March 23, 2020

Who has the right to apply for code rights under the new Telecommunications Code?

The Electronic Communications Code 2017 (“the New Code”) has caused a flurry of litigation as landowners, telecoms providers and also the courts come to grapple with the questions of how the New Code operates in practice.

One such provider is Cornerstone Telecommunications Infrastructure Limited, which features in two very recent cases on the New Code.

The first case, Cornerstone v Compton Beauchamp Estates Limited [2019] considered the question of whom telecoms operators should approach in order to gain new rights over land which they are looking to use for the first time.

Background

Vodafone had a lease of a site owned by Compton for a period of 10 years. The site was on the edge of farm land, near the railway, and a 15 meter mast, and associated equipment, was placed upon it.

Vodafone’s lease came to an end, but its equipment remained on the site, pursuant to the terms of the previous telecoms regime. Cornerstone (which is a joint venture between Vodafone and Telefonica) wished to install equipment on the land and obtain rights under the New Code to do so. Accordingly, it served notice on Compton under paragraph 20 of the New Code seeking code rights to be granted to it.

Compton objected, on the basis that, even though it was the land owner, it had no obligation to grant code rights under paragraph 20 of the New Code. The case went to the tribunal.

First Decision

The Upper Tribunal decided that Cornerstone had got it wrong. Rights under the New Code can only be conferred by an agreement between the “occupier” of land and an operator (see paragraph 9 of the New Code).

Compton, although it was the landowner, was not the “occupier” of the land – Vodafone was.

Accordingly, if Cornerstone wanted to obtain rights under the New Code it should have reached an agreement with Vodafone and then asked Compton to be bound by that agreement. If Compton refused, Cornerstone could then have made an application to the tribunal under paragraph 20 of the New Code to bind Compton to the rights that had been agreed between Cornerstone and Vodafone as “occupier”.

The appeal

Cornerstone, not liking this outcome, took the case to the Court of Appeal. Unfortunately for Cornerstone, the Court of Appeal agreed entirely with the analysis of the Upper Tribunal.

These were the key points made the in the judgment:

  • The New Code is clear that code rights can only be conferred by the “occupier”. The landowner (if different) can either agree to be bound by those rights, or the tribunal can be asked to make an order that the landowner is bound
  • Whether someone is an “occupier” is a question of fact not legal status and depends on the physical presence and control of the land in question. In this case, because the mast was in place and the land fenced off, Vodafone, not Compton was the “occupier”
  • This approach makes best sense of the drafting of the New Code, and even more sense when it’s recognised that the 1984 legislation that first gave rise to telecommunications rights, acknowledged that it might impede the grant of rights if operators were to have to spend time identifying and contacting the landowner. The actual occupier of the land was always the first port of call
  • Cornerstone suggested that this outcome created a conflict within the New Code, as operators who are “in situ” may apply for new code rights to the landowner. The Court of Appeal considered that there was no conflict. They took the view that Part 5 of the New Code (which allows operators in situ to apply for code rights) was a wholly separate regime, and so did not conflict with Part 4, which Cornerstone had tried to use. In Part 5 cases, the operator must liaise with the “site provider” which is the entity bound by the code rights. In this case, as Cornerstone was not in situ, Compton was neither an “occupier” nor a “site provider” so there was no basis on which Cornerstone could apply directly to it for new rights

Practical implications

It may seem, at least initially, that this is a strange decision– that the landowner should only be asked to agree (or have forced on it) code rights in respect of a new operator that have been granted to that new operator, not by the landowner, but a third party who may have very little legal title (if any) to the land.

However, the key point to remember is that the New Code is geared towards giving operators clarity about whom they should be dealing with when it comes to land. If they are approaching land for the first time, then their first port of call is the entity that occupies the site. This might be a landowner, but it might equally be another operator, a tenant or even in some circumstances a licensee.

It is a reminder to landowners to be diligent and understand their occupation of their estate. If there are other telecommunications operators present on the site, then it is that operator, and not the landowner, who is entitled to grant a new operator code rights. Landowners may find that they are asked to consent to an agreement that they have had nothing to do with negotiating, with the threat of tribunal proceedings if they do not agree.

Remember, operators may also share equipment with other operators under the New Code, so ensuring that the right to share is restricted to the equipment currently on site, will at least mean that any operator wishing to install new equipment must go through a formal process to obtain rights.

The article first appeared in our Real Estate Bulletin - March 2020.