Legislation introduced in 2017 has led to a surge in disputes and delays with landowners; expanding it to include 15,000 more sites looks unlikely to improve matters
From 7 April, legislation comes into force in the UK that brings thousands more landowners, public bodies and small businesses into a scheme that changes the model for hosting telecoms infrastructure.
The new legislation is an expansion of Part 2 of the Product Security and Telecommunications Infrastructure (PSTI) Act which extends the Electronic Communications Code (ECC) introduced in 2017. It replaced the original Electronic Communications Code which was introduced in 2003 but was widely viewed as a muddled, confusing piece of legislation.
A major reason for updating the ECC from 2017 was to transition thousands of existing telecoms sites away from older legal frameworks (such as the Landlord and Tenant Act 1954) to the new ECC.
The new Code’s main aims were to enable:
- Faster and cheaper deployment of telecoms infrastructure, particularly 5G, by overcoming administrative obstacles and legal ambiguities, as well as the difficulties in acquiring sites so that operators could deploy infrastructure faster and more cheaply.
- Upgrading and sharing apparatus through granting operators automatic rights to upgrade apparatus and share it with other operators without needing landowners’ consent, provided there is minimal additional burden.
- Lowering site costs (valuation) is one of the big sticking points as it shifts the basis of a site’s valuation from a “market value” to a “no-scheme” approach, lowering the rent payable by operators, regardless of the value of the site to the operator. Previously operators had claimed they were all but held to ransom, being charged exorbitant amounts for key sites to the extent they were unviable.
- Tackling unresponsive landowners by providing mechanisms, including court-imposed agreements, to deal with landowners who do not respond to requests for Code-based rights.
- Extending security of tenure so that operators gain long-term, statutory rights to retain apparatus on land, even after agreements expire, needed, according to operators to make their investment worthwhile and predictable.
- Assigning rights allows operators to transfer their agreements to other operators without the landowner’s consent.
It was abundantly clear by January 2019, just 13 months after it came into force, that the legislation was failing in its aims, as reported by Mobile Europe.
Government Ministers say this latest move which affects about 15,000 sites will support growth and accelerate the roll-out of telecoms infrastructure; a coalition of landowners and infrastructure investors groups claim it risks doing the opposite. Coalition members say that in some instances payments to them will be reduced by up to 90%, fundamentally changing the economics of hosting telecoms infrastructure.
The coalition which includes the British Property Federation, the Farmers Union of Wales and APWireless, warns that Labour is expanding a framework that is already giving rise to disputes, delaying agreements and holding up deployments.
Surge in disputes since 2017
Given the aims of the Code, it is perhaps not surprising that since the 2017 reforms, disputes between operators and site providers have surged, with more than 1,000 legal cases compared to 33 in the previous three decades. Negotiations are taking longer, relationships have become increasingly strained and agreement is harder to reach.
Critics point out that the UK is already lagging much of Europe in mobile connectivity, citing, for example, analysis from Ookla which found the UK is 24th out of 32 European countries for 5G availability. Clearly they view the introduction of the Code in 2017 as a major factor.
Further, a recent survey found that 35% of landowners who host telecoms masts are considering withdrawing from agreements altogether.
The coalition said in a statement,“The intention behind the 2017 reforms was to speed up rollout and make investment easier. In reality, they have made the underlying relationships harder to manage. Extending the same approach to a further 15,000 sites, without addressing those issues, risks reinforcing the problem rather than improving outcomes. We are already seeing the effect of this, with a third of site providers now considering stepping away from hosting infrastructure altogether as a result of reforms.”
The coalition also warned that the expansion is being implemented without the key safeguard intended to support it. The complaints mechanism under Section 70 has not been brought forward, leaving no clear, independent route to resolve disputes or concerns about conduct.
They are calling for Section 70 to be implemented as soon as possible, alongside a review of how the framework is operating in practice to ensure it supports both investment and delivery. A key change introduced in Part 2 of the Act requires operators to consider alternative dispute resolution (ADR), such as mediation, before applying to a tribunal, with a view to encouraging more collaborative negotiations and reducing reliance on legal proceedings.
