ICO Satellite Ltd, R (on the application of) v The Office of Communications [2010] EWHC 2010 (Admin)

Case No CO/5018/2009

[2010] EWHC 2010 (Admin)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

ADMINISTRATIVE COURT

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 30 July 2010

Before

THE HON. MR. JUSTICE LLOYD JONES

Between

R (ICO Satellite Limited)Claimant

The Office of CommunicationsDefendant

Lord Pannick QC, Brian Kennelly and Catherine Donnelly

(instructed by Penningtons) for Claimant

Christopher Vajda QC and Ben Rayment (instructed by Ofcom) for Defendant

Hearing Hearing dates: 12 th and 13 th May 2010

Judgment

The Hon. Mr. Justice Lloyd Jones :

[1]The Claimant (“ICO”) seeks judicial review of the decision of the Office of Communications (“Ofcom”) made on the 24th February 2009 to write to the International Telecommunications Union (“the ITU”) to request the cancellation of the assignments currently recorded in its Master International Frequency Register (“MIFR”) in respect of the Claimant’s ICO-P mobile satellite communications system.

[2]The ITU is an international organisation established by a treaty, the Convention on the International Telecommunications Union. It is responsible for the international arrangements for electronic communications systems, in particular the radio frequencies and orbits used by telecommunications satellites. The United Kingdom is one of 191 States which are members of the ITU.

[3]The Constitution of the ITU provides:

“Article 12(1) Functions and structure. The functions of the Radiocommunication Sector shall be, bearing in mind the particular concerns of developing countries, to fulfil the purposes of the Union, as stated in Article 1 of this Constitution, relating to radiocommunication: - by ensuring the rational, equitable, efficient and economical use of the radio-frequency spectrum by all radiocommunication services, including those using the geostationary-satellite or other satellite orbits, subject to the provisions of Article 44 of this Constitution, and - by carrying out studies without limit of frequency range and adopting recommendations on radiocommunication matters. Article 44 Use of Radio-Frequency Spectrum and of the Geostationary Satellite and Other Satellite Orbits - by ensuring the rational, equitable, efficient and economical use of the radio-frequency spectrum by all radiocommunication services, including those using the geostationary-satellite or other satellite orbits, subject to the provisions of Article 44 of this Constitution, and - by carrying out studies without limit of frequency range and adopting recommendations on radiocommunication matters. Use of Radio-Frequency Spectrum and of the Geostationary Satellite and Other Satellite Orbits 1. Member States shall endeavour to limit the number of frequencies and the spectrum used to the minimum essential to provide in a satisfactory manner the necessary services. To that end, they shall endeavour to apply the latest technical advances as soon as possible. 2. In using frequency bands for radio services, Member States shall bear in mind that radio frequencies and any associated orbits, including the geostationary-satellite orbit, are limited natural resources and that they must be used rationally, efficiently and economically, in conformity with the provisions of the Radio Regulations, so that countries or groups of countries may have equitable access to those orbits and frequencies, taking into account the special needs of the developing countries and the geographical situation of particular countries.”

Use of Radio-Frequency Spectrum and of the Geostationary Satellite and Other Satellite Orbits

[4]The ITU has established a system of frequency co-ordination governed by its Radio Regulations. This is based on an examination or assessment of compatibility of a proposed new assignment of spectrum to a satellite network with the characteristics of satellite networks previously submitted to the ITU by one of the national administrations of the ITU Member States. Once a filing has successfully completed co-ordination with those prior filings which have priority, it may be notified to the ITU as having been brought into operation and entered on the MIFR at the Radiocommunications Bureau of the ITU. In this way specific radio frequencies are assigned to national administrations and thereby to their satellite operators. The procedure includes requirements of due diligence to ensure that the relevant satellite network for which an initial filing is made is actually brought into regular use in accordance with its notified specification.

[5]The procedure for the co-ordination, notification and recording in the MIFR of allocated frequencies under the Radio Regulations begins with Advance Publication Information (“API”), the submission pursuant to Article 9.1 of the Radio Regulations by the national administration of a general description of the network or system setting out the mandatory characteristics listed in Appendix 4 to those Regulations. These are sent to the ITU’s Radiocommunication Bureau (“ITU-BR”) for advance publication in the International Frequency Information Circular, thereby giving notice of the operator’s intention to use the particular frequencies. Article 9.6 of the Radio Regulations requires a national administration to effect co-ordination with other affected administrations before a frequency is assigned or brought into use. A submission must be sent to ITU-BR requesting co-ordination. The ITU-BR examines the information provided, identifies the administrations with which co-ordination must be effected and publishes these details in the International Frequency Information Circular. This is followed by the notification of a frequency assignment by the national authority to the ITU-BR in accordance with Article 11 of the Radio Regulations. Examination of the notice is undertaken by the ITU-BR with particular regard to issues of co-ordination and harmful interference. If these requirements are satisfied the frequency assignment is recorded in the MIFR.

[6]The frequency co-ordination process under the Radio Regulations is based on an examination or assessment of the compatibility of a proposed new assignment of spectrum to a satellite network (“a junior filing”) with the characteristics of satellite networks previously submitted to the ITU by a national administration (“a senior filing”). Once a filing has successfully completed co-ordination with any senior filings it may be notified to the ITU as having been brought into operation and entered on the MIFR. All later filings must plan around it and avoid causing interference to it. Satellite filings must be brought into operation in accordance with their notified characteristics within a specified regulatory period from the start of the co-ordination process (Radio Regulations, Article 11.44). In the case of ICO-P the regulatory period within which the satellite network was required to be brought into use was a total of nine years from the date of publication or receipt of the specified API.

[7]Resolution 49 of the World Radiocommunication Conference requires national administrations to impose certain administrative due diligence requirements on satellite networks for which they act as the notifying administration, including specific information relating to the contractual status of the satellite and launch vehicles.

(b) of the Radio Regulations provides:

“(b) whenever it appears from reliable information available that a recorded assignment has not been brought into regular operation in accordance with the notified required characteristics as specified in Appendix 4, or is not being used in accordance with those characteristics, the Bureau shall consult the notifying administration and, subject to its agreement or in the event of non-response after the dispatch of two consecutive reminders, each within a three-month period, shall either cancel, or suitably modify, or retain the basic characteristics of the entry. A decision of the Bureau to cancel the entry in the event of non-response shall be confirmed by the Board.”

Ofcom.

[8]Section 22, Communications Act 2003 (“the 2003 Act”) empowers the Secretary of State to impose on Ofcom the role of representing the United Kingdom in international and other bodies having communications functions. Under this provision the Secretary of State has appointed Ofcom the national notifying authority for the United Kingdom to the ITU, with responsibility for the co-ordination and notification of satellite networks.

[9]More generally, section 3 of the 2003 Act imposes duties on Ofcom. Section 3 provides in material part:

“(1) It shall be the principal duty of Ofcom, in carrying out their functions— (a) to further the interests of citizens in relation to communications matters; and (b) to further the interests of consumers in relevant markets, where appropriate by promoting competition. (2) The things which, by virtue of subsection (1), Ofcom are required to secure in the carrying out of their functions include, in particular, each of the following— (a) the optimal use for wireless telegraphy of the electro-magnetic spectrum; (b) the availability throughout the United Kingdom of a wide range of electronic communications services; … (3) In performing their duties under subsection (1), Ofcom must have regard, in all cases, to— (a) the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed; and (b) any other principles appearing to Ofcom to represent the best regulatory practice. (4) Ofcom must also have regard, in performing those duties, to such of the following as appear to them to be relevant in the circumstances— … (b) the desirability of promoting competition in relevant markets; (c) the desirability of promoting and facilitating the development and use of effective forms of self-regulation; (d) the desirability of encouraging investment and innovation in relevant markets; … (f) the different needs and interests, so far as the use of the electro-magnetic spectrum for wireless telegraphy is concerned, of all persons who may wish to make use of it; … (m) the extent to which, in the circumstances of the case, the furthering or securing of the matters mentioned in subsections (1) and (2) is reasonably practicable.” (a) to further the interests of citizens in relation to communications matters; and (b) to further the interests of consumers in relevant markets, where appropriate by promoting competition. (a) the optimal use for wireless telegraphy of the electro-magnetic spectrum; (b) the availability throughout the United Kingdom of a wide range of electronic communications services; … (a) the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed; and (b) any other principles appearing to Ofcom to represent the best regulatory practice. … (b) the desirability of promoting competition in relevant markets; (c) the desirability of promoting and facilitating the development and use of effective forms of self-regulation; (d) the desirability of encouraging investment and innovation in relevant markets; … (f) the different needs and interests, so far as the use of the electro-magnetic spectrum for wireless telegraphy is concerned, of all persons who may wish to make use of it; … (m) the extent to which, in the circumstances of the case, the furthering or securing of the matters mentioned in subsections (1) and (2) is reasonably practicable.”

[10]Ofcom performs its functions in this area in accordance with Guidance entitled “Ofcom: Procedures for the Management of Satellite Filings” (“the Guidance”). The current edition was published on 27th March 2007 and consolidates all previous documents on this subject published by Ofcom or its predecessor, the Radiocommunications Agency.

[11]Paragraph 1.2 of the Guidance provides:

“1.2 Spectrum and orbital positions are valuable and limited resources. Radio spectrum is in high demand as new mobile and broadband technologies develop and it becomes increasingly challenging to find frequencies to deliver new communications services. Orbital positions from which satellites can serve commercially attractive markets, such as the USA and Europe, are very popular and are becoming congested. If the spectrum and orbital positions are not used efficiently, competition, innovation and growth in communications services will be hindered to the detriment of consumers and businesses.”

