The new Electronic Communications Code is expected to come into law as early as December 2017 following The Digital Economy Act 2017 which received royal assent earlier in the year. The new code seeks to clarify the law, enable the sharing of apparatus and give the mobile operators greater flexibility and rights to use and operate their equipment as they see fit.
Faced with Brexit and the UK leaving Europe in 2019, government wanted to reform the code and put in place modern regulation that fully supported the rollout of digital communications infrastructure. The existing code was also in need of reform having been described by many as ‘an ill thought out and incoherent piece of legislation’.
So what’s new? The security of tenure provisions of the Landlord & Tenant Act 1954 will not apply to any agreement between landlord and a mobile operator if the primary purpose is to grant code rights. There is an automatic right for operators to assign code agreements to another operator, whilst any provision that seeks to limit such rights will be null and void.
Under the new code, the operators will also have the automatic right to upgrade and share apparatus with another operator. A landlord’s ability to terminate agreements for their own use is now limited to that of a redevelopment where a requirement for 18 months’ notice to be served on the operators is now mandatory.
Compensation or rent paid will be based on market value and to be valued on a ‘no scheme’ basis and based on compulsory purchase principles. Government is seeking to reduce rents paid to landlords and encourage mobile operators to invest any savings made into the further development of their networks.
We foresee rents paid for greenfield leases coming under pressure whilst rents paid for roof top leases we believe will increase as landlords restrict the supply of sites available to the mobile operators. In practice however, it will take at least a couple of years for rental values to settle down.
Currently a code of practice, prescribed forms and standards terms to be used in agreements are being negotiated between various landlord representative organisations and the mobile operators. There will be an inevitable period of uncertainty as the new code comes into force and settle down in practice.