Member Article

The Electronic Communications Code was subject to a wholesale re-write in 2017, with the intention of facilitating the faster roll-out of the UK’s digital communications infrastructure.

Three years on, the government has commenced a consultation on proposals to revise aspects of the Code to ensure it is fit for purpose.

Background

The first iteration of the Code was criticised by one member of the judiciary as being “not one of Parliament’s better drafting efforts and “one of the least coherent and thought-through pieces of legislation on the statute book.”

Following extensive analysis by the Law Commission, it was redrafted in its entirety in 2017, with the aim of speeding up the process for operators and infrastructure providers to gain access to land to deploy and upgrade their networks. However, paradoxically, the number of new agreements each year between operators and landowners has actually fallen since the new Code came into force.

On 27 January 2021, the government issued a consultation paper identifying what it considers to be particular log-jams within the Code and setting out headline proposals for overcoming the same.

What issues have been identified?

Improving the speed of new agreements

It is proposed that greater collaboration and engagement between operators and landowners can be driven by introducing a statutory process for monitoring non-compliance with Ofcom’s Code of Practice.

To further encourage landowners to engage in negotiations, it is also proposed that a streamlined process be introduced whereby operators can quickly obtain a Code agreement where, despite reasonable steps having been taken, the landowner has simply refused to respond.

In so far as landowners are refusing to engage because of concerns about the perceived risk of operators’ failing to comply with their obligations under any new agreement, it is proposed that a new alternative dispute resolution process be introduced. The intention would be to enable the swift resolution of any perceived breaches, thus giving landowners increased confidence to enter into new agreements.

Finally, the government is also concerned about the way in which the courts have interpreted the Code as prohibiting operators from obtaining new Code agreements, where they are already in situ under an agreement that expired prior to 28 December 2017 and which is not protected by the Landlord and Tenant Act 1954. It is proposing to amend the Code, to close this unintended loophole.

It is interesting to note is that the consultation does not extend to cover the ‘no scheme’ valuation model adopted by the Code. This is seen by many within the sector as being a major factor inhibiting the rollout of new infrastructure, as it has significantly reduced one of the main landowner incentives for voluntarily hosting such sites. The consultation document makes it clear that the government still believes in this valuation model and will not be revisiting the same. 

Improving sharing and upgrading rights

The Code automatically confers rights into agreements entered into since 28 December 2017 for operators to both:

• share their apparatus with other operators
• upgrade their existing apparatus.
  
  

However, these automatic rights are only exercisable in certain prescribed circumstances and the government is concerned that these circumstances are not sufficiently clearly defined. Rather than leaving it to the tribunal to interpret and clarify, on an ad hoc basis, where and when such automatic rights can be relied upon, it is intended that further clarificatory wording be introduced to the Code.

When the new Code came into force, the detailed transitional provisions stated that the automatic sharing and upgrading rights would not be applied retrospectively to agreements completed prior to 28 December 2017.

To hasten the speed at which the UK’s digital infrastructure can be overhauled and upgraded, the government is now consulting upon retrospectively implying these automatic sharing and upgrading rights into agreements completed before the new Code came into force.

Finally, whilst the tribunal has already confirmed that it has the jurisdiction to expressly impose sharing and upgrading rights in an agreement that go beyond the automatically implied rights, the government is also keen to clarify when and how such ‘enhanced’ rights can be imposed by the tribunal.

Introducing flexibility to modify agreements whilst still ‘in term’

As presently drafted, the Code only permits a party to unilaterally seek to modify the terms of an agreement once it has expired. This enables both the operator and the landowner to have certainty as to the bargain struck between them for the duration of the agreement.

The government is generally keen to uphold this position but it does consider that there are circumstances in which it might ultimately be necessary and in the public interest for a party to apply to the tribunal for an order seeking the modification of an existing agreement. It is therefore seeking views upon the scenarios in which such applications to the tribunal should be permitted and the extent of any public benefit test that must be satisfied by the party seeking the modification.

Improving the renewals process

Under the transitional provisions (and as recently confirmed by the Court of Appeal in Cornerstone v (1) Ashloch and (2) APWireless II (UK) agreements completed prior to 28 December 2017 and which were originally protected under the Landlord and Tenant Act 1954 must be renewed for one final time under the provisions of the 1954 Act. However, all other agreements are to be renewed under the provisions of the Code.

The government now considers that this has caused an unnecessary additional layer of uncertainty and a ground for dispute between landowners and operators. It is therefore proposing that going forwards, all agreements will be renewed under the provisions of the Code rather than under the 1954 Act.

The consultation also identifies concerns around the length of time that it takes for the renewals process to be concluded. At present, all references to the tribunal for a new Code agreement must be determined within six months. However, there is no such statutory framework for renewals and there is a concern that they will be deprioritised a result. To counter such risks, it is proposed that all references (regardless of whether for a new agreement or a renewal) should be determined within six months.

The government is also seeking to go further and enable either party to seek an interim agreement that reflects the terms of the renewal agreement being sought, pending determination of the renewal process. The intention behind this is to reduce the risk of either party actively delaying renewal negotiations, so as to maintain the status quo for as long as possible.

Comment

Lord Justice Davis, sitting in the Court of Appeal, echoed the thoughts of many when he said “the [new] Code itself is, to my way of thinking, fiendishly complex” and no-one is in any doubt that its drafting has led to a certain level of frustration and confusion amongst all stakeholders.

This consultation should therefore be welcomed from those within the operator community and whilst landowners will be sorely disappointed that there is no desire to re-visit the new Code’s valuation principles, they will no doubt accept that the current impasse needs to be resolved.

Access to land: consultation on changes to the Electronic Communications Code*

Closing date for comments: 24 March 2021

*ECC_consultation_27_January_2021.pdf (publishing.service.gov.uk)

 

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