Business news

New telecoms legislation presents challenges for landowners Matthew Howse, Partner – Dispute Resolution & Litigation, Eversheds Sutherland

Posted By: Eversheds Sutherland

9th Jun 2022

Despite significant reforms and changes in 2017, the Electronic Communications Code (”the Code”) is set to be amended once more when the Product Security and Telecommunications Infrastructure (PSTI) Bill becomes law. Currently passing through the House of Commons, the main thrust of the new legislation is to introduce mandatory security requirements for smart devices and ‘consumer connectable products’ like smart phones, smart TVs, and home speakers.

The second part of the new bill is to make changes to the Code, the main law that governs the rights of telecoms companies to install their infrastructure on land across the UK. It’s fair to say that the Code has been controversial since its first major reform in 2017. While reforms were introduced to reflect the significant changes to electronic communications over the past 20 or 30 years, the Code as amended in 2017 aimed to provide network operators the ability to expand and improve their networks with more freedom and to reflect the dominance of mobile and internet networks in the modern day.

These reforms, however, have been controversial, in particular the changes to land valuation. For many landowners, rents for hosting telecoms equipment have reduced dramatically, while the Code has also been blamed for causing delays to infrastructure roll-out. Historically, many landowners and small farmers in Northern Ireland agreed with telecommunications companies a rent in order to install masts and infrastructure on a portion of their land. While rents varied, they could often be in the region of £3000 to £4000 per year (or more), a not insignificant income for landowners.

The reforms to the Code in 2017, however, gave much greater power to the tenant to negotiate or, in many cases, demand a much lower rate of rent when it is up in the name of the societal ‘greater good’. In several cases, this has meant that landowners have seen their incomes slashed. For small landowners or independent farming families, this can mean a huge reduction in what is often vital income.

The current PSTI Bill aggravates the position further by inserting new Articles 18A, B and C into the Business Tenancies (Northern Ireland) Order 1996, to remove the subsisting agreement protection, so that the landowner will be compelled to accept the £200 to £300 being offered by the agents. The amended Code will, in theory, see the process of finalising new telecoms agreements and rolling out new infrastructure sped up to supercharge the UK’s digital revolution. However, this may come at significant expense to landowners up and down the country.

In the struggle between private property rights and the speedy roll-out of the UK’s digital infrastructure, the current PSTI Bill may see small landowners and farming communities come out the losers. Litigation and legal action over the Code is likely to rumble on until the new legislation is passed. And with the power tipping even more to the tenants under the new PSTI Bill, landowners may find themselves in difficulties under the new laws.