New electronic communications code to come into force on 28 December 2017

Regulations have been made bringing the new Electronic Communications Code into force before the end of the year.

Overview

The new Electronic Communications Code (the Code) will come into force on 28 December 2017.  It brings into play a regime which will apply to new and, with some modification, existing agreements. The Code regulates the relationship between those who provide electronic communications infrastructure and equipment and those who own and/or occupy the land on which it is situated.

The Government had previously noted that a new code was required to reflect the vast changes that have taken place in digital communications since the code was first established back in 1984 (albeit it has been subject to later revision) and it is looking to put digital communications infrastructure on a similar regime to utilities like electricity and water.  

It is interesting to note given the recent publication of the Law Commission’s 13th programme of law reform, that reform of the electronic communications code was looked at by the Law Commission between 2011 and 2013 and the new Code builds on their recommendations.

Who benefits from Code rights?

Ofcom decides on application who the Code is to apply to and maintains a register of those "operators" who can benefit from the Code rights.   

The Code rights are detailed and in short provide for the installation, operation and maintenance of ‘apparatus’ by operators in order to provide a digital communications network.  Code rights can be acquired by agreement or imposed by the court.  It is not possible to contract out of the Code.

Some key provisions and themes from the new Code

  • The new Code is generally viewed as more operator friendly and contains provisions which are likely to see lower rents charged to operators.
  • The Code provides that provisions in agreements which restrict operators assigning to other operators, or makes such an assignment subject to conditions, are void. However, a requirement for a guarantee from the outgoing operator is permitted. In addition, provided there is minimal adverse impact on appearance and no additional burden on the other party to the agreement the Code also provides automatic rights for operators to upgrade and share equipment.
  • The Code introduces a new security of tenure regime for such agreements; the security of tenure provisions under the Landlord and Tenant Act 1954 do not apply to agreements whose "primary purpose" is to grant code rights and instead the Code has its own security of tenure regime which is similar to the 1954 Act, but with much longer notice periods (a site provider should give 18 months’ notice to bring a code agreement to an end).   There are also various provisions in relation to removal of apparatus, again with notice periods.
  • Code rights bind whether or not they are registered at the Land Registry.

Transitional provisions  

Parts of the new Code apply to existing agreements but this is subject to modifications set out in the transitional provisions. Some points of note in relation to the transitional provisions include:

  • Narrower code rights: Code rights for existing arrangements will continue to be referenced to the old code.  These rights are narrower than under the new Code.
  • New rights in relation to assigning, sharing and upgrading not retrospective: Part 3 of the new Code which contains the more wide ranging provisions in relation to assigning agreements and upgrading and sharing equipment does not have retrospective effect and will not apply to existing agreements.
  • Termination and modification provisions: In relation to the termination and modification of existing agreements, the transitional provisions provide that the termination and modification provisions of the new code do not apply to any existing agreements that either (a) have the protection of the Landlord and Tenant Act 1954 or (b) are excluded from the protections of that Act but whose primary purpose is not to confer code rights. The transitional provisions go onto provide that subject to the exclusions above, the termination and modification provisions in the new Code will apply to existing agreements but with variations which include:
    • if at 28 December 2017 an existing agreement has an unexpired term of less than 18 months, then the notice provisions for bringing a code agreement to an end under the new regime will be a period equal to the unexpired residue or 3 months whichever is the greater.  The notice period under the new regime is 18 months.
    • the transitional provisions direct the Court, when deciding whether to make an order for termination, to disregard the amount of consideration payable by the operator to the site provider under the existing code agreement.
  • Court applications and orders: Where an application has been made to the court under an existing agreement/the existing code for required rights, any order made will be governed by the new Code.  Any court applications made after the new Code comes into force will be governed by the new Code.
  • Rights to compensation that arise before repeal preserved: Repeal of the existing code will not affect rights to compensation that arose in relation to matters that occurred before repeal.
  • Alteration and removal of equipment: Where a notice has been served under the existing code prior to repeal requiring removal of apparatus, the provisions of the existing code will continue to apply.  Provisions relating to the alteration of equipment installed before the new Code comes into force will continue to be governed by the existing code. 

Ofcom - supporting documentation

The Code includes obligations on Ofcom to publish:

  • a Code of Practice to accompany the Code
  • a number of template notices which must or may (depending on the circumstances in question) be used by Code operators and landowners/occupiers, and
  • standard terms which may (but need not) be used by Code operators and landowners or occupiers when negotiating agreements to confer Code rights.

Details of these together with a statement from Ofcom on the Code can be found here.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.