Legal Challenges to Telecommunications Code give Operators the Upper Hand

Partner Neal Salomon gives an update on the changing landscape following the introduction of the Code 12 months ago

It has been almost twelve months since the introduction of the new Electronic Communication Code and that time has been characterised by a general lack of activity in terms of new deals or lease renewals as the telecoms operators seek to exercise their new, stronger, powers and the landowners continue to resist.

The reason for the introduction of the new Code is well understood. The previous version of the Code was based on legislation dating from the 1984 at a time when the use of mobile telephones was extremely limited and prior to the time, over a decade later, that internet usage became widespread. The now ubiquitous use of mobile phones and internet, and the government assurances of a continuing rollout of more and faster coverage (including the forthcoming 5G services), meant that the introduction of the new Code was seen as essential. In many ways this reflected that telecommunications is now seen as being on a par with the traditional utilities of water, gas and electricity.

Despite the apparent stalemate in securing agreements in the time since the introduction of the new Code, the first cases have now made it through the courts and it is fair to say that the decisions have supported and strengthened the position of the operators rather than the landowner. The first such case is Cornerstone Telecommunications Infrastructure Ltd V The University of London [2018], which was concerned particularly with the rights of an operator to take access to land for surveys. The right to undertake surveys is not explicitly included within the rights afforded by the Code (“Code Rights”) and therefore the landowner had refused a request for access.

The outcome of the case was decided in the operator’s favour, with the judge noting that the intention of the Code was to facilitate and ease the rollout of communications networks. Any requirement for an operator to enter a ransom situation in order to acquire rights for a survey would be contrary to these intentions and it was therefore found that a right of access was implicit in the Code Rights. Furthermore, the judgement made it clear that, in times of dispute, a Code Operator could seek interim rights with much less stringent requirements, without submitting any application for permanent rights.

The case was not specifically dealing with valuation matters, but the judgement did also refer to the fact that the value of rights under the code is expected to be “nominal”, which will again come as unwelcome news to landowners and strengthen the negotiating position of the telecommunications companies.

This case has closed one of the potential loop-holes that a landowner may have looked to benefit from in seeking to capitalise from the approaches of a telecommunications company. It is likely that this case will be considered as precedent in any future dispute taken before the Upper Tribunal and may have an impact on the assessment of costs. A landowner facing a similar situation would therefore be advised to exercise caution before deciding to prevent access.

It is yet to be seen how futures cases are decided (or indeed if this recent case is appealed) but it is seems likely from the tone of the judgment that future decisions to clarify other elements of the Code are more likely be decided in the favour of the operator than the landowner. As the interpretation of the Code continues to become more clearly defined by the decisions of the courts it is now more important than ever that those dealing with telecommunications matters take the best possible advice.

Our team of specialist expert valuers can help navigate the changing landscape and assist in negotiations with telecommunications companies. For more information please contact enquiries@bellingram.co.uk

Published on 17th December 2018