Imposing a duty to consider Alternative Dispute Resolution in telecoms disputes

The Product Security and Telecommunications Infrastructure Act 2022 (PSTIA) received Royal Assent on December 6, 2022.

The PSTIA makes various changes to the Electronic Communications Code (the Code) – however, its intended effects are only being felt piecemeal, as its provisions are being slowly brought into force through secondary legislation.

Ss.68 and 69 of Part 2 of the PSTIA will now come into force on 7 November 2023, pursuant to the Product Security and Telecommunications Infrastructure Act 2022 (Commencement No. 3) Regulations 2023 (SI 2023/1022). 

Court-ordered rights and interim orders – s.68

Where a telecoms operator or a site provider has applied for renewal or termination of an existing Code agreement, from 7 November 2023 para.35 of the Code - as amended by s.68 PSTIA - will allow either party to apply to court for an interim order amending that existing agreement, pending final determination of the main application. 

The interim order can seek changes to any of the terms of the agreement, including to the financial terms – and the changes can be backdated to take effect from the date of the application for the interim order. 

Given that other provisions in the PSTIA seek to align the regimes, this change does not reflect the way in which the starting date is calculated for an interim rent payable in lease renewals under the Landlord and Tenant Act 1954 (the 1954 Act). 

Currently under the Code, interim applications can only be made in relation to expired agreements: a) in respect of the consideration to be paid and b) by a Site Provider. Given how long it can take for a full determination, this is therefore a powerful interim measure particularly for operators, where sites may currently be subject to high pre-Code rents. 

Duty to consider and propose Alternative Dispute Resolution (ADR) – s.69 

In line with the general direction of travel in the courts, s.69 imposes a new duty for operators to consider using ADR before making applications to the First-tier Tribunal (FTT). The burden is on the operator to also make landowners aware of this option, including in their initial s.20 notice seeking a Code agreement.

The PSTIA makes it clear that there are potential costs penalties for those that unreasonably refuse to engage in ADR. However, only time will tell whether parties utilise the opportunity to resolve disputes outside the FTT, or whether this duty merely becomes boilerplate drafting in every notice. Ofcom has recently closed a consultation on its proposed changes to the form of para.20 and 33 notices, seeking agreement to the conferral of Code rights or the change of the terms of a Code agreement.

What next?

The sector is still waiting for regulations to bring into force other key provisions of PSTIA under ss.61-65, to align the renewal processes under the Code and the 1954 Act. 

In the meantime, what will be key for telecoms operators - and under Ofcom’s proposals, site providers - is to ensure that the correct form of para.20 and 33 notices is used from 7 November 2023.