[12]Section 2 of the Guidance sets out the ITU procedures for co-ordination and notification of satellite networks. The present case concerns a non-planned band. Paragraph 2.15 provides:

“An assignment in a non-planned band results from an application by an operator for an assignment in a given band, with a specified coverage and a particular orbital position. Such applications are, in general, filed on a first-come-first-served basis.”

[13]The Guidance makes provision for the various stages of the procedure for co-ordination and notification of satellite networks: the submission of API (paragraphs 2.19-2.20), the request for co-ordination (paragraphs 2.21-2.29) and notification (paragraphs 2.30-2.36).

[14]The Guidance explains that thereafter all assignments are subject to ongoing regulatory requirements. “Regulatory Requirements. This section applies to both planned and non-planned bands. 2.45 The status given to each assignment recorded in the Master Register derives from the successful application of the relevant coordination procedures and the resulting coordination agreements. However, the status is conditional on: a) the assignment being brought into use within a defined regulatory time limit (see No. 11.44.1 of the Radio Regulations); b) notification information; and c) due diligence information (ITU Resolution 49, see section 2.47), where applicable, being submitted within the defined regulatory time limit. 2.46 As required by No. 11.44.1 of the Radio Regulations, the bringing into use of the assignments and receipt by the ITU-BR of notification information and Resolution 49 data must all have occurred before the expiry of the seven year regulatory period. Failure to do this will normally result in the filing being cancelled by the ITU-BR. Administrative Due Diligence - Resolution 49 2.47 In the majority of cases for proposed networks in FSS, MSS and BSS the submission of due diligence information to the ITU-BR is required in accordance with ITU Resolution 49 of the Radio Regulations. Resolution 49 requires administrations to impose certain administrative due diligence requirements on satellite networks for which they act as the notifying administration, including specific information relating to the contractual status of the satellite and launch vehicle. Therefore, before registering a prospective system with the ITU-BR, it is incumbent on an administration to satisfy itself that there is a realistic likelihood that the satellite will be launched and will not block a valuable orbital slot or frequency assignment because it subsequently fails to be developed. It is also incumbent on an administration to monitor progress against pre-specified milestones for the deployment of the satellite network. 2.48 The primary reason for requiring this due diligence information is to avoid the reservation of orbital resources without actual use. 2.49 The due diligence information required is set out in Annex 2 of Resolution 49 and includes specific details of the satellite network operator and details of the API and coordination request publications. The information must also include details of contractual undertakings related to the construction and launch of the relevant satellites. The information should be provided to the ITU-BR as early as possible before bringing into use of the frequency assignment, but in any case it must be submitted before the end of the seven year period established as a limit to bringing into use a satellite network for non-planned bands.” a) the assignment being brought into use within a defined regulatory time limit (see No. 11.44.1 of the Radio Regulations); b) notification information; and c) due diligence information (ITU Resolution 49, see section 2.47), where applicable, being submitted within the defined regulatory time limit.

Administrative Due Diligence - Resolution 49

[15]Section 5 of the Guidance sets out Ofcom’s due diligence requirements. “5.1 ITU Resolution 49 requires national administrations to make submissions to the ITU in respect of the construction and launch (including timings) of its satellite networks. Administrations should, therefore, implement these obligations by imposing administrative due diligence requirements on operators. The purpose of these due diligence requirements is to ensure that filings are only submitted to the ITU where there is a reasonable prospect that the proposed network will be brought into operation within the relevant time period. It also serves to address the problem of reservation of orbit and spectrum capacity without actual use and has an impact, together with other relevant mechanisms, in reducing paper filings and in bringing more transparency to the filing process. 5.2 The ITU-BR relies on the confirmation provided by administrations, under No. 11.47 of the Radio Regulations that a frequency assignment has been brought into use, to assess compliance with the regulatory time period set out in No. 11.44. The latter provision states that the notified date of bringing into use of any assignment to a space station of a satellite network will not be later than seven years following the date of receipt by the ITU-BR of the complete API information under No.9.1 or

9.2 of the Radio Regulations. Any frequency assignment not brought into use within the required period will be cancelled by the ITU-BR after informing the relevant administration. 5.3 In addition to the requirements of Resolution 49, Ofcom requires to receive commercial information from applicants, as set out in Table 1, for the purposes of due diligence in order to be satisfied that a proposed satellite network has an adequate financial backing, that all relevant commercial and other contracts are in place or are about to be entered into and that there is a reasonable probability that the network will be brought into operation.” It should be noted that, as is made plain by the opening words of paragraph 5.3, Ofcom’s due diligence requirements go beyond the ITU requirements in Resolution 49, in requiring commercial evidence that the proposed network is commercially viable. Furthermore, paragraph 5.5 provides:

“Any change to the business plan, including the key milestones, must be communicated to OFCOM by the applicant immediately.”

It then identifies the information which OFCOM requires to be supplied to it. Details of “milestone requirements and progress monitoring” are set out in paragraphs 5.6-5.9. Paragraph 5.9 provides:

“5.9 Once the relevant assignment(s) is recorded in the Master Register, the operator (formerly described as the applicant) will provide Ofcom with yearly reports covering the assignment(s). The operator will provide these reports to Ofcom, on the anniversary of the date of bringing into use the assignment(s), each year for the lifetime of the assignment(s). These reports must set out the status of the implementation of the assignment(s) and whether it is operating in accordance with its recorded characteristics and its business plan. Ofcom will assess the information provided in the yearly reports to establish whether the assignment(s) are meeting these criteria. In the event that Ofcom finds that the operator is not meeting these requirements, Ofcom expects to consult with the operator and provide it with reasonable notice in which to apply corrective measures. If appropriate corrective measures are not or cannot be applied in order to bring the assignment(s) back into use or to enable it to operate in accordance with its recorded characteristics and its business plan within the notice period, the provisions set out in section 12 of this document will be applied by Ofcom.”

[16]Section 12 of the Guidelines governs the cancellation of a filing. “12.5 Sections 12.5 to 12.9 will apply to the use of an assignment in either a planned or non-planned band which is either: a) notified and recorded in the Master Register and in operation; or b) still in the process of coordination. 12.6 As stated in section 5 of this document, applicants will provide Ofcom with due diligence documentation and progress reports for each satellite network indicating any variations from the previously submitted business plan and also details of their coordination progress and status, including whether the original network is likely to enter into commercial service according to the timescale envisaged. Ofcom will use such information to assess whether the applicant’s project is meeting the criteria that had been set and will be completed within the satellite network’s regulatory time period. Ofcom will assess the facts, circumstances and next stages of each case individually. 12.7 If, in Ofcom’s opinion, there is insufficient evidence of progress as against the milestone commitments on the basis of the information supplied by the operator, Ofcom will consult with the relevant operator. Ofcom will provide the operator with an opportunity to remedy the situation, to ensure that progress is brought into line with the milestone commitments, within a specified timeframe. 12.8 Ofcom would expect that if the operator fails to remedy the situation within the specified timeframe, referred to in section 12.7, Ofcom may cancel the filing or may seek to reassign it to another operator in accordance with the procedures set out in sections 12.1 to 12.3. 12.9 Ofcom will consult with the Secretary of State prior to taking any action to cancel a filing in accordance with section 12.8.” a) notified and recorded in the Master Register and in operation; or b) still in the process of coordination. The registration of the ICO-P system.

[17]ICO secured its filing for the ICO-P system in the following way. On 16th August 1994 the Radiocommunication Agency (“the RA”), which was at that time the United Kingdom agency performing the role now performed by Ofcom, notified to the ITU-BR the API of the proposed S-Band MSS System “ICO-P”. The API was published on 7th February 1995. This put all persons on notice of ICO’s intention to operate the mobile satellite services (“MSS”) on the S-band frequency using an MEO (Medium Earth Orbit).

[18]On 16th February 1995 the RA sent a request for co-ordination on behalf of ICO. That request contained the technical characteristics of the proposed satellite network and details of the proposed frequency assignment in respect of which co-ordination was sought. The ITU-BR examined the information provided, identified the administrations with which co-ordination was required to be effected and published these details in the International Frequency Information Circular. Thereafter ICO carried out the co-ordination process.

[19]On 29th December 2003 the RA’s functions were transferred to Ofcom.

[20]By early 2004 ICO had completed its co-ordination with other Member States of the ITU to make the S-Band available for ICO-P. Furthermore, by this date a satellite had been launched. In the case of satellite networks for which relevant API had been received prior to 22nd November 1997 (i.e. this case) the notified date of bringing into use of any assignment to a space station of a satellite network was required by 11.44 Radio Regulations (“RR”) to be not later than nine years from the date of publication of the information. In this case the information had been published on 7th February 1995. Accordingly the last possible date for the notification of bringing into use the assignment of this satellite network was 7th February 2004.

[21]On 26th January 2004 Ofcom notified the Bureau that the filing had been brought into use. This step was taken in expectation of the system being brought into regular operation. Had Ofcom not taken this step by the 7th February 2004, the filing would have been cancelled automatically by the ITU. The notified characteristics of the ICO-P system were a 12 satellite system of which ten satellites would be in orbit and two would be used as reserves. At that time ICO’s business plan, which had been supplied to Ofcom, stated that the remaining satellites would be launched in 2005. However, on 29th January 2004, three days after Ofcom notified the Bureau that the filing had been brought into use, ICO terminated its satellite construction and launch contracts with Boeing. It did not inform Ofcom of this. Ofcom learnt of this development from media reports. In May 2004 Ofcom wrote to ICO requesting an updated business plan and time scales for its project.

