Out-Law Analysis | 07 Nov 2018 | 11:38 am | 9 min. read
On 30 October, the Lands Chamber of the Upper Tribunal in England and Wales published two rulings in cases that involved disputes over rights claimed under the ECC – the framework that gives telecoms operators qualified rights to install, inspect and maintain electronic communications apparatus including masts, cables and other equipment on public and private land.
The following day, alongside a raft of other Budget papers, the government opened a consultation on plans to amend the ECC in a way which will support development by telecoms operators.
The rulings, issued prior to a separate judgment clarifying the Upper Tribunal's jurisdiction, provide a useful overview and insight into the Tribunal’s thinking and approach to cases brought under the new Code, while the policy proposals highlight the government's commitment to reform the rules to deliver the digital infrastructure the country needs.
In the first ruling, the Upper Tribunal considered the rights of telecoms operators to gain access to property to determine whether the building was suitable for installing electronic communications apparatus on. It was described by the ruling QC as the "first substantive decision" given by the Tribunal" since the new ECC came into force in late 2017.
The underlying dispute was between telecoms company CTIL (Cornerstone Telecommunications Infrastructure Limited), the joint venture between telecom operators Vodafone and Telefonica O2, and the University of London. CTIL wanted to carry out "a survey and other non-intrusive investigations" to determine whether a University of London building which serves as student accommodation was a suitable new site for the apparatus. However, University of London refused CTIL access to carry out its investigatory work citing amongst other reasons safeguarding and welfare reasons.
In his ruling, deputy Chamber president Martin Rodger QC imposed an agreement granting Cornerstone rights to access the University of London building to carry out its site survey.
Rodger was also the judge in the second case, which concerned a dispute between telecoms operators EE and Three, and the mayor of the London borough of Islington.
EE and Three asked the Upper Tribunal to grant them interim rights to install and then use telecoms apparatus on the roof of Threadgold House, a block of flats in Islington as an alternative site to move to from their existing building location which the landlord there claimed to want to redevelop.
EE and Three asked the Upper Tribunal to grant them interim rights to install and then use telecoms apparatus on the roof of Threadgold House, a block of flats in Islington.
EE and Three were granted the interim rights they applied for, but the Tribunal made it clear that its interim rights order was conditional – if planning permission for the redevelopment of a nearby property which houses EE and Three's telecoms apparatus currently is refused, then the companies will lose their right to install and use equipment on the Threadgold House site, it said. This is because their existing site will not need to be demolished and can continue to be used instead, it said.
In both cases, the Tribunal offered useful guidance on how the wording, meaning and purpose of the ECC will be determined.
The deputy Chamber president Martin Rodger QC made it clear that while the wording used in draft legislation, explanatory notes and Law Commission papers and reports can be "a useful tool" to inform how the ECC should be interpreted – as both CTIL and the University of London did in their submissions – it is the wording in the Code itself that will prevail where there is no ambiguity.
Rodger said it is apparent in the way the ECC was worded that the Code is "not simply concerned with the better regulation of private rights" and that "its objective is the speedy and economical delivery of communications networks in the public interest". He said it is "contrary to the principles on which the Code has been designed" to allow landowners to hold telecoms operators to ransom when seeking to exercise rights of access under the ECC.
He also said the definition of the 'works' that CTIL argued, which included initial site surveys and associated steps to check for the suitability of the site for a more permanent location for its apparatus, fell within the ambit of the Code rights and that to interpret the Code rights more restrictively would run contrary to parliament’s intention.
"It simply cannot have been intended that, before an operator may insist on the acquisition of Code rights in consideration of payments assessed on a favourable 'no network' basis, it must first negotiate outside the scope of the Code to acquire a right of entry to undertake essential preliminary surveys," Rodger said.
Rodger acknowledged that the ECC requires a review of the prejudice caused to a site owner when Code rights are imposed on them. However, he highlighted that "the whole premise of the Code is that there is a need, in the public interest, to impose agreements on unwilling parties in return for consideration which parliament has deemed to be adequate notwithstanding that it may be significantly lower than would result from unrestricted commercial negotiation".
This clarifies that in cases where a commercial agreement cannot be struck, landowners should not expect the statutory provisions on prejudice to support large payments.
In the EE case, the Tribunal provided further guidance on when landowners can expect to be remunerated financially for prejudice caused to them by a Code order.
It said that if parties have been negotiating over financial sums in return for the imposition of Code rights then, where negotiations break down, this is an "indicator" that the rights sought are capable of being compensated financially.
In the EE case, the Tribunal ordered on an account consideration payment of £2,551 per annum, close to EE and Three's suggested £2,551.77pa suggested valuation, rejecting Islington's claims for £12,500pa, possibly indicating that it will be more sympathetic to the valuations of operators.
The Tribunal also clarified that just because an imposed interim rights agreement is a lease, as an estate in land, is not of itself prejudicial to landowners and that any loss in value for diminution of the value of the land can be met with an order for compensation.
