Updates to telecoms legislation come into force

Updates to telecoms legislation come into force

Telecoms reform - government to get power to block vendors from public communications market

In December last year, the Telecommunications Infrastructure Bill received Royal Assent and became law. One of the main purposes of this bill is to provide clarity on certain aspects of the Electronic Communications Code (the code) and ensure a smoother process for agreement to be reached between landowners and telecommunications operators. The key changes this bill makes to the code are as follows:

Relationship of the code and the Landlord and Tenant Act 1954 (the 1954 Act)

One of the areas which have previously been unclear when dealing with telecommunication agreements is the relationship between the code and the 1954 Act on renewals. In 2017, the legislation specifically excluded new code agreements granted after the code came into force from the security of the 1954 Act. However, it left open the question of existing telecoms leases with 1954 Act protection on lease renewal.

The bill sets out that in this scenario, the renewal process for tenancies where the primary purpose is to confer code rights should now be more closely aligned to that set out in the code. A new Section 34A is added to the code, which sets out how rents payable will be assessed. In particular, rental assessments will include the following assumptions:

  • A “no network” assumption that the transaction does not relate to the provision of an electronic communications network
  • An assumption that all code rights apply other than those relating to assignment, upgrading and sharing and
  • That the operator has an alternative site which could be used for the rights sought.

These clarifications will seek to end any uncertainty over rents which might be obtained under a 1954 Act renewal and bring these in line with the procedure set out in the code.

Operator’s to be able to make claims for interim rent

Until now, the power to make an application for interim rent on a renewal had sat solely with the landowner. This has now been changed so that the operator will also have the right to bring a claim for interim rent. It is likely we will see operators make use of this power to avoid scenarios where the renewal process is slow and the operator is left paying the previous (usually higher) rent.

Alternative dispute resolution (ADR) encouraged

Operators are now obliged to consider using ADR prior to making a tribunal application. In particular, operators will be required to inform landowners that ADR is an option. This encouragement for both parties to use ADR is reflected in the relevant form of notices. Any unreasonable refusal to engage in ADR may result in costs awards against the defaulting party in any future tribunal proceedings.

Changes to sharing and upgrading rights

Changes have been made so that the sharing and upgrading of rights set out in the code can apply to “subsisting agreements” (being agreements entered into before the code came into force). This will give operators an automatic right to share and upgrade their equipment (subject to the limitations set out in the code) even where a new code agreement has not been entered into.

Dealing with unresponsive landowners

The bill sets out a procedure for operators to serve a series of four notices on landowners and if no responses are received from the landowner an application can be made to the tribunal to impose an agreement. It remains to be seen how effective this process will be as it appears that by simply acknowledging at least one of the notices, the landowner would be able to prevent the operator from making such an application.

National security

A provision has been added which gives the government an ability to block a code agreement where the Security of State provides a certificate that the imposition of code rights to an operator would be prejudicial to national security.

It is hoped that these changes will provide clarity to both operators and landowners in respect of the issues outlined above. It remains to be seen how some of these changes will play out in practice and whether it will reduce litigation. However, what is clear is that there is a desire in government to smooth out the process by which code agreements are entered into.

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