The new Code legislation is still a hot topic amongst landowners and operators. At the recent London Real Estate Forum 2019, Belinda Fawcett, General Counsel and Director of Property and Estates at Cornerstone encourages the landlord community to work together with Cornerstone to help deliver the infrastructure that’s needed for 5G.
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With the increase in agricultural technology and more services available online, we appreciate that farmers can benefit from the latest information and trends direct through their mobile devices. Having real-time information and immediate access to services such as the weather forecast, commodity prices and agricultural suppliers can make a big difference and directly increase productivity.
Delivering mobile infrastructure across the UK is vital if we want to take advantage of what digital connectivity can offer. Just as businesses and individuals rely on mobile phones to keep connected, operators also need to rely on mobile infrastructure to deliver services to their customers.
Cornerstone, the leader in UK mobile infrastructure is committed to delivering excellent mobile connectivity to support the UK digital economy. Working with over 12,000 landlords, our mobile infrastructure is placed on rooftops, greenfield sites in rural locations and street work sites for our customers who include Vodafone and Telefónica. Our landlords play a critical role in helping us to achieve this.
The Government also recognises the importance of mobile connectivity in rural areas and has revised the Electronic Communications Code legislation to help deliver digital services more quickly and easily within the UK. Changes have been brought in to give clarity for landowners and operators concerning putting mobile infrastructure on sites.
To truly experience a well-connected society and enhance rural connectivity, we believe engaging with the landlord community and working together will help us all to achieve the next generation of connectivity. We are already starting to see this happen and are encouraged that this trend will continue with our landlords.
If you would like to speak to Cornerstone, please write to us through our contact page on www.cornerstone.network or to: Landlord Communications, Hive 2, 1530 Arlington Business Park, Theale, Berkshire, RG7 4SA.
Cornerstone is proud to announce that the Code Team has been shortlisted for The Lawyer Awards under the category for “In-house Commerce & Industry Team of the Year.”
The Lawyer Awards are industry-leading awards which demonstrate legal excellence in Europe and are well known for recognising best practices within the legal industry.
The reformed Electronic Communications Code is transforming how telecom sites are acquired to help deliver improved connectivity across the UK. The Code Team is delivering transformational change to Cornerstone and the wider industry.
The Lawyer Awards have recognised the contribution made by the Code Team over the last 12 months in shortlisting the team for this prestigious award.
Carlos Pierce, Head of Strategic Legal Projects & The Code Programme commented, “I’m really proud to lead the Code Team that has been shortlisted for The Lawyer Awards 2019 under the In-house Commerce & Industry Team of the Year category. Congratulations to such a fantastic team that have been pivotal in driving change within the industry.”
The shortlist for In-House Commerce & Industry Team of the Year are:
The final winners will be announced in June.
The Electronic Communications Code came into effect in 2017 but some uncertainty on the legislation changes still continues today. At Cornerstone, we want to help provide a better understanding of why the Code was updated and how it helps to deliver better connectivity in the UK.
Cornerstone’s Head of Strategic Legal Projects & The Code Programme, Carlos Pierce explains the differences between the old and new Code and provides a vision on how current debates can be resolved between landlords and telecom operators.
The Electronic Communications Code (the Code) has created much debate and opinion. Here, Cornerstone, the UK’s leading mobile infrastructure services company, gives its view on why co-operation between landowners and telecoms operators is key to a productive solution for everyone.
Integrating new technology to cars, the transport industry, home and commercial security systems, the healthcare sector and other areas of our daily lives will see mobile usage continue to increase across the UK.
The volume of mobile data is increasing by 60% a year. It will continue to do so as the next-generation mobile network, 5G, will support greater connectivity and far-higher volumes of traffic. This 5G technology presents a huge opportunity for the UK.
A June 2018 report for the UK government by Deloitte concluded that ‘the capabilities of 5G have the potential to transform key sectors of the UK economy.’
However, to meet the increasing growth in demand and provide 5G capability across the UK, all operators must increase the number of masts and significantly upgrade the existing ones. It’s therefore important that we focus on how to invest in cost-effective infrastructure while considering the interests of every party.
