Digital Economy Bill (HL Bill 102)

Digital Economy BillPage 110

(5) Any agreement under Part 2 of this code is void to the extent
that—

(a) it prevents or limits the upgrading or sharing, in a case
where the conditions in sub-paragraphs (2) and (3) are met,
5of the electronic communications apparatus to which the
agreement relates, or

(b) it makes upgrading or sharing of such apparatus subject to
conditions to be met by the operator (including a condition
requiring the payment of money).

(6) 10References in this paragraph to sharing electronic
communications apparatus include carrying out works to the
apparatus to enable such sharing to take place.

Effect of agreements enabling sharing between operators and others

17 (1) This paragraph applies where—

(a) 15this code has been applied by a direction under section 106
in a person’s case,

(b) this code expressly or impliedly imposes a limitation on
the use to which electronic communications apparatus
installed by that person may be put or on the purposes for
20which it may be used, and

(c) that person is a party to a relevant agreement or becomes a
party to an agreement which (after the person has become
a party to it) is a relevant agreement.

(2) The limitation does not preclude—

(a) 25the doing of anything in relation to that apparatus, or

(b) its use for particular purposes,

to the extent that the doing of that thing, or the use of the
apparatus for those purposes, is in pursuance of the relevant
agreement.

(3) 30This paragraph is not to be construed, in relation to a person who
is entitled or authorised by or under a relevant agreement to share
the use of apparatus installed by another party to the agreement,
as affecting any consent requirement imposed (whether by an
agreement, an enactment or otherwise) on that person.

(4) 35In this paragraph—

  • “consent requirement”, in relation to a person, means a
    requirement for the person to obtain consent or permission
    to or in connection with—

    (a)

    the installation by the person of apparatus, or

    (b)

    40the doing by the person of any other thing in relation
    to apparatus the use of which the person is entitled or
    authorised to share;

  • “relevant agreement” means an agreement in relation to
    electronic communications apparatus which—

    (a)

    45relates to the sharing by different parties to the
    agreement of the use of that apparatus, and

    (b)

    is an agreement that satisfies the requirements of sub-
    paragraph (5).

Digital Economy BillPage 111

(5) An agreement satisfies the requirements of this sub-paragraph
if—

(a) every party to the agreement is a person in whose case this
code applies by virtue of a direction under section 106, or

(b) 5one or more of the parties to the agreement is a person in
whose case this code so applies and every other party to
the agreement is a qualifying person.

(6) A person is a qualifying person for the purposes of sub-paragraph
(5) if the person is either—

(a) 10a person who provides an electronic communications
network without being a person in whose case this code
applies, or

(b) a designated provider of an electronic communications
service consisting in the distribution of a programme
15service by means of an electronic communications
network.

(7) In sub-paragraph (6)

  • “designated” means designated by regulations made by the
    Secretary of State;

  • 20“programme service” has the same meaning as in the
    Broadcasting Act 1990.

Part 4 Power of court to impose agreement

Introductory

18 25This Part of this code makes provision about—

(a) the circumstances in which the court can impose an
agreement on a person by which the person confers or is
otherwise bound by a code right,

(b) the test to be applied by the court in deciding whether to
30impose such an agreement,

(c) the effect of such an agreement and its terms,

(d) the imposition of an agreement on a person on an interim
or temporary basis.

When can the court impose an agreement?

19 (1) 35This paragraph applies where the operator requires a person (a
“relevant person”) to agree—

(a) to confer a code right on the operator, or

(b) to be otherwise bound by a code right which is exercisable
by the operator.

(2) 40The operator may give the relevant person a notice in writing—

(a) setting out the code right, and all of the other terms of the
agreement that the operator seeks, and

(b) stating that the operator seeks the person’s agreement to
those terms.

