Telecoms Update: Further powers for operators to seek Court-imposed Code Agreements in multi-occupancy buildings

Telecoms Update: Further powers for operators to seek Court-imposed Code Agreements in multi-occupancy buildings

This article was published on: 23rd March 2021

The Telecommunications Infrastructure (Leasehold Property) Act 2021 became law on 15 March 2021.  It amends the existing Code[1] by introducing a new Part 4A.

Further Regulations must be passed before the key provisions take effect, but what is the purpose of the legislation?

 

 

Background

When the legislation was first introduced in January 2020, the explanatory notes described the Government’s aims to introduce a “bespoke process” for multiple dwelling buildings where a “landlord has repeatedly failed to respond to an operator’s request for access”.

DMCS was informed that around 40% of requests to install broadband in multi-occupancy buildings went unanswered.  In response, the Government introduced a Bill which would increase an operator’s power to seek a Court-imposed agreement under the existing Code, in specific circumstances.

Changes to the Code

The Act introduces a new Part 4A to the Code.

Operators wishing to install apparatus at “leased premises” may consider serving notice under paragraph 20 of the Code to “the required grantor”.  This notice will ask the grantor(s) to agree to confer or be bound by Code rights.  This will typically be a freehold or leasehold owner of the building under which premises are leased.

Conditions

Certain conditions must be satisfied before an operator can apply to Court:

  • An occupying leaseholder must have requested provision of electronic communications services from the operator to “target premises” (e.g. the flat he/she occupies)
  • In order to fulfil that request, the operator needs a grantor to confer and/or be bound by Code rights in respect of land “connected to” the target premises
  • The grantor has not responded to those requests.

“Target premises” must be part of a “multiple dwelling building” – defined as a building which contains two or more separate dwellings – blocks of flats are the obvious example.

Land “connected to” target premises is land used in connection with the target premises, for example for access purposes, and which is in common ownership with the target premises.  This might typically be the freehold estate of the block of flats in question.

How many notices are required?

A minimum of four notices are required:

  1. The original request under Part 20 of the Code
  2. A first warning notice
  3. A second warning notice
  4. A final notice.

All notices have specific form, content and service requirements.

What if the grantor responds?

The operator loses its right to apply under Part 4A if it receives a response from the required grantor before the final notice expires.

This need not be a complete acceptance/refusal of the operator’s request; a mere acknowledgment is enough to rule Part 4A out as an option.

What happens after the required grantor fails to respond?

If all other conditions are satisfied, the operator may apply to Court for an order imposing a Code agreement on the grantor.

This agreement will provide that the grantor confers, or is otherwise bound by, the Code rights sought, subject to the terms of the Part 4A agreement.

What terms will the Court impose?

The Secretary of State must specify the terms of a Part 4A agreement through Regulations, which will be introduced following consultation with key operator and landowning representatives.

The Act requires the Secretary of State to ensure those terms include, amongst others:

  • Restrictions on an operator’s right of entry to specific times
  • Provisions requiring restoration of land following completion
  • Provisions as to upgrading and maintenance of apparatus
  • Restrictions on the grantor which:
    • Prevent damage to apparatus
    • Ensure access to the apparatus
    • Minimise disruption to the operation of apparatus
  • Restrictions which ensure other operators may also provide services

Scope of the Rights

The rights “acquired” by the operator must be exercised in relation to:

  1. The target premises (e.g. the leaseholder’s flat); and
  2. Other premises, but only if this imposes no additional burden on the grantor (e.g. other flats in the same building).

An additional burden includes anything which adversely affects the grantor’s enjoyment of land or causes it to suffer additional loss.

When do Part 4A Rights Expire?

An imposed agreement under Part 4A can end in three ways:

  1. On the date a “replacement agreement” takes effect under Part 2 of the Code
  2. In accordance with a Court Order if an operator’s application to impose a replacement agreement under Part 2 is dismissed
  3. At the expiry of the Part 4A agreement term, which must be a period of not more than 18 months (to be confirmed through further Regulations)

The grantor has the right to seek removal of apparatus under Part 6 of the Code, if/when Part 4A rights expire.

Compensation

A grantor may apply for compensation if a Part 4A agreement is imposed.  A grantor may be compensated for loss and damage that has/will be sustained following exercise of the rights.

That application can be made at any time after the agreement is imposed, and even after rights have expired if there is a recoverable loss.

The Court has wide discretion as to the amount and payment of compensation; it can also refer disputes to arbitration or order the parties to agree it between themselves.

What Next?

The key provisions of the Act are not yet in force.  The Secretary of State will consult with key stakeholders regarding the form/content of a Part 4A agreement and introduce Regulations which may also include further conditions.

The Act represents a further significant widening of operator powers. There is an opportunity to influence the scope and form of agreements through engaging in those consultations.  Besides this, the key point for landowners at this stage appears to be this: do not ignore notices if you want the opportunity to negotiate the terms of an agreement or raise objections before a Tribunal application is made.

As ever, the interaction of Part 4A with the remainder of the Code will be scrutinised closely, and the Court/Tribunal may need to answer those questions which lead to uncertainty.

[1] Schedule 3A Communications Act 2003, as amended by the Digital Economy Act 2018

Landowners and occupiers potentially affected by this legislation should contact us for specific advice. Please email hello@hagenwolf.co.uk or telephone 0330 320 1440.

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