Deployment and maintenance of mobile infrastructure is costly. Operators spend in excess of £2bn a year to provide customers with a reliable network and services. This is not surprising, given that there are tens of thousands of sites across the UK and thousands of miles of fibre required to connect them. But the ongoing cost is unsustainable for an industry that has to meet the changing way we use our mobile devices and the challenging regulatory conditions in which operators have to work to provide coverage, particularly in hard-to-reach rural areas.
The Code became effective in December of last year. The government’s ambition was that the new legislation would support improved mobile coverage across the UK and encourage greater investment in this critical national infrastructure.
Jeremy Wright, secretary of state for Digital, Culture, Media and Sport, wrote in his ministerial foreword to the Future Telecoms Infrastructure Review in 2018 that ‘We want to be a world leader in the next generation of mobile technology, 5G, with deployment to the majority of the country by 2027 so that UK consumers and businesses can take early advantage of the benefits’ (bit.ly/FTIR18).
The Code is wide ranging and covers many issues that are critical to the ability of an operator to build, manage and maintain a site. For example, easier 24/7 access is vital to ensure that when there is a technical failure or damage to the mast or equipment, repairs can be made quickly and easily. Where we need to upgrade the mast, it can also be done speedily and at a sensible cost.
Since the Code was introduced, the change in the way we value a site has caused considerable debate. The new legislation saw the telecommunications industry moving to a ‘no-scheme’ valuation, whereby payments to a landowner for masts on their land are no longer based on the value to the operator, but on the true value of the land, with fair compensation being paid to the landowner for any loss suffered as a result of the installation.
While there are other challenges, the issue of valuation has been the primary cause of division, stalling the roll-out of new infrastructure. Some property professionals have been reluctant to adopt the revised method of valuation, not least because they see the income-reducing with the new approach, but also because there are many different interpretations of the Code (see Property Journal March/April, pp.18–19).
Hopefully, as a result, we will start to see the stagnation in the deployment of new masts which arose immediately following the introduction of the Code become a thing of the past, as we all start to evolve our thinking based on the clarity being provided. [EE Limited and Hutchison 3G UK Limited v The Mayor and Burgesses of the London Borough of Islington [2019] UKUT 53(LC) / Cornerstone Telecommunications Infrastructure Limited v Richard Gregory Keast [2019] UKUT 0116(LC) (Electronic Communications Code)]. But let’s recap what the legislation aimed to do because the government was clear about its intentions. In April 2017, the Department for Digital, Culture, Media & Sport stated: ‘Landowners will receive a fair market value that excludes any additional value generated by the provision of electronic communications. The Government is confident this “no-scheme” approach will reduce the cost of infrastructure roll-out, leading to greater investment, and improved coverage and connectivity.’
Without a doubt, the Code states that all parties must seek to reach a deal by consensual means, and operators have made it very clear that they want to do so.
But there must be a baseline for any negotiations, as without a place to start parties become increasingly polarised. The operators have been criticised for setting the starting value of the site too low, but it is important to remember that this is based on an interpretation of the Code and is a foundation on which to open negotiations according to the Code’s valuation principles.
Where these principles have been accepted, great strides have been made and many deals agreed. We are now seeing many local authorities accepting that connectivity is more valuable to them and their residents than the annual rent historically paid. They are being paid a fair amount and are compensated for any loss. In turn, the operators get a site that can provide strong coverage and connectivity for the area. It is a win-win for all parties, achieved by engagement and an open mindset that looks to the future, not the past, seeing the benefits of what a truly digital economy offers.
However, many landowners and agents are not willing to engage, with some actively seeking to derail the application of the Code. Unfortunately, operators have been given no choice but to refer these matters to the Lands Tribunal for resolution. This is costly and time-consuming for all parties, and in the long run, will only delay the upgrade to a world-class network.
It is also important that all parties acknowledge and adhere to the Ofcom Code of Practice published in December 2017.
Paragraph 1.5 of the Code of Practice states that “All parties to whom this Code of Practice applies should treat each other professionally and with respect, always remembering that the goal is to improve and maintain essential communications services for all.” Landowners and their agents would be well advised to bear this in mind when deciding whether to engage in negotiations.
