Consultation on Electronic Communications Code

Summary

The UK Government is consulting on changes to the Electronic Communications Code in relation to access to land. This follows regular feedback from various stakeholders that the 2017 Code is not having its intended effect. The Government considers that changes are required to realise fully the aim and ambition behind the 2017 Code and speed up commercial and public investment in gigabit-capable networks. The closing date for responding to the consultation is 24 March 2021.

Objective

The Government is committed to making the United Kingdom a global leader in digital connectivity. This requires reliable, long-lasting gigabit capable connections to be made widely available across the UK.

Government is targeting a minimum of 85% gigabit-capable coverage by 2025 (getting as close to 100% as possible) and aiming to ensure 95% of the UK’s geographic landmass has 4G coverage from at least one mobile network operator by 2025 and the majority of the UK population has 5G coverage by 2027.

To achieve the Government’s goals, the country’s digital infrastructure has to be maintained and upgraded, which requires a supportive legislative framework. That legal framework is the Electronic Communications Code (Code) which is a schedule to the Communications Act 2003. The Government intended the most recent version of the Code, which went live in December 2017, to support faster and easier deployment and encourage industry investment in the UK’s digital networks, while balancing those requirements with the rights and interests of landowners and other site providers.

However, following regular feedback from various stakeholders that the 2017 Code has not been delivering its intended effect, the Government considers that changes are required to realise fully the aim and ambition behind the 2017 Code and to speed up commercial and public investment in gigabit-capable networks.

Consultation on 3 key areas

The consultation focuses on 3 key problem areas:

• Issues relating to obtaining and using/relying on Code agreements;
• Rights to upgrade and share; and
• Difficulties specifically relating to the renewal of expired agreements.

Rather than setting out detailed proposed reforms, the consultation sets out a range of potential means to address the problems and feedback is sought on the scope of any changes to the Code.

Issues relating to obtaining and using Code agreements

The Government highlights certain constraints, including:

• Code rights require an agreement between a Code operator and the occupier of the relevant land, or a court order.
• They can only be exercised in accordance with the terms of that agreement.
• The Code does not allow for either party to apply to the Court for new or different terms, until the end of the agreement.

Agreement is often not achieved quickly enough for the required speed of rollout and once completed the agreements are not sufficiently flexible to accommodate changes in circumstances.

To address this, the Government is considering:

• a statutory process for monitoring raising complaints about non-compliance with the Ofcom Code of Practice;
• the introduction of an Alternative Dispute Resolution Scheme;
• fast-track court procedures;
• introducing an alternative procedure for Code rights to be obtained if an operator can demonstrate that reasonable efforts have been made to secure an agreement, but the occupier or landowner has failed to respond to repeated requests;
• making changes to the definition of an “occupier” or changing who is able to confer Code rights where an operator is in occupation of a site. The Government’s view is that where an operator is already occupying land under an expired or ongoing Code agreement, it is appropriate that the site provider is the person able to grant new rights or renew the agreement. The problems that this can cause for operators was explored in the Compton Beauchamp case.
• allowing a party to seek, from a court, modified terms or additional rights before an agreement expires in some situations. This could assure site providers and operators that agreements can be adapted if needed, while maintaining sufficient certainty that existing terms cannot be revisited without good cause. The court could be required to take into account a public benefit test similar to that used for the imposition of Code rights, in order to maintain an appropriate balance between the rights of the parties.

These proposed changes, in the Government’s view:

• support faster and more collaborative negotiations;
• help to ensure compliance with best practice guidance;
• encourage greater dialogue between the parties;
• provide efficient ways to deal with disagreements;
• address failures to respond to requests for Code rights; and
• ensure completed agreements can operate effectively.

Rights to upgrade and share

The 2017 Code includes automatic rights for Code operators to upgrade their own apparatus and share use of it with other Code operators, subject to satisfaction of certain conditions.

However, the Government reports that disagreements and uncertainty about those automatic rights are also protracting negotiations, undermining relationships between site providers and operators and preventing or delaying upgrading and sharing. Also the automatic right only exists in the 2017 Code from the end of December 2017 limiting the use of pre-existing networks.

The proposed changes:

• revisit the automatic rights and the conditions, reviewing when they should be available and how they may be clarified. The Government’s objective is to frame conditions that will provide sufficient clarity and certainty to allow appropriate automatic upgrading and sharing to happen in practice, while making clear to the parties concerned what is, and is not, permitted;
• clarify the position where operators seek upgrade and sharing rights that do not satisfy the existing pre-conditions. The Government wants to make clear that a court has jurisdiction to impose rights to upgrade and share beyond those contained in paragraph 17 of the Code, where the court is imposing either a new agreement or a renewal agreement;
• consider the benefits of introducing limited retrospective rights to share and upgrade apparatus installed prior to the 2017 Code, in a way that adequately protects the rights of site providers and operators, possibly with different and stricter conditions.

Difficulties specifically relating to the renewal of expired agreements

Code agreements are for a defined period of time, but Part 5 of the Code allows for an operator to continue to exercise Code rights even after that period has elapsed, and this carries on until the agreement is either terminated or renewed.

The Government’s concern is that there is a reported lack of clarity and consistency about when Part 5 applies and what should happen where Part 5 does not apply. There is also a perception that the current legislation does not encourage prompt negotiations for renewal agreements.

The consultation proposes that:

• because greater certainty is needed for operators and site providers about what will happen when the agreement ends, a potential solution would be if Part 5 were to apply in all cases so that, unless new terms have been agreed, the operator’s rights should continue to be exercisable and the site provider should remain entitled to payment in accordance with the expired agreement, but with either party being able to seek a modified agreement or the site provider being able to seek termination of the agreement under Part 5;
• there should be greater consistency in the way disagreements over the renewal of Code rights are dealt with. The Government is considering introducing a requirement for all Code disputes to be heard and decided on within 6 months of the date the application to a court is made;
• the legislative framework should encourage prompt and collaborative negotiations for renewals, with appropriate measures for where agreement cannot be reached. Consideration is being given to a procedure permitting either party to request an interim order in relation to a request for a renewal agreement and where a renewal agreement is subsequently imposed, permitting the court to backdate the financial terms of that agreement to the date that the request for an interim order was made.

Consultation document and Next steps

Please click here for the Consultation document and on how to respond. A reminder that the closing date for responding is 24 March 2021.

The Government will consider the responses received and provide a consultation response outlining the final policy position and any proposed legislative changes.