[2025] UKUT 136 (LC)

Schedule 3A to the Communications Act 2003 (the Electronic Communications Code) provides for the acquisition or imposition of certain rights listed in paragraph 3, referred to as Code rights, in favour of the operators of electronic communications networks or those who provide infrastructure for such networks. CTIL is an “operator” for the purpose of the Code and is therefore entitled to acquire Code rights over land belonging to other people, provided certain conditions are met.

The most common Code right is the right to install electronic communications apparatus. In Cornerstone Telecommunications Infrastructure v The University of London [2019] EWCA Civ 2124, the Court of Appeal held that the right to install apparatus included an ancillary right to enter a building to undertake a non-intrusive survey to determine whether the building might provide a suitable site for such apparatus. A right of access for inspection can therefore be the subject of an agreement within the Code.

Code rights are conferred on operators by agreement between the operator and the occupier of land (paragraph 9). If agreement cannot be reached, an operator may apply for an order imposing an agreement (paragraph 20). In England and Wales, such applications are now made to the FTT.

An agreement entered into under paragraph 9 or imposed under paragraph 20 confers significant security of tenure on the operator but paragraph 26 makes provision for interim Code rights, which do not carry that security. To avoid abuse, interim rights may not simply be agreed between the parties but must be imposed by order.

The conditions which an operator must satisfy to obtain interim rights reflect their transient nature. By paragraph 21 the operator need only show that it has a “good arguable case” that the usual test for the imposition of Code rights is satisfied. In the present case it has never been disputed that CTIL has such a case and the Building Owner did not oppose the principle that the FTT should impose an agreement for interim rights to enable CTIL to carry out an MSV.

Paragraph 24(1) of the Code provides that the consideration payable by an operator to a site provider under an agreement imposed under paragraph 20 is to be an amount representing “the market value of the relevant person's agreement to confer … the code right.” As paragraph 24(2) explains, that amount is: “… the amount that at the date the market value is assessed, a willing buyer would pay a willing seller for the agreement” on certain assumptions listed in paragraph 24(3). The most important of those assumptions is that the right that the transaction relates to does not relate to the provision or use of an electronic communications network, which is often referred to as the “no-network” assumption.

The terms of a code agreement imposed by the FTT are governed by paragraph 23. By sub-paragraph (3), the terms of the agreement must include terms as to the payment of consideration by the operator. Otherwise, by sub-paragraph (2), an agreement under paragraph 20 (i.e. an agreement attracting security of tenure) is to give effect to the code right sought by the operator with such modifications as the FTT thinks appropriate.

Where the FTT imposes an agreement under paragraph 26 providing only for interim rights, paragraph 23 applies in a modified form. In particular, the duty to provide for the payment of consideration becomes a power to do so. Whereas every code agreement under paragraph 20 must provide for payment of consideration, an agreement for interim rights may do so (paragraph 26(6)(b)). Paragraph 23 applies subject to that modification, so the discretionary decision whether to provide for consideration is governed by paragraph 23(2) and the agreement will include a term for payment of consideration if the FTT thinks it “appropriate” that it should.