The Electronic Communications Code (the “Code“) is the legal framework in the UK underpinning rights for network operators to install and keep electronic communications apparatus on public and private land. The framework is designed to facilitate the installation and maintenance of electronic communications networks.

Current powers under the Code

When the telecom regulatory authority in the UK (“Ofcom“), gives a direction that the Code applies to a certain person, such as a network operator, the Code confers “code rights” to them. Code rights grant that operator the right to install and maintain apparatus on, under and over land and results in considerably simplified planning procedures. For example, the Code allows these designated operators to construct communications infrastructure in certain areas without planning permission and apply to the Court to bind landowners or occupiers to agreements when their land is required to build the network.

Consultation on changes to the Code

The Code was substantially reformed in December 2017. Those reforms specifically recognised the increasing importance of access to fast and reliable digital services for society and the economy, made in view of a planned nationwide rollout of ultra-fast gigabit capable broadband and 5G networks.

However, the Government has received regular feedback since the 2017 reforms, suggesting that further changes may be needed.

The Government therefore opened a consultation on the Code on 27 January 2021, focussing on the three areas described below. The feedback will inform decisions on the scale and scope of any future alterations to the Code.

Areas for further reform

The Government has identified three key areas for possible reform:

  1. Issues relating to obtaining and using Code agreements;
  2. Rights to upgrade and share; and
  3. Difficulties specifically relating to the renewal of expired agreements.

1. Issues relating to obtaining and using Code agreements

What’s the problem?

Operators have found it difficult to make agreements in good time, delaying their ability to provide homes and businesses with mobile coverage and gigabit capable connections quickly. Protracted and difficult negotiations have negative impacts on parties, who are subject to a time-consuming and costly process, and on digital networks, which suffer from delays in upgrading sites and rollouts.

The Government’s proposal

The Government has offered a series of proposals to support successful negotiations and applications, including:

  • introducing a statutory process for monitoring raising complaints about non-compliance with the Ofcom Code of Practice;
  • introducing an alternative dispute resolution scheme and fast track court procedure for applications;
  • introducing an alternative procedure for Code rights to be obtained if an operator can demonstrate that reasonable efforts have been made to secure an agreement, but the occupier or landowner has failed to respond to repeated requests;
  • changing the definition of an occupier or changing who is able to confer Code rights where an operator is in occupation of a site; and
  • allowing a party to seek modified terms or additional rights before an agreement expires in certain situations from a court. The court could be required to take into account a public benefit test similar to that used for the imposition of Code rights in deciding if modified terms should be imposed.

2. Rights to upgrade and share apparatus

What’s the problem?

The 2017 reforms introduced automatic rights permitting operators to upgrade their own apparatus and share use of it with other operators, subject to certain conditions. However, the Government has found that disagreements about the automatic rights to upgrade and share are undermining relationships between parties and prolonging negotiations. Additionally, these automatic rights only apply to agreements completed after December 2017, limiting the use of pre-existing networks.

The Government’s proposal

In response, the Government is considering the following changes:

  • giving the court jurisdiction to impose rights to upgrade and share apparatus that are separate to the automatic rights currently permitted under paragraph 17 of the Code, allowing agreements to be adapted if there is good cause; and
  • introducing limited retrospective rights to share and / or upgrade apparatus installed prior to the 2017 reforms.

3. Difficulty renewing expired agreements

What’s the problem?

Part 5 of the Code provides that once an agreement has expired, the operator can continue to exercise the Code rights, and the site provider continues to be bound by them, until the agreement is either terminated or renewed. However, Part 5 does not apply to all expired agreements. Reports to the Government indicate there is a lack of clarity and consistency about when Part 5 applies and confusion about renewing agreements.

The Government’s proposal

To provide greater clarity, the Government has proposed:

  • applying the Part 5 provisions to all agreements (including those entered into before the 2017 Code came into effect). Unless new terms have been agreed the operator’s rights would continue to be exercisable in accordance with the expired agreement, and the site provider would remain entitled to payment in accordance with the terms of that agreement;
  • introducing a requirement for all disputes relating to the Code to be heard and decided on within six months of the date that the application to a court is made; and
  • introducing a procedure permitting parties to request an interim order in relation to a request for a renewal agreement and, where a renewal agreement is subsequently imposed, permitting the court to backdate the financial terms of that agreement to the date of the request for an interim order.

Next Steps

The consultation will run for 8 weeks, closing on 24 March 2021. The Government will then consider the responses received and provide a consultation response outlining any proposed legislative changes.

The Consultation document can be found here.

Author

Steve Holmes leads Baker McKenzie's Technology & Communications practice in London. Steve is rated by the UK legal directories as a leading lawyer in the outsourcing, telecoms and technology categories. Steve’s practice focuses on drafting and negotiating major technology, outsourcing, telecommunications and digital transactions, acting for both customers and suppliers across a range of sectors. He also provides regulatory advice to clients operating in the technology and digital space.

Author

Alex is an associate in the Tech and Commercial team of Baker McKenzie's London office. Alex advises clients across a wide range of IT, technology, regulatory and commercial work. Alex's practice spans a broad range of transactional and commercial advisory work, focusing on telecommunications regulatory issues as they apply to the technology sectors.

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