We all have our own interest to consider. For a landowner, this might be the investment value or return from a property; for operators, concern to the share price and the consumer experience; while an infrastructure provider might focus on the investment value of their portfolio and the connectivity it is enabling. A connected society is what we all want, where mobile communications stand alongside traditional utilities. In a recent report commissioned by Cluttons in association with YouGov, 57% of tenants said they would pay higher rent for better digital connectivity, 73% believed poor connectivity could influence renewal, and 81% of employees are more satisfied when their office is well connected.
If the pushback against the deployment of new mobile infrastructure continues, the government will have to review the legislation and introduce more stringent controls over the terms on which mobile infrastructure can be deployed on private land. I don’t think this will be in the interests of any party and will only serve to frustrate and delay the roll-out of 5G, which cannot be allowed to happen.
Connectivity is key and it’s irrelevant whether we’re in the property sector or telecommunications industry, we are all equally invested in providing a first-class mobile experience across the UK that benefits consumers and businesses. Let’s work together to a common interest, overcome the challenges and embrace the new legislation that has been put in place to realise those ambitions.
Belinda Fawcett
General Counsel and Director of Property and Estates at Cornerstone
Carlos Pierce and Tina Middleton look at the recent decision in Cornerstone Telecommunications Infrastructure Limited v Richard Gregory Keast [2019] UKUT 0116(LC) where Cornerstone successfully argued that:
The decision will be welcomed by both operators and landowners and will hopefully facilitate discussions on agreement terms. Read the full article here.
Simon Oborn, Head of Property & Estates at Cornerstone wrote this recent article for Farmers Weekly, where he discusses the enhanced benefits improved mobile coverage will have on rural communities and businesses.
Poor connectivity in rural areas can have a significant adverse effect on the residents, local farms and businesses who require better mobile coverage to keep pace with today’s evolving digital society.
In response to rural communities’ concerns, the Government made changes to the Electronic Communications Code (ECC) legislation in December 2017, making it easier for telecom operators to install and upgrade mobile infrastructure on sites. By bringing land valuations in line with their actual worth rather than their value to the telecom operators means that greater investment can be put into improving coverage to rural areas.
The ECC is a mechanism for bringing operators and landlords together to agree consensually on land valuations and rental terms. It’s a way of improving and extending mobile connectivity across the UK. The previous way of valuation would not have been commercially viable to provide the infrastructure now needed to support the demands for connectivity, particularly with data growth increasing exponentially.
The ECC has divided opinion. For some it is seen as a mechanism for building the UK’s digital future, for others, it’s a barrier to installing mobile infrastructure.
Cornerstone, the leader in UK mobile infrastructure, believe that if landlords and telecom operators work collaboratively together, they will create a far more positive change, more quickly, for rural communities to connect wherever and whenever they want.
Recent tribunal cases on the ECC (EE Limited and Hutchison 3G UK Limited vs The Mayor and Burgesses of the London Borough of Islington) point to consensual agreements being the preferred route rather than through the Lands Tribunal.
Significant benefits have already been gained from rural areas that have had mobile masts installed whether for homeowners, farmers, visitors, businesses or tourists. Having digital access saves time, money and effort which wouldn’t be possible with poor or no mobile connection. That’s why reliable mobile connectivity makes such a huge difference to the rural community.
“Cornerstone is committed to providing high-class mobile connectivity to the UK digital economy. Our mobile infrastructure is placed on rooftops, greenfield sites in rural locations and street work sites including monopoles for our customers Vodafone and Telefónica, amongst others.”
Simon Oborn, Head of Property & Estates, Cornerstone
Upper Tribunal dismisses a paragraph 20 Application by Cornerstone for a Code Agreement
Carlos Pierce and Tina Middleton look at the recent decision in Cornerstone Telecommunications Infrastructure Limited v Compton Beauchamp Estates Limited [2019] UKUT 0107 (LC) under the Electronic Communications Code (“the Code”).
Cornerstone (a joint venture company owned equally by Vodafone and Telefónica (O2)) sought a Code agreement from the freeholder of land at Galleyherns Farm in Longcot Oxon (“the Site”) which is owned by Compton Beauchamp Estates Limited (“CBE”). Vodafone is currently transmitting from the Site, although its 1954 Act excluded lease had expired.
