Telecoms spread offers opportunity

M Many landowners and farmers will all too often have first-hand experience of the poor broadband and phone network connectivity experienced in rural areas.

Thankfully, we are now seeing efforts from the government to improve connectivity across rural Scotland.

I see this as having the potential to affect landowners and farmers in two aspects – improved connectivity in the longer term, and in the short term the drive for better coverage means that there is likely to be continued demand for new sites to host telecoms infrastructure.

A new Electronic Communications Code, which will provide a framework for how telecoms operators can acquire sites to install and maintain copper telephone wires, fibre optic cables and telecoms masts, looks set to come into force by the end of 2017.

The new code is worth flagging up now as, when it does come into force it is likely to take a while to bed in and, importantly, to influence the market value of site rents.

Under the new code, market value will be a key consideration when setting a site rent.

For a while it was thought that the consideration may be based on compensation, e.g. loss of alternative earning potential from land. I have no doubt that site rents would have decreased significantly if the compensation model had been chosen, so news that rents are to be based on market value has been welcomed by site owners and their agents.

Expert advice, from a land agent experienced in the telecoms sector, should always be sought when engaging with telecoms providers.

This will be especially important in the period when the new code is first bedding in and – with precious few comparables – market value is likely to be difficult to calculate.

Network operators could pressurise non-represented landowners into a deal which is not reflective of the market, impacting on rents going forward.

Under the code, sites will only ever be acquired by agreement – the code does not grant compulsory purchase powers to telecoms operators.

However, the code does stipulate that, if an agreement cannot be reached, operators will be able to ask the courts to impose an agreement, imposing “fair and reasonable” terms where the operator’s access to the site is in the public interest.

The “public interest”, with regards to sites for telecoms infrastructure, could see the net being cast wide in the search for new sites.

Not only is new infrastructure likely to be the only cure for low connectivity in remote areas, but also sites across Britain are actively being sought at present for a new communications network for the emergency services.

A last point to raise regarding new code agreements is that the code will grant operators freedoms to assign the agreement to a third party – e.g. to another operator – and freedoms to upgrade and share the apparatus where doing so does not have more than minimal visual impact or impose added burdens on the landowner.

To sum up, after a long period of relative inactivity with regards to new telecoms infrastructure, it looks like we are about to enter a new period of expansion.

With this in mind, the new Electronic Communications Code – itself part of wider Digital Economy legislation – is unlikely to make the sector any less complex to understand and navigate, and I would therefore urge any landowner or farmer to seek expert advice before engaging with a telecoms provider.

It is helpful, for both parties, if a suitably qualified land agent is involved in negotiations at an early stage. Because of this, network operators are almost always willing to meet agents’ fees for lease negotiations, meaning there is no cost to the landowner for expert advice.