Telecom operators can apply for new court imposed code rights although they are already occupied through the existing telecom device on site
The Supreme Court has issued judgment in the long-awaited decision in the joint appeals in Cornerstone v Compton Beauchamp, Arqiva Services Ltd (now On Tower UK Ltd) v AP Wireless II (UK) Ltd and Cornerstone vs. Ashloch. See here.
The main question concerned how an operator who has already installed electronic communications equipment (ECA) at a site can acquire new or better rights under the Electronic Communications Code (Code) from the owner of the site. At the heart of the three appeals is paragraph 9 of the Code:
“a land right relating to the code can only be conferred on a holder by an agreement between the occupier of the land and the holder”.
An agreement can be concluded with the agreement of the owner of the site (paragraph 11) or failing that, by an operator seeking a judicial agreement imposed on the owner of the site (paragraph 20).
The Supreme Court accepted that an operator is not barred from claiming rights under the Code simply because it already occupies a site and reversed lower court findings to the contrary. On-site operators are not occupants when seeking new rights under the Code. Operators can therefore request new rights to the Code even if they are already busy through their device – in such circumstances, this occupation should be ignored.
The shutdown represents a significant gain for operators because it should make it easier for them to secure the telecom agreements necessary for the deployment of new digital infrastructures. The Code applies to the whole of the UK and the decision will be important for the telecommunications industry nationwide. Using a tennis analogy as Wimbledon looms, it’s currently Advantage: Operators. We will have to wait and see what happens in the Ashloch case as it will be subject to further submissions from the parties.
WHAT DID THE LOWER COURTS DECIDE?
The Court of Appeal held that for an operator to be granted rights under the Code, the claim had to be made against the occupier at the time and Compton Beauchamp was not, in fact, the occupier . The occupier happened to be Vodafone, an on-site operator (although its only rights were those under Part 6 of the Code where notice had to be served for ECA withdrawal). Where an operator has already installed an ECA on land, they will often be both the “operator” and the “occupier of the land” for the purposes of paragraph 9. An operator cannot enter into an agreement with itself. The Court of Appeal concluded that in these circumstances an operator is precluded from claiming rights under the new Code.
ARQUIVA WIRELESS V AP SERVICES
The Upper Tribunal reluctantly followed the decision in Compton Beauchamp and concluded that On Tower had no right to make a claim under Section 20 of the Code when it remained in occupation of the communications site after the determination of an at-will rental.
CORNERSTONE V ASHLOCH
The Court of Appeal followed Compton Beauchamp. It concluded that an in situ operator who had a tenancy protected by the 1954 Act had no right to make a claim under Part 4 of the code and had to apply for renewal under the 1954 Act in accordance to the transitional provisions of the code.
SUPREME COURT DECISION
The Supreme Court concluded that operators should not be treated in the occupation where they seek new Code rights. Operators can apply for new rights under the Code during the contractual term of an existing agreement under the Code or a transitional tenancy under the 1954 Act under Part 4 (a court-imposed agreement) . Therefore, rights under Part 4 are not simply limited to operators occupying without security, even if they occupy the business in accordance with the terms of their existing Code agreement (which may be a lease) and constitute the occupant for the pursuant to Section 105 of the Code.
There are two conditions for ignoring the operator’s profession:
- An operator may not seek to change the terms of a Code agreement during its term, but must wait to use the provisions of Part 5 for this purpose at the end of the contract term. In other words, he cannot request during the contractual term to modify the terms of the code agreement
- An operator who has an agreement in force under the transitional provisions which is protected by the 1954 Act must apply for renewal under the 1954 Act.
APPEAL RESULT IN BRIEF
Compton-Beauchamp: The appeal was dismissed, as Cornerstone’s claim, which sought new rights under the Code against the landowner, Compton Beauchamp, had to be against the occupier, and Vodafone and not Compton Beauchamp was the occupier. The profession of the operator should not be ignored in this third scenario.
Ashlock: The call will be resubmitted.
On Tour: The appeal was upheld: its occupation of the land due to the installation of its ECA was to be ignored as it sought an entirely new deal.
Greater clarity on the interpretation of Code provisions is welcome in what has been a highly contentious area. The ruling reinforces government policy to encourage the rollout of new digital infrastructure, and that would be hampered if operators could not apply for new rights simply because they were already busy through their device. There are many cases before the Upper Tribunal which are suspended pending this decision. It is likely that many of them will now authorize operators to apply for the rights they wish to obtain. A smoother passage and a gentle operator.