Tribunal rules on telecoms equipment rights and valuation of greenfield sites

Out-Law News | 18 Dec 2020 | 8:43 pm | 4 min. read

A recent decision by the Upper Tribunal (Lands Chamber) for England and Wales clarifies an operator's unrestricted right to share and upgrade equipment on a site, according to experts at Pinsent Masons, the law firm behind Out-Law.

The tribunal's decision, in favour of telecoms infrastructure provider On Tower UK (formerly Arqiva Services Limited), also adds "another important piece of the jigsaw" in relation to valuation under the Electronic Communications Code (the Code), they said.

Property disputes expert Alicia Foo of Pinsent Masons, who was part of the team who advised On Tower, said: "A key plank of government thinking behind enacting the new Electronic Communications Code was 'to make it cheaper and easier for apparatus to be deployed, maintained, shared and upgraded'. The question of whether the Code's provisions restricted an operator's ability to share and upgrade has been a significant battleground between landowners and operators thus far".

"In recognition of the fast moving and changing nature of technology, the tribunal made clear the answer to this was an unequivocal no. It said 'without the ability to share the claimant is out of business and cannot fulfil its statutory purpose ... Moreover as a neutral host it needs an unrestricted right to share'," she said.

Foo Alicia

Alicia Foo

Partner

The question of whether the Code's provisions restricted an operator's ability to share and upgrade has been a significant battleground between landowners and operators thus far.

On Tower was seeking a new lease of an existing greenfield site located in an area of woodland on the Dale Park Estate, South Downs, on which it has installed a mast and other electronic communications apparatus (ECA). The landowner, JH & FW Green Ltd, did not object to the grant of a new lease in principle but sought to restrict the equipment that could be kept on the land in future; and to limit On Tower's rights to carry out future upgrades and to share the equipment with mobile network operators.

Paragraph 17 of the Code sets out the minimum rights operators have in respect of the ability to upgrade its equipment on a site, and to share that site with other operators. The tribunal has now reaffirmed that this is a 'floor'. When considering whether to grant wider rights, the tribunal said it should consider such a request in three stages: the term sought and why, in light of the operator's business and the public interest in a choice of high quality telecommunications services; whether qualifications should be placed on the term sought given the objections raised by the respondent; and whether further qualifications should be imposed in order to minimise loss or damage.

The tribunal found that the rights sought by On Tower were essential to its business as a neutral host of infrastructure and noted that other terms of the proposed agreement and the planning laws served to protect the site provider and addressed its concerns. Amongst other things, the agreement forbid On Tower from causing nuisance on the site, giving the landowner remedies if those terms were breached. The tribunal also noted that, as a result of the 2019 Court of Appeal Compton Beauchamp decision, On Tower would not be able to seek additional rights from the tribunal once the agreement was imposed.

The tribunal said: "[This] is fast-moving technology with which operators - whether network operators or infrastructure providers - need to keep up, and government policy … encourages sharing wherever possible so as to minimise the installation of intrusive ECA, the duplication of mast sites and so on".

"However genuine the respondent's concerns, they are not really reflected in reality nor founded on evidence. The agreement, and planning law, provide the protection that the respondent needs from the levels of nuisance and disturbance that can realistically be anticipated … The conditions set out in paragraph 17 are not needed in view of the safeguards built into the agreement and the availability of compensation," it said.

Pierre Smith of Pinsent Masons said: "Since the introduction of the 'new' Code in 2017, the limited upgrading and sharing rights in paragraph 17 of the Code have been widely misconstrued".

"The tribunal has helpfully developed the understanding of paragraph 17 and, as a consequence, parties should no longer see requests for wider rights as something out of the ordinary. Indeed, it has been recognised that the statutory purpose of wholesale infrastructure providers can only be achieved with rights to share and upgrade beyond the minimum rights granted in paragraph 17," he said.

The tribunal ordered On Tower to pay JH & WH Green £1,200 per annum by way of consideration, as well as the landlord's legal and surveying costs. Following the valuation framework set out in an earlier case, it set out how it arrived at this sum, being £100 for the alternative use value, £600 for the benefits to On Tower and £500 for the burdens upon the site provider.

The tribunal added that the figure arrived at reflected the special circumstances of the site, being a rural site but with dwellings in close proximity. In what will be regarded as a helpful comment to agents reading the judgment, the tribunal added that where those special circumstances did not exist, a sum of £750 for a greenfield site would be appropriate.

Pierre Smith said: "This case is another important piece of the valuation jigsaw, as operators and site providers now have the tribunal's clear guidance on the value of both greenfield sites - the subject of this case - and rooftop sites - as per another recent tribunal judgment".

"All will be hopeful that the backlog of renewals for existing sites and the rollout of new sites can now progress both consensually and more efficiently. Agents for both operators and site providers have long been trying their best to navigate the murky waters of the Code valuation principles. They can now make more confident strides forward, to the benefit of their respective clients," he said.