Bill Bidder, a partner and Head of IBB Solicitor’s Real Estate Practice provides developers with a ‘need to know’ on the new Electronic Communications Code.
With the demand for digital connectivity growing exponentially and the approaching roll out of 5G, the demand for cell sites is expected to increase significantly. This increase in demand is coupled with a changing statutory approach towards telecommunications operators which begins to treat them almost as utilities providers. This can be seen in the introduction of the new Electronic Communications Code at the end of 2017. The new Code is considerably clearer than the old Code but is proving to be much less favourable to property developers when dealing with operators.
Termination of code agreements
One of the most important changes made by the new Code is the significantly longer notice period for termination of at least 18 months’ notice, compared previously to the much shorter former notice period of 28 days. In addition, the notice needs to specify one of four statutory grounds for termination. The ground proving of most interest to developers is the intention to redevelop. However, the new Code does not give any indication of how redevelopment should be evaluated. Developers should look to the redevelopment regime under the Landlord and Tenant Act 1954 for guidance.
Termination is not the only timing hurdle. To remove apparatus a further notice specifying a reasonable period must be served on the operator. Even then a developer can only remove the apparatus with the benefit of a court order in the absence of the operator’s agreement.
Lift and shift
One of the major differences between the new and old regimes is that the former does not contain any statutory ‘lift and shift’ mechanism. How then can developers look to relocate apparatus elsewhere on site? The new Code does not contain any prohibition upon contractual ‘lift and shift’ mechanisms for the relocation of apparatus. Therefore, it seems that the enforcement of such contractual rights is not inconsistent with the operators’ rights under the Code – but this remains to be tested.
Enforcement of operators’ rights
Given the revised valuation criteria in the New Code has caused a significant fall in market rents for telecommunications sites, landowners are increasingly unwilling to grant access. This in turn may lead to more attempts by operators to force access to sites to assess their viability and perhaps ultimately to force installation of apparatus without landowners’ consent.
The recent Upper Tribunal (Lands Chamber) decision in Cornerstone Telecommunications Infrastructure Limited -v- University of London [2018] UKUT 0356 (LC) should stand as a warning to landowners that Code agreements do not only come about between willing parties. Agreements may be imposed by which unwilling landowners may be compelled to grant Code rights to operators.
Developers can take some comfort that the Tribunal may not impose such agreements where the landowner intends to develop the land. However, the extent of the intention to develop required has yet to be tested.
While the New Code gives greater clarity to developers over the ambiguities of the Old Code, the existence of telecommunications apparatus on a development site should trigger a warning.
The termination of operators’ Code rights and removal of apparatus must be built into any development timetable. Furthermore, should any operator be interested in surveying a site’s viability for cell apparatus the landowner should urgently seek advice before engaging with the operator.