It further said it recognised the grant of interim Code rights over a residential building can cause noise, disturbance and inconvenience to residents that may not apply as much where the rights are being imposed in relation to commercial property. However, it said given the limited period for which the interim rights are granted, this causes limited prejudice and can be compensated.
The ECC makes provision for interim rights under the Code to be granted for a specified period or until the occurrence of a specified event.
The Tribunal assessed the policy purpose of the ECC and interim rights provisions and determined that it shows the public interest in granting those rights is greater than the public interest in preserving property rights.
Because parliament has made provision for interim rights to be granted "without the need for an operator to satisfy the normal civil standard of proof" this gives "greater weight to the public interest in the provision of electronic communication networks than to the public interest in the preservation of private property rights", Rodger said.
Interim rights can therefore be granted if there is a "good arguable case" made for doing so, he said.
The Tribunal also said that interim rights hearings should be "on a summary basis, without oral evidence or cross examination, and without full disclosure of documents".
Rodger said that telecoms operators seeking an interim rights order should provide sufficient disclosure to enable the Tribunal to be satisfied that the statutory tests to make an order to impose an agreement have been met and said the Tribunal "will not generally make assumptions in favour of an operator which is in a position to provide evidence".
In the CTIL case, the University of London raised concern about giving CTIL unsupervised access to its building, which provided student accommodation, and explained it was responsible for the welfare of the hundreds of students who stayed there. It flagged the cost of supervising access and diversion of staff time away from other activities.
The Tribunal recognised that the "inconvenience" costs were costs that should be "properly compensated". The University of London estimated that it would cost it £400 per access visit, but the Tribunal did not comment on whether that estimate was appropriate.
Might this now be taken by landowners' agents as giving the green light for landowners to levy access charges of £400, or even more if they can show that the cost is reasonable where there is no pre-existing agreement for access?
The ECC is supplemented by a code of practice developed by UK communications regulator Ofcom. The code of practice sets out the protocols telecoms operators and landowners should follow when in negotiation over rights under the ECC.
Often, non-compliance with the protocols is used by those in negotiations as a stick to beat one another with, but the Tribunal has highlighted its importance.
Rodger said: "The Ofcom protocol is important in all cases, and especially so where a site owner is not professionally represented".
However, the protocol is only useful if the parties comply with the spirit of it. In the CTIL case, CTIL was criticised for drafting letters to the University of London where the "tone was imperative and threatening” in a move described by Rodger as "a poor move in what should be a consensual process". The University of London was also criticised for its policy and its agent's view about access, which was said to have led negotiations to stall.
The EE case usefully highlighted that the Tribunal will be willing to make the grant of interim rights conditional. In that case, the Tribunal explained that EE and Three would not enjoy the interim rights granted if planning permission for redevelopment of a nearby property housing the EE and Three telecoms apparatus is refused, as the operators would be able to continue using that site.
The current ECC only took effect on 28 December last year, but the government has opened a consultation on plans to amend it.
It said it wants to "place an obligation on landlords to facilitate the deployment of digital infrastructure in their properties where a request for service has been made by the tenant and an operator has suitably notified that landlord".
The government said it hopes the measure would "incentivise and encourage landlords to engage with operators and reach negotiated agreements with them, without the need to go to the tribunal for code rights to be imposed".
As a secondary measure aimed at addressing the problem of landlords ignoring access requests, telecoms operators would be given the right to seek a warrant from a magistrates' court, or Sheriff court in Scotland to gain "entry to a property in order to install or upgrade electronic communications apparatus".
Telecoms operators would only be able to apply for the warrant through the courts if they have received no response from landlords two months after first contacting them and if a number of other criteria are met.
"To ensure that the courts are not overwhelmed by applications, the legislation will set out what the substantive requirements are for an operator to meet before applying to the court (e.g. the mode and frequency of attempts by the operator to contact the landlord before applying to the court), it will also provide clear guidance for the court on whom the evidential burden lies," the government said in its consultation paper. "Our intention is to create a fast, simple process, based on the provision – by the operator – of evidence which will then be considered by the magistrates’ court."
The proposed new measures are interesting and are no doubt included now to reinforce the public policy objective of the Code as described by Martin Rodger QC in the CTIL case as being "the speedy and economical delivery of communications networks in the public interest".
At a very early stage in new Code case law, both of the rulings provide a very useful overview and insight into the Tribunal’s thinking and approach to new Code cases – the CTIL case is particularly helpful, but reinforced by the pronouncements in the EE case, in setting out the public policy rationale behind the new Code and how the Tribunal is seeking to give effect to this in the imposition of Code rights over unwilling site provider’s land and buildings.
The new policy proposals also appear aimed at underpinning the public policy objectives.
There remains in force a provision in the Communications Act 2003 that converts lease provisions to ensure that where tenants wanted to have a choice of telecoms services or providers or install telecom apparatus, the landlord is required not to withhold consent unreasonably to tenants' requests. It looks like this new consultation to amend the Code is designed to give more teeth and reinforce the public policy imperative.
Alicia Foo is a property dispute resolution specialist at Pinsent Masons, the law firm behind Out-Law.com.