Commercial

Private Virtue and Public Goods

Historically, the virtue underpinning commercial law has been the ability of the parties to a contract to agree and enforce payment for the value of goods and services...

…following a negotiation which inevitably considered the value which the other party attributed to such goods and services.

The 21st century has seen the development of the concepts of enhanced individual rights and Public Goods which have replaced this private virtue of bilateral agreement with the determination of what is the appropriate consideration for goods and services for society as a whole. This is exemplified in Telecommunications law where universal coverage and access to mobile networks have been raised up as human rights and a landscape shrouded by a cloud of connectivity is seen as a species of public goods whose delivery is not amenable to private agreement.

In this context the Electronic Communications Code (“the Code”) governs the acquisition and exercise of new rights by operators of electronic communications networks to install electronic communications apparatus on, under or over land. The Code is found in Schedule 3A of the Communications Act 2003 into which it was inserted by the Digital Economy Act 2017 with effect from 28 December 2017. It empowers a court or tribunal to impose agreements providing for the exercise of Code rights on unwilling land owners and to provide payment and compensation provisions as a result of such agreements. The recent cases of Conerstone Telecommunications Infrastruture Ltd v Keast [2019] UKUT 116 and EE Ltd v Mayor and Burgesses of the London Borough of Islington [2019] UKUT have both shown that the that the upper tribunal is heavily influenced by the public right to a readily available and affordable network and the question of access has been summarily dealt with on an interim basis. However, in EE Ltd the payment and compensation for a final imposed access agreement was considered for the first time and following detailed consideration of a variety of methods of valuation of the consideration payable the tribunal held that:

“The objective of reducing the costs of providing high quality telecommunications services is apparent in the Code’s consideration provisions, particularly in the no-network assumption in paragraph 24(3)(a) which gives effect to the policy that site providers should not share in the economic value created by the very high demand for those services” .

Accordingly, very modest consideration was attributed to the access agreement but the Tribunal did indicate that the door may be open to compensation based approaches in the future. The irony of the
imposed access agreement was not lost on the Tribunal: “An imposed agreement is not an agreement at all, except by the deeming effect of paragraph 22 but once an agreement has been imposed it applies just as much to satisfy the requirement of paragraph 9 as for any other part of the code.”

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