FREE CHAPTER from ‘The Electronic Communications Code: A Practical Guide – 2nd Edition’ by Kerry Bretherton KC, James Castle, Mark Loveday

CHAPTER ONE – AN INTRODUCTION TO THE ELECTRONIC COMMUNICATIONS CODE

This introductory chapter deals with the following topics:

1. The development of the Electronic Communications Code 2017 (“the Code”)¹ to replace the old Electronic Communications Code (“the Old Code”);²

2. The purpose of the Code; and

3. An overview of how the Code operates, and its contents.

The Development of the Code

Electronic communications (“telecoms”) infrastructure is the beating heart of modern society in our digital age. This has never been truer than in the wake of the Coronavirus pandemic, which prompted developed countries across the world to adapt to socially distanced life by embracing new remote means of communication. The United Kingdom’s telecoms apparatus is now relied upon heavily not just in our homes and businesses, but also by HM Courts & Tribunals Service, the National Health Service and even our schools.

The technology involved in maintaining these services develops at an alarming rate; as a result, electronic data transmission rates have been growing exponentially for decades. This is one of the reasons why the statutory regime governing the relationships in the United Kingdom between its telecoms network operators and the landowners on whose land they erect their telecoms apparatus ought to be regularly reviewed and updated.

But until 28 December 2017, the United Kingdom was still using its original telecoms code, the Old Code set out in Schedule 2 to the Telecommunications Act 1984. A code, drafted before the invention of the World Wide Web, that it was envisaged would regulate the rollout of landline telephones across the United Kingdom.³ Its draftsmen could barely have conceived of fibre-optic broadband or the 5G mobile network.

However, when the Law Commission published its independent review of the Old Code on 28 February 2013, its reasons for recommending reform were not limited to simply future proofing the existing statutory regime against emerging technologies.⁴ The Law Commission recognised that the Old Code has been condemned judicially as “not one of Parliament’s better drafting efforts… one of the least coherent and thought-through pieces of legislation on the statute book”,⁵ and recommended extensive reforms to (inexhaustibly):

1. Clarify the valuation principles for determining the consideration that landowners can charge telecoms network operators for the use of their land to host telecoms apparatus;

2. Resolve inconsistencies between the Old Code and other legislation, such as the Land Registration Act 2002 and the Landlord and Tenant Act 1954;

3. Clarify which third parties ought to be bound by rights conferred on telecoms network operators by landowners;

4. Improve the procedure for resolving disputes arising under the Old Code;

5. Clarify the process for terminating agreements falling under the Old Code; and

6. Give limited new rights to telecoms network operators to upgrade and share their network equipment, given the emergence of new technologies that could enable telecoms network operators to save costs with the benefit of these new rights (passing those costs savings onto consumers).

In December 2014, HM Government’s Department for Culture, Media and Sport (the Department for Digital, Culture, Media and Sport since 3 July 2017 – our emphasis) announced that it would reform the Old Code based on the Law Commission’s recommendations. It consulted on its draft legislation between February and April 2015,⁶ and published its revised proposals for a new code on 17 May 2016.⁷

HM Government’s proposed reforms largely aligned with the Law Commission’s original recommendations. This included the recommendation that any new code does not have retrospective effect, but instead provides for the Old Code to become ‘naturally’ obsolete as agreements subject to the Old Code are either terminated or renewed under the new regime.

However, following independent economic analysis, HM Government did decide to adopt a new (and controversial) basis for the valuation of rights conferred under agreements falling within the remit of the new statutory regime. Whereas the Old Code valued rights on an open market basis, the Code values them on a ‘no scheme’ basis, dramatically altering the potential value of the rights.

The result was the coming into force of the Code on 27 December 2017.

There have subsequently been substantial additions to the Code. The Telecommunications Infrastructure (Leasehold Property) Act 2021 (“TILPA”) introduced a new Part 4A after Part 4 of Schedule 3A to the Communications Act 2003, to address the issue of unresponsive proposed grantors of agreements in relation to multiple dwelling buildings. Such applications are to be dealt with by the First-tier Tribunal. There have also been amendments to other parts of the Code by the Product Security and Telecommunications Infrastructure Act 2022 (“PSTIA”). Some parts of PSTIA are in force at the time of drafting. Other parts of PSTIA are not yet in force, but have been included in this book because it is anticipated that they will be in force soon. This includes the new Part 4ZA to the Code, to be added after Part 4 of the Code, which enables the Tribunal to impose agreements on non-responsive owners of relevant land in cases where the operator needs to install electronic communications equipment under or over relevant land, but does not need to install electronic communications equipment on the relevant land.

The Purpose of the Code

We have set out above that the Code is designed to regulate contractual relationships between telecoms network operators and landowners. But the Code itself does not clearly state why it exists; what purpose the regulation serves.

