Telecoms cases swamp tribunals

Fears are growing that land tribunals are being inundated by a rising tide of telecommunications cases since ministers amended rules to boost the country’s drive towards faster broadband.

In less than five years the number of reported decisions in the Upper Tribunal for land disputes in England and Wales has risen by five-fold and lawyers and campaigners fear that “traditional landlord rights” have been overturned.

As a result, there are claims that “thousands of smallholders” — including charities, sports clubs, farmers and churches — are being “deprived” as vital rent revenue is sacrificed on the altar of “superspeed” internet connectivity.

That unprecedented increase in telecoms infrastructure cases is claimed to have resulted from government changes implemented five years ago to the electronic communications code.

The code governs the rents smallholders can charge large telecom companies for the lease of land on which phone masts are sited.

In 2017 ministers reformed the valuation mechanism, with campaigners claiming that the changes effectively transferred the rights to set rents from landlords to tenants in a reversal of centuries-old property rights.

The government said at the time that the change was a crucial element of the UK’s drive towards superspeed broadband — but now a group called Protect & Connect claims that it left thousands of smallholders starved of revenue.

Fears have mounted as those 2017 reforms are set to be enshrined in statute once the Product Security and Telecommunications Infrastructure Bill becomes law.

The lands chamber at the Upper Tribunal hears cases where site providers of mobile infrastructure have been unable to reach agreements with the mobile telecoms operators who lease their land.

The campaign group argued that since the law changed, large operators such as Vodafone, EE and Telefónica — which make combined annual profits of more than £30 billion — “have been able to drastically cut the rents they pay site providers” by up to 99 per cent.

The group argued that the increase in tribunal cases was evidence that as existing agreements came up for renewal site providers were “desperately turning to the courts to claw back their lost income”. They pointed to figures showing that last year there were 146 cases involving telecoms giants heard in the lands chamber, compared with just a handful before the 2017 reform. In the year after the reforms, there were 49 cases in the lands tribunal while in the first half of this year alone there were 120.

Anna Turley, the chairwoman of Protect & Connect, said that the tribunal figures demonstrated that “the telecommunications infrastructure market is fundamentally broken” and that the problem was “a direct consequence of 2017 changes to the law that allowed multinational mobile companies to rip up and aggressively renegotiate rental agreements with site providers”.

Lawyers agreed that the 2017 reforms had considerably changed the landscape. Thekla Fellas, a partner at the City law firm Eversheds Sutherland, has specialised in issues around the telecoms code for more than 20 years. She said that before the introduction of the new code “it was a very niche area of law, with most issues being dealt with by consensual agreement”. However, since the 2017 amendments disputes around the code ballooned. “It is also interesting to note that most of the reported cases are for renewals of existing sites or for replacement sites where a site has been decommissioned,” Fellas said. She added that “there are not many cases dealing with “brand new” sites where there currently isn’t any connectivity”.

One example the lawyer highlighted was the 2019 case of Telecommunications Infrastructure and Compton Beauchamp Estates, one of three disputes that went to the Supreme Court. The case records that the operator offered annual rent of £2.96, or £26 for a ten-year term. Fellas said the court heard expert evidence that showed the rent being offered was the equivalent to 5p a week. “There has been a significant reduction in rents, which appears to go much further than the government’s impact assessment, which advised rents would decrease by 40 per cent,” Fellas said. She added that there was no evidence that the benefits of peppercorn rents for telecom providers were being passed on to consumers. “The irony is that the rent . . . paid by the operators to a site provider for the use of their land, is often less than cost of mobile phone contract,” Fellas said.

Turley said that in the circumstances it was unsurprising “that so many site providers . . . have been forced to seek remediation through the courts. This should offend anyone’s notion of justice, and it is putting an unacceptable strain on our judiciary and leading to terrible outcomes as mobile operators can vastly outgun the legal resources of individual land providers.”

She called on ministers to use the bill that is before parliament at present “to update the code and rebalance the market”. If not, she argued that our courts were destined to continue to clog up as the consequences of 2017 come home to roost.