Tribunal sets out guidance on public benefit test for use of rooftops as telecoms sites

Out-Law News | 28 Oct 2020 | 4:57 pm | 3 min. read

A pair of recent cases have clarified how rights conferred under the Electronic Communications Code (the Code) should be applied when it comes to the sharing of space, equipment upgrades and rent charged on rooftop sites.

The Upper Tribunal (Lands Chamber) ruled in two cases brought by Cornerstone Telecoms Infrastructure Limited (CTIL), which was seeking to assert its rights under the Code for two rooftop sites – one residential and one commercial.

The Code regulates the legal relationship between operators who provide electronic communications networks or infrastructure, and the occupiers of land on which those operators need to place their equipment.

In the first case, CTIL was looking for the right to temporarily install equipment on the roof of a building owned by the University of the Arts London (UAL), which is to be demolished as part of the redevelopment of Elephant and Castle Town Centre.

UAL resisted the imposition of Code rights because it said it could not be adequately compensated in money, and that public benefit tests would not be met by CTIL’s use of the rooftop. It also raised concerns that CTIL would not vacate the site when it was time for the building to be sold to developers ahead of its demolition, which could have led to a £3million per annum loss to UAL in contractual delay penalties, itself providing a public benefit as an educational institution.

Ian Morgan

Associate

The Tribunal will always consider each case on its facts and has provided welcome examples of the type of issue which it could decide may override the public benefit.

The Tribunal ruled in the university’s favour, refusing to grant Code rights. It said UAL risked suffering prejudice in a number of areas if CTIL’s application was granted, and that this was not capable of being quantified in financial compensation.

Code expert Ian Morgan of Pinsent Masons, the law firm behind Out-Law, said: “The Tribunal helpfully clarified that in many cases the starting and ending point will be that the public benefit of imposing an agreement to install electronic communications apparatus under the Code ‘will generally outweigh inconvenience and annoyance and readily calculable losses’. 

“However, the Tribunal will always consider each case on its facts and has provided welcome examples of the type of issue which the Tribunal could decide may override the public benefit.  In this case, UAL adduced evidence that there was a real risk of reputational damage, difficulties with its future relationships with its students and prospective students, and stress and uncertainty, none of which could be compensated in money, as required by the Code,” Morgan said.

“These factors, when added to the extreme losses delay to UAL's scheme could cause, meant that, perhaps unusually, the boundary had been crossed ‘between prejudice that has to be suffered for the public good, and prejudice that is too much to ask’,” Morgan said.

The Tribunal did clarify that operators of telecoms equipment did not have to specify the equipment being installed. It said forcing operators to provide a list at the outset could raise future disputes when equipment needed upgrading or adding to.

In a separate case before a different judge, but also involving CTIL, the operator sought the right to install equipment on the roof of a block of flats in South London. It settled most of the issues amicably with the site’s owner, London and Quadrant Housing Trust (L&Q), for a 10-year agreement.

However there were outstanding disagreements over the terms to be imposed in relation to equipment rights, upgrading and sharing. L&Q wanted to limit the equipment that could be installed and limit CTIL’s ability to upgrade and share its equipment.

The Tribunal found it was “fanciful” to fear that CTIL would install unlimited equipment and it would be restricted by the terms of its agreement and safety issues. As with the UAL case, the Tribunal said imposing an equipment cap would invite future disputes and jeopardise CTIL’s ability to provide a service to telecoms network providers.

It added that it would diminish the public benefit to restrict CTIL from upgrading equipment in the future as technology advanced.

The Tribunal also considered the rent and compensation due for the site. It said the annual rent should be £5,000 and compensation just over £3,000, and added that there was no reason to expect that the market value for Code rights on other residential rooftop sites whether in London or the rest of the country would be “much more or less” than £5,000.

Property dispute resolution expert Alicia Foo of Pinsent Masons said the cases would be helpful in the future.

“Having had a dearth of cases on the elephant in the room as to what operators should pay landowners by way of rent and compensation and the vexed question of the extent to which operators can share and upgrade their apparatus with others, we now have two cases on these very points from different judges of the Upper Tribunal, both concerning rooftop sites, with one commercial and the other residential but both in London,” Foo said.

“It is clear from both judgments and the judges’ remarks they wish to set out very clear, helpful guidance on how both parties should behave and what valuation arguments should or should not be considered. Future would-be litigants should take these cases into account and ignore at their peril,” Foo said.