CBE argued that it wasn’t the occupier for the purposes of paragraph 20 of the Code and that Cornerstone should seek the Code agreement from the occupier, i.e. Vodafone.
There was a discussion over the exact status of Vodafone’s occupation. In possession proceedings, CBE asserted that Vodafone was occupying pursuant to the Telecommunications Act 1984 (as amended by the Communications Act 2003) (“the Old Code”) whilst Vodafone argued for a periodic tenancy. In the Code proceedings, each party reversed its position.
The Tribunal decided that Vodafone was occupying the Site pursuant to the Old Code.
The judge dismissed the case because it said that Cornerstone should have sought the Code Agreement from the occupier, Vodafone, rather than the freeholder.
The Tribunal had to consider four key issues:
| Headline | Issue |
|---|---|
| Jurisdiction | Can Cornerstone seek the Code agreement against the freeholder (CBE) or should it seek it against the occupier, Vodafone |
| Public Benefit | Does Cornerstone pass the public benefit test in paragraph 21 of the Code where there is existing apparatus in situ? |
| Terms | The Terms that the Tribunal might impose |
| Valuation | The value of the Code agreement |
The judge agreed with CBE that the “relevant person” who can confer the Code Rights for the purposes of paragraph 20 of the Code is the ‘occupier’ as that term is defined in paragraph 105 of the Code. He said Vodafone was the ‘occupier’ for the purposes of paragraph 20 of the Code. The judge dismissed the application on a technicality and therefore didn’t discuss the terms.
Whilst deciding in favour of CBE, the judge made the following observations:
“[Cornerstone] could have reached agreement with Vodafone for it, as occupier, to confer the rights on [Cornerstone], and could then have asked the Tribunal to impose an agreement providing for those rights to bind [CBE] but it did not do so.” (paragraph 89).
The judge also explained how an operator might overcome such an obstacle including:
“..the Tribunal…[imposing] an agreement which was contingent on Vodafone voluntarily giving up its right…” (paragraph 94).
This could give a welcome direction, and a practical solution, for an operator in a similar position. An operator could seek a Code agreement directly from the operator in occupation on its preferred Code terms and ask the freeholder to be “bound” by that agreement.
The judge said that Cornerstone would have met the public benefit test in paragraph 21 of the Code in this case and said that “…the public benefit resulting from the making of an order for a new agreement would outweigh the prejudice to the respondent.” (paragraph 103).
As the case was dismissed, the Tribunal made no decision, or binding direction, on valuation. However, its observations are of particular interest as to how it might have arrived at a decision.
CBE only made one claim for compensation, that being the loss of rent from the existing Vodafone lease should a Code agreement be imposed by the Tribunal. This claim was dismissed by the Judge.[1]
As regards consideration, the judge considered the different approaches taken by the opposing expert valuers but did not arrive at a conclusion on the appropriate consideration in this case.
The judge dismissed:
However, whilst the Old Code agreement approach seems to have now been put to bed, the judge tantalisingly suggested that true Code agreements might be useful in future cases[3]. Clearly, though, those agreements would need to relate to sites with similar characteristics in close proximity and be agreed on the statutory assumptions to be true comparables.
In the absence of any potential alternative use, Cornerstone’s approach was to use evidence of freehold sales of arable land (existing use) convert it to an appropriate rental value and then pro-rata it for the Site based on its area. A recognised, and established, method of valuation.
Whilst the Tribunal acknowledged that, for a site with no alternative use, existing use values may be an appropriate starting point,[4] it was not attracted to the ‘low’ value such an approach generated. The Judge said:
“[the parties have to] stand back and look at the product of the valuation…if it seems improbably high or low..” (paragraph 110).
It, therefore, seems that, whilst the Tribunal in the EE Limited and Hutchison 3G UK Limited v London Borough of Islington[5] case (“EE/3 case”) found that there was no floor below which the willing seller wouldn’t go, in this case, that would not have been the case.