[22]ICO-P was recorded in the MIFR at the ITU on 12th March 2007. The date of seniority of the ICO-P filing is based on the date of receipt by the ITU of the original API. Thereafter, any other MSS operator wishing to use the S-Band frequency in which ICO-P operated was required to co-ordinate its operation with ICO. A further effect of the filing was that ICO had fulfilled a pre-condition for the grant of a licence of authorisation of services in the territory of any ITU Member State. The events leading to the decision.

[23]Following the filing, Ofcom became increasingly concerned about the failure to bring the ICO-P satellite network into commercial operation in accordance with its notified specification, a matter which it considered to be critically important for the retention of the relevant ITU frequency assignments.

[24]By letter dated 27th May 2004 Ofcom reminded ICO that it had been agreed at the end of 2003 that Ofcom would notify the bringing into use of the ICO-P satellite network on the basis of ICO’s assertions that the satellite network was still a viable system and would be brought into service by the end of 2005. Ofcom expressed concern over press reports that the contract between ICO and Boeing had been cancelled. In the light of this Ofcom requested that ICO provide information in relation to the satellite network including an updated business plan, evidence that there were sufficient financial resources to complete the construction and launch of the remaining satellites and timescales for bringing the ICO-P satellite network into commercial operation by 2006.

[25]By letter dated 15th July 2004 ICO supplied to Ofcom an updated business plan. It stated that six of the remaining satellites had been substantially assembled and four had been partially assembled. ICO confirmed that it had terminated its contract with Boeing due to a dispute as to contractual performance. It also stated that ICO was engaged in negotiations for additional funding for completion and launch of the remaining satellites.

[26]In January 2006 ICO sent to Ofcom a revised schedule for bringing the ICO-P network into commercial operation, which stated that it would commence in the first quarter of 2009.

[27]On 15th May 2006, ICO lodged a filing with the US Securities and Exchange Commission (“SEC”) in which it stated:

“[ICO] do not currently have the funding required to launch additional MEO satellites. If we were required to launch additional MEO satellites in order to maintain the UK authorization but were unable to secure the additional funding required for the completion of construction and launch of those satellites, it could lead to the loss of our UK MEO authorization, which could have a material adverse effect on our prospects, financial condition and results of operations.”

[28]In July 2006 ICO provided a status report which stated that ICO continued actively to pursue funding for the ICO-P satellite system and was in “serious, high level negotiations with two global satellite operators both of whom are focused on MSS service offerings in Europe, utilising the ICO-P system.” The commercial service launch date depended on the conclusion of discussions. It was estimated that “this is likely to be in the 2009 timeframe”. In the updated outline schedule, no date was given for recommencement of satellite construction. However, the status report did not indicate that the funding or the contracts for the launch of the further satellites had been secured.

[29]At this point, due to its concern that the ICO-P network had not been brought into commercial operation, Ofcom conducted an assessment of ICO’s performance against the commitments it had provided to Ofcom.

[30]On 13th December 2006 Ofcom wrote to ICO in relation to its assessment of the July 2006 status report. Ofcom stated that it had concluded that the evidence did not demonstrate any substantive change to the contractual commitments of ICO that would give any confidence that the ICO-P satellite network would be brought into commercial operation within the timescales indicated in the business plan provided on 26th July 2006. Accordingly it stated:

“We have therefore concluded that unless ICO is able to provide documentary evidence by 30th June 2007 that: (a) it has contracts in place for the completion and the launch of the remainder of the ICO-P satellite network; and (b) it has secured the necessary funding to finance the bringing of the ICO-P satellite network into commercial operation; Ofcom will initiate procedures to cancel the ICO-P ITU filing.” (a) it has contracts in place for the completion and the launch of the remainder of the ICO-P satellite network; and (b) it has secured the necessary funding to finance the bringing of the ICO-P satellite network into commercial operation; Ofcom will initiate procedures to cancel the ICO-P ITU filing.”

[31]By letter dated 22nd January 2007 to ICO Ofcom stated:

“…we have been engaged in the due diligence review process for a number of years and, in this time, ICO has based its arguments for continued maintenance of the ICO-P filing on a number of claimed impending developments that have, in the event, failed to materialise. These were summarized in my letter of 13 December. We have reached the point where the only basis on which we can justify the maintenance of the filing is through demonstrable evidence of meeting concrete milestones by a defined deadline… Ofcom requires documentary evidence that ICO have contracts in place for the construction and launch of the relevant number of satellites to bring the ICO-P satellite system into commercial operation and requires evidence of funding for bringing the ICO-P network into commercial operation. We require these by 30 June 2007.”

[32]The ICO-P status report dated March 2007 stated:

“The commercial services launch date continues to be targeted for the 2009 timeframe and remains dependent on a number of factors, including the Boeing litigation, MEO contract negotiations, partner discussions, launch contract and financing plans all of which are progressing well and all of which will be further reported upon, with more detail, by or before the June 2007 update.”

[33]By letter dated 15th May 2007 to ICO Ofcom refused a request for a 6 month extension of the date by which the documentary evidence was required. “In making this decision Ofcom had to determine whether ICO had provided any additional information that would lead Ofcom to alter its decision from that set out on 13th December 2006. As indicated in its response to ICO of 8th May 2007, Ofcom did not consider that the points raised provided any additional information that would cause Ofcom to change its position. Ofcom took into account the balance which has to be struck between ICO’s interests on the one hand and, on the other hand, both the interests of third parties with a commercial interest in management satellite filings and the public interest in ensuring that due diligence requirements are met in order to enable efficient use of the satellite filing, which is a valuable and scarce resource.”

[34]On 28th June 2007 ICO provided Ofcom with information in response to Ofcom’s letter of 13th December 2006. Thereafter Ofcom sought certain missing attachments. ICO provided further information on 31st August 2007.

[35]In its filing to the US Securities and Exchange Commission for the period ending 30th September 2007 ICO stated:

“Depending on the development of a MEO business plan and the associated costs (including the costs to comply with the final milestone or any new milestones imposed) and the evolution of the regulatory environment for the S-Band systems globally, particularly in Europe, as well as the success of discussions with potential partners who could provide the funding for the development of the MEO satellite system, we may or may not proceed with the development of our physical regulatory MEO assets.”

[36]By letter dated 16th April 2008 Ofcom notified ICO of its provisional decision. Ofcom considered that the information provided by ICO did not satisfy the requirements set out in the letter of 13th December 2006. “72. Having reviewed these documents, Ofcom is of the opinion that:(a) There is no evidence that either sufficient ICO-P satellites are ready for launch or that contracts are in place to complete the necessary number of satellites in order to bring the ICO-P network into commercial operation;

(b) There is no evidence that ICO had entered into any form of binding contract to launch additional ICO-P satellites. ICO has an option to launch five additional satellites but has not exercised that option.

(c) The recently signed contract with Space Systems Loral in respect of an ICO-P satellite network only commits ICO to complete the first phase of the contract. Phases 2 and 3 were options that could be exercised six months and ten months after the effective date of the original contract. Thus ICO does not have any binding contractual commitments with respect to delivery of an ICO MEO constellation; and

(d) ICO has not provided any evidence that funding is in place to support the further deployment of the ICO-P network. 73. Ofcom has carefully considered all of the evidence of progress above and considers that it remains the case that there is no evidence of any realistic prospect of ICO bringing the ICO-P satellite network into commercial operation by any of the dates it has suggested. Having consulted the Secretary of State in accordance with paragraph 12.9 of Ofcom’s Guidance, Ofcom is therefore minded to cancel the ICO-P filing subject to any further representations received from ICO.” (at paragraphs 72, 73) The provisional decision also stated: “90. Ofcom does not accept ICO’s contentions that it has met the relevant milestones. Neither does it accept it has imposed additional unnecessary, untargeted or disproportionate obligations on ICO. In exercising its functions Ofcom accepts that it is required to have regard to the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed. As explained earlier, the aim of the filing system is to ensure that the most efficient use is made of spectrum which is a scarce and valuable resource. The RA and Ofcom Guidance set out a scheme which is appropriate and necessary to meet this objective. In this context Ofcom has set lawful and appropriate requirements with which ICO has failed to comply. Cancellation of the filing as a result of ongoing failure to comply with those requirements is therefore no more than is necessary to secure the objective which they were designed to achieve.” (a) There is no evidence that either sufficient ICO-P satellites are ready for launch or that contracts are in place to complete the necessary number of satellites in order to bring the ICO-P network into commercial operation; (b) There is no evidence that ICO had entered into any form of binding contract to launch additional ICO-P satellites. ICO has an option to launch five additional satellites but has not exercised that option. (c) The recently signed contract with Space Systems Loral in respect of an ICO-P satellite network only commits ICO to complete the first phase of the contract. Phases 2 and 3 were options that could be exercised six months and ten months after the effective date of the original contract. Thus ICO does not have any binding contractual commitments with respect to delivery of an ICO MEO constellation; and (d) ICO has not provided any evidence that funding is in place to support the further deployment of the ICO-P network.

[37]A response from ICO dated 16th May 2008 stated, inter alia, that Ofcom’s proposed action was unlawfully and inequitably premature because there was no pressing need to take action against ICO’s filing at this time. No other satellite operator was within years of operating an S-Band satellite that would require ICO’s S-Band spectrum.

