Improving access to gigabit-capable connections


Government proposals to amend the Electronic Communications Code to encourage landlords to engage with telecom operators to provide tenants with the connectivity they need.

Summary

The Telecommunications Infrastructure (Leasehold Property) Bill (Bill) has been laid before *Parliament, the aim of which is to "help accelerate the delivery of fast, reliable and secure broadband networks". It provides for telecoms network operators to gain access to multiple dwelling buildings to deploy fixed line broadband connections, where a landlord has repeatedly failed to respond to the operator’s request for access following a tenant’s request for an electronic communications service.

*However the Bill failed to complete its passage through Parliament before dissolution. This means that the Bill will make no further progress for the time being but, nonetheless, the government's intention to improve connectivity remains and it seems as good a time as any to report on what is being proposed. We anticipate that the Bill will be re-introduced when Parliamentary time permits. Forewarned is forearmed even if some changes are made.

Background

In October 2018, the Government consulted on proposed changes to the Electronic Communications Code to make it easier for commercial and residential tenants to access high quality and reliable broadband. The Government, in the recent Queen's Speech, reiterated its commitment to delivering gigabit-capable connections nationwide as it believes such connections will be "the enabling infrastructure of the UK's future economic growth" and "to legislate as soon as Parliamentary time allows".

One perceived problem relates to the delay in an operator's ability to gain Code rights to install equipment where landlords are unresponsive to tenants' or operators' access requests. In addition, compensation and "lift and shift" provisions were cited as key concerns in the consultation. There is a clear message from the Code cases which have been heard to date, that the public interest in access to a choice of high-quality telecommunications services is of fundamental importance.

Government response

The Government has issued its response to the consultation which addressed two key issues:

  • whether the Code should be amended to place an obligation on landlords to facilitate the deployment of digital infrastructure when they receive a request from their tenants.
  • whether telecoms operators should be allowed to use magistrates' courts to gain entry to properties where a landlord fails to respond to requests for improved or new digital infrastructure.

The Government has decided not to legislate to place an obligation on landlords to facilitate access to operators. Instead, it believes that landlords will be incentivised to respond to tenant/operator notices if it is made easier for operators to use the Upper Tribunal (Lands Chamber) (UT) to obtain interim rights.

Telecommunications Infrastructure (Leasehold Property) Bill

The legislation applies to the whole of the UK. The Bill proposes to insert a new Part 4A to Schedule 3A of the Communications Act 2003 (the Electronic Communications Code (the "Code"- see here). The Government's view is that amendments are required to the Code to enable operators to obtain a faster and cheaper route to interim Code rights via the UT.

Proposed changes: "a fast, cheap, light-touch application process to obtain interim rights"

New interim rights application: scope

The Bill, as introduced, appears to apply only to residential or, potentially, mixed use leasehold premises. This is supported by paragraph 1 of the Explanatory notes to the Bill as introduced which refers to a bespoke process for telecoms network operators to gain access to multiple dwelling buildings (blocks of residential flats and apartments). Section 27B (2) refers to applying to a "multiple dwelling building" which is defined in 27(1) as a building containing two or more sets of premises which are used as, or intended to be used as, a separate dwelling". This definition would seem to rule out wholly commercial premises but there is the power in 27B(2) for the Secretary of State to extend the application of the Act by regulations to "other premises of a description specified in regulations". We will monitor developments. 

New interim rights application: the detail

The proposed new interim rights application process applies where:

  • an occupying tenant within the property has requested an electronic communications service (it is likely that the landlord's permission will be required for that service to be delivered);
  • the operator is unable to fulfil the tenant's service request without the landlord conferring Code rights;
  • the operator has served notice on the landlord pursuant to paragraph 20 (2) of the Code seeking Code rights from the landlord (a "request notice") but the landlord has failed to respond and;

If following the subsequent service of two warning notices and a final notice on the landlord, and no response has been received, the operator can apply for a Part 4A order (a court imposed order conferring Code rights identified in the request notice).

Part 4A order

The court (the UT) may make a Part 4A order only if it is satisfied that the application requirements have been met and the required grantor (the landlord/freeholder) has not objected to the making of an order. Further regulations are to be made which will set out the terms of any Code agreement imposed under Part 4A, following consultation with operators and representatives of those with an interest in land likely to be affected. The Government intends to issue guidance to assist operators, tenants and landlords.

The proposed new interim rights application process is intended to:

  • provide operators with the ability to access a leasehold property more quickly where there is an unresponsive landlord by reducing the time it takes an operator to apply to the UT to six weeks (42 days)
  • give additional rights allowing the installation and maintenance of digital infrastructure within the tenant's building for a limited period, currently proposed to be 18-months. The intention is that during this period, the operator would either seek to reach a more permanent consensual agreement with the landlord or apply to the UT to have rights imposed through the existing Code process under Part 4 of the Code (paragraph 20) for a court imposed agreement[1]  
Landlord safeguards

Further regulations (yet to be produced, and which will require a consultation process before being issued) will set out the terms of an agreement imposed by a Part 4A order with which the operator must comply, and to include:

  • details of the works to be carried out;
  • the obtaining of appropriate consents for the works;
  • the service of the necessary notices as evidence of operator attempts to contact the landlord (operators should ensure, wherever possible, that access requests are sent to the actual landlord at the correct address (or to an individual empowered to respond to access requests);
  • restrictions on the operator's right to enter the land at specified times (except in cases of emergency), to carry out work in an appropriate manner and reinstate at the end of the works;
  • the requirement for appropriate insurance cover or indemnification. 

It appears from the Bill, as drafted, that there is nothing that would prevent an operator from pursuing both the existing Part 4 route and the new Part 4A route in tandem, right up until the point where the landlord responds to any notice. The landlord’s response to any notice (that is a paragraph 20(2) notice, a warning notice or a final notice) will close off the Part 4A route. It would seem to make sense for the operator to have the option of both routes, particularly as a landlord can easily prevent the Part 4A route at almost any stage by responding to a notice. More clarity is required and it is hoped that this will be addressed in the accompanying guidance when this is issued.

It is envisaged that the landlord will have power to apply to the UT to challenge the interim Code rights and where interim rights are granted, the Bill allows landlords to apply to the UT for compensation from the operator for any loss or damage that has been or would be sustained as a result of the exercise of those rights.

Comment

It will be interesting to see whether operators need to use these new powers or whether their mere existence produces the desired effect. We will report on the detail as and when more information is released.

Key contacts

Julie Middlemass

Julie Middlemass

Partner, Real Estate Disputes
United Kingdom

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Chris Perrin

Chris Perrin

Partner, Real Estate Disputes
Manchester

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Charles Jagger

Charles Jagger

Partner, Real Estate Disputes
Manchester

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Andrew Blower

Andrew Blower

Partner, Real Estate Disputes
London, UK

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[1] Under paragraph 21, the court may impose an agreement where the prejudice caused to the relevant person by the order is capable of being adequately compensated by money and the *public benefit likely to result from the making of the order outweighs the prejudice to the relevant person.

*Public benefit – the court must have regard to the public interest in access to a choice of high quality ECA.