Telecommunications operators in occupation but unable to claim code rights - a gap in legislation?

Telecommunications operators in occupation but unable to claim code rights - a gap in legislation?

Court of Appeal confirms that global patent licences can be FRAND

Arqiva Services Ltd V Ap Wireless II (UK) Ltd [2020] UKUT 0195 (LC)

The latest judgment on the Electronic Communications Code in the Upper Tribunal case Arqiva Services Ltd V Ap Wireless II (UK) Ltd [2020] UKUT 0195 (LC) highlights the implications for a telecommunications operator in occupation of a site without code rights and is a helpful reminder to landowners when entering into negotiations with operators who remain in situ.

The Electronic Communications Code

Schedule 3A of the Communications Act 2003 sets out the new Electronic Communications Code (the New Code), which updated the previous Electronic Communications Code (the Old Code). The New Code is widely seen as being more favourable to operators than the Old Code.

Key provisions

This case concerned two provisions within the New Code:

  • Paragraph 20: this paragraph provides the circumstances for a court to impose an agreement on an operator and a landowner. The process commences with the operator serving notice on the landowner and if no agreement can be reached, the court may impose the terms of such agreement.
  • Paragraph 27: this paragraph allows the court to impose a temporary agreement where an operator has equipment in situ and another party (normally a landowner) has rights to require such equipment to be removed.

It is established that an operator must serve notice under paragraph 20 before any application to court can be made under paragraph 27. This was set out in a previous case, The University of London v Cornerstone Telecommunications Infrastructure Limited [2019] EWCA Civ 2075.

Case background

Arqiva is a code operator and had occupied land under a lease which expired in October 2016. The lease was contracted out of the Landlord & Tenant Act 1954 but Arqiva continued to occupy and pay rent. No new agreement was put in place. Arqiva served notice on the landowner seeking a court order for a Code Agreement under paragraphs 20 and 27 of the New Code.

Questions for the court

  1. Under what arrangement did Arqiva occupy the site after expiry of its lease?
  2. Was a “subsisting agreement” under the New Code in place?
  3. If no “subsisting agreement” existed and the operator had not obtained code rights under the New Code through any other agreement, could the court impose an agreement under paragraph 20 of the New Code?

Outcome

The court held that there was no subsisting agreement in place as Arqiva’s lease had expired. Arqiva therefore, occupied as a tenant at will.

The court held that it was bound to follow the decision set out in Cornerstone Telecommunications Infrastructure Limited v Compton Beauchamp Estates Limited [2019] EWCA Civ 1755, which ruled that an operator in situ cannot use paragraph 20 of the New Code to obtain code rights and therefore no temporary agreement could be ordered under paragraph 27.

Impact

The principle applied in this case is that operators in situ on sites which were occupied under the Old Code and where no rights have been obtained under the New Code are not able to make an application for code rights to be imposed under paragraph 20 of the New Code.

This leaves operators in occupation but without a subsisting agreement in a situation where they cannot rely on the court to impose the grant of rights under the New Code.

For landowners, it is something to bear in mind when entering into negotiations with operators who remain in situ but whose leases have expired and who have no subsisting agreement granting rights under the New Code.

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