Gibfibre Ltd (trading as GibFibreSpeed) v Gibraltar Regulatory Authority
| Jurisdiction | UK Non-devolved |
| Judge | Lord Hamblen,Lord Reed,Lord Lloyd-Jones,Lord Leggatt,Lord Sales |
| Judgment Date | 29 November 2021 |
| Neutral Citation | [2021] UKPC 31 |
| Docket Number | Privy Council Appeal No 0014 of 2020 |
| Court | Privy Council |
[2021] UKPC 31
Privy Council
Michaelmas Term
From the Court of Appeal of Gibraltar
Lord Reed
Lord Lloyd-Jones
Lord Sales
Lord Hamblen
Lord Leggatt
Privy Council Appeal No 0014 of 2020
Appellant
Sir Peter Caruana KCMG, QC
Christopher Allan
(Instructed by Peter Caruana & Co (Gibraltar))
Respondent
James Segan QC
George Molyneaux
(Instructed by Maddox Legal Ltd)
Intervener (Gibtelecom Ltd)
Robert Palmer QC
Moshe Levy
(Instructed by Hassans International (Gibraltar))
Heard on 6 and 7 October 2021
( with whom Lord Reed, Lord Lloyd-Jones and Lord Leggatt agree)
The appellant, the Gibraltar Regulatory Authority (“the GRA”), is the regulator of the telecommunications industry in Gibraltar. It is the appointed national regulatory authority in accordance with the Communications Act 2006 (“the Act”) which transposes into Gibraltar law the provisions of Framework Directive 2002/21/EC on a common regulatory framework for electronic communications networks and services (“the Framework Directive”).
The respondent, Gibfibre Ltd (“Gibfibre”), is an authorised operator of a public electronic communications network in Gibraltar and a provider of electronic communications services, having built its own fibre optic system.
The intervener, Gibtelecom Ltd (“Gibtelecom”), is also an authorised operator of a public electronic communications network and an electronic communications services provider in Gibraltar. It was formerly the state monopoly provider of telecoms services in Gibraltar. It is wholly owned by the government of Gibraltar.
As well as its activities as an electronic communications network operator and service provider, Gibtelecom's wholly owned subsidiary, Rockolo Ltd, also operates a data centre at Mount Pleasant in Gibraltar (“the data centre”). A data centre is a building which houses computer servers, arranged on racks. The servers are owned by third parties who have rented space on the racks. The data centre provider is responsible for providing a highly secure, climate-controlled environment, providing electrical power to the servers, including backup power systems, and for monitoring relevant systems. The creation of a data centre requires a significant capital investment.
The servers in a data centre are connected to the outside world by means of electronic communications services. At Mount Pleasant, those services are provided by Gibtelecom itself, as well as by Sapphire Networks Ltd (“Sapphire”). Sapphire has contracted with Gibtelecom to be allowed access to the data centre to place its own servers in a dedicated carrier room, which can then be connected through the data centre's internal cabling to the appropriate customer servers.
Gibfibre wished to provide its electronic communications services to potential customers whose servers and related equipment were hosted at the data centre. For that purpose, Gibfibre asked Gibtelecom for access to the data centre on like terms as those afforded to Sapphire. This involved (i) having access to the data centre via certain ducts which are used by Gibtelecom as part of its network, (ii) placing Gibfibre's own server in the data centre, and (iii) connecting that server to the customers' servers, so as to provide electronic communications services directly to those customers over its own network, without connecting via Gibtelecom's network (save for the use of the ducts) (“the requested access”).
Gibtelecom refused Gibfibre's request, initially denying that the ducts had the requisite capacity, but later conceding that its true reasons were purely commercial. In consequence, in or around November 2015, Gibfibre sought the GRA's assistance and intervention, as the national regulatory authority. Based on information provided to it by Gibfibre and investigations carried out by the GRA itself, the GRA engaged with Gibtelecom in a bilateral regulatory enforcement process in respect of Gibtelecom's refusal to grant the requested access. After extensive and detailed exchanges with Gibtelecom and consideration of the matter by the GRA in the light of counsel's advice, the GRA (having initially taken a different view) concluded that it did not have the legal powers to require Gibtelecom to grant Gibfibre the requested access. This was because it considered that the request was not for access to or interconnection of public electronic communications networks or public electronic communications services or associated facilities thereof, as explained in the GRA's decision letter dated 16 February 2017 (“the decision”).