Digital Economy BillPage 112

(3) The operator may apply to the court for an order under this
paragraph if—

(a) the relevant person does not, before the end of 28 days
beginning with the day on which the notice is given, agree
5to confer or be otherwise bound by the code right, or

(b) at any time after the notice is given, the relevant person
gives notice in writing to the operator that the person does
not agree to confer or be otherwise bound by the code
right.

(4) 10An order under this paragraph is one which imposes on the
operator and the relevant person an agreement between them
which—

(a) confers the code right on the operator, or

(b) provides for the code right to bind the relevant person.

15What is the test to be applied by the court?

20 (1) Subject to sub-paragraph (5), the court may make an order under
paragraph 19 if (and only if) the court thinks that both of the
following conditions are met.

(2) The first condition is that the prejudice caused to the relevant
20person by the order is capable of being adequately compensated
by money.

(3) The second condition is that the public benefit likely to result from
the making of the order outweighs the prejudice to the relevant
person.

(4) 25In deciding whether the second condition is met, the court must
have regard to the public interest in access to a choice of high
quality electronic communications services.

(5) The court may not make an order under paragraph 19 if it thinks
that the relevant person intends to redevelop all or part of the land
30to which the code right would relate, or any neighbouring land,
and could not reasonably do so if the order were made.

What is the effect of an agreement imposed under paragraph 19?

21 An agreement imposed by an order under paragraph 19 takes
effect for all purposes of this code as an agreement under Part 2 of
35this code between the operator and the relevant person.

What are the terms of an agreement imposed under paragraph 19?

22 (1) An order under paragraph 19 may impose an agreement which
gives effect to the code right sought by the operator with such
modifications as the court thinks appropriate.

(2) 40An order under paragraph 19 must require the agreement to
contain such terms as the court thinks appropriate, subject to sub-
paragraphs (3) to (8).

(3) The terms of the agreement must include terms as to the payment
of consideration by the operator to the relevant person for the

Digital Economy BillPage 113

relevant person’s agreement to confer or be bound by the code
right (as the case may be).

(4) Paragraph 23 makes provision about the determination of
consideration under sub-paragraph (3).

(5) 5The terms of the agreement must include the terms the court
thinks appropriate for ensuring that the least possible loss and
damage is caused by the exercise of the code right to persons
who—

(a) occupy the land in question,

(b) 10own interests in that land, or

(c) are from time to time on that land.

(6) Sub-paragraph (5) applies in relation to a person regardless of
whether the person is a party to the agreement.

(7) The terms of the agreement must include terms specifying for how
15long the code right conferred by the agreement is exercisable.

(8) The court must determine whether the terms of the agreement
should include a term—

(a) permitting termination of the agreement (and, if so, in
what circumstances);

(b) 20enabling the relevant person to require the operator to
reposition or temporarily to remove the electronic
communications equipment to which the agreement
relates (and, if so, in what circumstances).

How is consideration to be determined under paragraph 22?

23 (1) 25The amount of consideration payable by an operator to a relevant
person under an agreement imposed by an order under paragraph
19 must be an amount or amounts representing the market value
of the relevant person’s agreement to confer or be bound by the
code right (as the case may be).

(2) 30For this purpose the market value of a person’s agreement to
confer or be bound by a code right is the amount that, at the date
the market value is assessed, a willing buyer would pay a willing
seller for the agreement—

(a) in a transaction at arm’s length,

(b) 35on the basis that the buyer and seller were acting
prudently and with full knowledge of the transaction, and

(c) as if the transaction were subject to the other provisions of
the agreement imposed by the order under paragraph 19.

(3) The market value—

(a) 40must be assessed on the basis of the value of the right or
agreement to the relevant person, and

(b) must not be assessed on the basis of the value to the
operator of the right or agreement or having regard to the
use which the operator intends to make of the land in
45question.

(4) The market value must be assessed on the assumption that—

Digital Economy BillPage 114

(a) there is more than one site which the operator could use for
the purpose for which the operator intends to use the land
in question (whether or not that is actually the case), and

(b) paragraphs 15 and 16 (assignment of code rights and
5upgrading and sharing of apparatus) do not apply to the
code right or any electronic communications apparatus to
which the code right could apply.

