The Electronic Communications Code and how it might affect social housing providers

Posted: 14/09/2022

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Social housing providers might have heard of the new Electronic Communications Code (ECC), which facilitates the installation and maintenance of telecommunications equipment. However, they may be unaware of quite how wide the implications of the Code are, and how it might affect stock management.

A recent Supreme Court decision has broadened the reach of the ECC still further. Any provider with an existing installation of such equipment on their land or buildings should look to understand the ramifications.

Background

In June 2022, the Supreme Court issued its first decision on the ECC. The decision concerned the following three cases brought by Cornerstone Telecommunications Infrastructure Limited and On Tower UK Ltd, both providers of infrastructure to mobile network operators. They were: CTIL v Compton Beauchamp Estates Limited; CTIL v Ashloch Ltd and AP Wireless II (UK) Limited; and On Tower UK Ltd v AP Wireless II (UK) Ltd [2022] UKSC 18.

The operators wanted to establish that they had the right to apply under Part 4 of the ECC where they already had equipment installed on the land. The issue on appeal centred on the interpretation of paragraph 9 of the ECC: "A code right in respect of land may only be conferred on an operator by an agreement between the occupier of the land and the operator."

Compton Beauchamp

In Compton, Vodafone placed equipment on farmland under a fixed term contracted out tenancy. The tenancy at will which arose in due course was terminated. CTIL served notice on Compton under paragraphs 20 and 27 of the ECC (seeking respectively, permanent, and temporary rights) envisaging that a ‘sweetheart’ deal could be done with Vodafone).

The Upper Tribunal held that it had no jurisdiction because (paragraph 9 in mind) the person in occupation of the site was Vodafone, not Compton Beauchamp. The Court of Appeal upheld the decision of the Tribunal.

Ashloch

In Ashloch, Vodafone held a tenancy of a roof-top site protected by Part II, Landlord and Tenant Act 1954. After the expiry of the fixed term, the tenancy continued under s.24(1) of the Act. There was an intervening lease of the site (subject to the tenancy) in favour of AP Wireless.

In 2019 – following the decision in Compton – CTIL arranged to take an assignment of Vodafone’s tenancy, and then served notice under paragraph 20 of the Code for permanent rights. The Court of Appeal identified the following points:

1. that on the current understanding the only means by which an operator might add or modify rights during the term of an agreement was consensually
2. that it was clear that an operator in situ under a ‘subsisting agreement’ had the right to renew either via part 5 of the new ECC, or Part II, Landlord and Tenant Act 1954, but not both; and
3. that where operators were considered the occupier for the purposes of para. 9 the effect of the transitional provisions was to leave some operators in situ without any means to renew at all.

On Tower

In On Tower contracted out leases expired, so the operator sought rights pursuant under paragraphs 20 and 27 of the ECC. At first instance in the Tribunal, Judge Cooke indicated any periodic agreement arising by conduct or inference, such as here, would not constitute an “agreement in writing of the occupier” - the requirement for such an agreement to be subject to the transitional provisions that which apply to the ECC.

Where the agreement is not “an agreement in writing of the occupier” the agreement will be outside the ambit of the ECC altogether. As such, On Tower was one of the operators left ‘out in the cold’, without any means to renew.

The decisions of the Supreme Court

The main issue for the Supreme Court to determine was what meaning to give to the term “occupier” and whether an operator with equipment in situ should be considered to be one or not. If operators were indeed “occupiers” they could not use paragraph 20 to apply for new rights.

The Supreme Court decided in favour of the operators; they were not ‘occupiers’ (whether caught by the transitional provisions or not – such as in the On Tower case) and therefore could use paragraph 20. Deciding the case, the Supreme Court noted that in interpreting the ECC, the correct approach was not to work out what the word “occupier” means, but to work out how the scheme was meant to work and then consider which meaning would achieve the statutory purpose (judgment, paras 106-107).

The Supreme Court noted that the ECC was designed to support the rollout of new infrastructure, which would be impeded if operators were prevented from applying for new rights where they already had apparatus installed.

However, operators cannot seek to modify the terms of an agreement during its term; they must respect the bargain that exists between the parties. If they wish to modify an extant agreement otherwise than consensually, they must wait to use the provisions of Part 5 of the ECC for this purpose at the end of the contractual term.

In Compton Beauchamp, the operator’s appeal was dismissed because CTIL was not the operator on the site, Vodafone was. Where a third-party operator happens to be in occupation, it is not open to a claimant operator to argue that the third party’s occupation must be disregarded to allow the landowner to grant rights to the claimant.

In On Tower, the operator’s appeal succeeded. As On Tower was in occupation under an unwritten agreement, it was not in occupation under an ECC agreement (by paragraph 11 of the ECC). As a result, it was permitted to seek code rights under the paragraph 20 procedure.

In Ashloch, the court asked for further submissions so that it could determine whether what the operator was seeking was entirely new rights (not conferred as part of the previous agreement) – which would be permissible – or whether the application was in fact a modification of previous rights.

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