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Supreme Court clears up Electronic Communications Code mess – in favour of telcos

A win for telcos, landowners will remain unhappy.

The UK supreme court has mostly sided with telcos in settling at least some of the confusion around the 2017 Electronic Communications Code, in rulings on three cases it handed down today.

The court allowed one appeal, dismissed another, and asked for more information in a third in cases raised by landowners due to significant rent reductions of phone masts on their property.

The result is generally a win for cellular operators and telcos.

Landowners continue to push back against the lower valuations the Electronic Communications Code (ECC) has brought, and amendments to the code are making their way through parliament.

Emma Humphreys, Partner, law firm Charles Russell Speechlys said: "Today’s decisions are an important step forward for both sides in providing some further clarity as to how the new Code should work...

"At the end of the day, both operators and landowners are paying the price for hastily passed legislation which put them on an inevitable path towards disputes rather than collaboration.  More importantly, it is the public who are paying the price through continuing inadequate mobile and broadband coverage.”

Today’s ruling covered three cases: Cornerstone Telecommunications Infrastructure Ltd v Compton Beauchamp Estates Ltd (known as Compton Beauchamp); Cornerstone Telecommunications Infrastructure Ltd v Ashloch Ltd and AP Wireless II (UK) Ltd (known as Ashloch); and On Tower UK Ltd v AP Wireless II (UK) Ltd (known as On Tower).

Under the wording of the ECC, new “code rights” for land may only be agreed in a contract “between the occupier of the land and the operator”. This rather vague wording resulted in considerable confusion – with implications for many thousands of existing telco equipment sites across the UK -- and triggered legal action.

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All three case broadly hinged on the same issue: according to the ECC, did an “occupier” of land always mean the owner of the land – or could it also mean the literal occupier that was using the land?

In all three cases, telecoms equipment operators – either Cornerstone or On Tower – had been occupying sites for many years, and wanted to vary the conditions of their leases under the terms of the ECC.

The Court of Appeal had previously ruled that the “occupier” could refer to the “operator” – in other words, they were one and the same. As it is not possible to agree a contract with oneself, that in turn meant operators of existing sites were unable to agree new code rights. The Supreme Court unanimously disagreed.

In her judgment, Lady Rose looked at the intentions of the ECC and concluded the government had not intended to prevent operators from being able to vary their code rights once in occupation of a site.

As a result, On Tower’s appeal was allowed. The Compton Beauchamp appeal was dismissed, as in this case Cornerstone – a joint venture between Vodafone and Telefonica – had claimed Compton Beauchamp Estates was the occupier of the land, when the court concluded it was in fact Vodafone, the original tenant.

In the case of Ashloch, the existing tenancy in this case relied on the Landlord and Tenant Act 1954, rather than the Telecommunications Act 1984. Lady Rose asked for further submissions, as it was unclear whether Cornerstone was seeking new rights, or rights which should be dealt with under the 1954 legislation.

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The result, while clearing up issues caused by poorly-worded legislation, will do nothing to resolve the ongoing controversy caused by the Electronic Communications Code. The aim of the ECC was to make it easier for telcos to get permission to use land for their equipment – the effect has been a drastic reduction in the rent telcos pay to landowners, in some cases from thousands of pounds to just tens of pounds a year.

In a report released earlier this month, the Institute for Economic Affairs (IEA), a right-wing think tank, criticised the government for its approach to the problem, and called on it to restore the valuation principles used before 2017: “The Government appears determined to prevent the operation of market forces in this way.

"Instead, it is seeking to change rules and procedures to strengthen the legal position of operators when they are seeking to compel landowners to allow the use of their land,” said the IEA.

The Product Security and Telecommunications Infrastructure (PSTI) Bill, which is currently under scrutiny in a Lords committee, will as written strengthen the position of telecoms operators, by giving them additional rights to telcos, including speedier negotiations, rights to renew on similar terms, and controversially, rights to occupy land temporarily if the owners do not respond after a certain time.

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