The decision

[38]By letter dated 24th February 2009 Ofcom notified ICO that it had made a decision to write to the ITU to request that the ICO-P assignments currently recorded in the MIFR be cancelled.

[39]The letter referred to the provisional decision of 16th April 2008 and further correspondence which had taken place since that date. The letter stated:

“We understand that the Superior Court of the State of California has entered judgment in the litigation between ICO and Boeing over satellite construction for damages in the amount of approximately $698 million plus interest. We also understand the litigation is not yet final as Boeing has filed motions for judgment notwithstanding the verdict and/or for a new trial on various issues. In addition Boeing has publicly stated that they will appeal the verdict. The litigation may therefore continue for some time in the future.”

[40]The letter stated that after carefully considering the representations and the answers to Ofcom’s questions submitted by ICO, and following consultation with the Secretary of State for Business, Enterprise and Regulatory Reform, Ofcom had decided to write to the ITU to request that the ICO-P assignments currently recorded in the MIFR be cancelled. It intended to do so on 17th March 2009.

[41]The reasons for the decision were set out in an annex which addressed the ITU regime in relation to frequencies and spectrum, United Kingdom procedures governing the management of satellite filings, European regulation, the ICO-P satellite filing and the history of events subsequent to that filing. Annex 1 then stated: “Ofcom’s assessment of the information provided by ICO on the US litigation.102. The information required by Ofcom in order to assess that the ICO-P satellite network would be brought into commercial operation was that: - it had contracts in place for the completion and the launch of the remainder of the ICO-P satellite network; and - it had secured the necessary funding to finance the bringing of the ICO-P satellite network into operation. Construction and launch contracts.

103. ICO terminated its contracts with Boeing in 2004. ICO has subsequently confirmed to Ofcom in its response to Ofcom of 28 August 2008, that Boeing is the only party who can complete the satellites forming the ICO-P network. Ofcom notes that one of the remedies sought by ICO in its cross complaint against Boeing was an order for the specific performance of the launch and construction contracts by Boeing. The judgments filed by the Superior Court of the State of California did not grant such an order.

104. Ofcom therefore has no evidence that, even if the case were not ongoing, ICO would be in a position to conclude the relevant contracts. Funding of the network.

105. ICO had asserted in its letter of 16 May 2008 that if successful in the litigation it would be in a position to fund the completion of the network. Therefore Ofcom specifically requested evidence of management decisions to show that any damages received would be applied for this purpose. ICO stated that it could not respond to this request on the advice of its US counsel until after the Boeing litigation was concluded. … When Ofcom subsequently wrote to ICO again after the jury’s verdict in the Boeing litigation, Ofcom provided ICO with a further opportunity to answer the question. ICO replied that the trial was still not complete and could not answer specific questions relating to the litigation and the subsequent actions to be pursued by ICO. However ICO stated that once proceedings were completed, its Board would be informed and decide on the way forward. …

106. Although ICO has been awarded damages, it is unclear whether any proceeds of this settlement, following the exhaustion of all appeal processes, would be used for completing and bringing into operation of the ICO-P network or whether they might instead be used to fund ICO’s other business requirements or returned to shareholders.

107. Ofcom therefore has no evidence on the issue of funding to indicate that ICO’s position is any different from that set out in its filing with the SEC in September 2007, namely that the necessary funding was not in place. Conclusion

108. Ofcom has carefully considered all of the representations and answers to Ofcom’s questions submitted by ICO. Ofcom concludes that it remains the case that there is no evidence of ICO meeting the requirements set out in its letter of 13 December 2006. ICO has provided no evidence of contracts for the completion and launch of the satellites and the funding necessary to finance bringing the ICO-P satellite network into operation by any of the dates it has suggested. ICO’s litigation with Boeing does not alter that position. Having consulted the Secretary of State in accordance with paragraph 12.9 of Ofcom’s Guidance, Ofcom will write to the ITU to cancel the ICO-P filing.” - it had contracts in place for the completion and the launch of the remainder of the ICO-P satellite network; and - it had secured the necessary funding to finance the bringing of the ICO-P satellite network into operation.

Conclusion

[42]Ofcom has refrained from giving effect to the decision pending the determination of the present application for judicial review. The challenge.

[43]On 22nd May 2009 ICO commenced proceedings seeking judicial review of the decision of Ofcom to write to the ITU inviting the ITU to cancel ICO’s assignment registered in the MIFR. On 21st September 2009 Burnett J. granted permission to apply for judicial review.

[44]At the hearing before me the Claimant relied on the following grounds.(1) Ofcom had regard to an irrelevant factor in that it proceeded on the erroneous basis that it had a duty under the ITU regulatory regime to cancel the filing by reason of the delay in bringing the system into full use in the time period specified by Ofcom, alternatively that there was an expectation within the ITU regime that it would cancel the assignment in such circumstances.

(2) Ofcom failed to have regard to relevant considerations, namely (a) The lack of any pressing need to cancel the registration at that time in the absence of any prejudice to third parties; (b) The adverse impact of the decision on ICO; (c) The possibility that the dispute with Boeing might be resolved during the appellate process; and (d) Article 13.6,

(3) The decision was in all the circumstances disproportionate.

[45]Lord Pannick QC, opening the application on behalf of ICO, suggested that there is one essential complaint of which these grounds are different aspects. Ofcom decided to cancel the filing because the ICO-P service was not in operation and it was not satisfied that ICO would be able to provide the service in the foreseeable future. While ICO accepts that these clearly were relevant factors, it submits that OFCOM proceeded on an erroneous view of the ITU regime and also failed to take account of the broader picture. Ground 1.Ofcom had regard to an irrelevant factor in that it proceeded on the erroneous basis that it had a duty under the ITU regulatory regime to cancel the filing by reason of the delay in bringing the system into full use in the time period specified by Ofcom, alternatively that there was an expectation within the ITU regime that it would cancel the assignment in such circumstances.

[46]Lord Pannick QC submits that in taking its decision Ofcom acted on a misunderstanding of the ITU regime in that it considered that it was under an obligation to cancel the registration, alternatively that there was an expectation that it would cancel the registration by reason of the delay in bringing the system to full use within the time period specified by Ofcom.

[47]In this regard ICO relies on the following statements in the first witness statement of Mr. Charles Alexandre Jenne, a Director of Spectrum Policy at Ofcom:(1) “There is no provision for the continued inclusion of an assignment in the MIFR to be influenced by whether or not other identified satellite systems wish to use the same or similar assignments other than the obligation to respond to co-ordination requests in respect of junior filings i.e. those submitted at a later date. Instead, the ITU regime sets out clear criteria for an assignment to be entered into the MIFR and for it to remain there. In particular, the ITU process for co-ordination and notification for registration of non-planned satellite systems (which includes all mobile satellite networks such as ICO-P) is based on frequency co-ordination between systems that are required to be brought into use within a predefined period from the initiation of the process. This is 7 years from the date of the initial application for the majority of cases. If the assignment has not been brought into use within this period it cannot be recorded in the MIFR, even if it has been fully co-ordinated. Equally if an assignment has been brought into use, it is required to remain in use in accordance with the registered characteristics in order to maintain its status in the MIFR; if it does not do so, the national administration is expected to cancel the assignment in order to fulfil its obligations under the ITU Constitution (Article 44(2)) that radio frequencies and associated orbits must be used rationally, efficiently and economically.” (at paragraph 11).

(2) “Finally I would note that there is always an inherent risk assumed by commercial operators in the satellite industry that if an operator’s planned frequency assignments are not fully brought into use within the regulatory period established by the ITU (generally 7 years) then those assignments will be cancelled by the ITU. Indeed, it is not unusual for this to happen in spite of initial investments being made albeit not on this scale. The position is no different if the conditions for maintaining a filing imposed by the national administration are not met. In either case the obligation to cancel assignments in such circumstances in the general interest of the system is not over-ridden by considerations of bad luck, or force majeure that may have affected an individual satellite operator.” (at paragraph 30) A duty under the ITU regime to cancel the assignment.

[48]It is common ground between the parties that the ITU regime does not impose a duty on national administrations to cancel assignments in the circumstances of the present case. However, I am totally unpersuaded that the passages relied on by ICO support the view that Ofcom considered that the ITU regime imposed such a duty. The final sentence of paragraph 30 of Mr. Jenne’s first witness statement refers to two cases in which there is an obligation to cancel assignments. When that sentence is read in the context of the entire paragraph it is clear that the first such situation under consideration is that in which an operator’s planned assignments are not fully brought into use within the regulatory period, which is generally seven years but was nine years in the case of the ICO-P assignment. There was no dispute before me that under the ITU regime (Article 11.44 of the Radio Regulations) failure to give such notification leads automatically to cancellation. However, in the present case we are not concerned with the situation before such notification is given. The second case contemplated by the final sentence of paragraph 30 is where the conditions for maintaining a filing imposed by the national administration are not met. Here, Mr. Jenne is addressing requirements imposed by the national regulator and not any obligation arising within the ITU regime. In this regard, it should be noted that there has been no challenge in these proceedings to the entitlement of the national regulator to impose requirements going beyond those of the ITU regime. Accordingly, nothing in paragraph 30 indicates that it was the view of Ofcom that there was a duty under the ITU regime to cancel the assignment in the circumstances of the present case.

