Author
Emma Dooley

Emma Archer

Senior Associate

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Author
Emma Dooley

Emma Archer

Senior Associate

Read More

11 October 2022

RED Alert - October 2022 – 3 of 5 Insights

Mind the gap: Electronic Communications Code update

Summary

The Upper Tribunal has considered how an operator in situ can renew its Electronic Communications Code (the Code) rights, where the site provider has granted a concurrent lease to a third party.

The facts

The case concerned a tower in Bingley, used by Vodafone as a site for its electronic communications apparatus. The background of the arrangement is as follows:

  • In 2003, Vodafone was granted a lease which expired in 2018.
  • The freehold of the building changed hands a number of times and is now in the ownership of Gencomp.
  • In 2018, after the commencement of the new Code but before the expiry of Vodafone’s lease, a previous freeholder granted a concurrent lease of parts of the tower to AP Wireless II (UK) Ltd (APW), subject to and with the benefit of Vodafone’s lease.  The concurrent lease was for a term continuing until 2058 and when it was granted APW became Vodafone’s immediate landlord.

The parties disagreed as to how the renewal should be achieved:

  • Vodafone argued that only Gencomp could grant it new rights under the Code, which rights should be made binding on APW.
  • APW argued that it is the only party capable of granting Code rights to Vodafone, and that those rights should then be made binding on Gencomp.

The decision

The Tribunal concluded that an operator seeking to renew or modify Code rights in a situation where a concurrent lease has been granted, cannot use the Part 5 procedure as a paragraph 33 notice can only be served on the 'other party to the agreement'.

An operator should instead use the Part 4 procedure and serve a paragraph 20 notice seeking an order against a site provider which was not a party to the original agreement.

The decision means that operators will be able to secure new Code agreements against concurrent lessees by serving a 28-day paragraph 20 notice on the concurrent lessee before issuing proceedings in the tribunal for the grant of a new Code agreement.

Whilst a solution has been provided for operators, the Tribunal also determined that a site provider who was not a party to the agreement by which the rights were originally conferred (e.g. a concurrent lessee) cannot access a mechanism under the Code to bring that agreement to an end. Martin Rodger QC, in his decision stated:

I do not see a solution to that small but potentially important structural defect … I would add, however, that for so long as this gap in the structure of the Code remains, a concurrent lessee who wishes to redevelop a building over which code rights have been granted by a superior landlord will find themselves in difficulty, and with no obvious means of bringing the code rights to an end. A person contemplating taking a concurrent lease with a view to redevelopment would therefore be well advised either to adopt a different structure or to ensure that any code agreement which may interfere with their proposals has been terminated before they acquire their interest.

Our comment

The wider implications of this judgment is likely to be cause for concern for developers, who should carefully consider the structures of development sites involving telecoms sites, to help mitigate the "gap" created by this decision.

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