On 28 December 2017 a new Electronic Communications Code (the “New Code”) came into force replacing the Code contained in the Telecommunications Act 1984 (the “Old Code”).
The New Code is important to all landowners who have let, or are considering letting, land to telecommunications Operators for the installation of electronic communications apparatus.
Its purpose is to ensure that telecommunications infrastructure is in place to improve coverage across the UK, to help a faster roll out of future technological advances (such as 5G networks) and to ensure the UK can remain competitive in the wider global marketplace.
The New Code will only apply compulsorily to Ofcom approved Operators.
What is the effect of the New Code?
Operators are given a number of automatic code rights (expanding on rights under the Old Code) for the statutory purposes of providing their network.
These include rights: of automatic access; to carry out works to the apparatus; to connect to a power supply; to obstruct or interfere with a Landowner’s access; and to lop trees/vegetation.
Significantly, the New Code allows Operators, without consent, to:
- Automatically assign leases to other Operators
- Share the site with other Operators
- Upgrade the apparatus
Consequently, landowners will lose control over who their Tenant is, will inevitably lose ‘payaway’ income obtained from allowing third party site sharers and will no longer be able to charge an Operator additional amounts for upgrades.
The Landlord and Tenant Act 1954 will not apply to New Code agreements.
Whilst this is a welcome clarification for a Landowner, in practice it will still be difficult for a Landowner to remove an Operator from its land.
The basis of valuation
The basis of valuing a telecoms site has changed.
The previous open market basis is replaced by a ‘no scheme’ basis which reflects the land value to the Landowner ignoring the existence of the telecoms Lease and the Operator.
Consequently, rents could be significantly reduced because the value of land to a Landowner is less than to an Operator.
For example, the value of an unused part of a rooftop to a Landowner will be significantly less than the value of the same space to an Operator.
When and how does the New Code Apply?
The New Code will only apply in full to agreements entered into after 28 December 2017 (subject to certain conditions).
A modified version of the New Code will apply to any agreement entered into prior to 28 December 2017. Importantly the assignment, site sharing and upgrade rights will not apply retrospectively.
A New Code agreement is capable of binding successors in title, even when not registered at the Land Registry.
Hence, Landowners will need to be careful when dealing with Operators and should seek legal advice at an early stage.
Simon Linnitt is a partner at award-winning regional law firm VWV. Simon can be contacted on 0117 314 5292 or at email@example.com.