[49]Furthermore, for reasons which will be developed subsequently, I consider that the decision was made solely on the basis of a failure to meet the requirements imposed by Ofcom, the national regulator, in accordance with its own procedures and guidance. An expectation within the ITU regime that the assignment would be cancelled.

[50]ICO’s alternative case is that Ofcom proceeded on the mistaken basis that there is an expectation within the ITU regime that an assignment will be cancelled in the circumstances of the present case. Here, Ofcom does not resile from the statement at paragraph 11 of Mr. Jenne’s first witness statement that if an assignment has been brought into use it is required to remain in use in accordance with the registered characteristics and if it does not do so the effect of the ITU regime is that the national administration is expected to cancel the assignment. Ofcom submits that Mr. Jenne is plainly right to say that where a filing is not in use and there is no realistic prospect that it will be, there is an expectation both under the ITU regime and under the national Guidance that the filing will be cancelled. ICO submits that there is nothing in the documents establishing the ITU regime to support the view that there is such an expectation of cancellation. In this regard ICO points to Article 13.5(b) of the ITU Radio Regulations which states that whenever a recorded assignment has not been brought into regular operation or is not being used in accordance with its notified characteristics the Bureau, subject to agreement of the national administration, shall either cancel, or suitably modify, or retain the basic characteristics of the entry. The existence of these options, ICO submits, is inconsistent with any expectation of cancellation.

[51]In relation to this issue both parties rely on further material.

[52]Ofcom relies on a circular letter sent on 1st May 2009 by the Director of the ITU-BR to the administrations of all Member States of ITU. This letter post-dates the decision but is, nevertheless, evidence of the attitude of the ITU to unused frequency assignments. It states that it has become increasingly difficult for national administrations to obtain suitable new GSO positions and frequencies in both the planned and non-planned satellite services and fully to co-ordinate them. It also notes that some unused frequency and GSO resources remain recorded in the MIFR. It then states:

“The Radiocommunication Bureau therefore now feels obliged to request all administrations to review the use of their recorded satellite networks and urges them to remove unused frequency assignments and networks from the Master Register. In parallel with this request and in line with the well known principles which the membership has deemed important enough to embed in the ITU Constitution, Convention and Radio Regulations – calling for the equitable, efficient and rational use of the limited spectrum/orbit resources and their use to the minimum extent essential to meet requirements – the Bureau also considers itself bound to have recourse to certain provisions of the Radio Regulations (e.g. No. 13.6) and where appropriate, to enforce the removal of unused frequency assignments from the MIFR when their use has not been suspended in accordance with the Radio Regulations.”

The letter also states that the Bureau intends to undertake similar action at its own initiative in application of the relevant provisions of the Radio Regulations in appropriate cases. It urges all administrations “to co-operate in these efforts that employ the scrupulous and diligent application of the principles and provisions of the ITU Constitution, Convention and Radio Regulations, in order to reduce, and to the extent possible remove, the obstacles impeding the development and bringing into operation of new satellite networks.” The letter is signed by Valery Timofeev, Director, ITU-BR, and requests that any queries be sent to Mr. Yvon Henri at the ITU-BR.

[53]Contrary to the submission of Lord Pannick QC, I consider that this letter is concerned with the situation following notification of coming into use as it is only at that point that frequencies are assigned. Furthermore, I do not read this letter as limited to GSO satellite systems but as applying generally to spectrum and orbit resources.

[54]For its part, ICO relies on an email from Dr. Toure, the Secretary General of ITU to Mr. Craig McCaw a major investor in ICO. This email was sent at 18:42 on 11th May 2010, the evening before the start of the hearing before me and has the subject heading “The UK Trial”. It reads:

“Dear Craig, We at ITU remain fully committed to promote the MSS industry and with regard to the ICO-P, I have been informed by Director BR, Mr. Valery Timofeev of the BR’s position which has been communicated to the UK administration i.e. “that ICO-P network was brought into operation by the launch of the first satellite in the orbit and must be kept in the MIFR until it is fully operational.”

According to my knowledge there was no new requests from UK after our last exchange of correspondence with this explanation. (sic) Be assured that the BR will not change this view even if we received a new request from the Administration. As you know we are trying our best to clean the MIFR from the paper satellites but this particular case would be an action in completely opposite direction if we implement any type of cancellation. We have also received communication from other administrations expressing their desire to avail MSS from the ICO-P hence we would like to see ICO-P become fully operation ASAP.” Regards, Dr. Hamadoun I. Toure Secretary General” “that ICO-P network was brought into operation by the launch of the first satellite in the orbit and must be kept in the MIFR until it is fully operational.” Dr. Hamadoun I. Toure Secretary General”

Dr. Hamadoun I. Toure

[55]This document was produced at the hearing. Mr. Christopher Vajda QC, who appears for Ofcom, was shown this document for the first time at court shortly before the hearing. Ofcom immediately caused a search to be made for any communication from the ITU to Ofcom including the statement quoted in Dr. Toure’s email. Later that day Mr. Vajda told the court that Ofcom had been unable to find any record of having received any such letter and, indeed, that there had been no correspondence between Ofcom and ITU in relation to the ICO-P network since 26th January 2004 when Ofcom sent to ITU a letter confirming that the ICO-P system had come into operation.

[56]Lord Pannick relies on Dr. Toure’s email as confirming that the ITU scheme does not include any expectation of cancellation in the present circumstances. He submits that this e mail and the statement allegedly made to Ofcom by the Bureau, i.e. that the ICO-P network must be kept on the MIFR until it is fully operational, are totally inconsistent with the suggestion that there is any expectation of cancellation.

[57]At the end of the second and final day of the hearing before me, 13th May 2010, both parties indicated that they wished to make further enquiries. I invited them to make written submissions in relation to the results of those enquiries. This set in course something of a paper chase. Since the hearing Ofcom has provided extensive disclosure to ICO and I have received further submissions from Ofcom dated 19 May 2010 and 10 June 2010 and from ICO dated 21 May 2010 and 28 June 2010.

[58]Ofcom made further enquiries of Dr.Toure by e mails dated 12th and 13th May 2010. Ofcom pointed out that it had no record of having received the communication referred to in the e mail of 11th May and asked when and to whom it was sent, the form of communication and requested copies of the entire communications. On 16th May Dr. Toure replied in the following terms:

“I am a bit surprised to receive these sorts of questions from you. It looks like you are engaging ITU in a Law Suite and you should know well the procedures to do so. (sic) I would rather suggest that your administration settle these cases in a amicable manner within ITU. We have a long history of resolving these matters in the best interest of all parties.”

A further request dated 17th May received the following response from Dr. Toure on 18th May:

“I am suggesting to both Ofcom and ICO to cancel any court litigation and come to ITU to find a workable solution. There are real sulutions (sic) that are internationally agreed within ITU and I believe it is a waste of time and money to go through this. The BR has been in touch with Ofcom to try to give the right interpretation of the rules and procedures and they can still do it. I am copying Director of BR who is ready to assist if required by both parties.”

In written submissions dated 19th May 2010 counsel for Ofcom observed that Dr. Toure had not provided the information requested. Furthermore, they noted the statement in the e mail of 18th May 2010 that the BR had been in touch with Ofcom to try to give the right interpretation of the rules and procedures but stated that Ofcom had no knowledge of any such communication.

[59]Meanwhile, ICO was also making enquiries of the ITU. On 13th May ICO wrote to Mr. Yvon Henri, Head of the Space Services Department at the ITU-BR asking for clarification. Mr. Henri replied by e mail dated 13 May 2010 stating:

“[C]larification has been given in the past to the UK Administration on BR application of the notion of bringing into use of non-GSO constellation back at the time of bringing into use of the ICO-P system (i.e. one satellite operating in all notified frequency bands was sufficient to consider the bringing into use of a constellation; this was consistently applied to all type of non-GSO constellations). Clarification was also orally mentioned to Ofcom regarding the cancellation of satellite network and the necessity for such cancellation to be taken into account by the BR, that the notifying administration states clearly that the operation of the satellite network to be suppressed has been switched off.”

In response to a further request, Mr. Henri stated in an e mail dated 19th May that the communications had been with Mr. Stephen Limb at Ofcom in February/March 2009 and an individual at the United Kingdom Mission to the United Nations in Geneva.

[60]By letter to Ofcom dated 21st May, ICO requested disclosure of(1) all communications between its employee Stephen Limb (and anyone else in Ofcom) and the ITU-BR for relevant material relating to the cancellation of the ICO-P filing; and

(2) all communications between Ofcom and the UK Mission for relevant material relating to the cancellation of the ICO-P. This resulted in extensive disclosure by Ofcom on 9th June. However, Ofcom does not accept that the documents disclosed are relevant to any issue that the court has to decide. In addition, witness statements by Bob Phillips, Stephen Limb and Polly Weitzman were lodged. It is convenient to refer in turn to the specific documents on which ICO now relies.

[61]The first communication relied on by ICO is an e mail dated 1st June 2006 from Stephen Limb, Manager, International Frequency Co-ordination, Space Services at Ofcom to Bob Phillips, Head of the Space Services Unit of Ofcom. Mr. Limb informs Mr. Phillips that he asked Mr. Henri what the BR would consider sufficient for bringing into use a NGSO system comprising a constellation of more than one satellite in one or more orbital planes and records the answer of Mr. Henri: “He said that, as far as Radio Regulations were concerned, it was enough to have one satellite in orbit which is capable of operating on all the frequency assignments contained in the notice. This does not mean that the system has to provide a service, just that it is capable of operating.” (BP1 p. 1) ICO relies on this as consistent with Dr. Toure’s e mail of 11 May 2010 where he stated that that the ICO-P network was brought into operation by the launch of the first satellite in the orbit. However, to my mind it does not provide any assistance in relation to cancellation of a registration.

