Sharing rights come into force today, but how is the Electronic Communications Code changing?

The full effect of the Product Security and Telecommunications Infrastructure Act 2022 is yet to be felt, despite it having received Royal Assent on 6 December 2022.

Further rights will, however, come into force today, Monday 17 April 2023. Sections 58-59 of the Act grant three distinct rights to telecoms operators enabling them to upgrade and share apparatus.

These new rights, as part of the wider Act, will have a key impact on the Electronic Communications Code, while changing how it works moving forward.

Impact of the Act

There are two sections to the 2022 Act – part 1 regulating Product Security, and part 2 regarding Telecommunications Infrastructure.

Part 1 relates to the security of ‘connectable products’ – smart devices – with an estimated 12.9bn such products worldwide. It places various duties on manufacturers and distributors to ensure that consumers are protected against cyber-attacks and hacking. These provisions are not yet in force.

Part 2 has direct implications on landowners, occupiers and telecoms operators.

Key changes made by Part 2 include:

1. A right to upgrade and share apparatus – ss.57-59 now in force.

The Act grants telecoms operators rights to share apparatus:

  • For new agreements, sharing apparatus becomes an express Code right. Both parties are also permitted to access land to carry out works associated with that sharing. However, the Act only gives the ‘first’ or ‘apex’ operator permission to share its apparatus with another – it does not give others the right to require the first operator to share.
  • Subsisting Code agreements can also enjoy sharing and access rights. These are more limited and subject to there being no adverse impact on the land, with no additional burden imposed on any person with an interest in the land. To claim these rights, the operator must first attach notice to the land no later than 21 days before upgrading works are carried out.
  • For pre-29 December 2003 agreements, the Act amends the Code’s transitional provisions – permitting an operator to upgrade the apparatus or share its use with another operator where previously, a new Code-compliant agreement would have been necessary. Again, these rights are subject to notice being displayed and there being no adverse impact on the land and no additional burden imposed on any person with an interest in the land.

2. Amendments to the 1954 Act to align the renewal process with Part 5 of the Code – ss.61-65 not yet in force

One of the key drivers behind the Act was to align the security of tenure procedure under the Landlord and Tenant Act 1954 more closely with the Code, where the subsisting tenancy is primarily for the conferral of Code rights.

The main change is that jurisdiction in relation to Code renewals is transferred from the County Court to the First-tier Tribunal (FTT) and Upper Tribunal. This means that the FTT will have the power to decide the terms of the agreement, the level of rent, and what compensation is due to the landlord.

The Act also amends the 1954 Act as to:

  • How the level of rent under a Code renewal should be calculated – by reference to the market value of the landlord’s agreement to confer renewed rights. A new s.34A will be inserted into the 1954 Act to introduce a ‘no network’ assumption, which will operate to exclude any element of value attributable to the intention of the operator to use the site as part of its network from the rent calculation.
  • How interim rent should be calculated; and
  • How the landowner should be compensated, calculated by reference to the landlord’s damage or loss.

These amendments only apply to agreements entered into after 28 December 2017, i.e. when the Code came into force.

3. Unresponsive occupiers and court-ordered rights – s.67 not yet in force

Where a landowner has failed to respond to repeated requests for access, an operator can apply to court for an order imposing an agreement granting limited rights of access for up to a six year period. This seeks to combat one of the main complaints made by operators during the consultation period.

The new procedure is not a short one. It requires an operator to serve the initial request notice, then two warning notices and a final notice, meaning a total wait time of at least 84 days - during which there must be radio silence, as even acknowledgment of receipt by the occupier will defeat the operator.

The right will also only apply in limited circumstances. For example, where the land has no buildings on it and is not used as a garden, park or other recreational area, and where the apparatus is to be installed under or over the land, rather than on it.

4. Duty to consider and propose Alternative Dispute Resolution (ADR) – s.69 in force from 7 November 2023

In line with the general direction of travel in the courts, the Act imposes a new duty for operators to consider using ADR before making applications to the FTT. The burden is on the operator to also make landowners aware of this option, including in their initial s.20 notice seeking a Code agreement.

The Act makes it clear that there are potential costs penalties for those that unreasonably refuse to engage in ADR. However, it is yet to be seen whether this becomes simply boilerplate drafting in every notice or whether in fact parties take the opportunity to resolve disputes outside the FTT.

Comment

While the legislation is successful in ironing out some elements of the New Code that were considered prejudicial to both landowners and operators, the overarching purpose of the 2017 Act and its sister legislation, to clarify and streamline telecoms law, is still open to debate.

The legislation remains unwieldy in parts, with both parties being required to jump through innumerable hoops to meet their objectives. Further clarification from the FTT is, therefore, critical.

Disclaimer

This information is for educational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. © Shoosmiths LLP 2024.

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