The New Telecoms Code – Now In Force

Although the Digital Economy Act received Royal Assent on 27 April 2017, the provisions for the new Electronic Communication Code were only recently brought into force with effect from 28 December 2017. The new Code replaces the previous Electronic Communication Code.

Our Scott Logan has previously blogged on the background to the Code and the key changes being introduced. The overarching aim of the new Code is to put in place modern regulation that supports the rapid rollout of digital communications infrastructure, including 4G networks, superfast broadband and future generations of technology. As a reminder, the Code is a statutory framework which underpins (and can override) contractual terms agreed between landowners and operators for the installation, maintenance and use electronic communications apparatus.

Between April and December of last year we experienced a large upsurge in the number of new agreements being put in place (and the renewal and replacement of existing agreements) between landowners and operators.

Why the rush?

From the landowners' perspective, there were clear advantages in signing up before the new Code came in to effect. In addition, where commercial terms had been agreed on the basis that the agreement would be brought in to effect under the old Code, there was an impetus to do so to avoid the renegotiation of the agreed commercial terms.

A key driver for this is the move from the previous market value approach to the new "no scheme" value approach for mast site rents. Given the volume of telecoms masts located up and down the country, well established market comparables were available to agents involved in the negotiation of mast site rents. Under the new Code, the payments landowners can expect to receive for having equipment installed on their land is likely to drop because the basis of valuation disregards the operator's use of the site for electronic communications and the new provisions on assignation, upgrading and site sharing (which might otherwise increase values) are to be disregarded. Given the infancy of the new Code and the lack of comparables under the new regime, it is difficult to predict how operators and landowners will tackle rent negotiations going forward.

On assignation the new Code prevents any contractual limitation on assignation of the operator's rights and landowners will no longer be able to impose assignation fees or other conditions on assignation - such as a covenant test...