Perhaps what the Tribunal is doing is encouraging the parties to make an additional ‘allowance’ for the potential risk and burdens on the landowner arising from the grant of the Code agreement where the existing use value does not perhaps recognise these risks. This is consistent with the EE/3 case where an additional ‘allowance’ was used to supplement the nominal value of £50 leading to the grant of an ‘all-in’ agreement.
There is a lot that both operators and landowners can learn from this case. But what most people involved in telecoms really want to know is…what’s a Code agreement worth?
Pulling the various threads together from both this case and the EE/3 case, it appears that where there is a greenfield site with similar characteristics as this site:
What’s clear though is that both parties must keep working at this – and that’s what the Tribunal will expect…
At Cornerstone, we are always willing to have a discussion with landowners on the value of sites, and their alternative uses.
Carlos Pierce is Head of Legal Projects, Strategy and the Code programme, and Tina Middleton is a Senior Code Lawyer, at Cornerstone the UK’s leading mobile infrastructure services company set up as a joint venture between Vodafone and Telefónica.
[1] This is consistent with the approach taken by the Tribunal in EE Limited and Hutchison 3G UK Limited v The Mayor and Burgesses of the London Borough of Islington [2019] UKUT 0053 (paragraphs 132 and 133)
[2] Paragraph 113 of the judgment
[3] paragraph 114 of the judgment
[4] Paragraph 107 of the judgment
[5] EE Limited and Hutchison 3G UK Limited v The Mayor and Burgesses of the London Borough of Islington [2019] UKUT 0053, per paragraph 96
Belinda Fawcett, General Counsel & Property and Estates Director at Cornerstone talks to Total Telecom about why faster deployment of mobile infrastructure is needed to roll out 5G and deliver better mobile connectivity in UK. The interview highlights what are the current issues, specifically around the updated Code legislation and what needs to be done to overcome them.
Read the article by Carlos Pierce, Head of Strategic Legal Projects & The Code Programme at Cornerstone, on how landlords play a key role in the UK mobile industry.
In today’s fast-paced environment, we are always looking for ways to save time and increase efficiency in a cost-effective way. Using a mobile device which gives us 24/7 access to almost anything is one way to achieve this whether that is communicating with colleagues anywhere in the world; making wireless payments; requesting emergency services; shopping online; conducting research or reporting issues real-time. The flexibility that mobile communications have created over the years is incredible.
Whatever your reason for using a mobile device, it is clear that many of us rely on having instant mobile access in our daily lives…it’s become a necessity rather than a luxury. A report by We Are Social and Hootsuite (Global Digital Report 2019) showed that the number of unique mobile phone users in 2019 was 5.112 billion worldwide – up 2% in the past year.
Cornerstone, leaders in UK mobile infrastructure services, are committed to providing high-class mobile connectivity to the UK digital economy. Our mobile infrastructure which is placed on rooftops, greenfield sites in rural locations and street work sites such as lamp-posts helps keep our society well connected.
Site landlords play a crucial role in enabling Cornerstone to build the infrastructure needed for mobile connectivity. We work collaboratively with them to streamline the process of building an even better communications network in the UK by placing masts where they are needed most. Without their partnership, it will have a detrimental effect on the mobile services we benefit from today. The Government recognises the vital co-operation between landlords and telecom operators and renewed the Electronic Communications Code legislation in 2017 with the objective for both parties to work together in delivering a prosperous UK digital economy.
The legislation is a step in the right direction to further boost digitalisation. The difference in how land is valued and how landowners charge rent has been one of the main changes in the Electronic Communications Code legislation. The valuation of the land is now based on its worth to the landowner rather than the operator to create a fair land acquisition model. To roll out technology more quickly and efficiently, operators can upgrade and share equipment directly on the land. Whilst these legislative changes may need some fine tuning, it’s important that their objectives remain at the top of the agenda if we are to maintain and expand our mobile infrastructure to keep up with the ever-growing demand of connectivity. It is in the interest of the operators and landowners that neither of us becomes a bottleneck to placing masts on sites. If that happens we won’t reap the mutual benefits of enhanced network coverage and connectivity that we all need. Communication is crucial between landlords and telecom operators to reach a common understanding to quickly roll out masts across rural and urban areas.
