Ringing the changes in the telecom market

The introduction of the Digital Economy Act last year probably did not generate a great deal of discussion over the proverbial farm gate or around the ring at the local mart. However, there is at least one element which should be of interest to many farmers and landowners.

An early result of the Act was the introduction of the new Electronic Communication Code, which came into force on the 28th December 2017. If you really want to know, this replaced the code which was introduced by the Telecommunication Act 1984, which seems rather a long time ago in the field of electronic communications. I fear that I may not have gripped the readership at this point, but if you have a phone mast on your land, or may have in the near future, the below will be of significance.

The objective of the new Code is to make life easier for telecom operators in the hope that it will result in improved communications for us all. In so doing, it tilts the playing field away from landowners.

Under the new Code, which applies to renewal and new leases entered into after 28 December 2017 operators will have the right to share sites without seeking the consent of the landowner. They will also have the right to assign the site lease without the need for landowner consent. These changes will apply regardless of the terms of any written agreement.

The operators now also have the right to upgrade equipment without landowner consent, although there should be no more than a minimal adverse visual change and no additional burden on the landowner. What this actually means in practice will no doubt be decided in due course via conflict!

The valuation basis for new agreements will also change. Now, instead of the figure being determined by what the site is worth to the operators, it is based on the value to the landowner. Rents may therefore increase in some cases, for example for city-centre sites, but may decline in rural areas.While the Code rights will still be included in a written agreement, most likely a lease, between the two parties, the lease will no longer be included under the Landlord and Tenant Act 1954. New telecoms agreements will only be protected by the new Code and there can be no opting out.

Operators will continue to have the power to place equipment on private land, and keep it there after an agreement has ended, even if no agreement can be reached on a lease. “Payaways”, where an owner secures a cut of the income from operator-operator site sharing agreements, will no longer be permitted.

There is a message in here in that if you are asked to enter into such an agreement, early advice is key to achieving the best deal and knowing your rights.  Existing leases when up for renewal sometimes don’t go as far as operators require in a changing technological world and there is still wriggle room in negotiations and potentially a deal to be had!

All in all, it does not look like a great deal for landowners and rents will most likely decline. However, will it meet its main objective of improving communications? Time will tell, but disincentivising a crucial party in the arrangements seems an odd way to try and achieve success.

If you would like any further information or to discuss any rural related matter, please contact Tom Wills, head of the agriculture & estates department at Sintons.

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