Telecoms operators can seek new court imposed code rights despite being in occupation already through existing telecoms apparatus on site

SUMMARY

The Supreme Court has handed down judgment in the long-awaited decision in the conjoined appeals in Cornerstone v Compton Beauchamp, Arqiva Services Ltd (now On Tower UK Ltd) v AP Wireless II (UK) Ltd and Cornerstone v Ashloch. See here.

The main issue concerned how an operator who has already installed electronic communications apparatus (ECA) on a site can acquire new or better rights under the Electronic Communications Code (Code) from the site owner. At the heart of the three appeals is Paragraph 9 of the Code:

"a code right in respect of land may only be conferred on an operator by an agreement between the occupier of land and the operator".

An agreement can be made with the consent of the site owner (Paragraph 11) or failing that, by an operator applying for a court imposed agreement on the site owner (Paragraph 20).

The Supreme Court accepted that an operator is not barred from applying for rights under the Code just because it is already in occupation of a site and reversed the findings to the contrary in the lower courts. Operators in situ are not occupiers when seeking new Code rights. Operators therefore can seek new Code rights despite being in occupation already through their apparatus - in such circumstances that occupation is to be disregarded.

The judgment represents a significant gain for operators as it should make it easier for them to secure telecoms agreements required for the roll-out of new digital infrastructure. The Code applies across the UK and the decision will be of importance to the telecoms industry nationally. Using a tennis analogy as Wimbledon looms, it is currently Advantage: Operators. We will have to wait and see what happens in the Ashloch case as this will be the subject of further submissions from the parties.

WHAT DID THE LOWER COURTS DECIDE?

COMPTON BEAUCHAMP

The Court of Appeal held that in order for an operator to be granted Code rights, the claim had to be made against the occupier for the time being and Compton Beauchamp was not, on the facts, the occupier. The occupier happened to be Vodafone, an operator in situ (although its only rights were those under Part 6 of the Code where a notice was required to be served for the removal of ECA).  Where an operator has already installed ECA on land, it will often be both the "operator" and the "occupier of the land" for Paragraph 9 purposes. An operator cannot enter with an agreement with itself. The Court of Appeal concluded that in those circumstances, an operator is precluded from applying for new Code rights.

ARQIVA SERVICES V AP WIRELESS

The Upper Tribunal reluctantly followed the decision in Compton Beauchamp and found that On Tower had no entitlement to make a claim under paragraph 20 of the Code where it remained in occupation of the communications site post determination of a tenancy at will.

CORNERSTONE V ASHLOCH

The Court of Appeal followed Compton Beauchamp. It found that an operator in situ who had a protected 1954 Act tenancy was not entitled to make a claim under Part 4 of the Code and had to seek renewal under the 1954 Act in accordance with the Code's transitional provisions.

SUPREME COURT DECISION

The Supreme Court found that operators are not to be treated in occupation where they seek new Code rights. Operators can seek new Code rights during the contractual term of an existing Code agreement or a transitional 1954 Act tenancy pursuant to Part 4 (a court imposed agreement). Consequently, rights under Part 4 are not simply restricted to operators in occupation with no security, and this is so even if they are in occupation pursuant to the terms of their existing Code agreement (which may be a lease) and constitute the occupier for the time being in accordance with para 105 of the Code.

There are two qualifications to ignoring the operator’s occupation:

• An operator cannot seek to modify the terms of a Code agreement during its term, but must wait to use the provisions in Part 5 for this purpose, at the end of the contractual term. In other words, it cannot make an application during the contractual term to modify the terms of the Code agreement
• An operator who has a subsisting agreement within the terms of the transitional provisions which is protected by the 1954 Act must seek renewal under the 1954 Act.

APPEAL OUTCOME IN A NUTSHELL

Compton Beauchamp: The appeal was dismissed, as the claim by Cornerstone, which was seeking new Code rights against the landowner, Compton Beauchamp, had to be against the occupier, and Vodafone not Compton Beauchamp was the occupier. The operator’s occupation is not to be ignored in that third party scenario.

Ashloch: The appeal will be the subject of further submission.

On Tower: The appeal was allowed: its occupation of the land by virtue of its ECA being installed was to be ignored as it was seeking an entirely new agreement.

COMMENT

More clarity on interpretation of the Code's provisions is welcomed in what has been a highly contentious area. The decision reinforces government policy to encourage the roll-out of new digital infrastructure, and that this would be impeded if operators could not apply for new rights merely because they were already in occupation through their apparatus. There are numerous cases in the Upper Tribunal which are stayed pending this decision.  It is likely that a good number of those will now proceed with operators being permitted to seek the rights they wish to obtain. A smoother passage and a smooth operator.