The New Telecommunications Code

Background to the Digital Economy Act 2017- The New Code

The existing Code, first introduced in 1984, was intended to give operators wide-ranging powers to install and maintain telecoms equipment on land.

With vastly increasing changes to the telecoms landscape, the new Code aims to bring telecoms more in line with other utility service providers and makes significant changes to existing legislation. The new Code is accompanied by a Code of Practice published by Ofcom.

The changes introduced by the new Code should be considered carefully when entering into new agreements with operators.

Key Provisions

Rent

This will be calculated by reference to open market value subject to certain assumptions. The land is valued as it is without the equipment for its current use, ignoring the special value of it to operators. The likely effect will be a reduction in rent payable to landlords and in turn a reduction in compensation awarded for loss of the use of the land.

Site Sharing and Upgrades

Operators will have a right to share occupation with other operators and upgrade installations without the requirement to obtain consent from landlords. Operators will, therefore, have an automatic right to upgrade and share their equipment and assign their agreements to other operators without having to pay the landlord additional fees.

Security of Tenure

Operators will not be able to rely on the security of tenure provisions under the Landlord and Tenant Act 1954 so they will not have an automatic right to renew the agreement on expiration. This may appear favourable to landlords, but landlords will still have to comply with termination procedures set out in the new Code. It is not possible to contract out of the provisions of the new Code.

Termination

Where a landowner wishes to terminate an agreement under the new Code, the landowner must give at least 18 months’ notice from the date that the notice is served stating that the agreement should come to an end based on one of the following grounds:

• substantial breaches by the operator
• persistent delayed payments
• landowner intends to redevelop the land
• disruption to the landowner outweighs the public benefit

The operator is entitled to serve a counter-notice within 3 months of receipt and then within 3 months of the date when the counter-notice is served can apply to Court.

Dispute resolution

The new Code provides for a more efficient, formal dispute resolution procedure. The parties will, however, be encouraged to resolve any disputes on an informal basis in the first instance.

Professional Advice

In the circumstances, it is essential for landowners to engage with their professional advisers at the very outset in order to achieve the most favourable outcome.

For further help or advice, please contact Lupton Fawcett’s Agriculture expert Caroline Hawcroft.