January 2017

The rights of carriers in property transactions

When negotiating a property transaction with a carrier, there are some things that you as a landlord should be aware of.

The Telecommunications Act 1997 (Cth) (Act) grants a holder of a carrier licence (i.e. a phone carrier) broad powers to deal with land of third parties. These broad powers are often not understood by landowners. Other times landowners are aware that these rights exist, but are not aware of how extensive they really are. In a practical sense, carriers will usually negotiate on a commercial basis with landowners, but landowners should be aware of the statutory rights which negate the need for the carrier to act commercially in some situations.

The powers and immunities are mostly contained within Schedule 3 of the Act. Broadly speaking they allow a carrier to enter land and exercise the following rights:

  • inspect the land to determine whether the land is suitable for the carrier’s purpose;

  • install a facility on the land; and

  • maintain a facility that is situated on the land.

These rights often mean that compliance with state and territory laws (such as planning) by the carrier may not be required. It also means that the carrier may deal with the land within the scope of these statutory powers irrespective of how the land may be classified under state or territory law. For example, a local council may be restricted in dealing with certain land that is classified as ‘community land’ under the Local Government Act 1993 (NSW). A carrier may exercise its statutory powers irrespective, and without regard to, this classification.

We will now look at these rights in a little more detail.

Inspect Land

The power to inspect is quite broad and allows a carrier to enter on and inspect land to determine whether the land is suitable for its purposes and allows the carrier to do anything on the land that is necessary or desirable for that purpose. The Act provides some specific examples of what a carrier may do pursuant to this section, and to the surprise of many landowners, is in fact quite broad. It includes the right to:

  • fell and lop trees and clear and remove other vegetation and undergrowth;

  • install a facility in, over or under a road or bridge; and

  • alter the position of a water, sewerage or gas main or pipe or the position of an electricity cable or wire.

Install a Facility

The power to install a facility under Schedule 3 is somewhat more limited than the broad inspection power. The power to install a facility can only be exercised in the following circumstances:

  • the carrier has a facility installation permit;

  • the facility is a low-impact facility; or

  • the facility is a temporary facility for use by, or on behalf of, a defence organisation for defence purposes.

Facility Installation Permit

This process is not straightforward and there is a particular process which must be followed by a carrier. It is usually limited to very specific circumstances and is typically a last resort by a carrier to get approval to install a facility. This process is also expensive with the initial application fee to the Australian Communications and Media Authority (ACMA) currently in the amount of $6,070.

A facility installation permit is a written instrument issued by ACMA providing authorisation for that carrier to proceed with installation of one or more specified facilities in circumstances where it has not obtained all the administrative authority and approvals required under relevant state and territory legislation.

Section 27 of Schedule 3 of the Act sets out the criteria that ACMA must consider before issuing such permit. It includes evidence from the carrier that the carrier has made reasonable efforts to negotiate in good faith all the administrative authorities and proprietor approvals required for carrying out the installation of the facilities covered by the application.

Low-Impact Facility

A carrier may install a low-impact facility pursuant to its Schedule 3 powers. The Minister may make a determination as to what constitutes a ‘low-impact facility’. Relevantly, the Telecommunications (Low-impact Facilities) Determination 1997 (Cth) (Determination) provides for what facilities are classified as ‘low-impact’.  A facility cannot be a ‘low-impact facility’ unless it is specified in the Determination.

The Act also specifically excludes the following from ever being able to be classed as ‘low-impact’:

  • designated overhead lines;

  • a tower that is not attached to a building;

  • a tower attached to a building and more than 5 metres high;

  • an extension to a tower that has previously been extended; and

  • an extension to a tower, if the extension is more than 5 metres high.

Importantly, a reference to a ‘tower’ does not include the antenna. So in calculating the height of the tower for the purposes of deciding whether the facility is ‘low-impact’, the antenna part does not contribute to the height limitations.

Furthermore, the Determination also limits a facility in being classified as ‘low-impact’ provided that it is installed in particular areas such as rural, industrial, commercial, residential areas, and areas of environmental significance.

By way of example, by virtue of Item 7 of Part 1 of the Schedule to the Determination, an in-building coverage installation to improve cellular coverage to mobile phone users operating inside a building and wholly contained or concealed in a building is permitted in either a residential, commercial, industrial or rural area.

For Defence Purposes

The other right to install a facility is where it is a temporary facility for use by, or on behalf of, a defence organisation for defence purposes. The exercise of this right is not as common but the need to have this included in the Act is self-explanatory.

Maintain a Facility

The power to maintain a facility is much broader than the power to install a facility under Schedule 3.

By virtue of clause 7 of Schedule 3 of the Act, a carrier is authorised at any time to maintain a facility.

This power is the one that landowners should take most notice of. It is particularly relevant in a situation where a facility exists on a particular parcel of land, the lease that was entered into has come to an end, and the parties are now negotiating a new lease. The carrier is in fact entitled to exercise its powers to maintain the facility under Schedule 3 of the Act without the need of having the landowner’s agreement to do so. It is often for this reason that a carrier may be in no hurry to finalise such agreement, or elects to take a hard line with certain provisions in the lease document. There may be instances where a carrier may cease all negotiations and elect to rely on its statutory rights where a landowner has been unreasonable (or greedy) in its negotiations to renew a lease. In these situations, a commercial agreement may not be entered into and the landowner may end up shooting itself in the foot by missing out on any rent payments entirely. Landowner’s should, therefore, act reasonably in negotiating the terms and amount of rent.

It is also worth noting that the right to maintain is fairly broad and the Act specifies additional activities that can be undertaken including the right to alter, remove or repair the original facility, and the right to replace the whole or part of the original facility in its original location provided that certain prescribed conditions are met by the carrier.

Other Requirements

Finally, it is also important to understand that there are overarching provisions which a carrier must comply with where it intends to exercise any of its Schedule 3 powers. These provisions are contained within Division 5 of Schedule 3 and includes such things as:

  • doing as little damage as practicable;

  • complying with recognised industry standards; and

  • giving notice to the owner of the land.

The giving of notice must occur before each and every exercise of the Schedule 3 powers. The notice must be given 10 business days before the carrier begins to engage in the proposed activity and must specify the purpose for which the carrier intends to engage in the activity. Compensation may be payable by a carrier where it exercises its Schedule 3 rights and the landowner suffers financial loss or damage in relation to property.

Finally, it should be noted that notice is not required in certain circumstances. For example, no notice is required where the activities need to be carried out without delay in order to protect:

  • the integrity of the telecommunications network or a facility;

  • the health or safety of persons;

  • the environment;

  • property; or

  • the maintenance of an adequate level of service.

In summary, it is important for any landowner to be aware of the Schedule 3 powers and immunities when coming to the negotiating table. Whilst many of these powers are extensive and far-reaching, a carrier will always attempt to act reasonably and negotiate in good faith where the landowner does the same.

In situations where a landowner receives notice of a carrier exercising a Schedule 3 power, legal advice should be obtained to ensure that the carrier intends to act within the scope of its legislative powers and does in fact comply with the conditions prescribed. The team at Bartier Perry have extensive experience dealing with these issues and would welcome the opportunity to assist you should you have such a matter.

Author: Bruno Confalone