UK: The Electronic Communications Code Industry Impacts And The Way Forward

Last Updated: 20 April 2012
Article by Malcolm Dowden

The Electronic Communications Code (Schedule 2 to the Telecommunications Code 1984) governs the rights of electronic communications network providers to install and maintain infrastructure on land. The Law Commission is currently reviewing the existing code in order to identify the commercial impacts any potential changes may have on the telecommunications industry.

The current Electronic Communications Code

The Electronic Communications Code (Code) addresses the construction of electronic communication networks. Key issues the current Code addresses include:

  • The construction of electronic network infrastructure on public land such as streets.
  • Access to private land through agreements with private land owners or with an application via County Courts.
  • Exemption from town and country planning legislation and land registration requirements.

Potential changes to the Code

It is expected that the potential changes to the Code will be outlined in a Law Commission consultation paper in June 2012. This paper will be followed by a report with recommendations to Government in spring 2013.

As the industry continues to experience rapid technological development, this consultation provides an opportunity for industry participants, including landlords and operators, to influence recommendations.

Below the Charles Russell Technology and Communications team highlight some of the potential themes likely to be addressed by the Code review.

Pricing

The Code currently provides for compensation (in respect of disturbance and inconvenience) plus consideration to land owners where their land is crossed. However, there is little certainty as to the appropriate measure of consideration. The court has confirmed that consideration is not based on a share of profits or as a ransom payment. There is little positive guidance on the question, and the industry has adopted radically different approaches to the negotiation of rates in urban and rural areas, and for mobile base stations and fibre optic cables.

This creates cost uncertainty and inconsistency over charges operators may face when installing apparatus. In increasingly difficult economic times, cost assurance and sensitivity will no doubt be a key concern for both property owners and operators as part of the Code's revision.

Addressing classifications and the 'one size fits all' approach

The current code treats electronic communications apparatus in a similar way to utilities such as water, gas and electricity where it is installed in, under or over publically maintained highways. However, it is treated as a wholly commercial venture when access to private land is required. The result can be a significant increase in infrastructure costs where access to private land is required. While the impact has been reduced by the Court of Appeal ruling in Geo Networks v Bridgewater Canal where fibre or cable crosses 'linear obstacles' (e.g. canals or railways), the incremental cost of crossing other private land directly affects the viability of broadband roll out in the UK.

Electronic communications networks comprise a range of different elements, including base stations, and fibre or wireless backhaul links. The land access issues facing mobile and fixed/fibre operators are very different and in the future would not be accommodated by a 'one size fits all' provision. This picture is likely to become ever more complex as the role of electronic communications in developments such as SmartGrid expands.

The future of technology

Over the past two decades, technology and the telecommunications industry has experienced and enabled vast changes. Through smart phones, tablet devices and portable computers, consumer demand for media streaming and other data-hungry applications is increasing. Credible industry evidence suggests that increasing demand for bandwidth could lead to 'data crunch', particularly in urban areas where demand is heaviest.

As a result of these changes, vendors and operators increasingly need to develop new technologies and solutions to ensure consumers can access data at the right time in the right way. Additionally, devices themselves must have increased capacity and corresponding equipment that allows the best performance. Technology-neutral provisions for such development should clearly be factored into any Code changes.

How operators and vendors will accommodate these developments in practice is difficult to predict. Due to existing infrastructure however, starting with a blank canvas is an unlikely option and therefore, the focus may be upon leveraging existing base stations (until they reach capacity) or possibly increasing adoption of low-power or low-lying base stations (eg femto cells). In urban locations such as London, the use of urban infrastructure (roofs, building facades or posts) would be key in ensuring that coverage, bandwidth and backhaul requirements can be met.

Security of tenure and contracting out

Unlike the Landlord and Tenant Act 1954, there are no contracting out provisions in the Code. Once the apparatus is on land then a different type of security of tenure applies1, preventing enforcement of any right to require removal of apparatus without a court order where the operator serves a code counter-notice.

Currently Paragraph 21(11) confers protection on any operator using equipment, regardless of ownership. This creates uncertainty and increases costs for the land owner as they may have to negotiate with and serve notices on multiple operators. Whether the option of contracting out or another suitable option is addressed by the Code revision will be interesting to see as it may have a number of implications for land owners and operators in particular.

A proposed new code

It is clear that it will take time to develop a high level piece of legislation but it is promising for the industry that such a Code review is underway and extensive feedback is being sought to ensure that all current and future issues can be addressed.

While we have presented several themes which would have value in being addressed by the new Code, undoubtedly there are many more.

Should you have any questions or wish to provide comments to the Law Commission, please do not hesitate to contact Charles Russell's Head of Technology and Communications sector, Vincenzo Lanni or article author, Malcolm Dowden.

Footnotes

1 Paragraph 21 Electronic Communications Code

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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