(5) The terms of the agreement may provide for consideration to be
payable—

(a) 10as a lump sum or periodically,

(b) on the occurrence of a specified event or events, or

(c) in such other form or at such other time or times as the
court may direct.

What rights to the payment of compensation are there?

24 (1) 15If the court makes an order under paragraph 19 the court may also
order the operator to pay compensation to the relevant person for
any loss or damage that has been sustained or will be sustained by
that person as a result of the exercise of the code right to which the
order relates.

(2) 20An order under sub-paragraph (1) may be made—

(a) at the time the court makes an order under paragraph 19,
or

(b) at any time afterwards, on the application of the relevant
person.

(3) 25An order under sub-paragraph (1) may—

(a) specify the amount of compensation to be paid by the
operator, or

(b) give directions for the determination of any such amount.

(4) Directions under sub-paragraph (3)(b) may provide—

(a) 30for the amount of compensation to be agreed between the
operator and the relevant person;

(b) for any dispute about that amount to be determined by
arbitration.

(5) An order under this paragraph may provide for the operator—

(a) 35to make a lump sum payment,

(b) to make periodical payments,

(c) to make a payment or payments on the occurrence of an
event or events, or

(d) to make a payment or payments in such other form or at
40such other time or times as the court may direct.

(6) Paragraph 83 makes further provision about compensation in the
case of an order under paragraph 19.

Digital Economy BillPage 115

Interim code rights

25 (1) An operator may apply to the court for an order which imposes on
the operator and a person, on an interim basis, an agreement
between them which—

(a) 5confers a code right on the operator, or

(b) provides for a code right to bind that person.

(2) An order under this paragraph imposes an agreement on the
operator and a person on an interim basis if it provides for them to
be bound by the agreement—

(a) 10for the period specified in the order, or

(b) until the occurrence of an event specified in the order.

(3) The court may make an order under this paragraph if (and only if)
the operator has given the person mentioned in sub-paragraph (1)
a notice which complies with paragraph 19(2) stating that an
15agreement is sought on an interim basis and—

(a) the operator and that person have agreed to the making of
the order and the terms of the agreement imposed by it, or

(b) the court thinks that there is a good arguable case that the
test in paragraph 20 for the making of an order under
20paragraph 19 is met.

(4) Subject to sub-paragraphs (5) and (6), the following provisions
apply in relation to an order under this paragraph and an
agreement imposed by it as they apply in relation to an order
under paragraph 19 and an agreement imposed by it—

(a) 25paragraph 19(3) (time at which operator may apply for
agreement to be imposed);

(b) paragraph 21 (effect of agreement imposed under
paragraph 19);

(c) paragraph 22 (terms of agreement imposed under
30paragraph 19);

(d) paragraph 23 (payment of consideration);

(e) paragraph 24 (payment of compensation);

(f) paragraph 83 (compensation where agreement imposed).

(5) The court may make an order under this paragraph even though
35the period mentioned in paragraph 19(3)(a) has not elapsed (and
paragraph 19(3)(b) does not apply) if the court thinks that the
order should be made as a matter of urgency.

(6) Paragraphs 22, 23 and 24 apply by virtue of sub-paragraph (4) as
if—

(a) 40references to the relevant person were to the person
mentioned in sub-paragraph (1) of this paragraph, and

(b) the duty in paragraph 22 to include terms as to the
payment of consideration to that person in an agreement
were a power to do so.

(7) 45Sub-paragraph (8) applies if—

(a) an order has been made under this paragraph imposing an
agreement relating to a code right on an operator and a
person in respect of any land, and

Digital Economy BillPage 116

(b) the period specified under sub-paragraph (2)(a) has
expired or, as the case may be, the event specified under
sub-paragraph (2)(b) has occurred without (in either case)
an agreement relating to the code right having been
5imposed on the person by order under paragraph 19.

