These appeals concern the grant to telecommunications operators of “code rights” enabling them to install and operate their network electronic communications apparatus (“ECA”) on land not owned by them. The main issue is whether and how an operator who has already installed ECA on a site can acquire new or better code rights from the site owner.
Code rights are governed by the Electronic Communications Code contained in a schedule to the Communications Act 2003. Paragraph 9 of the new code states that “a code right in respect of land may only be conferred on an operator by an agreement between the occupier of the land and the operator”. Such an agreement can be made with the consent of the site owner or failing that, by an operator applying to the Upper Tribunal (Land Chamber) for the imposition of an agreement on the site owner.
The Court of Appeal concluded that when an operator has already installed ECA on land, it will often be both the “operator” and “occupier of the land” for the purposes of Paragraph 9. As an operator cannot enter into an agreement with itself, the Court of Appeal concluded that in those circumstances an operator is precluded from applying for new code rights.
All the appellants are operators of mobile telecoms networks. They installed ECA on land owned by the respondents many years ago. Some of the operators simply kept their ECA installed on the land after the agreement expired, without objection from the site owner. Now the operators want to improve the security of their position on the land by applying for new code rights. The appellants argue that on the true construction of Paragraph 9, an operator with ECA on land pursuant to code rights cannot be the “occupier of the land”, and therefore that the presence of an operator’s ECA on land should be disregarded for the purposes of Paragraph 9 so that they can apply to the site owner or to the tribunal for new code rights.
The respondent site owners say that the telecoms operators’ ability to change the rights they have only arises once Part 5 of the new code applies to them. Part 5 does contain provision for the renewal and modification of an existing code agreement but only once the initial period covered by the agreement comes to an end.
HELD – In a unanimous judgment, the Supreme Court: (1) dismissed the Compton Beauchamp appeal; (2) requested further submissions from the parties in Ashloch; and (3) allowed the On Tower appeal.
The “occupier of the land” issue
The main issue before the court is whether – in determining who is the “occupier of the land” in Paragraph 9 – the word “occupier” includes an operator who is presently on the site as a result of having installed and operated ECA there, or alternatively whether you must ignore the presence of that operator’s ECA.
The Supreme Court starts from the proposition that the word “occupier” has no fixed meaning but takes its content from the context in which it appears and the purpose of the provisions in which it is used. Looking at the new code as a whole, the Supreme Court holds that an operator which is already a party to a code agreement can only apply to the Tribunal to modify the terms of existing code rights it already has once Part 5 of the new code becomes available.
This does not, however, prevent an operator on site from being able to obtain additional code rights in respect of the same land. This is an industry where technology develops quickly and Government policy is to encourage the roll out of new digital infrastructure across the whole country. It would impede this policy if operators could not apply for the new rights they need for their network simply because their ECA is already installed on the site. The bar on applying for new rights would also operate in an arbitrary way because not every installation of ECA on a site by an operator would result in that operator becoming the ‘occupier’ of the site under the test applied by the Court of Appeal. The Supreme Court also found that there are other provisions of the new code which are drafted on the assumption that an operator can apply for new code rights even if they already have ECA installed on the site.
Outcome of the appeals
Although the Supreme Court therefore largely accepts the operators’ arguments this does not result in all the appeals being allowed. The Compton Beauchamp appeal is dismissed because it was Vodafone which was in occupation of the site not the site owner Compton Beauchamp. The On Tower appeal is allowed because On Tower’s occupation of the land by virtue of its ECA being installed falls to be disregarded and there is therefore no barrier to a code agreement being imposed under Paragraph 20.
As regards the Ashloch appeal, the distinctive feature in this appeal concerns the fact that the tenancy initially conferring code rights under the old code was protected by Part 2 of the Landlord and Tenant Act 1954. This gives security of tenure to business tenants and permits the tenant to apply to the court to renew the lease when its initial term expires. The Supreme Court agrees with the Upper Tribunal and Court of Appeal that the transitional provisions mean that an operator with a subsisting agreement protected under the 1954 Act does not have the option of renewing the rights under the new code. An operator in this position must instead exercise its rights under Part 2 of the 1954 Act. It is not apparent from the description of the background facts as set out in the judgments below whether the application made by Cornerstone covered new rights or rather sought to renew the rights that can only be renewed under the 1954 Act. The Supreme Court therefore invites submissions from the parties as to whether the appeal should be remitted to the Upper Tribunal to consider this.
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