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In this post, William Crossley, an Associate at CMS, comments on the decision in Cornerstone Telecommunications Infrastructure Ltd v Compton Beauchamp Estates Ltd [2022] UKSC 18, concerning the rights over land granted to telecommunications operators under the Electronic Communications Code.

On 1, 2 and 3 February 2022, the Supreme Court heard the appeals in (i) Cornerstone Telecommunications Infrastructure Ltd v Compton Beauchamp Estates Ltd (the “Compton Beauchamp Appeal”); (ii) Cornerstone Telecommunications Infrastructure v Ashloch Ltd & Anor (the “Ashloch Appeal”); and (iii) On Tower UK Ltd v AP Wireless II (UK) Ltd (the “On Tower Appeal”). The appeals in these cases were heard together due to the similarity of the legal points considered which centre around rights over land granted to “operators” under the Electronic Communications Code (the “New Code”) (Communications Act 2003, Sch 3A). The Supreme Court gave a unanimous judgment in dismissing the Compton Beauchamp Appeal and allowing the On Tower Appeal but, requested additional submissions from the parties to the Ashloch Appeal. Despite the different outcomes, the approach of the Supreme Court is clear and the reasons for each judgment are set out below.

Background

The factual background to all three appeals is similar as each appellant operator had installed electronic communications equipment, on land that they did not own, and acquired rights under the provisions of the previous electronic communications code which was contained in the Telecommunications Act 1984 (the “Old Code”). With the arrival of the New Code and absent agreement with the relevant site owners, the operators each applied to the Upper Tribunal (Lands Chamber) (the “Upper Tribunal”) to acquire better rights in relation to the use of the land under the New Code.

The Supreme Court’s decision to hear these three cases together is logical in light of the factual and legal similarities between them. Each of the appellants are operators who can acquire certain rights under paragraphs 2-3 of the New Code. The conferral of such rights under the New Code aims to allow operators to install and maintain electronic communications apparatus, such as internet cables and relevant structures, without the requirement for prolonged negotiations to allow access and works on the various sites where the operators’ apparatus is located. Such rights can either be obtained by direct agreement between the operator and the occupier of the land or, in the absence of agreement, by order of the Upper Tribunal following the application of the operator as set out in the Communications Act 2003, Sch 3A, Pt 2, para 9 and Pt 4, para 20 respectively.

Decision of the lower courts

The Compton Beauchamp Appeal and the Ashloch Appeal were heard at first instance by the Upper Tribunal and then by the Court of Appeal. The On Tower Appeal was heard by the Upper Tribunal but on appeal was heard by the Supreme Court due to the similar features shared with the former two cases.

Compton Beauchamp Appeal: Cornerstone Telecommunications Infrastructure Ltd (“Cornerstone”) is a joint venture formed by Vodafone Ltd and Telefonica UK Ltd. In 2004, prior to the introduction of the New Code, Vodafone Ltd entered into a 10-year lease (without security of tenure under the Landlord and Tenant Act 1954) (“LTA 1954”) granting rights to install and use certain electronic communications apparatus on land owned by Compton Beauchamp Estates Ltd (“Compton”). Cornerstone served notice under the New Code on Compton, seeking to obtain New Code rights. The Upper Tribunal found against Cornerstone on the basis that it did not have jurisdiction because Compton was not in occupation of the land, Vodafone Ltd was in occupation as the leaseholder. Cornerstone appealed this judgment which was refused by the Court of Appeal confirming that the Upper Tribunal did not have jurisdiction to impose an agreement on a landowner where another operator, here Vodafone Ltd, was occupying the site. Compton was not the “relevant person” for the purposes of the New Code, Communications Act 2003, Sch 3A, Pt 4, para 20.

Ashloch Appeal: Cornerstone, acting against different landowner respondents in this case, has a tenancy pre-dating the New Code with security of tenure under the LTA 1954, Pt 2. Cornerstone served notice seeking rights under the New Code but the Upper Tribunal found that it did not have jurisdiction to impose an agreement under the New Code where the operator is in occupation of the land under a subsisting tenancy protected by the LTA 1954, following the provisions which set out the transition from the Old Code to the New Code, in particular the Digital Economy Act 2017, Sch 2, para 6. The Court of Appeal dismissed Cornerstone’s appeal.

On Tower Appeal: On Tower UK Ltd (“On Tower”) held a 20-year lease over a site, and corresponding rights under the Old Code, which expired in October 2016. On Tower remained in occupation after the expiry under a tenancy at will, as identified by the Upper Tribunal. As such the transitional provisions in the Digital Economy Act 2017 as set out above in the Ashloch Appeal did not apply. On Tower served notice on the freeholder under paragraphs 20 and 27 of the New Code for the Upper Tribunal to grant rights. The Upper Tribunal struck out the application on the basis that it did not have jurisdiction to impose an agreement under the New Code, explicitly following the precedent of the Court of Appeal’s decision in the Compton Beauchamp Appeal concerning operators in occupation. The On Tower Appeal was heard directly by the Supreme Court rather than the Court of Appeal due to the similar features to the other two cases.

Supreme Court decision

The main issue considered by the Supreme Court concerned who is an “occupier of the land” for the purposes of Communications Act 2003, Sch 3A, para 9. The central point made by all three appellants was that they argued, as operators, that despite having electronic communications apparatus installed on the respective land, that they were not occupiers of the land for the purposes of the New Code and, as such, should be able to apply for New Code rights under the Communications Act 2003, Sch 3A, para 20 in the absence of agreement with the landowner under para 9.

The Supreme Court found in favour of the operators’ argument concerning the interpretation of “occupier” and looked at the context in which the word appears and the purpose of the provisions in which it is used. The Supreme Court noted the “Government’s policy is that new improvements to digital infrastructure are rolled out across the country swiftly” (para 119), and that this would be hindered if operators could not apply for New Code rights because they already had electronic communications apparatus installed on land and were therefore identified as occupiers. The Supreme Court held that operators may seek New Code rights despite being in occupation due to their existing electronic communications apparatus and such occupation should be disregarded when applying the provisions of the New Code to an operator’s application.

Applying the above approach to the facts of the appeals, the On Tower Appeal was allowed as On Tower’s occupation with electronic communications equipment should be disregarded and so, as an operator, there is no barrier to applying for New Code rights. The Compton Beaumont Appeal was dismissed as it was held that Vodafone Ltd was in occupation of the site rather than the freeholder, Compton, to which Cornerstone, as operator, had applied for rights and as such, the Supreme Court did not have jurisdiction. In the Ashloch Appeal, due to the security of tenure of Cornerstone’s lease and the prohibition under the transitional provisions of the Digital Economy Act 2017, Sch 2, para 6, on applying to renew rights under the New Code until the expiry of a subsisting agreement, the protected lease in this case, the appeal was not allowed. However, the Supreme Court invited submissions from the parties to the Ashloch Appeal to consider a possible application by Cornerstone to renew its existing rights under the LTA 1954 as an application for rights under the New Code was not possible.

Comment

Whilst the outcome of the three cases was not universally positive for the operator appellants, the approach taken by the Supreme Court in considering the legislators’ intent with the New Code, and disregarding the “occupier” status of operators applying for rights thereunder, provides clarity to operators looking to obtain New Code rights rather than relying on their existing agreements and weaker rights under the Old Code.

It would seem that, prior to this Supreme Court decision, the government was acting to achieve a similar outcome with the Product Security and Telecommunications Infrastructure Bill, Pt 2, which is currently in the House of Lords. The proposed Bill would amend the New Code to explicitly allow an operator in exclusive occupation to apply for and receive rights under the New Code, despite such occupation.