Does an assignee of a telecoms lease, take the full benefit of Code rights?

A telecommunications operator had assigned the benefit of licences granting rights under the Electronic Communications Code (Code) to another operator. The assignee operator then served statutory notices on the owner of those sites for new Code agreements and sought an order from the Tribunal for new leases. The owner opposed the assignment and said that the new operator was not a “party to a Code agreement” within meaning of the Code.

Who is a party to a Code agreement?

The owner of the sites contended that where the operator was merely an assignee of the licences, it was not “party to a code agreement” within the meaning of paragraph 33. Paragraph 33(1) confirms: “An operator or site provider who is a party to a code agreement by which a code right is conferred by or otherwise binds the site provider may, by notice in accordance with this paragraph, require the other party to the agreement to agree that…”

An assignee must take primary responsibility

The challenge was whether the operator could, as an assignee, take the benefits and burdens of the original operator to the Code agreement. The owner of the sites argued there must be a direct contractual relationship between the parties, because, in order for a new operator to be treated as a “party to a code agreement” following an assignment, it had to be the person currently (or most recently) entitled to the benefit and burden of the Code agreement.

The First Tier and Upper Tribunals both held an assignee was a party to a Code agreement under paragraph 33 – with the Upper Tribunal saying a lawful assignee who had assumed primary responsibility for performing the obligations in the licences will be a party to a code agreement. The issue was referred to the Court of Appeal.

Enabling operators to exercise Code rights

The Court of Appeal affirmed the views of the Tribunals. It said that the definition “party to a Code agreement” did not mean those who would be regarded as “parties to an agreement” as a matter of contract law. An operator with merely the benefit of a Code agreement was a “party” for the purposes of paragraph 33.

If you are an operator, infrastructure provider or landowner dealing with telecoms infrastructure and agreements, or you have any concerns or questions about the impact these issues may have on you or your business, please do not hesitate to get in touch with our Telecoms Team or your usual Brodies contact.