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Virgin Media agrees £1 telecoms land access settlement

Out-Law News | 30 Aug 2018 | 11:55 am | 2 min. read

Virgin Media has settled its case with Durham County Council and will be allowed to lay cables for the delivery of its 'Project Lightning' ultrafast broadband scheme on council land for a nominal fee, both parties have announced.

The settlement follows a much-publicised dispute over land access rights under the new Electronic Communications Code ('the Code'), which was initially heard before the deputy president of the Upper Tribunal, Martin Rodger QC, on 6 July 2018. The dispute had been listed for a final hearing on 24 and 25 September 2018 but has now settled.

In a statement to the Daily Telegraph newspaper Virgin said that the outcome of the case would set a "much-needed precedent" about the interpretation of the Code. However, property disputes expert Rhiannon Saunders of Pinsent Masons, the law firm behind Out-Law.com, said that the settlement would not bind landowners and operators in future cases.

"This is an interesting development given that there was so much commentary at the time the new Electronic Communications Code was announced querying whether operators would see a significant reduction in sums paid for code rights," she said. "Valuers and practitioners involved in this field were eagerly awaiting the tribunal's decision and guidance on the Code's consideration and compensation provisions."

"The settlement ostensibly supports the position that operators will now pay only nominal sums for code rights. However, whilst this is a useful indication of the attitudes of code operators and site providers, the fact that the case settled means that this is not a binding precedent and we await to see whether the Tribunal would endorse such a decision," she said.

Telecoms expert Pierre Smith, also of Pinsent Masons, added that there were "less publicised but equally important" issues in the same case which would have provided some "helpful guidance" had they been determined by the Upper Tribunal (Lands Chamber).

"For example, it was suggested that the process by which Virgin Media kickstarted the application to the tribunal may have been flawed and, had that been the case, this may have had the potential to interrupt Virgin's plans. These issues were finally resolved between the parties in the settlement reached, but they will no doubt be raised again until we get that all-important precedent value," he said.

The Electronic Communications Code governs the relationships between landowners and operators of electronic communications services licensed by Ofcom. It gives operators certain rights to install, inspect and maintain electronic communications apparatus including masts, cables and other equipment on public and private land, even where the operator cannot agree the necessary rights with the landowner.

A new Code, intended to support the government's vision for the UK's digital future, came into force on 28 December 2017. Among other measures, the new Code restricts the ability of landowners to charge premium prices for the use of their land by basing rent rates on the underlying value of the land. It is also expected to make it easier for operators to upgrade and share equipment such as masts or cables without having to pay landowners extra. At the time, the government said that it expected the new Code to deliver significant cost reductions to the telecoms sector while ensuring that landowners receive fair payment for the use of their land.

Virgin Media's 'Project Lightning' is a £3 billion programme of investment through which it originally aimed to connect an extra four million homes to its cable network by 2020. Durham County Council had previously sought to charge the company "hefty" per metre access fees to allow it to lay its cables along grass verges in the authority area, according to press reports.

The company has agreed to connect more properties in the area to the network as part of the settlement, according to the reports.

In a joint statement issued earlier this month, trade bodies for landowners and operators reaffirmed their commitments to work "collaboratively together" for the success of the new Code, along with the related Ofcom code of practice, in conjunction with the government's Department for Culture, Media and Sport (DCMS). The statement was issued after a meeting between the various different bodies, convened to address tensions that have arisen since the new Code came into force.