On Tower UK Limited v British Telecommunications PLC

A building falls within the Code definition of electronic communications apparatus only where its sole purpose is to enclose other such apparatus. That question is ordinarily answered objectively by identifying the building’s function. A building which also provides office, storage and welfare facilities has a wider purpose, even if housing communications apparatus is its principal function.

A Code agreement continues under Communications Act 2003, Schedule 3A, paragraph 30 despite a contractual break mechanism. Under paragraph 31(3)(b), a termination notice need not be accompanied by a valid contractual break notice. It is enough that, disregarding paragraph 30, the site provider could have brought the agreement to an end before the proposed termination date.

On Tower UK Limited, an infrastructure-provider Code operator, held a lease of roof space at British Telecommunications plc’s Kenton Road telephone exchange. It used the site for mobile telecommunications apparatus. British Telecommunications plc served both a contractual termination notice and a notice under paragraph 31 of the Electronic Communications Code.

The claimant gave a counter-notice and referred the matter to the Tribunal. The reference was initially transferred to the First-tier Tribunal, but returned to the Upper Tribunal for preliminary issues of principle. The central questions were whether the roof lease was a Code agreement and, if so, whether the paragraph 31 notice was valid without an effective contractual break notice.

1. The Tribunal determined that the Site Lease was a Code agreement and that the paragraph 31 notice was valid. The question whether the site provider could ultimately establish its pleaded termination grounds under paragraph 31(4)(c) or (d) was left for agreement or a later determination.

2. The Kenton Road exchange was not electronic communications apparatus for the purpose of the exclusion of apparatus from “land”. Under paragraph 5(3), a building is a structure only where its sole purpose is to enclose other electronic communications apparatus. Read in context, “purpose” identifies the building’s objective function; it does not require an inquiry into the owner’s subjective reason for retaining it. The exchange accommodated apparatus but also provided offices, storage, and welfare facilities. Its purpose was therefore wider than enclosing apparatus.

3. This construction accorded with the Code’s purpose. The exclusion prevents one Code operator obtaining rights over another operator’s apparatus on Code valuation terms, described in CTIL v Keast [2019] UKUT 116 (LC) as a “blue on blue” application. The claimant sought rights over the roof, not over the respondent’s apparatus. The lease accordingly conferred Code rights.

4. By paragraph 30, the Code agreement continued despite any contractual attempt to end it. A clause 5.8 notice was therefore ineffective to terminate the Code rights. The agreement could be ended only through the paragraph 31 procedure and the Tribunal’s eventual determination of an applicable statutory ground.

5. Paragraph 31(3)(b) asks whether, disregarding paragraph 30, the agreement could have been brought to an end before the proposed statutory termination date. It requires a hypothetical contractual ability to terminate, not the actual service of a contractual break notice. The recipient must nevertheless be able, when the paragraph 31 notice is served, to identify the contractual ground on which that ability rests.

6. Here, clause 5.8(b)(v) was available because the respondent wished to surrender the exchange with vacant possession, a reason outside the four specified termination grounds. The proposed date was more than 18 months after service and was one by which the lease could hypothetically have been ended. The paragraph 31 notice was valid. The Tribunal additionally held that the contractual notice was valid when served; subsequent changes in the respondent’s pleaded case did not alter that conclusion.

• Upper Tribunal (Lands Chamber): This was a reference under Schedule 3A to the Communications Act 2003. It was initially transferred to the First-tier Tribunal, then transferred back for preliminary issues of principle. The Tribunal determined those issues in [2024] UKUT 51 (LC).