The Government plans a radical transformation of the Electronic Communications Code, which was first established in 1984.
Over the last 30 years there has been a profound shift in the way that we access digital communications. The telecommunications operators are under tremendous pressure to upgrade their infrastructure to provide services which are faster, more reliable and available throughout the length and breadth of the UK.
Over a period of time the industry has successfully lobbied the Government with a view to updating the Code to make it easier for the industry to acquire, use and modify sites (which usually takes the form of a landlord and tenant relationship under a lease). It is argued that this is necessary in order to accommodate the fast pace of change experienced both with regard to the technology used and with regard to consumer demand.
More particularly, the industry has persuaded the Government to widen the scope of the Code so that it shifts the essential balance between private landlords and telecommunications operators in favour of the operators. This argument is put on the basis that making it easier for operators to deploy and maintain their infrastructure is in the public interest. The industry has argued that this is necessary to ensure that communications services meet the needs of UK citizens in the digital era.
The Government has recently published proposals for a revised Code. These are far ranging but the proposals which will be of most concern to private landlords are:
- A proposal to make a major change to the way that mast sites are valued. The proposal is to suspend what might otherwise be the open market position in order to acknowledge the economic and social value for all of society created by investment in digital infrastructure. The Regulatory Policy Committee’s assessment is that this could reduce rental values by 40%.
- A proposal that the Code will overrule the traditional landlord protection written into modern commercial leases so that operators have automatic rights to share sites and to upgrade apparatus without the need for landlord’s consent. Fundamentally this means that the identity of the tenant and the equipment used might change irrespective of the landlord’s wishes.
The Government intends to take this ambitious package of reforms forward through primary legislation at the earliest opportunity. Although the new Code will not have retrospective effect, it is set to significantly change the relationship between private landlords and operators.
We have seen a reluctance on the part of telecommunications operators to enforce their Code rights. There has been a perception that Code enforcement generates bad publicity which in turn makes it more difficult for the industry to acquire new sites. We think that this is about to change. With a new Code in place we anticipate that telecommunications operators will happily enforce their new Code rights and tell everyone that it is in the public interest for the industry to do so.