Electronic communications code - sending a message

Owing to the proposed redevelopment of the property on which their electronic communications apparatus was currently situated, EE Limited and Hutchison 3G UK Limited (EE) wanted to relocate the equipment and operate it from the roof of Threadgold House, which had been identified as a suitable alternative and which was owned by the London Borough of Islington (LBI).

The parties failed to agree terms and so EE applied to the Upper Tribunal for an agreement to be imposed pursuant to the Electronic Communications Code (the Code). The Code is still in its relative infancy, having come into force on 27 December 2017. Therefore, these early decisions provide particularly useful guidance and assistance in interpreting the Code. In this case the Upper Tribunal noted that this was their first decision on the meaning and effect of the consideration and compensation provisions of the Code. There was also a separate point of principle concerning the jurisdiction of the Tribunal to impose Code rights by lease. The Upper Tribunal found the following.

• There was a large number of issues in dispute over the detailed terms of the agreement, but following LBI’s deliberate failure to comply with earlier directions issued by the Tribunal to submit marked up comments on the travelling draft of the agreement, LBI lost its right to make representations on these terms, leaving only the consideration, compensation and nature of the agreement (i.e. whether it was a lease or licence) to be determined.

• The Tribunal has jurisdiction to impose an agreement in the form of a lease. It was also noted that the Tribunal’s order is sufficient to bring this into existence and no separate agreement between the parties is necessary.

• As the parties had been unable to reach agreement on the consideration payable, the Tribunal determined in this case that, on a ‘no-network’ assumption, the nominal value of the rights was £50 and that the consideration that willing parties would agree on the basis of the terms to be imposed in this case would be £1,000 per annum. However, as EE had proposed a sum of £2,551.77, that would be the figure imposed.

• The decision analyses in some detail the valuation assumptions under the new Code. In discussing the no-network assumption the Tribunal notes ‘[t]he presence in the market of operators who might wish to use the site to provide a network must therefore be ignored, and the price which such operators would in practice offer for the site must not be taken into account in assessing consideration.’ The Tribunal also states that ‘[t]he value of the land to the willing buyer will depend in every case on its characteristics and potential uses, and not simply on the number of potential bidders in the market’. The Tribunal highlights that, prior to the new Code coming into force, the parties had in fact reached agreement in principle for use of this site on the basis of a sum of £21,000 per annum, however this was not completed (it is assumed owing to the valuation provisions under the new code being thought to be more favourable to operators, which is borne out by this decision).

• The Tribunal also assessed LBI’s claim for compensation under the Code. LBI submitted 29 separate claims for compensation. The Tribunal found LBI was entitled to its reasonable legal and surveying costs associated with the agreement and to compensation for loss or damage caused by the installation of the claimants' apparatus, including temporary use of LBI’s land at ground level (although these requirements were not yet known). In this case the Tribunal dismissed all other claims for compensation, including a claim for diminution in the value of the land, noting that ‘it was not the intention of Parliament that the share in the economic value created by the operator's network which has been denied to the site provider in the assessment of consideration should be paid over in the form of compensation for diminution in the value of that land’. The Tribunal considered that if the value of the site provider’s land is diminished as a result of the rights being granted, that should be reflected in the consideration payable. However, it did not rule out such claims completely, stating ‘[i]f it could be shown that the value of the land had been diminished to a greater extent than had been reflected in the assessment of consideration a separate claim may be admissible’. The Tribunal also noted that LBI may be entitled to bring future claims for compensation.

EE Limited and Hutchison 3G UK Limited v The Mayor and Burgesses of the London Borough of Islington [2019] UKUT 53 (LC).