Arqiva Ltd and Others v Everything Everywhere Ltd (formerly T-Mobile (UK) Ltd) and Others
| Jurisdiction | England & Wales |
| Judge | The Hon. Mr. Justice Ramsey |
| Judgment Date | 26 July 2011 |
| Neutral Citation | [2011] EWHC 2016 (TCC) |
| Docket Number | Case No: HT 11-102 |
| Date | 26 July 2011 |
| Court | Queen's Bench Division (Technology and Construction Court) |
[2011] EWHC 2016 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Hon. Mr. Justice Ramsey
Case No: HT 11-102
David Blunt QC, Juliette Levy (instructed by Charles Russell LLP) for the Claimants
Alex Charlton QC, Matthew Lavy (instructed by Bird & Bird LLP) for the First, Second and Fourth Defendants
Pushpinder Saini QC, Mark Vinall (instructed by Ofcom) for Ofcom, an interested party
Judgment No. 2
Introduction
In an earlier judgment handed down on 27 May 2011 ( [2011] EWHC 1411 (TCC)) ("the May Judgment") I dealt with issues of construction and liability in relation to agreements between the claimants ("Arqiva") and the first defendant, Everything Everywhere Limited ("EE"), formerly T-Mobile (UK) Limited, the second defendant ("OPCS") and/or third defendant ("OH") and the fourth defendant ("MBNL"). I refer to the first, second and fourth defendants (EE, OPCS and MBNL) together as the Defendants.
As set out in paragraph 40 of the May judgment there was a particular issue relating to the spectrum licences which had originally been issued to OPCS but which Ofcom had re-issued in the name of EE on 2 March 2011 ("the Spectrum Licence Issue"). Arqiva contended that the transfer of those licences was invalid under section 30 of the Wireless Telegraphy Act 2006 ("the 2006 Act") whilst the Defendants contended that the licences had been re-issued by Ofcom and they were entitled to rely on the relevant licences. I held that before I decided a matter which related to the exercise by Ofcom of its powers, I should give Ofcom the opportunity to make submissions on the relevant issue.
As a result, Ofcom served a witness statement and have made submissions on the issue, as have Arqiva and the Defendants.
In addition to the Spectrum Licence Issue, there was also an issue concerning rights under the Electronic Communications Code ("the Code Rights Issue"). There were also a number of other matters which arose out of the May Judgment which I also deal with.
The Spectrum Licence Issue
Background
Prior to July 2010 OPCS held two Public Wireless Network Licences under the Wireless Telegraphy Act 2006. The first, Licence number 249673, was first issued on 14 February 1994. From the documents it is evident that the licence has been in the name of OPCS since 2 August 2005 and revision 13 of this licence in the name of OPCS was issued on 6 January 2011. The second licence was a third generation mobile licence, licence number 207129, which was first issued to Orange 3G Limited on 1 September 2000 and then was issued as revision 1 to OPCS on 3 June 2003. Both those licences were replaced by licences issued on 2 March 2011 in the name of EE. The issue is whether that transfer or re-issue of the licences to EE was valid.
The basis on which the Spectrum Licences were re-issued was dealt with by Mr Martin Ballantyne in his witness statement. He is employed by Ofcom as a legal adviser. He explains that his involvement with the relevant licences in this case started in May 2010 when Graham Louth, Director of Mobile and Auctions in the Spectrum Policy Group at Ofcom, sent an email explaining that he had been contacted by Ms Robyn Durie of EE and asked whether Ofcom would be willing to change the name on various wireless telegraphy licences held by OPCS and T-Mobile (UK) Limited to EE as part of the process of integration of the OPCS and EE businesses.
Another Ofcom colleague, Mr Mason, proposed effecting EE's request by revoking the OPCS licence and re-issuing it in EE's name, as had been done on two previous occasions prior to the coming into force of the European Framework and Authorisation Directives.
Mr Ballantyne responded to Mr Mason highlighting concerns that if Ofcom were to revoke and re-issue the licences this would run the risk of an argument that the frequencies had reverted to Ofcom so that Ofcom should re-allocate the licences using an open award process in accordance with Article 5(2) of the Authorisation Directive.
