The long awaited Electronic Communications Code became law on 28 December 2017. The new code replaces the existing Telecoms Code which many described as being an ill thought out and incoherent piece of legislation. Christopher Hicks, Head of Telecoms at Fisher German gives a brief overview below of the main changes to the code and how it differs from the old Telecoms Code.

Land and property owners need to consider carefully their existing telecoms leases with a view as to what impact this new Telecommunications Code will have on them and give very careful consideration when asked to enter into brand new mast agreements by the mobile phone operators.

Assignment

Assignment of leases will be permitted in law and any agreement will be void to the extent that it prevents or limits assignment to another operator, or makes assignment subject to conditions. Under the existing Telecoms Code, it is for the parties to agree how assignment will be dealt with including the matter of payment of money.

Upgrading and sharing

Under the new code an operator may upgrade or share apparatus with another operator providing that there is no more than a minimal, adverse impact upon appearance and that the upgrading or sharing of apparatus imposes no additional burden on the landowner. Under the existing Telecoms Code, it was for the parties to agree whatever terms they wished in respect of the sharing and upgrading of apparatus including payment of monies where appropriate.

Consideration and valuation

The existing Telecoms Code envisages that consideration is based on market value and, simplistically put, rents paid are based upon comparable evidence.  The new code imposes that consideration or rent will be based on market value but on a ‘no scheme world basis’ i.e. you disregard the fact that the transaction relates to the provision of an electronic communications network and that the operator may assign, upgrade and share.  In the countryside, it is likely that rents paid for leases by operators will come under pressure. However, in arriving at market value, the value of the agreement of a landowner for the imposition of apparatus with subsequent limits on the use of the land must be borne in mind and we envisage will, on the whole, lead to very little change in rents paid.

Termination of agreements

Under the new code the security of tenure provisions of the Landlord & Tenant Act 1954 will not apply. A Code Agreement may only be ended by giving at least 18 months’ written notice and specifying the grounds for termination. Grounds for termination include substantial breaches, de-lay of payments or the landowner wishing to develop the land. The most significant change from the existing Telecoms Code is that a landowner may no longer end a Code Agreement simply for his own use and purpose.

The old and new code

Where a landowner already has a lease in place with a telecoms operator, that lease will continue to be governed by the existing Telecoms Code until such a time as it expires or is terminated. A landowner entering into a new agreement post the new Electronic Communications Code coming into law will find their agreements governed by the new code and therefore need to approach such negotiations for a new agreement with extreme care and caution and mindful of the full facts of what they are entering into.

For further information email Christopher Hicks here