Ringing the changes in telecoms

Posted: 10/12/2019

Law and policy in the telecoms field continues to evolve at pace. Judgment was handed down in Cornerstone Telecommunications Infrastructure Ltd v Compton Beauchamp Estates Ltd [2019] EWCA Civ 1755; [2019] PLSCS 201 in October. It provided immediate and important reading for the Deputy President of the Upper Tribunal (UT), who heard submissions from the parties in the case of CTIL v Ashloch Ltd and another [2019] UKUT 338 (LC); [2019] PLSCS 216 the following week.

The issues in Ashloch followed on from those decided in Compton Beauchamp, and saw the UT consider the overlap between the Landlord and Tenant Act 1954 (referred to throughout this article as the 1954 Act) and the Electronic Communications Code for the first time.

The cases in detail

In Compton Beauchamp the operator appealed the ruling by the UT of April 2019 that it lacked jurisdiction to impose a code agreement on the landowner, because the landowner was not in occupation of the site (in fact, it was already occupied by Vodafone).

The Court of Appeal found that the UT had correctly determined that the question of who the occupier was for the purposes of the code was one of fact, not legal status. It was only an occupier who could either agree or be required to confer a code right on the operator. As such, despite the fact that CTIL was confident that it would be able to secure a ‘sweetheart’ deal with Vodafone (a shareholder in CTIL, being the joint venture formed by Vodafone and Telefonica) its application could not succeed. In Ashloch, the key question for the UT was whether it had jurisdiction, under Part 4 of the code, to impose code rights over land in favour of an operator which is already in occupation of the same land under a tenancy which is being continued after its contractual expiry date by section 24(1) of the 1954 Act. That is, where the fixed term on a protected business tenancy has expired, and where the operator remains in occupation (on a continuation tenancy), does the UT have jurisdiction to entertain an application for new code rights? In doing so, the UT considered an important statement of principle by Lewison LJ contained in Compton Beauchamp, as follows:

“The renewal of rights by an operator in situ is not primarily governed by Parts 2 and 4. Rather, it is governed (at least principally) by Part 5.”

By bringing the case, CTIL was seeking to test the notion that an operator in situ may use Part 4 of the code, rather than using the procedures set out in Part 5, which concern termination and renewal. The UT did not agree and dismissed the application after determining the primary issue of jurisdiction. In doing so, it confirmed the steps to be taken by an operator to obtain a new code agreement in respect of a site occupied under a protected tenancy. Rather than issuing a notice under paragraph 20 of the code (Part 4), the operator should: (i) apply to the county court for a new tenancy under the 1954 Act; (ii) when that tenancy is close enough to its contractual termination, give six months’ notice under paragraph 33 of the code, and only then seek renewal under Part 5 of the code.

The decisions in Compton Beauchamp and Ashloch have both clarified some important points of interpretation and practice. With regard to Compton Beauchamp, operators are unlikely to make such a mistake again and will simply look to secure the agreement of the occupier (which in this case, given the overlap in interests, would have been straightforward), before seeking the landowner’s consent to be bound by the agreement between operator and occupier. Should the landowner refuse, the operator would then be in a position to serve a notice requiring new rights under paragraph 20 of the code to bind the landowner to the terms of the agreement reached with the occupier.

The Ashloch decision goes slightly against the curve since it sees the operator being denied its preferred route through the code. CTIL would no doubt have been in a better position had it been able to use the Part 4 mechanism, since it would likely have secured better terms. It would also have done so without having to jump through the procedural hoops contained in the 1954 Act to renew the existing protected tenancy. The decision also clarifies that a continuation tenancy under the 1954 Act will be considered a ‘subsisting agreement’ under the transitional provisions of the code.

Consultation response

In October 2018, the Government launched a consultation entitled ‘Ensuring tenants’ access to gigabit-capable connections’. The consultation was open until December 2018, with the Government publishing its response on 10 October 2019. In its response, the Government has announced that it will amend the code “to provide operators with a fast, cheap, light-touch application process to obtain interim rights from the tribunal”. This will be available where the tenant requests a communications service, the operator is unable to fulfil the tenant’s request without the landlord of the property conferring code rights, and requests that the same are granted, but where the landlord repeatedly fails to respond to formal notices given by the operator seeking the rights.

However, the response to the consultation confirms that the Government will not bring forward legislation which provides a route by which operators might obtain a warrant for entry, on the basis that it would be confusing to introduce a procedure whereby the magistrates’ courts had jurisdiction, and agreed that operators should instead seek interim rights via the UT.

Th​is article was published ​in Estates Gazette in December 2019. 

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