The Impact of the Digital Economy Act 2017 for Landowners

Here Adrian McClinton, Associate Solicitor at Coffin Mew LLP discusses the Digital Economy Act 2017 and its implications for landowners trying to get telecommunication companies to remove antennas and other apparatus from their land.

When farmers are offered a few thousand pounds each year by telecommunication companies (i.e. mobile telephone network providers) to put up antennas in empty fields, they might be forgiven for viewing this as money for nothing.

Eventually though the ‘empty field’ becomes ripe for development. Except that there is a massive antenna in the corner and nobody wants to live next to a massive antenna. But the farmer can simply ask the telecommunication company to take it away right? Wrong.

Any solicitor or surveyor who has acted for a landowner trying to persuade a telecommunication company to remove their apparatus their land will be sympathetic when I say it isn’t straight forward.

The existing legislation regulating this process is set out in the Electronic Communications Code which is currently found on schedule two of the Telecommunications Act 1984. The code contains a wealth of obstacles that landowners must overcome to compel the operator to remove the apparatus. Also, landowners cannot take steps under the code until they have extinguished rights under the Landlord and Tenant Act 1954.

The Digital Economy Act 2017 (DE 2017) received royal assent on 27^th April 2017, and introduces a new code. It should be noted that this will only apply to agreements entered into after the Secretary of State issues regulations to bring it into effect. Please note that at the time of writing the new code is not in force. However, when it does come into force it will introduce changes that substantially impact the rights of all parties to an agreement relating to telecommunication apparatus. The most noteworthy are:

• The definition of ‘code rights’ is expanded and clarified.
• The DE 2017 amends the LTA 1954 so that new agreements will not have protection under the LTA 1954.
• Under Part 3 of the new code there will be no right for the landowner to restrict the ability of the operator to assign, share with other providers (which they often do, making it difficult to identify who is in actual control of the apparatus) or upgrade the apparatus. A provision preserving the right for the operator to upgrade the apparatus is entirely understandable given the need to keep up with advancements in technology.
• Under part 4 of the new code there is a new method to calculating compensation for imposing agreements on landowners that will likely result in falling levels of compensation and have an adverse knock on effect on rents.
• Part 5 of the New Code introduces a right to terminate by the landowner similar to Ground F of the LTA 1954. This will replace the current process that requires the landowner to serve a notice, wait to see if the operator fails to serve a counter-notice (they won’t) within 28 days and then make an application to court for the removal (so long as the landowner can meet certain criteria).

  The new code requires the operator to serve a counter-notice and then subsequently apply to court within three months. The court must order the agreement to end if it finds that the landowner can substantiate any of the following:

  • That there have been substantial breaches of the operator’s obligations in the agreement or persistent delays in making payments under the agreement.
  • There is an intention redevelop all or part of the land, or neighbouring land, and the landowner cannot do so unless the apparatus is removed.
  • Where financial compensation is inadequate/the landowner’s rights outweigh any benefit to the public.
• Part 6 of the new code sets out a two-stage process relating to the actual physical removal of the apparatus. If agreement cannot be reached between parties, then the landowner will need to apply to court to obtain a further order.

It is important to note that under Part 4 of the new code operators can still apply to court to impose an agreement on a landowner, if certain criteria can be met and the landowner can be adequately compensated. The court has a wide discretion in relation to the terms of the agreement and the rights granted to the operator, but it must include terms relating to rent and length of term.

The rights of each party should be clearer soon hopefully, but this clarity will come at a cost to the landowner in terms of how much they can recover by way of rent and compensation.

The Government is faced with a need to continue to provide incentives to operators to invest large sums in the telecommunications infrastructure, whilst hoping to clarify the law and balance the proprietary rights of landowners. Many of the surveyors that I have spoken to since the confirmation of the new code indicate that they will find it difficult to convince landowners of the benefit of allowing operators to situate installations on their land.

The fact that the court must order the termination of an agreement if the landowner can demonstrate the need for possession of the land to re-develop is a step forward for landowners in terms of clarity. However, the introduction of a two–stage process to remove the apparatus will increase the landowners’ costs of development.