New Electronic Communications Code

The new Code is appended to the Digital Economy Act 2017, which received Royal Assent on 27 April this year. Although the new Code is largely based on the old version, landowners and operators of digital services alike need to be aware of some key differences.

Background

The current 1984 Code has been long overdue a reform. Initially enacted to govern the installation, maintenance and removal of communications equipment on land, it has struggled to keep up with the pace of change in digital communications - not least the widespread proliferation of the internet. Despite an attempt at modernisation in 2003, it remains famously ill-drafted and has confused many (including the judiciary) in its conflict with the security of tenure provisions of the Landlord and Tenant Act 1954. Has the new Code provided long-awaited clarification?

Key changes

Many will be relieved to see that the new Code has removed the overlap with and ambiguity in respect of the 1954 Act. Under the new Code, an operator can have either 1954 Act protection or Code protection but not both. The downside to landowners is that statutory notice periods for landowners to obtain vacant possession are longer under the Code than under the 1954 Act. However, this should be weighed against an increase in certainty and transparency of process and, in reality, a significant number of cases are still likely to be settled out of Court by way of negotiated compensation.

Other headline changes include: reform of the 'public benefit' test; who is covered by the Code; how compensation to landowners works; how operators can share equipment; and how a landowner can require equipment to be altered or removed. A summary of these changes is set out in the quick-reference table below.

The digital economy act 2017

A wide ranging Act, including provisions for:

a legal right to faster broadband of at least 10 mbps;
the construction of new digital infrastructure under the new Electronic Communications Code;
civil penalties for online pornographers who don’t verify their customers' ages;
protecting online intellectual property on the same level as physical intellectual property;
regulating direct marketing in an attempt to reduce spam and nuisance calls; and
enabling data-sharing for a wide variety of public sector purposes.

Reaction to the new code

The overarching aim to increase access for the public to electronic communications equipment permeates the drafting of the new Code. This is good news for consumers, but what has the reaction been amongst landowners and operators – the ones who will be dealing with the Code in practice?

Initial reaction amongst landowners has been dismay at the increased timescales and potential costs to be incurred in removing equipment – either by way of statutory compensation payable to an operator or by negotiated settlement. An operator may well seek to benefit from the longer notice periods a landowner will be bound by if the statutory process is required. There has also been much speculation at the extent to which a landowner's income for letting to communications operators will be reduced by the 'market value' compensation valuations.

From the operators' perspective, the amendments seem to provide a welcome opportunity for those wishing to expand their networks, to obtain certainty of occupation, or simply to gain flexibility to share with other providers.

What next?

The new Code is not yet in force – we are waiting for its enactment – and once enacted there will be a complicated raft of transitional provisions governing subsisting agreements. For a period, potentially a lengthy one, we will see landowners left dealing with some operators under the new and some under the old Code rights.