On Tuesday 1 to Thursday 3 February 2022 Martin Thomas, our property litigation partner, will lead a team bringing two appeals to the Supreme Court on behalf of Cornerstone Telecommunications Infrastructure Limited ("Cornerstone"). This landmark legal case which addresses a fundamental issue in the Telecoms code (the Electronic Communications Code 2017 ("the New Code"), namely how an Operator with equipment already on a site, for example under a previous agreement, can obtain additional Code Rights or extend an expired agreement.
This litigation is therefore significant for both landowners who host, or may be required to host, electronic communications apparatus on their land, as well as Operators themselves.
The hearing will be livestreamed on the Supreme Court's YouTube channel throughout the proceedings between 10.30am and 4pm.
Gowling WLG's full team is: partner Martin Thomas, associate Emilie Beek, principal associate Senay Nihat, associate Rachel Bright, and trainee solicitor May Yuen.
What is the New Code?
The New Code came into effect in December 2017, replacing the existing Code ("the Old Code"). The New Code provides a mechanism for renewing expired agreements (either through the Code or through Transitional provisions for agreements which expired before the new Code came into force) and for obtaining enhanced Code Rights for the installation, maintenance, sharing and assignment of electronic communications apparatus ("ECA").
One purpose of the New Code was to make it easier for operators to improve connectivity and to roll out new technology more quickly. However the interpretation of the New Code by the lower Courts in these two cases create significant obstacles to Operators attempting to access the New Code Rights and procedures in respect of any existing (as opposed to new) sites.
Why is this important?
Telecommunications operators, like Cornerstone must be able to install, maintain and upgrade ECA, to support nationwide connectivity and allow for swift deployment of new technology such as the rollout of 5G.
Landowners on the other hand are concerned that the rents under the New Code are much lower than before, whilst the rights granted are often wider, so are likely to want to postpone the transition to a New Code agreement if they can.
What questions will the Supreme Court be answering?
The issues in the appeals go to the "essential principle" that:
- agreements under Part 4 of the New Code must be between the operator and the occupier;
- if the operator already has ECA on site e.g. under a previous agreement, are they treated as the "occupier" and so unable to acquire New code Rights except through a renewal process? and
- if so, which renewal process (if any) is applicable and does that depend on a) the nature of the installation and/or b) whether the previous agreement was in writing.
The Court of Appeal decided (CTIL v Compton Beauchamp [2019] EWCA Civ 1755, CA.) that operators with ECA already on site were the "occupier" for the purposes of the Code and that is the key issue and lead appeal. The second appeal (CTIL v Ashloch(1) and APW (2)) raises the issue whether an agreement which was a business tenancy under the landlord and Tenant Act 1954 can only be renewed through the 1954 Act, or whether the Operator can seek additional Code Rights under the New Code. The third appeal (On Tower v APW) concerns whether unwritten agreements can be renewed through the New Code.
The issue in CTIL v Compton Beauchamp is therefore fundamental to the way the New Code operates, whilst the other two appeals raise other key issues which fundamentally affect the way the New Code works, and therefore impacts on landowners and the operators on many thousands of telecoms sites across the UK.
Other law reform
Interestingly, whatever view taken by the Supreme Court, a government consultation on the Code has recently come to an end and the resulting proposals, and draft legislation, indicate several changes will be introduced.
Whilst the proposed changes will not deal with all the issues raised in the appeals (and they also address a range of wider issues from the Consultation) there is implicit recognition that the Code is not working for operators in the way intended, and they should not be shut out of the New Code by reason of already having equipment on site (the central point in Cornerstone v Compton Beauchamp). So it looks certain that important legislative changes will be made to the New Code, although it's unclear when this happen and exactly what form the amendments will take.
Therefore, both landowners and operators should be aware that, one way or another, the practical approach to operating the New Code is likely to change in the next few months.
If you have any queries or to find out more about our property litigation team, please contact Martin Thomas.