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First Major Legal Test for New Electronic Communications Code

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Cable operator Virgin Media has, this week, launched a landmark legal action against Durham County Council which is the first major test of the new Electronic Communications Code which came into force on 28 December 2017.

Virgin has instigated proceedings to force the council to allow it to lay new fibre-optic cables along grass verges without paying “hefty” fees per metre.

Virgin claims that the “land levy’ will be a broadband blockade to thousands of homes and businesses across the county.

The case at the Upper Tribunal (Lands Chamber) is a test of the Electronic Communications Code reforms, designed to speed up the roll-out of broadband and mobile network upgrades and the Tribunal can impose terms if an agreement cannot be reached.

Electronic Communications Code Reforms – key facts

The Electronic Communications Code is incorporated into the Digital Economy Act 2017 and continues to provide licensed telecoms operators with statutory rights to place and maintain equipment on private land. Within the code:

  • telecom operators have an automatic right to share and upgrade apparatus (provided they cause no more than a minimal visual impact nor place additional burden on the landowner
  • operators will benefit from automatic right to assign code agreements
  • compensation or consideration owed by telecoms operators to landlords is now calculated by reference to the open market value of the land on a “no scheme” basis, utilising compulsory purchase principles – land will be valued based on its value to the landowner as opposed to the operator
  • an order from the court ending a relationship with an operator does not automatically confer an immediate right to possession. The procedure to remove an operator is now more protracted than ever before.

How is the new code performing?

Unsurprisingly, after only six months this is up for debate.

Indisputably, the new code has removed the uncertainty surrounding the application of the Landlord and Tenant Act 1954, which indeed posed a real struggle to the previous code’s efficiency. Now operators can only rely on the protection conferred by the new code.

Operators have on the face of it more freedom and flexibility to improve their networks, inviting opportunity for faster and more reliable services, especially in rural areas.

That said, from a landowner’s perspective, the revised valuation procedure will in all likelihood have a detrimental impact on rental yields.  This may in turn result in a reluctance to enter into telecoms leases, on the basis that they will offer a less attractive income stream.   Operators may be forced to rely on statutory powers in order to coerce landlords to play ball.  The inevitable litigation and associated fall out may end up being an unwelcome side-effect of the new regime.

Before entering into any new arrangement with a telecoms operator it is advisable for landowners to consider the practical impact of the new legislation and to seek legal advice where appropriate.

For general advice or to discuss specific Electronic Communications Code issues, please contact me on 0161 672 1539 or email simon.maddox@slaterheelis.co.uk

 

 

 

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