[62]ICO then relies on an e mail dated 6th June 2008 from Mr. Phillips to Mr. Jenne (BP1 p. 58) in which Mr. Phillips reports on an update he has received from Mr. David Riley of the UK Mission at Geneva. Mr. Riley had spoken with Mr. Malcolm Johnson, a director of ITU, and Mr. Henri, the Head of Space Services Department of ITU. The report relating to the conversation between Mr. Riley and Mr. Henri reads as follows: “(a) the proposed cancellation of the ICO-P filings is not unusual – it is part of a standard procedure either initiated by the BR or by administrations; (b) the BR was already receiving letters from the ITU members re the cancellation; (c) these claim that the ICO-P system is in use; (d) the role of the BR is to implement the regulations (including the rules of procedure) not to interpret the regulations; (e) if the BR feels unable to resolve the issue, it may pass to the Radio Regulations Board (RRB) for consideration; (f) if the RRB were to make a ruling, that decision could be challenged and the matter would then probably be referred to the next WRC for resolution.” (original emphasis) The disclosure also includes (BP2, pp.4-5) Mr. Phillips’s contemporaneous note of his conversation with Mr. Riley which is consistent with the e mail.

[63]In his first witness statement Mr. Phillips gives an account of the background to these documents. He states that Ofcom only learnt of the conversation between Mr. Riley and Mr. Henri as a result of Mr. Riley’s subsequent e mail. It appears that Mr. Riley informed Mr. Phillips that certain national administrations had written to Dr. Toure claiming that the ICO-P system was in operation and being used. Mr. Phillips states that this was not a surprise to him because Mr. Riley, on the basis of a conversation with Mr. Johnson, had already made him aware that ICO was circulating a letter to other administrations and encouraging them to sign and submit it to the ITU. Mr. Phillips states that Ofcom has never seen this correspondence. He further states that Mr. Henri made a reference to RR13.6 but did not elaborate further.

[64]This conversation between Mr. Henri and Mr. Riley is likely to be the oral clarification regarding cancellation referred to by Mr.Henri in his e mail of 13th May 2010. However, I note that the records of that conversation, at second hand, do not include any reference to any requirement that the notifying administration should state clearly that the operation of the satellite network to be suppressed has been switched off.

[65]ICO submits that Mr. Henri was here referring to the fact that as the ICO-P system was in use, a number of other national administrations would oppose cancellation of the filing. Furthermore, ICO submits that this e mail made clear that cancellation of the ICO-P registration would be unlikely to be straightforward and might involve consideration by the RRB or the WRC.

[66]Mr. Henri seems to have raised the possibility of the matter being considered within the ITU by the RRB and possibly the WRC. However, from this account it does not appear that Mr. Henri expressed any view as to whether it would be appropriate for the ITU-BR to cancel the filing if requested to do so by Ofcom. Indeed he is recorded as observing that it is the role of ITU-BR to implement the Radio Regulations not to interpret them.

[67]On behalf of Ofcom it is submitted that the procedures referred to by Mr. Henri would not be applicable in this case as the issues are not based on any dispute between the United Kingdom national administration and another national administration.

[68]Thirdly, ICO relies on an e mail from Mr. Jenne to Mr. Phillips, among others, dated 19th March 2009. Mr. Phillips had communicated to Mr. Jenne and others information he had received from Mr. David Riley who had received feedback from Mr. Malcolm Johnson, a director of ITU, after a meeting with Mr. Kapila in Geneva. Mr. Phillips had stated in his e mail:

“Lastly, Malcolm indicated that if the UK could demonstrate that the ICO-P satellite was no longer operational then the Radio Regulations Board would confirm that the filing should be cancelled. David wasn’t certain if this point was raised by Kapila or was Malcolm’s comment.”

In his response Mr. Phillips observed: “I also note Malcolm’s implication that the cancellation would need to get RRB approval and that this would be forthcoming [only, by implication again] if we are able “to demonstrate that the ICO-P filing was no longer operational” [presumably to their satisfaction]” (original parentheses)

[69]ICO submits that Mr. Johnson was stating the ITU position that so long as the one ICO-P satellite remained operational, the RRB would not consent to a request by Ofcom to cancel the ICO-P filing. It submits that this is consistent with the indication by Mr. Henri but goes further in that it sets out the position of the RRB.

[70]It is clear from Ofcom’s evidence and submissions that Ofcom does not agree with the views expressed. Moreover, Mr. Phillips states in his witness statement that Mr. Malcolm Johnson is the Director of ITU-T, which is responsible for the management of activities leading to development of standards for international telecommunications, and that he has no role in the ITU-BR which is responsible for the administration of satellite filings. Mr. Phillips also observes that in a number of the exchanges with the UK Mission to the United Nations, Mr. Johnson appears to be expressing opinions expressed to him by Mr. Kapila of ICO. On behalf of ICO it is submitted that Mr. Johnson was restating and developing the position already outlined by Mr. Henri of the ITU-BR. ICO also points to Dr. Toure’s e mail of 11th May 2010 as supporting the views expressed by Mr. Johnson. The further submissions of ICO.

[71]In the light of these further documents Lord Pannick submits that it is plain that there was no expectation under the ITU regime that Ofcom would cancel the ICO-P filing notwithstanding the fact that only one satellite under the filing was operational. He submits that it is open to the court to conclude that Ofcom erred in taking into account an irrelevant consideration in treating itself as bound or encouraged by the ITU Regime to cancel the ICO-P finding. He submits that it is open to the court to find that this view is wrong in principle because, under the ITU regime, cancellation is inappropriate where a satellite continues in operation and wrong in fact as the interventions by ITU before and after the taking of the decision demonstrate.

[72]He further submits that the documents now disclosed demonstrate that Ofcom failed to take into account a relevant consideration namely the statement of ITU policy by Mr. Johnson, a Director of ITU, to the UK Mission and thence to Ofcom that the ICO-P filing should not be cancelled where there continued to be an operational satellite.

[73]However, for the reasons set out below, I am unable to accept ICO’s submissions. The basis of the decision.

[74]Ofcom’s Procedures for the Management of Satellite Filings (“the Guidance”) set out the procedures which Ofcom, the national administration with responsibility for ITU filings on behalf of the United Kingdom, will apply in relation to such filings. They set out the regulatory requirements of Ofcom in this regard. To a certain extent the Guidance gives effect to the ITU regime. (See e.g. paragraphs 2.45 – 2.49). However, the guidelines also go beyond the requirements of the ITU regime in that they impose additional regulatory requirements. In this regard I draw attention, in particular, to paragraph 5.3 which expressly states that in addition to the requirements of Resolution 49, Ofcom requires commercial information from applicants for the purposes of due diligence in order to be satisfied that a proposed satellite network has an adequate financial backing. The due diligence requirements set out at section 5 of the Guidance are Ofcom’s due diligence requirements. Section 5 imposes milestone requirements and progress monitoring. In particular, paragraph 5.9 provides that once the assignment is recorded in the register, the operator must provide Ofcom with the yearly reports covering the assignment. These reports must set out the status of the implementation of the assignment and whether it is operating in accordance with its recorded characteristics and its business plan. In the event that Ofcom finds that the operator is not meeting these requirements Ofcom may move to the application of the provision set out in section 12 of the Guidance.

[75]Section 12 of the Guidance is entitled “Cancellation, relinquishment and reassignment by Ofcom of UK satellite networks filings.” Paragraph 12.7 provides that, if in Ofcom’s opinion there is insufficient evidence of progress against the milestone commitments, Ofcom will consult with the relevant operator and provide the operator with an opportunity to remedy the situation within a specified timeframe. Paragraph 12.8 states that Ofcom would expect that if the operator fails to remedy the situation within the specified timeframe Ofcom may cancel the filing or may seek to re-assign it to another operator.

[76]There has been no challenge in these proceedings to the Guidance. In particular, it has not been suggested that the regulator is not entitled to impose requirements on applicants and operators exceeding those under the ITU regime.

[77]The procedure followed by OFCOM in the case of ICO-P was precisely that set out in the Guidelines. The two requirements imposed by OFCOM in its letter of 13th December 2006 were requirements which OFCOM was entitled to impose in accordance with the Guidelines.

[78]On its face, the decision of 24th February 2009 is based entirely on non-compliance with these requirements imposed by Ofcom pursuant to its Guidelines. The reasoning of the decision and, in particular, the operative section at paragraphs 102–108 focus on non-compliance with the requirements which have been lawfully set under the Guidelines.

[79]After addressing the ITU regime under the sub heading “Legal Context” the decision turns to “UK procedures governing the management of satellite filings”. In this section particular reference is made to paragraph 12.7 of the Guidance. After a section on European Regulation, the decision sets out in chronological form the extent of ICO’s non-compliance with the milestones set in accordance with the Guidance. At paragraph 58 the decision records the requirements imposed on ICO by the letter of 13th December 2006. The following sections address ICO’s failure to meet those requirements. (See, for example, paragraph 87). At paragraph 102 the decision returns to the requirements imposed by Ofcom and then considers in turn whether each of the requirements has been met before coming to a conclusion at paragraph 108.

