Security of tenure

The Old Act automatically granted the operator security of tenure. In addition, security of tenure could also be claimed under the landlord and Tenant act 1954. Under the new regime, there are two options:

1. Where the main purpose of the lease is to grant rights under the New Act’s Electronic Communications Code, the operator will not be able to benefit from the security of the tenure under the LTA 1954; or
2. Where the main purpose of the lease is other than the grant of rights under the New Act Electronic Communications Code, the security of tenure under the LTA 1954 will apply, unless expressly excluded.

This will mean that the operator will only benefit from one form of security of tenure rather than two, thus dealing with the incompatibility in the two acts.

Consideration

The Old Act based the rent on a “fair and reasonable assessment”. The rent under the New Act will be based on the market value subject to a number of assumptions.

One assumption is the requirement for the valuation to be based on the rent that the landowner would achieve if the letting was for an alternative use, which may mean a higher rent for landlords.

Conclusion

Overall, the New Act is a welcome modernisation in the telecoms sector. While its provisions remain to be tested in practice, both the operators and the landowners will benefit from more clarity and stability now provided in the telecoms legislation.