(8) From the time when the period expires or the event occurs, that
person has the right, subject to and in accordance with Part 6 of
this code, to require the operator to remove any electronic
communications apparatus placed on the land under the
10agreement imposed under this paragraph.

Temporary code rights

26 (1) This paragraph applies where—

(a) an operator gives a notice under paragraph 19(2) to a
person in respect of any land,

(b) 15the notice also requires that person’s agreement on a
temporary basis in respect of a right which is to be
exercisable (in whole or in part) in relation to electronic
communications apparatus which is already installed on,
under or over the land, and

(c) 20the person has the right to require the removal of the
apparatus in accordance with paragraph 36 or as
mentioned in paragraph 40(1) but the operator is not for
the time being required to remove the apparatus.

(2) The court may, on the application of the operator, impose on the
25operator and the person an agreement between them which
confers on the operator, or provides for the person to be bound by,
such temporary code rights as appear to the court reasonably
necessary for securing the objective in sub-paragraph (3).

(3) That objective is that, until the proceedings under paragraph 19
30and any proceedings under paragraph 39 are determined, the
service provided by the operator’s network is maintained and the
apparatus is properly adjusted and kept in repair.

(4) Subject to sub-paragraphs (5) and (6), the following provisions
apply in relation to an order under this paragraph and an
35agreement imposed by it as they apply in relation to an order
under paragraph 19 and an agreement imposed by it—

(a) paragraph 19(3) (time at which operator may apply for
agreement to be imposed);

(b) paragraph 21 (effect of agreement imposed under
40paragraph 19);

(c) paragraph 22 (terms of agreement imposed under
paragraph 19);

(d) paragraph 23 (payment of consideration);

(e) paragraph 24 (payment of compensation);

(f) 45paragraph 83 (compensation where agreement imposed).

(5) The court may make an order under this paragraph even though
the period mentioned in paragraph 19(3)(a) has not elapsed (and

Digital Economy BillPage 117

paragraph 19(3)(b) does not apply) if the court thinks that the
order should be made as a matter of urgency.

(6) Paragraphs 22, 23 and 24 apply by virtue of sub-paragraph (4) as
if—

(a) 5references to the relevant person were to the person
mentioned in sub-paragraph (1) of this paragraph, and

(b) the duty in paragraph 22 to include terms as to the
payment of consideration to that person in an agreement
were a power to do so.

(7) 10Sub-paragraph (8) applies where, in the course of the proceedings
under paragraph 19, it is shown that a person with an interest in
the land was entitled to require the removal of the apparatus
immediately after it was installed.

(8) The court must, in determining for the purposes of paragraph 19
15whether the apparatus should continue to be kept on, under or
over the land, disregard the fact that the apparatus has already
been installed there.

Part 5 Termination and modification of agreements

20Introductory

27 This Part of this code makes provision about—

(a) the continuation of code rights after the time at which they
cease to be exercisable under an agreement,

(b) the procedure for bringing an agreement to an end,

(c) 25the procedure for changing an agreement relating to code
rights, and

(d) the arrangements for the making of payments under an
agreement whilst disputes under this Part are resolved.

Application of this Part

28 (1) 30This Part of this code applies to an agreement under Part 2 of this
code, subject to sub-paragraphs (2) to (4).

(2) This Part of this code does not apply to a lease of land in England
and Wales if—

(a) its primary purpose is not to grant code rights, and

(b) 35it is a lease to which Part 2 of the Landlord and Tenant Act
1954 (security of tenure for business, professional and
other tenants) applies.

(3) In determining whether a lease is one to which Part 2 of the
Landlord and Tenant Act 1954 applies, any agreement under
40section 38A (agreements to exclude provisions of Part 2) of that
Act is to be disregarded.

