Despite the consistency with which the Upper Tribunal (the ‘UT’) has imposed telecoms agreements on landowners/site providers, a recent decision clarifies where the prejudice suffered by a site provider is deemed incapable of adequate monetary compensation despite the public interest in access to a choice of high quality telecommunications networks.
Cornerstone (the ‘Operator’) made an application under paragraph 20 of the Electronic Communications Code (the ‘Code’) seeking the imposition of an agreement to install and operate telecoms apparatus on the roof of a building in Elephant and Castle owned by the University of the Arts London (the ‘Site Provider’). However, the Site Provider was bound by a contractual obligation to sell the building to a developer with vacant possession, further to which the building would be demolished, in exchange for the developer delivering a new building elsewhere to the Site Provider.
Under paragraph 21 of the Code, the UT may make a paragraph 20 order imposing a telecoms agreement on a site provider if the following conditions are met:
- the prejudice caused to the relevant person is capable of being adequately compensated by money (para 21(2)); and
- the public benefit likely to result from the order outweighs the prejudice to the relevant person (para 21(3)).
At an interim hearing, the Operator was granted interim Code rights to install and use its apparatus at the Site Provider’s building under paragraph 26 of the Code until the determination of the Operator’s paragraph 20 application. Unlike the Code rights enjoyed by an operator pursuant to a paragraph 20 agreement, interim Code rights do not attract security of tenure and expire at the end of the term for which they are granted (usually until determination of the paragraph 20 application for a permanent telecoms agreement).
The Site Provider submitted that if a paragraph 20 agreement were imposed, it would suffer unacceptable prejudice because:
- it would fetter its ability to comply with its contractual obligations to the developer;
- it would be unable to give the developer vacant possession unless the Operator removed its apparatus, nor could it be certain of how and when the obligation to handover the building to the developer would be triggered given it was linked to the development programme; and
- removal of the Operator’s apparatus would necessitate compliance by the Site Provider with the Code provisions for termination including the lengthy notice procedure and establishing grounds for termination, and there was a risk that it would need to bring proceedings under Part 5 of the Code (termination provisions).
The Site Provider argued that the paragraph 21(2) condition was not met because the risk to its reputation, its relationship with students and staff, and the risk of proceedings were prejudices incapable of being quantified in money. The Site Provider also proposed that, as the level of prejudice to it was so high, the paragraph 21(3) condition was not met because any public benefit likely to result from an order would not outweigh the prejudice suffered.
The Operator argued that due to COVID-19, the development could be delayed or might not go ahead at all and, if it did proceed, that the Site Provider had exaggerated the impact of the litigation.
Despite noting that COVID-19 supports increased public interest in having access to high quality telecommunications infrastructure, the UT found in favour of the Site Provider and held that the conditions in paragraphs 21(2) and 21(3) were not met. Accordingly, the UT declined to impose a paragraph 20 agreement. It is worth noting that the Site Provider was willing to agree a time-limited agreement, but given that only interim Code rights can be excluded from the protection of security of tenure under the Code and these can only be imposed by the Upper Tribunal, this option was unavailable because parties cannot contract out of the Code.
Significance of the decision
This decision will be welcomed by site providers because it acknowledges that the UT does not expect site providers to fold to public interest benefits at all costs, and opposition to a telecoms agreement is not limited to a site provider itself redeveloping its site (paragraph 21(5) of the Code, which has an extremely high evidential threshold). It should also relieve some of the tension between site providers and operators negotiating telecoms agreements because it provides additional guidance on the UT’s approach to the paragraph 21 ‘public benefit’ test:
- the level of prejudice to the site provider must be “very high indeed” to outweigh the public benefit;
- the “net public benefit” test (i.e. subtracting Site Provider’s disbenefit from the benefit of the Operator’s activities) is overly reductive and of no merit; and
- the UT will not consider the availability of alternative sites to an operator, nor the availability of a sharing arrangement with another operator.
This article is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published. If you would like further advice and assistance in relation to any of the issues raised in this article, please contact us today by telephone or email firstname.lastname@example.org.