Mr Ballantyne says that he reached the conclusion in June 2010 that it would be open to Ofcom to change the name on the OPCS licence if OPCS became a member of the T-Mobile/EE corporate group and so under common ownership with T-Mobile/EE based on his view that section 30 of the Wireless Telegraphy Act 2006 would not apply to an intra-group transaction. He explains his reasoning, which is adopted by Ofcom, as follows.
He says that section 30 implements Articles 9(3) and (4) of the Framework Directive, which enable Member States to make provision for undertakings to transfer rights to use radio frequencies with other undertakings, in accordance with procedures laid down by the national regulatory authority, Ofcom. He relies on European law, in particular European competition law as derived from Articles 101 and 102 of the Treaty on the Functioning of the European Union ("TFEU"), and says that the concept of an "undertaking" encompasses all of the individual corporate entities within a group. As a result, in his view, the correct interpretation of Article 9(3) of the Framework Directive was that when it refers to the transfer of rights to use frequencies by one undertaking with other undertakings, it is concerned with the transfer of rights to use frequencies as between distinct corporate groups and not as between individual entities within the same corporate group. On this basis he says that Article 9(3) would not be engaged by a transfer within a group because, as Article 9(3) is implemented by section 30 of the Wireless Telegraphy Act 2006, he considered that section 30 should be interpreted purposively in light of, and consistent with, Article 9(3) so that it too would not apply to a transfer from one group company to another. He points out that under section 10 and Schedule 1 of the Wireless Telegraphy Act 2006 Ofcom has powers to vary wireless telegraphy licences and he considered that changing the name on the licence would amount to a variation for these purposes.
Mr Ballantyne says that he gave no further thought to the matter until late January 2011 when Ofcom was contacted by Mr Julian McGougan, Head of Public Policy & Regulatory Affairs at Arqiva to enquire whether Ofcom could confirm that EE and OPCS still held separate spectrum licences. He says that at around the same time, he noticed that in other cases EE had stated that OPCS was a wholly owned subsidiary of EE whilst he still understood that OPCS was an entity outside EE's corporate group. He says that on 3 February 2011 he therefore sent an email to EE, asking them to clarify the correct position as to the corporate structure. He also said that if it was now the position that OPCS was part of the EE corporate group, then his concerns about changing the name on the licence would not apply.
He says that Ms Durie responded later on 3 February 201l, confirming her understanding that OPCS was a wholly owned subsidiary of EE and asking what was needed to effect the change of name on the licences. Following discussions with Ms Durie she emailed to Ofcom a certified copy of a group structure chart which showed that OPCS was a wholly owned subsidiary of EE. Mr Ballantyne says that, on the basis that OPCS was a wholly owned subsidiary of EE, he was satisfied that Ofcom could change the name on the OPCS licences without constituting a trade for the purposes of the Wireless Telegraphy Act 2006. In order to be able to demonstrate for the purposes of schedule 1 of the Wireless Telegraphy Act that OPCS as the licence holder had requested Ofcom to vary its licence, Ofcom asked for a letter from Ms Durie requesting that the names be changed and on 2 March 2011 EE formally requested the names to be changed. On the same day, Ofcom changed the name on the licences and sent them as varied to EE.
Submissions
Pushpinder Saini QC, who appeared with Mark Vinall on behalf of Ofcom, submitted that, in re-issuing the licences in the name of EE, Ofcom was acting within the broad power that it was given under section 10 of and paragraph 6 of Schedule 1 to the 2006 Act to vary the "terms, provisions or limitations" of a licence. He submitted that, for example, if in error Ofcom issued a licence in the name of the wrong party, Ofcom would have the power to vary the name of the holder of the licence to change the name. He submitted that section 30 of the 2006 Act was to be construed in a purposive manner directed by the underlying EU legislation which it was intended to implement.
He submitted that when section 30(1) refers to a process to be set out in regulations for authorising the transfer of rights and obligations arising as a result of a licence from one "person" to another, there is nothing to affect the operation of the powers given to Ofcom under paragraph 6 of Schedule 1 to the 2006 Act. He also submitted that, when read consistently with the Directive which section 30(1) seeks to implement, the term "person" in section 30(1) can only properly mean an "undertaking" as that concept is understood in Community law. As a result, he submitted that the re-issue of a licence from one group company to another does not come within section 30(1) and is to be dealt with under Ofcom's general spectrum management functions, which under paragraph 6 of Schedule 1 allow variation to give effect to the change. He said...
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