[80]I consider therefore that it is apparent from the decision itself that its basis was quite clearly the failure of ICO to meet either of the requirements set out in Ofcom’s letter of 13th December 2006. There is nothing in the decision to support the view that Ofcom considered that under the ITU regime it was obliged to cancel the filing or that there was an expectation that it would do so, or that any such thinking played any part in the decision process.

[81]Ofcom is the body charged with the responsibility of taking decisions in relation to the cancellation of a United Kingdom satellite filing. It is required to do so in accordance with its own procedures and guidance and I am satisfied that that is what it has done in this case. Expanded reasons in support of the decision.

[82]In the alternative, Lord Pannick submits that the passages in the first witness statement of Mr. Jenne to which he draws attention are an attempt by Ofcom to provide further reasons for its decision and that where such further or expanded reasons advanced in support of a decision reveal a flawed approach on the part of the decision maker a Claimant is entitled to rely on this as invalidating the decision. Here he relies a number of authorities including R v Northwest Lancashire Health Authority ex parte A

[2000] 1 WLR 977

, 992E; R v Director of Public Prosecutions, ex parte Manning

[2001] QB 330

; R (London Fire and Emergency Planning Authority) v Secretary of State for Communities and Local Government

[2007] LGR 591

[83]In this regard Lord Pannick points in particular to paragraph 9 of Mr. Jenne’s first witness statement which appears under the main heading “a. ICO’s reliance on the fact that no other party is being displaced, disturbed or inconvenienced by the maintenance of the ICO-P filing” and reads as follows:

“9. ICO has suggested that the fact that at the time the Decision was made there was no other identified operator being displaced, disturbed or inconvenienced is a relevant consideration as to whether it should be allowed to maintain its ICO-P filing. This submission misunderstands the basis of the Decision.”

This is then followed by two side headings:

“(1) Nature of the ITU regime for satellite filings” and “(2) The position of other satellite operators wishing to use the frequencies”

. Paragraph 11 appears in the section under the first heading. Paragraph 30 appears in a later section of the witness statement under the main heading “b. Nature and scale of ICO’s investment in the ICO-P system.”

[84]To my mind, a fair reading of Mr. Jenne’s first witness statement and an examination of the relevant passages in their context make entirely clear that Mr. Jenne is responding to the arguments advanced on behalf of ICO in its Summary Grounds of Claim. (See, for example, paragraph 48.) In these passages Mr. Jenne was not attempting to explain or to supplement the basis of the decision. On the contrary, he is describing the operation of the scheme. The status of the statements emanating from the ITU.

[85]It appears that the statements emanating from the ITU on which ICO relies were made against the background of extensive lobbying on the part of ICO. Ofcom contends that that lobbying extended to members of the ITU and its Secretary General as well as the Ambassador and staff at the UK Mission. For present purposes, I am willing to accept that this does not necessarily make them unreliable. I accept for present purposes the submission of ICO that there is nothing illegitimate in making representations to the ITU and that there is no evidence that, as a result of such representations by ICO, the ITU Director and Secretary General were in some way suborned and no longer capable of stating an independent view.

[86]However, I have other concerns about these statements emanating from ITU on which ICO now relies. They are vague and imprecisely expressed. They originate in conversations or in brief, relatively informal e mails. The accounts placed before the court are often at second or third hand. Some are based on implication. I note that Mr. Henri of the ITU-BR is not reported in the e mail of 6th June 2008 as expressing an opinion in relation to the cancellation of the filing. Moreover, it is far from clear that such opinions as are expressed are the considered position of the organisation as opposed to the view of individual officers, however senior, or have been formed on the basis of knowledge of all material facts. It is difficult to regard them as definitive statements of policy or position made on behalf of the ITU. Furthermore, they are difficult to reconcile with the relevant ITU instruments. In this regard, I note that the test applicable under RR 13.6(b) is whether the “assignment has not been brought fully into regular operation in accordance with the notified characteristics … or is not being used in accordance with those characteristics.” Similarly, I have difficulty in reconciling the statements on which ICO relies with the letter of 1st May 2009 which is undoubtedly a statement of a policy position adopted by the ITU.

[87]In all the circumstances, I am not satisfied that the statements on which ICO seeks to rely are authoritative statements of the institutional view of the ITU. The meaning and effect of non-implemented international instruments.

[88]The dispute between the parties as to the meaning and effect of the instruments creating the ITU regime gives rise to a question of law of some difficulty. The ITU is an international organisation created by treaty. At the hearing I raised with counsel the question whether, having regard to the decision of the House of Lords in R (Corner House Research) v Director of the Serious Fraud Office

[2009] 1 AC 756

, it was appropriate for this court to rule on the meaning and effect of a treaty establishing an international organisation and the various instruments entered into on the international plane by Contracting States establishing the ITU regime, in circumstances where these have not been implemented into domestic law and their meaning and effect are disputed.

[89]In Corner House the Director of Public Prosecutions claimed that his decision not to prosecute was in accordance with Article 5 of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. In the event it was not necessary for the House of Lords to decide the question whether a mistaken understanding of a non-implemented treaty provision could found a judicial review. However, both Lord Bingham and Lord Brown addressed the issue.

[90]Lord Bingham described as “problematical” the Claimant’s submission that it was open to the domestic courts to interpret the non-implemented treaty provision and, if the Director’s interpretation were found incorrect, to quash the decision based upon it (at paragraph 43). He then observed:

“Whether, in the event that there had been a live dispute on the meaning of an unincorporated provision on which there was no judicial authority, the courts would or should have undertaken the task of interpretation from scratch must be at least questionable. It would moreover be unfortunate if decision-makers were to be deterred from seeking to give effect to what they understand to be the international obligations of theUKby fear that their decision might be held to be vitiated by an incorrect understanding.”

(at paragraph 44.)

Lord Brown expressed his concerns in the following terms:

“Although, as I have acknowledged, there are occasions when the court will decide questions as to the state’s obligations under unincorporated international law, this, for obvious reasons, is generally undesirable. Particularly this is so where, as here, the contracting parties to the Convention have chosen not to provide for the resolution of disputed questions of construction by an international court but rather (by article 12) to create a Working Group through whose continuing processes it is hoped a consensus view will emerge. Really this is no more than an echo of para 44 of Lord Bingham’s opinion. For a national court itself to assume the role of determining such a question (with whatever damaging consequences that may have for the state in its own attempts to influence the emerging consensus) would be a remarkable thing, not to be countenanced save for compelling reasons.”

(at paragraph 65) He later observed:

“It simply cannot be the law that, provided only a public officer asserts that his decision accords with the state’s international obligations, the courts will entertain a challenge to the decision based upon his arguable misunderstanding of that obligation and then itself decide the point of international law at issue.”

(at paragraph 67) and went on to propose that “… in this particular context the “tenable view” approach is the furthest the court should go in examining the point of international law in question …”(at paragraph 68) 92. One solution might be for the domestic courts, in recognition of the limits of their competence to provide a fully authoritative ruling on the point, the limits of their competence and domestic constitutional arrangements to rule on the subject-matter in question and the dangers posed to the national interest by them ruling definitively on the point at all, either to decline to rule or to allow the executive a form of “margin of appreciation” on the legal question, and to examine only whether a tenable view has been adopted on the point of international law (rather than ruling on it themselves, as if it were a hard-edged point of domestic law). (at p. 406)

[92]There are, undoubtedly, circumstances in which the courts of England and Wales will decide questions as to the extent of the obligations of the United Kingdom or, indeed, other States under treaties which have not been implemented into domestic law. (See, for example, J H Rayner (Mincing Lane) Limited v Department of Trade and Industry

[1990] 2 AC 418

per Lord Oliver at pp. 500-501; Occidental Exploration and Production Company v. The Republic of Ecuador

[2005] EWCA Civ. 1116

.) Thus, as Lord Pannick points out, in R v. Secretary of State for the Home Department, ex parte Launder

[1997] 1 WLR 839

and R v. Director of Public Prosecutions, ex parte Kebilene

[2000] AC 326

domestic courts decided the extent of the United Kingdom’s obligations under the European Convention on Human Rights before it was given effect in domestic law by the Human Rights Act 1998. In R (Barclay) v. Lord Chancellor

[2009] UKSC 9

;

[2009] 3 WLR 1270

Launder and Kebilene were accepted, on the basis of a concession, to be good law. However, Launder and Kebilene were treated in Corner House as exceptions to the general rule (Lord Brown at paragraph 65) and justified as cases in which there was no live dispute over the provisions of international law in issue or where there was a body of Convention jurisprudence on which the national court could draw in deciding the issue before it (Lord Bingham at paragraph 44 and Lord Brown at paragraph 66).

[93]Lord Pannick submits that the present case is to be distinguished from Corner House because the decision maker is not suggesting that it has acted in accordance with international law; rather it has based its decisions on a mistaken view of international law and so has acted by reference to irrelevant considerations. As explained earlier in this judgment, I do not accept the premise. However, in any event, I do not see that the distinction proposed provides any relief from the difficulty. In either case, to the extent that the issue before the court requires it to decide the disputed question of the effect of the ITU regime the objections identified in Corner House apply.

