The new Electronic Communications Code – what landowners need to know

The Electronic Communications Code gives licensed telecoms operators statutory rights to place and keep equipment on private land. A new Code (which will replace that in the Telecommunications Act 1984) is contained in the Digital Economy Act 2017. Until the new Code comes into force, the old Code continues to apply but it is expected that the new Code will come in before the end of the year. [Update – the new Code came into force on 28 December 2017.] The new Code contains wide-ranging reforms in favour of operators, and so landowners with telecoms tenants will want to understand the key changes.

What is changing

  • Site Sharing: Telecoms operators will have the right to share sites without the landowner’s consent (regardless of the terms of any written agreement).
  • Assignment: Operators will have the right to assign (i.e. transfer) their leases without landowner consent (regardless of the terms of any written agreement).
  • Upgrades: Operators will have the right to upgrade equipment without landowner consent (provided there is no more than a minimal adverse visual impact and no additional burden on the landowner).
  • Valuations: The valuation basis for telecoms sites will change from an open market basis to a 'no scheme' basis (i.e. one which artificially disregards both the existence of telecoms leases and the above rights).
  • Landlord and Tenant Act 1954: The new Code will end the double protection which telecoms tenants enjoyed under: (a) the old Code; and (b) the secure business lease regime contained in the Landlord and Tenant Act 1954. New telecoms leases will only be protected by the Code.

What is staying the same

  • Written Agreements: Code rights will still primarily be conferred in a written agreement between the landowner and the operator, such as a lease.
  • Code Powers: Operators will continue to have fall-back rights to place equipment on private land if agreement cannot be reached, and to keep it there after any written agreement has ended.
  • Opting out:  The new Code, like the old, will be compulsory. There can be no opting out by agreement.
  • Retrospectivity: The sharing, assignment and upgrading rights in the new Code will not apply to leases granted before it came into force. But, at the time of writing, further transitional regulations have yet to be published.

Key issues

  • Rentals: Due to the new valuation basis, rentals for leases under the new Code may well be depressed.
  • 'Payaways': Arrangements by which the landowner takes a cut of the income generated from operator-to-operator site sharing arrangements will no longer be permitted under the new Code.
  • Renewal: Since the site sharing, assignment and upgrading rights in the new Code will not apply to leases entered into before it comes into force, landowners will want to complete any outstanding lease renewals before that date, and we recommend as soon as possible.
  • Vacant Possession: Resisting the installation of new equipment, or regaining possession of an existing site, for redevelopment purposes may prove marginally simpler under the new Code – but it will still involve the landowner in a lengthy and uncertain Court process.
  • Risk versus Benefit: The new Code is intended by the Government to make the roll-out of mobile and broadband networks easier. However, if it causes landowners to regard hosting such equipment as more a burden than a benefit then, as the British Property Federation and the Country Landowners' Association have pointed out, there is the potential for the new Code to have the opposite effect.

When is it happening?

The new Code is expected to come into force before the end of 2017. [Update – the new Code came into force on 28 December 2017.] For more information on this topic, please follow these links:  

The Digital Economy Act 2017 ( Electronic Communications Code at Schedule 1)

OFCOM Consultation (including draft Code of Practice and model Code Agreement) 

For more information please contact Tom Brearley at tom.brearley@michelmores.com or on 01392 687554.