Blog - 20/04/2018
The new Electronic Communications Code
The new Electronic Communications Code applies to all telecommunications agreements completed after 28 December 2017, and applies in a modified form to telecommunications agreements already existing on that date. The new Code replaces the pre-existing Telecommunications Code which has been in place since 1984.
The previous Code was enacted 33 years ago. Since then technology has changed beyond recognition, with the emergence of mobile phones, tablets and other smart devices. The previous Code was deemed not fit for purpose, the Law Commission was asked to review it, and, following a consultation process in 2012 and 2013, the Law Commission recommended a wholesale replacement of the Code. The new Code was set out in Schedule 1 to the Digital Economy Act 2017, which was given Royal Assent on 27 April 2017.
Set out below are key changes from the previous Code and key points to note.
Operators may assign their rights without the landowner’s consent, but a landowner may require the outgoing operator to guarantee the incoming operator’s obligations. This change only applies to new agreements entered into after the new Code came into force.
- Sharing and upgrading
Subject to very limited conditions, telecoms operators now have the right to share a mast with another operator, and also the right to upgrade apparatus without the landowner’s consent. This change also only applies to new agreements entered into after the new Code came into force.
- Statutory continuation rights
The overlap between Code rights and the Landlord and Tenant Act 1954 has been removed. Under the new Code, any tenancy which has Code rights as its primary purpose will be automatically excluded from the security of tenure provisions of the 1954 Act. The new Code instead provides its own continuation regime akin to the 1954 Act, albeit with much longer notice periods and different grounds for termination.
- No Contracting Out
Any terms in agreements that are contrary to the provisions of the new Code are not enforceable.
Due to the new valuation basis, rents for leases under the new Code may well be depressed. If the rent is imposed by the court, it will be based on the open market value as defined by the new Code, which will be from the perspective of the landowner only. The value of the land to the operator, which could be quite substantial if it is a strategically important site, is disregarded.
- “Lift and shift”
Unlike the previous Code, the new Code does not provide expressly for landowners to be able to relocate apparatus.
- Existing agreements
Whilst the new Code generally applies to agreements entered into before 28 December 2017, these agreements must now be read in conjunction with a complex set of transitional provisions, for example, the new Code regarding the assignment of Code rights, upgrading apparatus and sharing of operators, will not apply to subsisting Code agreements.
The new Code clearly strengthens the power of the operators, and should significantly reduce their rent roll. This has led to the new Code coming under criticism in some quarters, with landowners being likely to lose out so that the public can benefit from having improved networks that today’s modern society demands.
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