(4) This Part of this code does not apply to a lease of land in Northern
Ireland if—

(a) its primary purpose is not to grant code rights, and

Digital Economy BillPage 118

(b) it is a lease to which the Business Tenancies (Northern
Ireland) Order 1996 (SI 1996/725 (NI 5)SI 1996/725 (NI 5)) applies.

(5) An agreement to which this Part of this code applies is referred to
in this code as a “code agreement”.

5Continuation of code rights

29 (1) Sub-paragraph (2) applies if—

(a) a code right is conferred by, or is otherwise binding on, a
person (the “site provider”) as the result of a code
agreement, and

(b) 10under the terms of the agreement—

(i) the right ceases to be exercisable or the site
provider ceases to be bound by it, or

(ii) the site provider may bring the code agreement to
an end so far as it relates to that right.

(2) 15Where this sub-paragraph applies the code agreement continues
so that—

(a) the operator may continue to exercise that right, and

(b) the site provider continues to be bound by the right.

(3) Sub-paragraph (2) does not apply to a code right which is
20conferred by, or is otherwise binding on, a person by virtue of an
order under paragraph 25 (interim code rights) or 26 (temporary
code rights).

(4) Sub-paragraph (2) is subject to the following provisions of this
Part of this code.

25How may a person bring a code agreement to an end?

30 (1) A site provider who is a party to a code agreement may bring the
agreement to an end by giving a notice in accordance with this
paragraph to the operator who is a party to the agreement.

(2) The notice must—

(a) 30comply with paragraph 88 (notices given by persons other
than operators),

(b) specify the date on which the site provider proposes the
code agreement should come to an end, and

(c) state the ground on which the site provider proposes to
35bring the code agreement to an end.

(3) The date specified under sub-paragraph (2)(b) must fall—

(a) after the end of the period of 18 months beginning with the
day on which the notice is given, and

(b) after the time at which, apart from paragraph 29, the code
40right to which the agreement relates would have ceased to
be exercisable or to bind the site provider or at a time
when, apart from that paragraph, the code agreement
could have been brought to an end by the site provider.

(4) The ground stated under sub-paragraph (2)(c) must be one of the
45following—

Digital Economy BillPage 119

(a) that the code agreement ought to come to an end as a result
of substantial breaches by the operator of its obligations
under the agreement;

(b) that the code agreement ought to come to an end because
5of persistent delays by the operator in making payments to
the site provider under the agreement;

(c) that the site provider intends to redevelop all or part of the
land to which the code agreement relates, or any
neighbouring land, and could not reasonably do so unless
10the code agreement comes to an end;

(d) that the operator is not entitled to the code agreement
because the test under paragraph 20 for the imposition of
the agreement on the site provider is not met.

What is the effect of a notice under paragraph 30?

31 (1) 15Where a site provider gives a notice under paragraph 30, the code
agreement to which it relates comes to an end in accordance with
the notice unless—

(a) within the period of three months beginning with the day
on which the notice is given, the operator gives the site
20provider a counter-notice in accordance with sub-
paragraph (3), and

(b) within the period of three months beginning with the day
on which the counter-notice is given, the operator applies
to the court for an order under paragraph 33.

(2) 25Sub-paragraph (1) does not apply if the operator and the site
provider agree to the continuation of the code agreement.

(3) The counter-notice must state—

(a) that the operator does not want the existing code
agreement to come to an end,

(b) 30that the operator wants the site provider to agree to confer
or be otherwise bound by the existing code right on new
terms, or

(c) that the operator wants the site provider to agree to confer
or be otherwise bound by a new code right in place of the
35existing code right.

(4) If, on an application under sub-paragraph (1)(b), the court decides
that the site provider has established any of the grounds stated in
the site provider’s notice under paragraph 30, the court must
order that the code agreement comes to an end in accordance with
40the order.

(5) Otherwise the court must make one of the orders specified in
paragraph 33.

How may a party to a code agreement require a change to the terms of an agreement
which has expired?

32 (1) 45An operator or site provider who is a party to a code agreement by
which a code right is conferred by or otherwise binds the site