Telecom lease rights: what has changed after the PTSI Act? 

A brief overview of the statutory sharing regime under the Electronic Communications Code and the practical impact of the Product Security and Telecommunications Infrastructure Act 2022. 

Introduction 

Most phone masts are protected nowadays by the Electronic Communications Code (“the Code”), which is contained in Schedule 3A of the Communications Act 2003. The Code gives phone companies wide-ranging statutory powers to, amongst other things, make use of land for their networks and to renew their agreements on expiry. The Code also gives phone companies extensive powers to share and upgrade their equipment. Phone companies are naturally encouraged to share masts where possible to cut down on the number required and to avoid unnecessary clutter on the landscape. It comes as no surprise therefore that the Code supports this, and empowers phone companies to share/upgrade where needed. 

The Code came into force in December 2017. Before then, landowners with masts on their land would often be able to restrict sharing and upgrading and would have a say in who was entitled to come onto their land to access the equipment.  

Things then shifted when the Code was introduced. Telecoms operators started pushing for the ability to share and upgrade their equipment as needed, without seeking landowner approval before doing so. Phone companies typically found that having to obtain landowner consent slowed down their plans and often meant that landowners were demanding payments in return for approving their proposals. The Code changed this to give the operators greater powers, but this only applied to leases entered into after December 2017. There remained (as is still the case) thousands of leases granted before that date, for which landowners were still needing to be consulted each time that operators wanted to make a change.   

Along then came the Product Security and Telecommunications Infrastructure Act 2022 (PSTI Act), which introduced further important changes to the Code with the aim of further supporting the continued rollout and improvement of digital infrastructure across the UK. 

One of the key areas affected by the reforms is the ability of telecoms operators to share and upgrade electronic communications apparatus, and for the changes to now apply retrospectively into older lease agreements. For landowners, the changes are significant because they reduce the scope to control sharing arrangements or negotiate additional sums in return for those rights. 

The PSTI Act reforms 

The PSTI Act expands the statutory regime by introducing new Code rights relating specifically to sharing apparatus. 

The practical effect is that operators now benefit from broader standalone sharing rights, making it more difficult for landowners to resist sharing arrangements or require additional consideration in return for them. 

This is an important shift. Sharing rights are now more clearly treated as Code rights, rather than as purely commercial rights to be negotiated separately between the parties. 

Impact on consideration and valuation 

Before the PSTI Act reforms, landowners were often able to negotiate separate payments where operators sought sharing rights in older leases. 

Following the reforms, sharing rights are now generally assessed within the Code valuation framework. Paragraph 24 of the Code applies the so-called “no network” assumption, meaning that value attributable to the operator’s use of the site as part of a communications network is disregarded when assessing consideration. This can materially reduce the value attributed to sharing rights when compared with a traditional open market assessment. 

Recent case law 

Recent decisions indicate that the tribunal is willing to approach sharing rights broadly, particularly where the operator’s business model depends on sharing infrastructure with multiple users. 

In On Tower UK Ltd v McClean (Bank’s Hill), the court recognised that companies like On Tower (who are a neutral host operator), need the ability to share with third parties and for those sharing rights to be accommodated within the Code framework. 

The direction of travel is therefore clear: the Code continues to support the efficient use of existing telecoms infrastructure, even where that limits the landowner’s ability to control or monetise sharing. 

The Birketts view – what does this mean for landowners? 

The changes will be welcomed by operators seeking to make fuller use of existing infrastructure and accelerate network deployment. 

For landowners, the position is less favourable. The ability to prohibit sharing, make sharing subject to consent, or require separate payments for future sharing arrangements is now significantly more limited. 

Parties entering into new telecoms agreements, or varying existing arrangements, should therefore consider carefully how the proposed sharing and upgrade provisions interact with the current Code regime. As further post-PSTI case law develops, we can expect more guidance on the full scope of these rights and their impact on both operators and site providers. 

For further advice in relation to telecoms leases and agreements, please contact a member of Birketts’ telecommunications team.