Is the Telecoms Code critically flawed?

It is clear that the Government amendments to the Communications Act 2003 are not working as was intended. The operators appear to be blaming the land owners agents and they in turn blame the operators. But who is really to blame?

Is it the Department for Culture Media and Sport (DCMS) who drafted this document with the help of their lawyers? Perhaps they would point to a document advising that they thought the Law Commission should be given time to review the final draft before giving it the green light?

Blame is not what we should be considering right now. Instead we should be looking for a practical solution to get the market moving once again.

All parties appear to be agreed that the drafting of Paragraph 24 is the culprit. The “no scheme” valuation model is not working. Nobody can agree on how it should work. Some say that the DCMS impact assessment that referred to a 40% reduction in rents was based upon assumptions and lack of evidence from the operators and so was critically flawed. Arguably it was, as some of the Code operators are now seeking reductions of 99.9%. Unsurprisingly, commercially minded land owners are not even bothering to instruct their agents to respond.

So if we can't agree on its interpretation, why does the DCMS not change Para 24? It has the power reserved to do so.

Maybe if we considered further the interpretation of Para 24(1)- specifically line 4 and para 24(2) (a), the courts could make a ruling that would leave the DCMS little or no option but to do so.

Para 24 (1) clearly states that the consideration must represent the market value OF THE RELEVANT PERSONS AGREEMENT (which assumes that the owner is willing) to confer or be bound by the code rights. Arguably, this supports the principle that there is a threshold below which the Owner will not deal.  I think we all know that ￡50.00 is well below that threshold.

This principle is reinforced by Para (2) which again sets out the circumstances in which that persons agreement can be given- and again this is vitally important.

24 (2) REQUIRES that it must be “in a transaction at arms length”.

The definition of an arms length transaction is that neither party must be under pressure or duress. Each party must be equal.

Note that “market value” (24(1)) also requires value to be reached without compulsion.

 So I beg to ask the question- does the New Code conflict with this paragraph? Does it place pressure or duress on land owners- by granting the Code Operators the right to seek an order from the court to have conditions imposed upon the owner if he is not willing to accept what is being offered?

The initial letter to land owners from the operators refers to the their rights to seek an order from the court.  More recently we have seen letters from the operators solicitors sent to land owners stating “This letter has been sent to you in accordance with Practice Direction on Pre Action Conduct (“the Protocol”) contained within the Civil Procedure Rules (“CPR”). In particular we refer you to paragraphs 13 to 16 of the Protocol concerning the courts powers to impose sanctions for failing to comply with its provisions. Ignoring this letter may lead to our clients issuing proceedings against you, the result of which is likely to increase your liability for costs.”

Does such a letter, from solicitors, not immediately place the land owner under pressure and duress? If you received a letter stating this, what would you think?  Are you on an equal footing with such a threat hanging over you?

The revised Code is driven by compulsion and makes it very clear that the land owners right to control the use of his or her land can be overridden. Is this not pressure or duress, or both?

The New Code is underpinned by the principle of Compulsory Purchase. Does this not also place the Owner under duress? Where is the balance in that?

So are both parties equal? Of course not.

The loss of the owners right to control his or her own land, arguably, totally undermines the overriding principles of an “arms length transaction” and “market value”.

Should a court impose an agreement upon an unwilling land owner under para 20, then the court has to take into account any “PREJUDICE CAUSED TO THE RELEVANT PERSON”. There you have it. The revised Code expects the Owner to be prejudiced.  The parties are not equal.

So arguably, the test for how consideration is to be determined must be critically flawed by the very construction of the New Code itself.

The revisions to the Communications Act 2003 were intended to facilitate the roll out of base stations across the UK. Instead, here we are 7 months later and we have all seen how the changes have brought the industry to a halt. Small businesses that support this industry are in financial difficulty. Amendments urgently need to be made to the Communications Act that bring clarity and  balance – and which provide an incentive for land owners to open their doors again to Code Operators.