Consultation on the Electronic Communications Code – 10 Key Announcements

Consultation on the Electronic Communications Code – 10 Key Announcements

This article was published on: 25th November 2021

The Government has issued its response to the consultation on changes to the Electronic Communications Code.  1266 responses were received from landowners, the general public, telecoms operators and professional bodies.  This reflects the range of interests affected by the Code. A number of proposals have been adopted and several ideas have been abandoned due to insufficient evidence of the need for change.

The Government has avoided addressing the valuation mechanisms in paragraph 24 of the Code, which will not be revisited.  This reflects the Government’s view that the statutory valuation framework “remains appropriate for the installation and maintenance of digital communications infrastructure systems”.

 

Full detail will follow in legislation introduced to Parliament.  The Government has already introduced the Product Security and Telecommunications Infrastructure Bill on 24 November which sets out some of the proposed changes in further detail.  This article summarises the key announcements in the Response.

What are the key announcements?

  1. No Introduction of “Fast-Track” Procedures

New “fast-track” court procedures for determining disputes will not be introduced.  The Government considered there to be insufficient evidence in support of introducing new processes, and is satisfied there is scope for expediting cases under existing rules and regulations.

  1. Increased use of the Tribunals

The Government will widen the remit of the FTT, to ease the burden on the Upper Tribunal and provide greater flexibility on where a case can begin.

The Tribunals will become the forum for determining all disputes under the Code.  They will also hear renewals under the 1954 Act (see below).  The days of telecoms cases in the County Court may soon be over. Tribunal Rules and Practice Directions need to be updated to help govern these processes.

  1. New procedures for non-responsive landlords

The Government previously introduced the Telecommunications Infrastructure (Leasehold Property) Act 2021 – the Act introduced a procedure for obtaining a Code agreement in relation to non-responsive landlords of multi-occupancy buildings such as blocks of flats.

A similar process will be introduced for non-responsive owners/occupiers of “land”.  It will, broadly, involve (yet more) notices followed by an application to the FTT.  Appropriate protections will be built in to protect landowner/occupier interests, with detail to follow.

A maximum term of six years will apply, with compensation rights preserved.  Statutory instruments will follow in due course.

  1. Addressing Compton Beauchamp

There are well-publicised difficulties for operators who wish to renew agreements under the Code, but cannot do so following Compton Beauchamp and the unavailability of Part 5.  Compton is being appealed in the Supreme Court, but the Government has stolen a march and indicated it will legislate to address some of those difficulties.

The Code will be amended to permit an operator in occupation to seek rights from whoever would have had standing to grant Code rights, were the operator not in occupation. An occupying operator’s ability to confer rights on other operators will be preserved.

  1. 1954 Act Renewals to be “aligned” with Part 5

The Government will amend the Landlord and Tenant Act 1954 so that this particular renewal process, and the terms of the new agreement, will more “closely align” with Part 5 of the Code, while preserving certain protections in the 1954 Act.

1954 Act renewals will be transferred to the Tribunals.

  1. Upgrading and Sharing

Rights to upgrade and share received significant attention in the Response:

  • Paragraph 17 remains unaltered

The Government will not legislate to amend Paragraph 17 and the conditions to be satisfied to obtain the available rights, which were said by some to be unclear.  It will be left to the Courts to determine whether the conditions are met in case of a dispute – other terms of the Code agreement may be relevant to that determination.

  • Sharing to become a Code right

Parties can freely negotiate rights to upgrade/share which are less “restrictive” than those obtained under paragraph 17.  Some stakeholders argued for changes to the Code which would make it clear the Tribunal may impose upgrading/sharing rights outside of Paragraph 17 in cases of disagreement.

Change to upgrading rights was felt unnecessary, as this is a standalone Code right in paragraph 3.

Sharing is not a paragraph 3 Code right, but will be introduced as one in due course.  This right will be limited to the operator which “owns the apparatus”.  Terms will be a matter for negotiation or imposition.  In the latter case, ordinary Code principles will apply and the Tribunal will retain discretion outside of Paragraph 17.

  • Retrospective application of automatic rights

Paragraph 17 applies to agreements completed after the introduction of the Code in December 2017.  It does not apply to subsisting agreements.  Operators asked the Government to introduce automatic upgrading/sharing rights for older agreements not caught by the benefits of Paragraph 17.

There was understandable concern at the introduction of retrospective rights and the interference with freely negotiated contracts made in entirely different market conditions.  Extended rights can of course still be agreed between parties negotiating freely.

Undeterred, the Government will be introducing the following limited automatic rights to upgrade/share where.

  • The apparatus is situated “under land”
  • Works must be possible without access to private land, unless agreed otherwise
  • Works must have no adverse impact on the land
  • Works must impose no burden on anyone who has an interest in the land; “burden” includes adversely affecting enjoyment or causing loss, damage or expense

Detailed notice provisions will be introduced.  It is irrelevant when the apparatus was installed and, for pre-29 December 2003 apparatus, whether there is a Code agreement in place.

  1. Interim Arrangements

Parties who cannot agree renewal terms may apply to Court for determination.  During this interim period, a site provider can apply under paragraph 35(2)(c) for an interim order setting the rent to be paid by the operator, pending determination.  In reality, the existing rent will often continue to be paid and no application will be made.

This right will be extended so that both parties can make the application and in relation to all interim terms, not only consideration.  It is likely operators will use this power to seek imposition of interim arrangements which are more closely aligned with Code rights, valuation and so forth.

  1. Increased Emphasis on ADR

ADR is not going to be made mandatory, but changes will be introduced to “encourage” its use, including:

  • A duty on operators to consider ADR before making court applications
  • A requirement to make site providers aware of ADR as an option
  • A requirement for the courts to penalise either party on costs if they unreasonably refuse to engage in ADR and the matter proceeds to trial

Parties who refuse ADR may find themselves out of pocket at trial, even if otherwise successful.

  1. Complaints

All operators will need to have a complaints procedure in place. Ofcom will have an increased role in relation to complaints made about their conduct in relation to “Code agreements and negotiations in the Code of Practice”.

  1. Code of Practice to remain unchanged

The Code of Practice will not be strengthened with binding enforcement procedures and will remain a statement of best practice only – Ofcom has the power to amend the Code of Practice subject to further consultation.  The majority of responses supported reform of the Code of Practice.

What Next?

The Government will be introducing legislation to implement these changes. A proper dissection of the law will be needed to understand their full nature and effect.  The Product Security and Telecommunications Infrastructure Bill was introduced on 24 November 2021 and is making its way through Parliament.

When they do become law, the changes appear to be wide-reaching and the landscape in which agreements are reached or imposed will, once again, be altered in an industry that has already seen extensive legislation introduced over a short period of time.

The Government’s aim of “faster and more collaborative negotiations” still relies on far more than Tribunal rules and 1954 Act amendments – there is no quicker manner in which apparatus can be rolled out than two willing parties freely reaching agreement on fair terms which protect the interests of both site provider and operator.  This will continue to be the case as we move into 2022 and grapple with yet more changes to the Code.

Author: Paul Sagar, Senior Associate

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