The uncertain waters surrounding the rights of operators of telecoms apparatus became considerably choppier at the end of 2017 when the Digital Economy Act bought into force the new Electronic Communications Code (the Code). The goal of the Code was to provide sufficient rights to telecoms operators to be able to meet the public's increasing demand for connectivity.
The Code not only gives greater security to operators with equipment in place, but also provides operators the ability to carry out surveys to assess prospective sites.
The question of survey rights and where these fall within the Code was examined by the Court of Appeal (The University of London v Cornerstone Telecommunications Infrastructure Limited [2019] EWCA Civ 2075).
The telecoms operator served notice requesting a survey of a potential apparatus site on the roof of university halls. The Court of Appeal upheld the decision by the Upper Tribunal that such surveys are capable of being a Code right, satisfying the public policy of improving electronic communication services. A key consideration in CTIL's favour was that its apparatus on an adjoining site was being removed due to redevelopment, but this decision effectively enshrines the rights of Code operators to carry out surveys on private land.
Should a landowner receive a request from an operator to carry out a survey and push back, the operator may serve a formal notice for interim Code rights. If the site provider fails to agree to the terms of the notice within 28 days then the operator may apply to the Upper Tribunal for an order. There are practical points to consider – such as the availability of alternative sites in the area; however, following the University of London case, it is likely that any application by an operator for interim Code rights to carry out surveys would succeed.
This follows a general trend of upholding Code rights that have a clear link to achieving widespread connectivity. This has been seen in decisions that protect continued coverage where a redevelopment ground was not viable and only used to frustrate Code rights (EE Ltd & Hutchison 3G UK Ltd-v-Sir James Chichester [2019]) or to ensure that an operator remains in occupation (Cornerstone Telecommunications Infrastructure Ltd-v-Compton Beauchamp Estates Ltd [2019]).
With operators able to apply to the Upper Tribunal for interim rights, in the event of receiving a request for a survey, the best course of action may be for a landowner to work with the operator from an early stage to establish favourable commercial terms. This can include requirements for a certain level of public liability insurance and indemnity for damage. Accompanied access may prove more difficult with Covid-19 restrictions in place, and recent government guidance has indicated that it is vital for access to be provided for repairs, maintenance and upgrades, although the extent of this is yet to be tested. Early communication with the operator may also allow a landowner to set the perimeters of a potential future occupation, with an effect on valuation.
As well as considerations on acquisition, the buyer needs to be aware of potential issues for raising finance by using the property as a security. Very often telecoms infrastructure is owned by a third party – telecoms provider – and the terms of the use of such infrastructure is governed by either a lease or a licence. When charging, consideration should be given to the terms of any such lease or licence from the position of the lender as there is a requirement to report on any such documentation in a charging exercise. In particular, the lender will be looking at any third party rights and reservations over the property in order to repair and maintain the telecoms infrastructure, what may happen should any damage be caused to the property whilst the third party is accessing the infrastructure, the term of any such lease or licence, the position on security of tenure and any forfeiture clauses which may prejudice the lender.
A lender will need to ensure that, should it find itself in an enforcement situation, the security is not compromised by any such lease or licence that is in place.
Under the new regime, reporting to the lender on such issues becomes more problematic in that these types of leases and licences do not need to be registered at the Land Registry in order to be binding on the land. Where there is no such evidence of such rights noted on title but they still exist over the land, further searches and client input will be required to reveal any such information.
There is also now an automatic right to assign electronic communication code agreements, whereby operators can assign code rights without the consent of the landowner and any contractual provision to the contrary will be void, which may cause issues when trying to identify the current operator of any such infrastructure on the property.
Thinking of the alternative scenario where the landowner has property which is already in charge and wants to enter into arrangements with a telecoms provider for the placement of such infrastructure or equipment on its property, the owner should check carefully in its terms with the lender as to whether or not consent from the lender is required. In almost all cases, the lender's charge will be protected by a restriction on title and in order to register any new lease or licence on the title to the property, the lender's consent would need to be granted in advance of entering into any such lease or licence. This may become less relevant now as not all leases and licences will need to be registered in order to be binding but in all cases a check with the lender as to whether they need notification of such agreements will be required.
