Telecoms code clarity
In an important ruling for both operators and site providers on the Electronic Communications Code, the Upper Tribunal has defined the limits of license assignments. Azmina Fozdar looks at the implications of the judgment.
In AP Wireless II UK Ltd v On Tower UK Ltd [2024] UKUT 429 (LC), the Upper Tribunal tackled complex issues under the Electronic Communications Code (the Code), offering vital clarification for operators, site providers and the broader telecommunications sector. This case addressed whether an assignee of a licence agreement could be deemed a party to a code agreement, and thus entitled to seek a renewal or variation of that agreement under Part 5 of the Code.
AP Wireless (APW), a provider of sites for telecommunications infrastructure, challenged the decision of the First-tier Tribunal (FTT) that On Tower UK Ltd (On Tower), as an assignee of the license agreements, qualified as a party to the code agreements and could validly apply for new agreements and reduced rents.
APW argued that a mere assignment of the benefit of a licence agreement was insufficient and that, for an assignee to become a party to the agreement, it must also assume the liability of the original licensee, such as obligations to pay licence fees and perform contractual obligations.
The Upper Tribunal (UT) carefully considered the statutory framework and underlying principles of the Code. It recognised the Code's purpose of facilitating the smooth operation and continuity of telecommunications infrastructure, while also upholding the integrity of established contractual principles.
The UT found that an assignee could only be treated as a party to a code agreement if it has assumed primary responsibility for the licensee's obligations. The UT emphasised that standing ''in the shoes'' of the original licensee required more than a payment of licence fees; there must also be an assumption of liability to perform the obligations under the licence agreement. Without such responsibilities, the assignee could not engage the Code's Part 5 renewal mechanisms.
Importantly, the judgment reaffirmed that practical continuity is essential under the Code, particularly with long-term licence arrangements. The Tribunal highlighted that the Code must balance enabling seamless operator transitions, against protecting the legal rights of site providers. The judgment also offered guidance on best practices, suggesting that applicants under Part 5 should clearly outline the basis of their standing, whether derived from a lease, licence or wayleave agreement.
This case has significant implications for both telecommunications operators and site providers. It clarifies that the statutory framework of the Code does not override fundamental contractual principles. To engage Part 5 rights, an assignee must demonstrate that it has not only inherited the benefits of a code agreement but has also assumed its obligations.
The decision underlines the importance of clear contractual drafting and robust due diligence in the assignment of telecommunications licences. It will shape future disputes in this area and provide clarity for stakeholders navigating the interface between private agreements and statutory rights under the Code.
By drawing a nuanced balance between continuity and accountability, this judgement reinforces the operational viability of the Code whilst preserving commercial certainty for site providers and operators alike.
Azmina Fozdar is an Associate at Trowers & Hamlins.
