12 Nov 2018

Recent developments in property aspects of the Electronic Communications Code

The new Electronic Communications Code which came into force on 28 December 2017 has created uncertainty in the market. Whilst the publication of a recent book on the subject by various barristers of Falcon Chambers provides some welcome guidance for operators and landowners alike, what is really wanted, however, are a series of decisions from the Upper Tribunal (which now decides telecoms disputes) as to how the contentious parts of the Code are to be interpreted.

The Tribunal (Martin Rodger QC) has recently given judgment in the first substantive cases to come before it– CTIL v the University of London and EE Ltd and Hutchison 3G Ltd v London Borough of Islington.

Notwithstanding unlikely references to human rights and beauty contests (as to which, read on!) each case concerned the grant of "interim rights" under the Code and each was decided in favour of the operator, with some interesting comments on the Code as a whole which are likely to be welcomed more by operators than landowners.

However, just as some of the fog is starting to lift on the Code, the Government has commenced a consultation upon the grant of new further powers to operators, which is referred to at the end of this article.

The Code

Paragraph 3 of the Code lists nine different types of rights which fall within its provisions including:

"(a) to install electronic communications apparatus on, under or over the land"; and

"(d) to carry out any works on the land for or in connection with the installation of electronic communications apparatus on, under or over the land or elsewhere"

Under the Code, operators can apply to the Tribunal for an "enforced agreement" if the landowner does not agree to grant a Code rights agreement, and the Tribunal may grant such an agreement if (as set out in para 20 of the Code):

  1. The prejudice caused to the landowner is capable of being adequately compensated by money.
  2. The public benefit likely to result from the making of such an order outweighs the prejudice to the landowner

If the test is met, the Tribunal can impose the terms of the agreement on a landowner including terms for compensation/ consideration.

However, if an operator wishes to get on site before such an enforced agreement order is made, there is an ability for an operator to seek "interim code rights" under paragraph 26. Such interim rights don’t confer the full benefits of the Code but allow for early access. In the absence of agreement, the Tribunal can order such interim rights if there is a "good arguable case" that the paragraph 20 test can be met.

The Counsel for the operator in CTIL v University of London described the new Code as recognition of the importance in modern life of "the human right of mobile telephony". This 'whimsical' description appears to have appealed to the Tribunal, and was repeated in the judgment!

The cases

Both of the two recent decisions concerned interim rights.

In CTIL v University of London, the operator wished to have access to a building to undertake surveys (known as a "multi-skilled visit" or MSV) to assess the suitability of the building for a telecoms mast. This was necessitated by the loss of a nearby site on a building scheduled for demolition. The landowner did not want a mast on its site at all and so refused access for an MSV.

The landowner's arguments included:

  • conducting an MSV did not come within any of the nine categories of Code rights and so the Tribunal was not entitled to make an order allowing it
  • an application for interim Code rights could only be made where there was also an application for a permanent agreement
  • in any event the two–stage test referred to above was not made out on the evidence.

In EE Ltd and Hutchison 3G Ltd v London Borough of Islington, the landlord did not object in principle to having telecoms apparatus on its land but there was a dispute over the consideration to be paid and so no agreement had been reached. The operator had applied for a permanent right under para 20 but owing to the anticipated loss of an existing site shortly and the lead in time required for constructing the new site, also sought an interim Code right. On the existing site, the land owner had issued court proceedings against the operator for possession on the grounds of an anticipated redevelopment. Although its planning permission had not get been granted, it was expected imminently.

The decisions

Interim rights were granted in each case, although in the latter on condition that the existing site provider was successful in its planning application for redevelopment. If it was not and the existing site was therefore more secure, the outcome of the balancing exercise test in para 20 of the Code (public interest v prejudice to landowner) would be different.

Significant points to note from the decisions include:

  • Undertaking surveys or an MSV was found to be a Code Right under paragraph 3(a) and/or 3(d) and an interim code right can be granted for such investigations. In commenting upon the landowner's argument the Tribunal stated that the object of the code is "the speedy and economical delivery of communications networks in the public interest" and it cannot have been intended that access for surveys, a necessary preliminary to being able to establish suitability of a particular site, was not included in the Code leaving landowners in a "ransom position". This suggests that technical arguments which conflict with the objective of the Code are unlikely to find favour with the Tribunal in future
  • It is not necessary to have made an application for a permanent agreement to be imposed to apply for an interim right. The cost of preparing a full application need not therefore be incurred until access has been allowed to establish whether the site is suitable
  • A good arguable case means that, "one side has a much better argument on the material available". This was explained further in the following terms, "That case need not be free of all doubt or uncertainty at this stage but it must be a case which is more than simply arguable. It must have a certain amount of strength and persuasiveness about it"
  • As regards the first part of the two-stage para 20 test, although commenting rather than deciding, the Tribunal suggested that the sorts of cases which might not be capable of being compensated by money might include "aesthetic or personal considerations" but it does appear that this may be a difficult for a landowner to establish
  • On the second part of the test, relatively modest evidence (happily for the operator expanded upon during cross examination) of poorer coverage following the loss of a nearby site was sufficient, combined with an absence of real evidence of prejudice to the landowner
  • Significant procedural points were clarified:
    • Martin Rodger QC indicated that, in general, an application for interim rights would be dealt with summarily , meaning evidence would be on paper and oral evidence would not usually be expected. It is therefore important for operators to ensure that their witness evidence is properly prepared and has enough detail to make out the necessary test. The Tribunal "will not generally make assumptions in favour of an operator which is in a position to provide evidence"
    • For new applications the Tribunal was bound to resolve the matter within six months and applications for interim rights should be dealt with much more quickly than this
    • In commenting upon the wording of the agreement conferring interim rights the Tribunal gave guidance to the parties that such agreement should place all of the risk on the operator and should impose no obligations on the site provider other than non-derogation from grant
    • Whilst the Tribunal appeared unimpressed at the "unattractive" language ("imperative and threatening") adopted by solicitors for one of the operators in the course of trying to get the landowner to consent to access without a Tribunal application, this was given little weight as "this is not a beauty contest".

DCMS consultation

The consultation paper, published on 29 October, addresses the following points in outline:

  • It is aimed at situations where a Tenant wants full fibre connectivity, but the telecoms operator cannot provide it because Landlord's permission is required to cross the Landlord's land, and the Landlord cannot be found/will not engage
  • In this scenario, it is proposed that if access is not allowed after two months of a request, operators will have the right to go to the local Magistrates Court for a "warrant of entry" to be issued giving the operator legal authority to enter onto the Landlord's land and lay the relevant fibre cable
  • The cable will then remain in place until a formal agreement under the Code can be negotiated or determined by the Tribunal

Comments on these proposals in the consultation are invited by 21 December 2018. One of the reasons given for the proposals is delay in applications to the Tribunal and operators not wishing to sour relationships with landlords by applying to the Tribunal. It may be wondered how far access via a magistrates' Court warrant would be regarded by landowners as more palatable and conducive to good on-going relations with operators than a Tribunal application. How far this power (an interim interim right?) would be required if the Tribunal can live up to Martin Rodger QC's aspirations of expedited hearings for interim rights remains to be seen.