The demand for mobile communications will continue to grow through generations to come. Cornerstone is very aware of this fact with our goal not to stay in the past but to join the future.
Carlos Pierce, Head of Strategic Legal Projects & The Code Programme, Cornerstone
This article appears as an advertorial on page 4 of the 22 February 2019 edition of Property Week. To read the article and this edition of Property Week click here.
Welcome to Cornerstone, the new name for CTIL, the UK’s leading infrastructure services company. It’s time to introduce you to our new brand identity, reflecting an exciting time in our company’s development.
The Cornerstone brand captures the spirit of how we work with each other, our partners, landlords and shareholders Telefónica UK Limited (“O2”) and Vodafone Limited (“Vodafone”). Our brand drives us to provide the best experience for the tens of millions of voice and data customers using the UK networks that depend on our infrastructure.
We are at the forefront of the rollout of 5G, providing thought leadership on new legislation affecting our industry and leading the conversation on innovation.
We don’t just connect businesses, we connect people, to each other and to what matters, to their world and the world around them.
Shared knowledge and a culture based on support have always driven us to make stronger connections. The launch of this new media hub, packed with resources to keep you up to date with Cornerstone, our industry and the future of mobile connectivity, will strengthen those values.
Our new website is under development, and we will launch it soon. It is a place to communicate, learn and inspire transformation.
Rhys Phillip
CEO
Read the joint press statement from Telefónica and Vodafone on their future working relationship and commitment to strengthen their existing network sharing agreement. This includes the 5G rollout, investigating options to deliver a shared, future proof fibre transmission and exploring options to enhance the jointly owned passive tower infrastructure.
– Statement Begins –
Telefónica UK Limited (“O2”) and Vodafone Limited (“Vodafone”) have entered into non-binding heads of terms intended to strengthen their existing network sharing partnership.
O2 and Vodafone plan to extend the existing network sharing partnership term and include 5G at joint radio network sites. This would enable both O2 and Vodafone to deploy 5G faster, to offer 5G services to more customers over a wider geographic area, and to do so at a lower cost.
In addition, both parties will look to extend greater network autonomy in a number of larger cities by deploying their own separate radio equipment on approximately 2,500 sites, which represents around 15% of sites outside London. This will give them even greater flexibility to meet the needs of their customers.
The companies also intend to upgrade their transmission networks with higher capacity optical fibre cables. This would enable customers to benefit from 5G’s new features, such as low latency, as well as provide both companies with greater economies of scale and an improved choice of infrastructure partners. O2 and Vodafone are also exploring options around their future transmission operating model which could drive synergies in the investment and operation of their end-to-end networks.
O2 and Vodafone further intend to devolve additional activities to CTIL, the 50:50 owned joint venture company that owns and manages the parties’ passive tower infrastructure. This will empower CTIL to take an enhanced role in the operation of the passive infrastructure, in order to improve the efficiency of its operations and pursue opportunities to add further third party tenants to the towers. In that context, the parties will explore a potential monetisation of CTIL after the new arrangements have been finalised.
The initiatives set out in the non-binding heads of terms and described in this announcement, remain subject to the parties agreeing detailed terms, concluding legally binding agreements and receiving all necessary regulatory approvals. O2 and Vodafone aim to conclude these steps during 2019.
Mark Evans, CEO, Telefónica UK, said: “I’m excited by the potential of these plans to meet the future needs of our customers while delivering value for our business. In addition, these plans would allow us to utilise the spectrum we acquired in the last auction very effectively.”
Nick Jeffery, CEO, Vodafone UK, said: “We believe that these plans will generate significant benefits for our business and our customers as we move into the digital era of connected devices, appliances and systems on a mass scale. Customers will benefit from the best 5G experience available and we will deliver even faster speeds by using our spectrum holding more effectively.”
-Statement Ends-
Statement source: https://news.o2.co.uk/press-release/telefonica-and-vodafone-to-strengthen-their-network-partnership-in-the-uk-with-5g-sharing/ Published: 23/01/2019 | by O2
A customer case study from our partner Telefónica UK Limited (“O2”) about the benefits of bringing connectivity to the rural community of Staylittle. Watch now.