[2025] UKUT 280 (LC)

Paragraphs 59 to 62 of the FTT’s decision are set out above at paragraph 33. It can be seen that the FTT recorded Mr Holloway’s evidence, and said nothing to indicate that it did not accept that the appellant’s customers do what Mr Holloway said they did (as indeed the Tribunal has accepted in previous cases). It referred to the discussion of sharing in Audley House, where wider sharing rights than those granted by paragraph 17 were conferred because of the appellant’s business needs and because its customers needed to place cabinets on the site (just as Mr Holloway described in the present case). The Tribunal in that case expressed some doubt about whether the wider rights were needed, even though in Audley House the appellant had a wider right to grant access to its customers than it has in the present case. In this case it can enable customers to exercise rights (e.g. to access the land) only as its agents, whereas in Audley House the lease stated that “rights exercisable by the Tenant shall be construed as being exercisable by the Tenant and all persons authorised by them”. Despite that the Tribunal granted the wider right sought by the appellant so as to put beyond doubt ability to allow customers to put ECA on the site.

Having re-capped that point the FTT then said:

“62.

We take the view that paragraphs 3(1)(ea) and (fa) now puts the matter beyond doubt and that the effect of the amendments introduced by the 2022 Act is that a provision requiring the sharing of the site as well as the equipment is no longer required.”

Mr Lees KC and Mr Clark KC put different constructions on those words.

Mr Lees KC argued that the FTT must have taken the view that the Code rights introduced by the PSTI 2022 clearly enabled the appellant to allow its customers to put ECA on the site, so that no express clause to that effect was required.

If that is what the FTT thought, then it was wrong.

What the PSTI 2022 did was to designate certain rights as Code rights. It did not provide that all three of the new Code rights ((ca), (ea) and (fa)) were to be terms of all Code agreements. Not all Code agreements contain all Code rights, and the rights at (ea) and (fa) seem to me to go beyond the minimum sharing rights that have to be conferred in every case pursuant to paragraph 17 of the Code. Even where all the Code rights relating to sharing – at (ca), (ea) and (fa) - are expressly granted by an agreement, they do not enable the tenant (in this case the appellant) to share the site or any rights granted by the agreement with its customers. As we saw in paragraph 4.20 of its response to the consultation (paragraph 28 above) that was not the aim of the amendments. The Code rights are for the tenant to share ECA, to carry out work in order to share its ECA, and to enter the site in order to share its ECA.

However, that may not have been what the FTT thought; Mr Clark KC argued for a very different construction of its words. He submitted that the FTT had been convinced by an argument addressed to the FTT by Mr Watkin KC during closings, of which a transcript was provided in the appeal bundle. Mr Watkin KC told the FTT that the effect of the 2022 amendments was that Audley House and other pre-2022 decisions about sharing no longer bind the FTT because the Code has been amended. Mr Watkin KC said (from page 67 of the transcript):

“… now sharing has been defined as a Code right, the Code rights of course being the things which Parliament has conferred on an operator for the policy of the Act and it’s a confined list.

… all that Parliament has said is a Code right is the right “to share with another operator the use of electronic communications apparatus”. Not the property, not the rights conferred by the agreement….

You can share electronic communications equipment in two senses. You can let other people broadcast through your kit, which sometimes happens, or you can let other people come on to your site and attach their equipment to your electronic communications equipment, which … would include the mast. But what you aren’t allowed to do is to share the site. So for example you can’t allow other operators to build their own infrastructure on the site, for example … the putting of a cabinet by another telecommunications operator on the site…”

He added “all we have to do is to make sure the rights which are being granted by this agreement mirror the code rights” (page 71 of the transcript).

Therefore, said Mr Clark KC, what the FTT meant in its paragraph 62 was that the policy and provisions of the Code require that the appellant share its ECA but not the Rights nor the site, because that would be to go beyond the Code rights and Code agreements must not do so.

If that was what the FTT thought, it did not say so; and I am extremely dubious as to whether it is permissible to construe the judgment by reference to the transcript. As a matter of objective construction of the FTT’s words I think the construction for which Mr Lees KC argued is more likely. But it is possible that the FTT was led astray by Mr Watkin KC’s argument, and it is important to explain why that argument was wrong.

First, it has never been the case that an operator is “confined” to the Code rights listed in paragraph 3. That argument has been made by site providers and consistently rejected by the Tribunal and by the Court of Appeal. That it is incorrect as a matter of principle is clear from the provisions of the Code, in which there is no prohibition on an operator being granted rights that are not Code rights. The purpose of Code rights – i.e. the reason why certain rights have that status - is to confer protection on the operator, not to restrict it. Rights going beyond Code rights have regularly been conferred by Code agreements, whether consensually or by order; hence the cases decided prior to the PSTI 2022 when rights to share ECA were granted despite sharing not being a Code right at all, and to an extent that went beyond what was required by paragraph 17. Hence also the many cases in which other terms, which are not Code rights, have been imposed or agreed.

Second, nothing in the PSTI 2022 has changed that position. Such a radical change would require clear wording to the effect that a Code agreement may not grant to an operator rights which are not Code rights. That that was not intended to be the case specifically in respect of sharing is clear from the consultation preceding the PSTI 2022, which did not suggest such a change, and from government’s response to that consultation. I repeat part of paragraph 4.20:

“…Any additional terms that may be needed to give effect to this right - for example, the circumstances in which another operator will be permitted to access the land - will be a matter for the parties to negotiate through additional terms or to ask the courts to impose.”

It remains the case that the issue is not whether sharing is a Code right but what rights the appellant needs, whether Code rights or other terms. It is simply wrong to say that the tribunals and the parties must “make sure the rights which are being granted by this agreement mirror the code rights”, whether in respect of sharing or of any other Code right.

Again one wonders why the respondent is so concerned to change the appellant’s business model so that it can no longer allow customers to put cabinets on the site. The answer, in terms of motivation, was explained by Mr Watkin KC to the FTT:

“we say simply that we’re entitled to be paid for something commercially which isn’t controlled by the Act. On Tower is being paid commercially by the MNOs to attach their equipment to the mast…. And we say, by the same token, we can charge MNOs if they want to put their cabinets on the land, and the way we do that is by confining On Tower to the rights – the Code rights which Parliament has said that On Tower is entitled to have.”

That reveals the third reason why Mr Watkin KC’s argument was incorrect: in its consultation paper published in January 2021 the government stated at paragraph 2.13 “We do not intend to revisit the valuation framework contained in the Electronic Communications Code.” The government’s response to the consultation confirmed at paragraph 1.14 that the valuation framework would not be amended. And Parliament made no change to the government’s drafting so as to effect such an amendment. Yet the respondent’s aspiration to confine the appellant to Code rights so that it can charge market rates for anything further that MNOs want would replicate the “payaway” practice that the Code put a stop to. If such a major change to the central policy of the Code had been intended it would have been set out very clearly, with lengthy explanation, in the government’s policy document and, again, made explicit in the drafting of the amendments. There is nothing whatsoever in the Code to support the respondent’s argument.

Whether the FTT understood the effect of the Code to be as Mr Lees KC suggested, or as Mr Watkin KC argued, I do not know, because the FTT did not say. I do not need to decide which error it made; both constructions were equally incorrect. There is nothing in the PSTI 2022 to suggest that an infrastructure provider either does not need or should not have the right to allow customers to place their own cabinets, cables and other ECA on the site. The PSTI 2022 did not make such wider sharing rights either unnecessary or impermissible.