First Communications Code decisions are a blow for landowners

By Neal Salomon, Partner in Utilities & Renewables

Landowners should expect a rough ride in the future as the impact of a new code covering the use of telecommunications equipment on land is being felt.

With government commitments to a continuing rollout of more and faster telecommunications coverage, including the forthcoming 5G services, the introduction of the new Code in December 2017 was seen as essential as means to foster greater investment by operators.

Under the Code, telecommunications operators benefit from further powers to install equipment and new rights to upgrade and share apparatus – widely considered to be at the disadvantage of landowners who have previously benefitted from relatively generous land payments.

The 18 months since the introduction of the Electronic Communication Code has seen 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 move.

Key decisions in the first cases to challenge the Code are showing clear outcomes in favour of the operators – which is likely to have serious financial implications for landowners.

The first of the cases – Cornerstone Telecommunications Infrastructure Ltd V The University of London [2018] – concerned particularly the rights of an operator to take access to land for surveys, which is not explicitly included within the rights afforded by the Code 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 to ease the rollout of communications networks and that this must have included an implicit right to undertake surveys. This closes a potential loop-hole that a landowner may have looked to benefit from in negotiating with a telecommunications company.

That first case has been followed by a raft of other cases, each of which has followed suit and found strongly in favour of the operators. Probably the most important of these from a landowner’s perspective is the case of EE Limited and Hutchinson 3G UK Limited v The Mayor and Burgesses of the London Borough of Islington [2019]. This case was the first to determine and value the consideration due to a site provider and related to a rooftop installation in London, although its commentary on valuation is equally as applicable in a rural setting.

The rent for the site had been provisionally agreed (under the old code) at £21,000 per year but the Tribunal found in the operators favour, valuing the consideration under the new code at a nominal payment of £50. The stark contrast between the negligible consideration decided upon and the provisional rent that had previously been agreed sends a clear message to landowners who should exercise caution before entering into any legal action against an operator seeking powers over their land.

It is yet to be seen how future cases are decided but it seems likely from the tone of the judgments to date, 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 from experts.

Bell Ingram has a team of specialist expert valuers that can assist in all telecommunications matters. The team has acted as expert witnesses in recent cases involving telecommunications valuations and has advised on national rates to be adopted for national fibre optic networks.

Head quartered in Perth, Bell Ingram manages over 500,000 hectares across the UK on behalf of public, private and corporate clients. It has built a name as one of the UK’s leading providers of land management services for the utilities and infrastructure sector.

To find out more contact Neal Salomon on tel. 01606 523 030 or email neal.salomon@bellingram.co.uk

Published on 19th August 2019