Last month the Government published proposals for a revised electronic communications code. The key points that Landlords should be aware of are:
1. The new Code will make major changes to the way that land is valued to ensure that Landlords get fair payment for their land, but also to explicitly acknowledge the economic and social value to all of society created from investment in digital infrastructure. Communications providers will have similar rights to utilities companies, reducing their rental expenditure and creating greater incentives for investment, including areas where costs have previously been prohibitive.
2. Operators will have new automatic rights to upgrade and share. This will ensure that new technologies can be deployed efficiently as they come to the market, with it being clear that communications providers cannot be charged extra for changes where there is minimal adverse visual impact or burden on site providers.
3. The new code will enshrine reassignment of code rights. As infrastructure assets are sold and acquired by communications providers, there will be no option for Landlords to negotiate new terms for existing contracts.
4. There will also be a policy to prevent "contracting out" of the Code. This will ensure that the Code underpins all commercial negotiations at all times.
5. Code rights will continue to apply to contracts signed after the law has come into effect and will not apply to existing contracts retrospectively. The Government intends to make transitional arrangements that will make clear how and when existing arrangements transition to the provisions of the new Code.
7. The new Code will also make practical administrative changes. In addition to clearer, modernised drafting of the legislation itself, reforms will be made to ensure that disagreements between Landlords and providers are resolved as effectively as possible. The dispute resolution procedure will be moved from the ordinary courts to specialist tribunals, which will increase the speed in which Code rights can be enforced.
8. The new Code will also contain provisions that will allow fast interim access to sites for communications providers in appropriate circumstances. This will enable operators to access sites even while valuation is being resolved.
Historically, many Landlords have been caught out by the protective provisions of the existing Electronic Communications Code which effectively grants a form of "security of tenure" to telecoms providers, making it very difficult for Landlords to seek the removal of their equipment at the end of the term. Landlords will certainly be apprehensive about these new proposals which tip the balance firmly in favour of telecoms tenants. Landlords must therefore exercise great caution when entering into any new arrangements with telecoms providers, particularly as "the Government intends to make transitional arrangements that will make clear how and when existing agreements will transition to the provisions of the new Code". We always recommend that legal advice is sought before Landlords enter into any form of arrangement with telecoms providers so that they can be made fully aware of the implications of the Code, which may not be obvious when reviewing any papers received from the providers.
On 17 May 2016, Government published details of its revised proposals for a new Code (see below). Following further consultation and additional independent economic analysis, Government’s proposed reforms remain broadly aligned with our recommendations, with some key exceptions. In particular Government has decided to adopt a different basis for the valuation of Code rights and to confer automatic rights to upgrade and share apparatus. The Government’s proposals will be included in the Digital Economy Bill announced in the Queen’s Speech on 18 May 2016.