The Digital Economy Act 2017 received royal assent in April 2017 and came into force on the 28th December 2017. The Act is designed to help implement government objectives to promote Britain as Europe’s most advanced digital nation. Provisions within the Act have reformed the Electronic Communications Code which was first drafted in 1984. The Code was implemented to confer statutory rights to Telecommunication Operators under agreements made with Landowners. Despite it being amended in 2003, it has become increasingly outdated due to rapid technological advances. This has prompted the government to extend the rights of Operators so that communications services can be implemented where they are needed.
Landowners should be aware of the following: -
Agreements between Operators
Subject to conditions, Operators may upgrade apparatus, share the use of their site or assign their Code rights to another Operator without the consent of the Landowner. Landowners will no longer be permitted to benefit financially from allowing Operators to share the site.
Valuation of Sites
Sites will be valued on a ‘no scheme’ basis which excludes the proposed use of the site from the calculation process. This will mean a decrease in rental income for landowners, who will no longer receive premium prices for the use of their land.
Security of Tenure
Security of tenure provisions contained within the Landlord and Tenant Act 1954 will not apply to agreements where the main purpose of that agreement is to confer Code rights. The purpose of the exclusion of these provisions is to ensure that agreements are not afforded double protection. Whilst the Landlord and Tenant Act 1954 does not apply in Northern Ireland, the implication is that the provisions of the equivalent Business Tenancies (Northern Ireland) Order 1996 will also be excluded.
The notice period required for termination of agreements under the Code has increased to 18 months. Further time will also be allowed for Operators to remove their equipment from site. Coupled with the potential for litigation, removing Operators may become a lengthy process for Landowners.
Landowners are prohibited under the Code from negotiating better terms. As such, there is no way to ‘opt out’ from the rights conferred by the Code.
There are now obligations on OFCOM to provide and publish a Code of Practice, Standard Terms and template Notices. The Code of Practice should be referred to by parties when entering into, negotiating and maintaining agreements. These documents are not binding so it remains to be seen how they may be enforced.
It is likely that proceedings will be issued sooner under the updated Code. Court orders will continue to be made to terminate, amend or allow an agreement to continue. The Court will act in the public interest to ensure that a high-quality communication service is provided. However, the Code has no retrospective effect and it may be some time before we see its provisions implemented.
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