The Shared Rural Network (SRN) is picking up pace in Scotland and it is becoming increasingly common for rural landowners to be approached by network operators looking to put telecoms masts on their land to eliminate partial or total 4G "not-spots".

Whilst the benefits of the SRN programme to rural businesses and communities is clear, from a landowner's perspective, playing host to a telecoms mast is not a decision to be taken lightly, and many landowners are concerned about the impact this will have on their property and businesses, including loss of amenity, visual impact, damage caused from works, disturbance from site visits, and the restrictions placed on future redevelopment and alternative use of the land.

When considering and weighing up the options if such an approach is made, it is important to have an awareness of the statutory framework which applies to communications networks, and what you can expect when dealing with the operators and their agents.

The Electronic Communications Code

Designated operators that have been approved by the industry regulator Ofcom (including Cornerstone, EE, Three, VMO2 and Vodafone) have wide-ranging statutory powers under the Electronic Communications Code (the Code). These Code operators can acquire rights to install and operate their masts and other telecoms apparatus on land (Code rights) either by agreement or, if consensual agreement cannot be reached, by applying to the Lands Tribunal for Scotland for an imposed "agreement" following service of a 28 day statutory notice.

Test applied for compulsory acquisition of Code rights

The test to be applied by the Tribunal in such cases is that the Tribunal must be satisfied that (1) the prejudice caused to the site provider is capable of being adequately compensated by money and (2) that the resulting public benefit in making the order (having regard to the public interest in having access to a choice of high-quality network services) is likely to outweigh that prejudice. The test is likely be met in most cases but there will be exceptions, e.g. where the prejudice to the landowner is particularly severe. There is also protection for owners with a genuine intention to "redevelop" the land if the imposition of an agreement means that they could not reasonably do so.

Terms to be imposed by the Tribunal

The current version of the Code, which came into effect at the end of 2017, introduced a new valuation regime which has led to a significant drop in telecoms rents. "Consideration" is now valued on a "no-network" basis, meaning that the telecoms use is disregarded from the assessment of market value. However, higher rents and commercial payments can usually be negotiated for consensual agreements. The Code also provides for statutory compensation for loss/damage but that only applies to court imposed agreements and so any consensual agreement should make contractual provision to cover any unforeseeable loss or damage in the future.

Restrictions on termination of agreements and the removal of apparatus

Once a Code agreement is in place, the Code gives the operator statutory protection with only limited grounds for termination (including a long, 18-month, notification procedure) and removal from the land.

Multi-skilled visits (MSVs)

Operators regularly seek permission (and enjoy statutory powers under the Code) to gain access to land to carry out surveys to assess the suitability of a site for hosting telecoms equipment, and have the power to apply to the Lands Tribunal for rights to do so if access is denied. It is becoming more common for landowners, and is eminently sensible, to insist on a MSV agreement to ensure an operator accesses land in an appropriate manner taking into account any special characteristics of it, makes good any damage caused; maintains appropriate insurance; and provides an indemnity against damage, loss, claims, etc. that might arise from the exercise of these rights.

Negotiating terms

In most cases, it is in a landowner's interest to negotiate terms on a consensual basis and avoid the risks and costs associated with Lands Tribunal proceedings. Upfront incentive payments are common and higher rents can usually be achieved. The lease or other agreement can also be negotiated on more favourable terms.

Professional fees

Reasonable professional fees in negotiating terms will ordinarily be covered but this should be confirmed with the operator at the outset and a binding undertaking put in place covering fees up to an agreed level so that you are not left out of pocket if the operator opts for a site elsewhere.

Dispute resolution

Any dispute that arises will incur an element of unrecoverable costs even by a successful party so, where a dispute can be avoided with these proactive steps, parties should be encouraged to engage with one another. An operator is required to attempt reaching a mutual agreement with a landowner before proceeding to Tribunal. Any refusal to engage must be reasonable, otherwise that party's conduct will be factored into any costs award at trial.

Contributor

Scott Logan

Legal Director