Gibfibre appealed the decision to the Supreme Court of Gibraltar under the appeal provisions in the Act. The appeal came before Butler J who dismissed it in a judgment dated 30 November 2018 on the following grounds: (i) the GRA did not have power to order the requested access under article 12 of Directive 2002/19/EC on access to, and interconnection of, electronic communications networks and associated facilities (“the Access Directive”) as the data centre was not part of Gibtelecom's communications network or its associated facilities and (ii) the GRA did not have power to order the requested access under article 5 of the Access Directive on the ground that access could only be required under article 5 for one of the purposes specified in paras (a), (ab) and (b) of article 5, which were not engaged by the requested access. He further held, rejecting the GRA's argument to the contrary, that the telecommunications market known as “Market 4” was not limited to the local loop, and was capable of being engaged by the requested access.
Gibfibre appealed the decision of Butler J to the Court of Appeal and the GRA cross appealed on the Market 4 issue. In a judgment dated 26 April 2019 the Court of Appeal (Sir Maurice Kay P, Sir Patrick Elias JA and Sir Colin Rimer JA) dismissed the appeal on ground (i), allowed the appeal on ground (ii) and dismissed the cross appeal. With the permission of the Court of Appeal the GRA appeals to the Board against the decision to allow the appeal on ground (ii) and the dismissal of its cross appeal. There is no cross appeal by Gibfibre against the Court of Appeal's dismissal of its appeal on ground (i).
The EU has adopted a common regulatory framework for the regulation of telecommunications throughout the EU. There are five Directives, all issued on 7 March 2002, which lay down the relevant legal rules. The appeal concerns two of those Directives, the Framework Directive and the Access Directive. These have been implemented in Gibraltar through the Act and the Communication (Access) Regulations 2006. The parties agree that Gibraltar law has properly implemented EU law and the case has been argued below and before the Board by reference to EU law. Since the date of the decision the five Directives have been replaced by a single Directive, Directive (EU) 2018/1972 of 11 December 2018 establishing the European Electronic Code, known as “EECC”. The appeal, however, falls to be decided by reference to the law prevailing at the date of the decision.
As explained at para 6 of the judgment of Sir Patrick Elias JA, with whose judgment the rest of the court agreed:
“6. Some regulations of markets are ex post and some are ex ante. The former include, for example, competition rules designed to ensure fair and efficient competition and the imposition of penalties for those acting in breach of the rules. But that is not enough to ensure effective competition in areas where a dominant operator hinders access to the market for potential competitors. The reason was explained by Etherton LJ in British Telecommunications plc v Office of Communications [2012] EWCA Civ 1051, paras 8–9:
‘(8) EU authorities have long recognised that in certain sectors of the economy reliance upon the application and enforcement of competition rules after the event (ex post regulation) may be insufficient to stimulate effective competition. That is particularly true of sectors, such as telecommunications and postal services, which were historically dominated by state-owned monopolies. In such sectors the historical incumbent, or other dominant undertaking, may possess such advantages that it is necessary to impose specific rules controlling its behaviour on a particular market in advance (ex ante regulation).
(9) The EU has therefore put in place regulatory frameworks for such sectors which allow the member states' national regulatory authority (“the NRA”) to impose in certain circumstances specific ex ante obligations on undertakings which are in a dominant position (that is, which have significant market power (“SMP”)) in particular markets, with the aim of stimulating competition more effectively than would be achieved by the mere ex post application of competition rules.’”
Under the Framework Directive and the Access Directive the ex ante regulation of undertakings which have significant market power is carried out under the following regime:
(i) The EU Commission identifies (by formal recommendations) “markets” (ie sectors, activities, products and services within the telecommunications industry) which, by virtue of the application of EU competition principles, are apt for ex ante regulation.
(ii) In respect of these “markets”, national regulatory authorities, such as the GRA, are required to intervene to impose obligations on undertakings only where the markets are considered (in that country) not to be effectively competitive as a result of such undertakings being in a position of dominance. This requires the national regulatory authority to assess their telecommunications “markets” (as identified by the EU Commission) in their country for competitiveness and, if...
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