Out-Law Analysis | 02 Jul 2012 | 9:13 am | 3 min. read
Telcos could be left with insufficient rights to upgrade equipment and find themselves unexpectedly ejected from land with little warning if the proposals are adopted. Telecoms companies should begin lobbying now to retain some existing rights and to demand a regulatory regime that is fit for the future of the digital age.
The Law Commission has just published a consultation (146-page / 440KB PDF) suggesting revisions to the Electronic Communications Code, which gives electronic communications network providers rights to install and maintain equipment such as masts and cables on public and private land.
Given that this is a law that was once described by a judge as "one the least coherent and thought-through pieces of legislation on the statute book", this attention is to be welcomed. But while the existing law favours telecoms companies, the Law Commission's proposed reforms have gone too far in the other direction and give landowners too much power.
Telecoms technology is constantly being updated. What is true for the mobile in your hand is true for the networks that feed it. It is essential for telecoms companies that they have access to their own equipment to upgrade and replace it, yet the Law Commission's proposals would not grant this.
The proposals ask for views on whether such a right should be included, but do not insist on it. The reformed code must contain an express right to upgrade and replace equipment so that telecoms infrastructure can keep with technological innovation and network demands.
The Commission believes that paragraph 20 of the Code entitles a landlord and anyone else with an interest in the site or adjacent land to end a telecoms lease to develop the land even where it does not contain a break right.
If its interpretation is correct, then the Commission must recommend that this part of the law change because the effect of it is effectively to insert a rolling break clause into any lease, though that provision would be subject to notices and, ultimately, to a court's view on the attempted termination.
The Commission says that this is "an important feature of the Code and balances the Code Operator's right to install apparatus against the landowner's wishes". In fact it is much more than a 'balancing': it skews the balance of power too much towards the site provider and its neighbours and results in unacceptable uncertainty for telecoms operators, their networks and their customers.
Another area in which the reforms would hand too much power landowners relates to their right to demand that telecoms equipment is removed from land. Paragraph 21 of the Code restricts that right, but the Law Commission has said that if both parties agree then their contract can ignore these restrictions.
This fails to take account of the imbalance of power in a lease for telecoms equipment. Telcos need to site their equipment somewhere, but landowners do not have an over-riding need to host it. This puts them in the stronger bargaining position and the result is likely to be that every lease in the land will contract out of the protections of paragraph 21 because landowners will demand it and telcos will not be in a position to refuse.
Anyone who has worked with the Code knows that it is hard to square its provisions with the security of tenure provisions of the Landlord and Tenant Act of 1954. There is an easy way out of this - parties can, and do, agree a lease which specifically contracts out of the Act in cases where it creates particular problems for the landlord. Where leases are regulated by both the Code and the Act, the reformed code can provide that site providers can serve notices under the Code and the Act at the same time and the Land Chamber can decide arising out of them.
Instead the Law Commission has proposed that, in a revised Code, the security of tenure elements of the Landlord and Tenant Act will simply never apply. This uses a sledgehammer to crack a nut and is not helpful.
That this law is under review is to be welcomed, but telecoms companies must act now to argue their case in the Law Commission's consultation before the review hands too much power to landowners.
Dev Desai is a property litigation specialist at Pinsent Masons, the law firm behind Out-Law.com.