On Tower UK Limited v AP Wireless II (UK) Limited

Under the pre-2017 Electronic Communications Code, Code rights had to be granted for a statutory purpose for which the operator had an Ofcom direction when the agreement was made. Under section 32(1) of the Communications Act 2003, an electronic communications network requires a transmission system, alone or with associated apparatus; passive infrastructure alone is insufficient. A later extension of an operator’s direction cannot retrospectively qualify an earlier grant. The always-speaking principle cannot convert the statutory conjunction “and” into “or” where the relevant business model pre-dated the legislation. The appeal succeeded on two grounds concerning the FTT’s reasoning, but failed on the decisive construction issue. The FTT’s finding that the 2016 agreement was not a Code agreement stood.

On Tower UK Limited, a wholesale infrastructure provider with an Ofcom direction applying the Code for electronic communications networks, held a 2016 agreement with AP Wireless II (UK) Limited for a telecommunications site at Vulcan Arms. AP Wireless, a site aggregator and not a Code operator, disputed that the agreement conferred Code rights. The agreement pre-dated the 2017 amendments, and On Tower’s direction then covered electronic communications networks but not infrastructure systems. The First-tier Tribunal (Property Chamber) held that the agreement was not a Code agreement. On Tower appealed, arguing that the 2003 statutory provisions covered its passive mast sites. The central issue was whether the rights were granted for the statutory purposes under the law in force when the agreement was made.

The appeal succeeded on grounds 1 and 2 but failed on ground 3. The FTT’s conclusion stood: the Vulcan Arms agreement was not a Code agreement.

1. The parties agreed, and the Tribunal considered it correct, that the rights had to meet the statutory requirements when conferred. The rights had to be of a type recognised by the Code, be for a statutory purpose, and be held by an operator to whom the Code had been applied for that purpose. The Tribunal accepted that the FTT had applied the wrong iteration of the Code and had wrongly treated the 2005 Ofcom direction as limited under section 106(5) of the Communications Act 2003. Those errors did not change the result.
2. Under section 32(1), an electronic communications network may consist of a transmission system alone, or that system together with listed apparatus used in association with it. The word “and” is conjunctive. Passive infrastructure alone cannot constitute such a network. The mobile operators’ connected equipment might form their networks, but On Tower’s separate mast sites were not themselves a transmission system or On Tower network. Its 2005 direction therefore did not cover the passive infrastructure rights granted in 2016. The 2018 extension could not retrospectively make those rights statutory Code rights.
3. The Tribunal applied the interpretive approach in Cornerstone Telecommunications Infrastructure Limited v Compton Beauchamp Estates Limited [2022] UKSC 18: identify how the statutory regime is intended to work, then construe its language to achieve that aim. The always-speaking principle, considered in R (Quintavalle) v Secretary of State for Health [2003] UKHL 13, did not assist. It could not change the structure of the definition from conjunctive to disjunctive. On Tower’s business model pre-dated the 2003 Act, and there had been no relevant technological or commercial change that could justify the proposed construction.
4. The practical consequences identified by On Tower followed logically from the statutory construction and did not make it absurd. Nor could settled practice assist: the wording was unambiguous, had not been subject to prior judicial determination, and no general settled understanding that WIPs held network directions was established. The result on ground 3 was that the 2016 agreement was not a Code agreement.

1. Upper Tribunal (Lands Chamber) [2026] UKUT 245 (LC) : grounds 1 and 2 succeeded, but ground 3 failed. The FTT’s conclusion was upheld on different reasoning.
2. First-tier Tribunal (Property Chamber) Ref BIR/OOCN/ECR/2024/0602 and others: held that the Vulcan Arms agreement was not a Code agreement.