Assistance can instead be drawn from Law Commission’s review of the Old Code. It says that a telecoms code needs to exist to (again, inexhaustibly):

1. Ensure that the availability of telecoms services are not impeded by telecoms operators having difficulties gaining access to land;

2. Strike a fair balance between the rights of landowners and the public interest in the provision of telecoms services across the United Kingdom; and

3. Make certain the legal consequences of agreements between telecoms operators and landowners on third parties.⁸

In the following chapters, we will set out the various ways in which these envisioned purposes indeed ring true in the Code. In particular, the reader will see that the issue of whether a fair balance is struck between the public interest and the rights of landowners is central to both the extent of the court’s power to impose code agreement terms on parties, and the new valuation basis for code agreements.

The Operation and Content of the Code and this Book

The Code creates a scheme whereby relevant telecoms operators can serve notice on landowners indicating a desire to acquire rights over their land for the purpose of furthering their telecoms networks. If the parties reach agreement on the terms of acquisition of those rights, then a qualifying agreement under the Code (“code agreement”) is created. If the parties are in dispute, the courts will adjudicate (in an expedited timeframe) and impose a code agreement if relevant criteria are met.

The core parts of the Code that are dealt with in this book are as follows:

1. Part 1 of the Code, entitled ‘Key Concepts’,⁹ sets out the various definitions that form the foundation for the Code. It deals with who the relevant telecoms operators are, what qualifies as telecoms apparatus and a telecoms network, and what core rights telecoms operators can seek to acquire under the Code (“code rights”). These matters are considered in more detail in Chapter Two;

2. Part 2 of the Code, entitled ‘Conferral of Code Rights and their Exercise’,¹⁰ is eclectic. It deals with the circumstances under which code rights can be exercised (Chapter Two), the relevant persons who can be compelled to enter into code agreements (Chapter Three), and the third parties that may be bound by code agreements (Chapters Three and Eleven);

3. Part 3 of the Code, entitled ‘Assignment of Code Rights, and Upgrading and Sharing of Apparatus’,¹¹ is self-explanatory. The ‘bonus rights’ to upgrade and share telecoms apparatus are explored in Chapter Two, and assignment is considered in Chapter Eleven;

4. Part 4 of the Code, entitled ‘Power of the Court to Impose Agreement’,¹² is far-reaching. It provides the power of the court to impose code agreement terms (Chapter Four), the formalities for code agreements and the kind of terms that can be included within code agreements (Chapter Five) and the new valuation basis (Chapter Seven);

5. Part 4A of the Code, entitled ‘Code rights in respect of land connected to leased premises: unresponsive occupiers’,¹³ together with Part 4ZA of the Code (not yet In force), entitled ‘Code rights In respect of land: unresponsive occupiers’,¹⁴ in Chapter 13. This considers the power of the First-tier Tribunal (Property Chamber) to impose agreements following a request by a leaseholder of a multiple dwelling building, in the case of Part 4A, and cases which involved installation of equipment under or over relevant land (but not on the relevant land), in the case of Part 4ZA (when Section 67 of PSTIA comes into force).

6. Part 5 of the Code, entitled ‘Termination and Modification of Agreements’,¹⁵ also contains the provisions for continuation and novation of code agreements. Continuation and termination are considered in Chapter Eight, whereas modification and novation are found in Chapter Nine;

7. Part 6 of the Code, entitled ‘Right to Require Removal of Electronic Communications Apparatus’,¹⁶ is dealt with in Chapter Ten; and

8. In addition, this book contains chapters on landowners’ rights to compensation payable under the Code (Chapter Seven), the transitional provisions bridging the Old Code and the Code (Chapter Twelve) and on alternative dispute resolution, and the procedures and practicalities of litigating under the Code (Chapter Fourteen).

This book does not pretend to comprehensively discuss every aspect of the Code. In particular, Parts 7 to 12 of the Code ¹⁷ lie outside the scope of this book. As does detailed consideration of the workings of the Old Code.

Summary

In summary:

1. The Code was not brought in simply because the Old Code was not up to the task of keeping up with developing technologies. The Old Code had a number of serious flaws, including poor drafting, and required extensive reform to operate satisfactorily both in the modern day and in the context of other statutory regimes;

2. The Code regulates the contractual relationships between telecoms operators and landowners chiefly to ensure that the former has sufficient access to the land it needs to provide services that are in the public interest, and also to ensure that third parties can be certain where they stand in respect of those agreements;

3. The Code operates by giving telecoms operators the power to compel landowners to enter into agreements with them for the conferral of code rights. Provided the relevant formalities are complied with, in default of agreement the courts will adjudicate the dispute and may impose a code agreement and decide its terms, including the payment of consideration and compensation. The Code also provides for the circumstances under which code agreements may be terminated (after which, when and how telecoms apparatus must be removed from the subject land) or varied; and

4. New machinery under the Code now exists to empower the First-tier Tribunal to impose agreements following a request by a leaseholder of a multiple dwelling building, and in future it will be able to impose agreements in cases which involve installation of equipment under or over but not on relevant land, when Section 67 of PSTIA comes into force.

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