Trenches Law News • July 20th, 2021
Most operators are familiar with the benefits that Code Powers bring when it comes to building and maintaining UK networks, but the perceived time and costs associated with an application to Ofcom deter many from tackling the paperwork. Here, Sharon McDermott, founder of Trenches Law and an experienced telecoms lawyer advises how to prepare the perfect submission…
In principle, every operator wants Code Powers – why wouldn’t they? Under the Electronic Communications Code, they provide the right to install, operate, inspect and maintain apparatus on, under or over land, without having to apply for a Section 50 licence.
In other words, when it comes to running telecoms infrastructure, they strip out a part of the process that can be costly and laborious. Without them, the operator is not protected from a wayleaves perspective, and we all know how notoriously troublesome they can be!
However, to gain Code Powers rights is often perceived as a tricky exercise in itself, and yes, an application does cost money, and can be quite complex – but not if you know what you’re doing, and what Ofcom is looking for.
That’s one of the reasons why Trenches Law supports so many operators with the preparation and submission of information – we know the holes that will be picked in a flawed application, so we hand hold clients through the process, and take on as much of the paperwork as we can.
What details need to be included in a Code Powers application?
At Trenches Law, we typically ‘interview’ our clients to obtain all the necessary information, in one go. Together, we’ll work through everything from the type of services usually sold, broadband speeds, and how the network operates, through to the lifespan of equipment, funding, and location(s) of upcoming roll-outs. It is crucial to provide enough information to satisfy Ofcom while preserving confidentiality to mitigate the risk of competitor overbuild.
A directors’ letter is also advised to confirm funds available and ring-fenced for liabilities.
How does the process work?
Trenches Law typically produces a draft application for informal submission to Ofcom. This provides the opportunity for feedback, amendments and the collation of any extra documentation required, before a formal application is made.
Once the submission has been reviewed, Ofcom will refer the matter for legal review and consultations will begin. A proposal for direction of Code Powers is then issued and, if successful, the rights are granted.
How long does it take for Code Powers to be granted?
Of course, there are many factors at play, but at the time of writing, the entire process is typically taking six months. Well established dialogue with Ofcom does often help to shorten these timelines, and Trenches Law typically maintains frequent contact so that clients have regular updates. Once the application reaches the consultation stage, it usually takes six weeks, if no objections are received.
What are the typical costs involved in applying for Code Powers?
Ofcom currently charges a one-off £10,000 fee in line with the Code Powers being granted, with an annual administrative charge of £1,000 plus 0.1064% of turnover (where turnover is five million pounds (£5,000,000) or more), which can be paid monthly. A fund for liabilities should also be ring-fenced to cover the cost to remove the infrastructure should the operator ever enter liquidation – common provisioning practice when it comes to decommissioning assets in many industries.
Such costs are not small by any means, but they far outweigh the costs of not having the rights, particularly for altnets that may eventually look to sell their business. The absence of Code Powers is likely to be a turn off for investors, so the time to apply for them is now – before turnover rises!
Trenches Law is often approached to prepare and submit Code Powers applications on operators’ behalf. To discuss your submission – or any other factors that risk delaying the roll-out or maintenance of your telecoms infrastructure, please contact us.