Telecommunications technology has made significant advances in recent times with digital communication no longer considered a luxury but rather a fundamental part of the country’s infrastructure.
Despite this, as it stands, the relationship between landowners and telecoms operators is currently governed by a Code originally enacted in 1984 to give telephone companies a statutory basis to install and keep landline equipment on land.
In recognition of the fact that the existing Code is out of date given the huge advances made in digital technology since its implementation and in an attempt to incentivise telecoms operators to continue to invest in the mobile network, the Government has agreed to update the Code.
Key Changes for Landowners to Note
The majority of the rights enjoyed by operators under the existing Code are being retained by the new Code but there is one major change that will affect landowners – the price operators will have to pay for renting the land on which their equipment sits.
Under the new Code, the value of the land will be assessed on the basis of its value to the landowner rather than the operator, as with the system used by utility providers. This means most landowners will be paid considerably less rent for having mobile equipment on their land.
Additionally, to facilitate the rapidly evolving nature of digital technology and encourage growth of the network, operators will no longer need to seek consent from the landowner to upgrade or share their apparatus, which effectively means a landowner will not only have little say over the size or amount of equipment installed on their land but will also lose their ability to earn extra income from each additional piece of apparatus or site sharing arrangement.
The new Code also prevents landowners from opting out of its provisions, meaning landlords won’t have the ability to negotiate terms more favourable to them than those set out in the Code.
When will the Changes Take Effect?
OfCom is currently consulting on the new proposed Code and it is expected that the Code will be implemented shortly after the consultation ends in early June 2017, although, at least in theory, the results of the general election next month could affect this.
The Code will not apply retrospectively and will only apply to contracts after the law has been enacted. Transitional arrangements will be put in place when existing contracts come up for renewal.
What can landowners do?
Landowners in the process of negotiating terms with a telecoms provider would be well advised to conclude any ongoing lease negotiations so that the lease can be completed before the new Code takes effect, to benefit from the current valuation regime and possible extra income from site sharing arrangements and/or installation of additional apparatus. This is particularly so since landowners can be compelled to agree terms for a new lease via a court order where an operator deems a particular site necessary to maintain the network, so pulling out of a deal as a result of the changes may not be an option. Of course, telecoms providers are also aware of what is coming, so may seek to delay for exactly the opposite reason!
Landowners should also be alive to the possibility of operators trying to terminate existing arrangements so as to bring replacement contracts within the auspices of the new and more favourable Code.