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Impact of COVID-19 on telecommunications apparatus

29 April 2020. Published by Catherine Young, Senior Associate

With COVID 19 keeping individuals and businesses in various states of lockdown around the world, the importance of telecommunications in keeping the country connected, both professionally and socially, has been thrown into sharp relief.

The emphasis on working from home and the physical separation of extended families mean that a reliable telecommunications network is of paramount importance.  This has been recognised by the government who have deemed any key staff working in the telecommunications sector a key worker.  This means they are eligible for continuing support from schools to enable them to work irrespective of their childcare obligations whilst schools are closed.

Electronic Communications Code

The importance of properly legislating the changing world of electronic communications has been evident for quite some time.  As has been widely reported, the Digital Economy Act 2017 introduced a new Electronic Communications Code (the Code) into the Communications Act 2003.  The previous code governing telecommunications equipment was issued in 1984 and so updates were required to ensure that this was still fit for purpose in the fast-changing world of telecommunications technology.  The Code grants rights to specific electronic communications operators specified by Ofcom to install, keep installed and make changes to apparatus located in land as well as rights to use that land in connection with the apparatus.  These rights will bind not only the current occupier but also the land going forward.  They should ideally be obtained by agreement between the operator and the landowner but, if the parties cannot reach a mutually satisfactory agreement, rights can be imposed by the court.

Two stage test court must consider when imposing rights on landowners

In considering whether or not to make an order imposing these rights the court must consider a two stage test set out in the Code.  Firstly, the court must be satisfied that the landowner may be adequately compensated by money.  Secondly, the public benefit that arises from the making of the order must outweigh the prejudice to the landowner.  The Code states that the court must have regard to the public interest in access to a choice of high-quality electronic communications services when making its decision.

Will landowners be adequately compensated?

Unfortunately for landowners, although the Code states that the compensation must be an amount representing the market value of the agreement between the parties, the case of EE Ltd and another v London Borough of Islington [2019] UKUT 53 (LC) shows that the court is unlikely to grant compensation equal to what the landowner considers to be the true market value.  The amount should be what a willing buyer would pay a willing seller in a transaction at arm's length with both acting prudently and with full knowledge of the transaction.  However, it is also calculated on the basis that the right does not relate to the electronic communications network or by other operators and on the assumption that there is more than one site which an operator could use for the same purpose.  This effectively removes any chance of the operator being considered a special purchaser and deliberately disregards the value of the land for the sole use of electronic communications apparatus.  The Upper Tribunal considers only the alternative uses for the site and whether the landowner is bound by any additional obligations to the operator.  In the case, this resulted in the compensation being awarded being much less than was originally offered.  This was a deliberate decision by the Tribunal, which stated that "the whole premise of the Code is that there is a need, in the public interest, to impose agreements on unwilling parties in return for consideration which parliament has deemed to be adequate notwithstanding that it may be significantly lower than would result from unrestricted commercial negotiation".  

Public interest v private rights

 If landowners are not adequately protected by the provision of compensation then the threshold for the public interest element of the test is important.  It is not usual for legislation to deprive the owner of an asset from realising its full benefit as English society has historically gone by the maxim "an Englishman's home is his castle".  In one of the first cases heard in the Upper Tribunal on the Code, Cornerstone Telecommunications Infrastructure Limited v University of London [2018] UKUT 356 (LC), the President of the Upper Tribunal commented that the code gives "greater weight to the public interest in the provision of electronic communication networks than the public interest in the preservation of private property rights".  This approach has been continued in the later cases of Evolution (Shinfield) LLP and others v British Telecommunications plc [2019] UKUT 127 (LC) and Cornerstone Telecommunications Infrastructure Ltd v Keast [2019] UKUT 116 (LC), both of which found in favour of the operator.  

It is generally accepted that the new Code is more operator friendly than the old 1984 code.  This has been enhanced by the willingness of the Upper Tribunal to favour the operator rather than the landowner in its interpretation of the legislation.  

The clear intention of Parliament behind the Code was to ensure that high quality electronic communications services are available to all, almost irrespective of the impact on individual landowners as a result.  The current crisis has made evident to all the crucial importance of electronic communications services in today's interconnected world.  It therefore seems unlikely that the approach of the Upper Tribunal will change; if anything it may lean even further in favour of operators in future decisions. Landowners wishing  to oppose operators have been put in an increasingly difficult position.