[94]To my mind, the present case provides a compelling example of the difficulties and the undesirability of a domestic court expressing a concluded view on a disputed point as to the meaning and effect of non-implemented instruments governing a regime established by an international organisation. It will be apparent from the documents referred to above that widely different views are held as to the consequences which should follow under the ITU regime in circumstances where, as in the present case, a number of years after its registration, an assignment has not been brought into regular operation in accordance with its notified specification. That is a live dispute as to the rights and duties of the 191 national administrations which participate in the ITU regime. Moreover, there is provision within the ITU regime for dispute resolution, although the question whether that would be applicable in the circumstances of the present case is itself apparently in dispute. A further difficulty in the present case is that the statements emanating from various officers of the ITU referred to above would, given their quality and characteristics, hardly be an appropriate basis for the task of resolving the issue. However, that apart, it would not be appropriate for this court to embark on such an undertaking for the policy reasons given by Lord Bingham and Lord Brown in Corner House. This court is not in an appropriate position to determine the issue for all those subject to the ITU scheme. Given the dispute between the parties as to the effect of the ITU regime, it would not be appropriate for this court to go beyond the “tenable view” approach in examining the point of international law in question.

[95]In the present case, I consider for the reasons stated above that Ofcom was not influenced by its view as to the ITU regime in coming to its decision. Nor did it subsequently seek to justify its decision on that basis. However, in any event, I consider that the view taken by Ofcom that there is an expectation under the ITU regime that in circumstances such as the present the registration will be cancelled is a reasonably tenable view. I find support for that view in Article 44(2) of the ITU Constitution, in RR 13.6(b) and in the object and purpose of the ITU scheme for the allocation of frequencies. Moreover, further support for that view is provided by the letter of the Director, Radiocommunication Bureau of 1st May 2009, which I consider to be a formal statement of policy on behalf of the ITU.

[96]Accordingly, for all these reasons I reject the submission that Ofcom in taking its decision was influenced by an irrelevant consideration. Failure to take account of a relevant consideration.

[97]It is convenient to address at this point a further submission of ICO founded on the further disclosure. ICO submits that Ofcom failed to take into account a relevant consideration namely the statement of ITU policy that the ICO-P filing should not be cancelled where there remained an operational satellite. This is based on the statement attributed to Mr. Malcolm Johnson, a Director of the ITU, in the e mail from Mr. Jenne to Mr. Phillips dated 19th March 2009. (See paragraph 68, above). This statement appears to accord with the statement of Dr. Toure in his e mail dated 11th May 2010 “that ICO-P network … must be kept in the MIFR until it is fully operational”. However, the views attributed to Mr. Johnson are based largely on implication. Moreover, the e mail of 19th March 2009 is subject to the shortcomings identified at paragraph 86, above. Ofcom maintains that these statements are incorrect and inconsistent with Article 13.6(b) of the Radio Regulations which addresses situations in which a recorded assignment has not been brought into regular operation in accordance with the notified required characteristics or is not being used in accordance with those characteristics and which, on its face, does not impose any such obligation. I note that neither Mr. Johnson nor Dr. Toure cite any authority for the proposition. In the circumstances, I consider that the view taken by Ofcom is a reasonably tenable view and that it cannot be criticised for failing to take account of an obligation which does not appear in any of the documents establishing the ITU scheme of radio frequency allocation and for which, so far as I am aware, ICO did not contend prior to the receipt of the e mail dated 11th May 2010 from Dr. Toure. Conclusions on Ground 1.

[98]My conclusions on Ground 1 may therefore be summarised as follows: (a) Ofcom did not proceed on the basis that it had a duty under the ITU regulatory regime to cancel the filing by reason of a delay in bringing the system into full use within the time period specified by Ofcom. (i) Ofcom does maintain that there is an expectation under the ITU regime that a filing will be cancelled where it is not in use and there is no realistic prospect that it will be within a reasonable timescale. (ii) However, that was not a basis of the decision. (iii) Furthermore it has not been advanced by Ofcom to explain or supplement the decision. (iv) The statements emanating from ITU on which ICO relies are not an authoritative statement of the position of the ITU. (v) In any event, Ofcom’s view of the effect of the ITU instruments is a reasonably tenable view. This court should not go further in ruling on the meaning or effect of the instruments establishing the ITU regime. (c) For these reasons Ground 1 fails. Ground 2. OFCOM failed to have regard to relevant considerations, namely (a). The lack of any pressing need to cancel the registration at that time in the absence of any prejudice to third parties, (b). The adverse impact of the decision of ICO, (c). The possibility that the dispute with Boeing might be resolved during the appellate process, (d). Article 13.6.

[99]ICO complains that Ofcom’s approach has been that ICO’s failures to comply with the milestones and requirements set by Ofcom of themselves justify cancellation. ICO contends that Ofcom has failed to recognise that the ITU procedures and Ofcom’s statutory duties require consideration by Ofcom of all relevant factors.

[100]In this regard ICO draws attention to the following matters (1) Ofcom’s letter to ICO dated 16th April 2008 containing the provisional decision states at paragraph 90:

“… the aim of the filing system is to ensure that the most efficient use is made of spectrum which is a scarce and valuable resource. The RA and Ofcom Guidance set out a scheme which is appropriate and necessary to meet this objective. In this context Ofcom has set lawful and appropriate requirements with which ICO has failed to comply. Cancellation of filing as a result of ongoing failure to comply with those requirements is therefore no more than is necessary to secure the objective which they were designed to achieve.” (At paragraph 90). The Annex to the decision letter incorporated this response of 16th April 2008. (2) In the first consultation letter to the Secretary of State dated 14th March 2008 Ofcom states at paragraph 26: “Given the continued lack of evidence of any realistic prospect of ICO bringing the ICO-P satellite network into commercial operation by any of the dates it has suggested, we have concluded that we have no alternative but to cancel the ICO-P frequency assignments, thereby removing this obstacle to other operators making productive use of this spectrum.”

(at paragraph 26). (3) The second consultation letter to the Secretary of State dated 6th February 2009 includes a similar passage at paragraph 14:

“In view of ICO’s failure to operate in accordance with its recorded characteristics and business plan, the continued lack of evidence of progress in bringing the ICO-P system into operation and the absence of any evidence that the ICO-P network will be brought into commercial operation within a reasonable timescale, we have concluded that we have no alternative but to cancel the ICO-P frequency assignments.” (4) In its Summary Grounds for Contesting the Claim Ofcom states at paragraph 36: “… the question of whether or not there is evidence of other persons wishing to use the assignments granted to ICO-P is irrelevant to the question of whether Ofcom, consistently with the Guidance, was entitled to cancel the assignments because of ICO’s failure to comply with Ofcom’s requirements.” (5) Mr. Jenne states in his first witness statement: “Ofcom’s procedures in its Guidance similarly do not make the absence of disruption to another identified operator a factor in deciding whether to cancel an assignment. This has always been the approach (as far as we understand it) underlying the ITU regime.”

(at paragraph 12). “…the level of investment is not a criterion for whether or not a filing should be withdrawn if it is not being used in accordance to its notified characteristics.” (at paragraph 25).

[101]It is convenient to address these matters under the separate headings. (1). The lack of any pressing need to cancel the registration in the absence of any prejudice to third parties.

[102]In his second witness statement Mr. David Bagley, the Senior Vice President of Global Corporate Development of ICO Global Communications (Holdings) Limited, maintains that notwithstanding the fact that ICO has cleared the S-Band globally by the process of co-ordination it carried out prior to filing, no other operator, so far as ICO is aware, has sought to use these frequencies as opposed to indicating an interest in using them. He maintains that Ofcom’s statutory duties require Ofcom to consider the actual competing demand for the relevant spectrum before cancelling the filing of an operator. He submits that it must be relevant to the question of the efficient and economic use of the spectrum whether any other operator is likely to take the place of the cancelled operator. Mr. Bagley argues that there is no prospect of either Inmarsat or Solaris, the winners in the EU competition for the allocation of frequencies in the S-Band, being able to provide a full commercial service on the S-Band for at least three years. He refutes Mr. Jenne’s suggestion that the mere existence of the ICO-P filing may dissuade an operator from commencing the expensive co-ordination process and maintains that there is ample space in the S-Band for serious operators in proper co-ordination pursuant to the ITU regime. He argues that no operator is anywhere close to being in a position to utilise the substantial amount of frequencies still available for use on ICO-P’s assigned frequency.

[103]ICO places great emphasis on the fact that no other satellite operator has yet approached ICO-P to seek co-ordination. Mr. Jenne offers a number of possible explanations. He suggests that the fact that one operator has a notified assignment in the MIFR can act as a deterrent to other operators pursuing frequency co-ordination and that this has a chilling effect. Furthermore, he suggests that other potential operators may not have approached Ofcom to request co-ordination on the basis that they consider that if the ITU regime operates correctly the ICO-P filing be cancelled so that they will not be required to do so. However, to my mind this debate misses the main point which is that under the ITU scheme and under the system established by the Guidance there is no entitlement to maintain a filing if it is not being used in accordance with its notified specification and that those responsible for junior filings should not be subjected to the need to co-ordinate with a filing which is not being used in any real sense.

[104]ICO also relies on the statement at paragraph 14 of Annex 2 to the decision which states:

“There is no dispute that currently no one else (within the EU) is being displaced, disturbed or inconvenienced. But that does not mean that ICO is entitled to maintain its assignment.”

However, that statement was expressly made in response to paragraph 13(2) of ICO’s letter of 9th June 2008 which makes the point that until the EU MSS selection process takes place the only occupant of the spectrum is the ICO-P system. That was undoubtedly true and, read in this context, the statement at paragraph 14 of Annex 2 to the decision provides no further support for ICO’s case.

[105]ICO’s submission that, before Ofcom can move to cancellation of a filing, it must investigate and ascertain the impact of the maintenance of the filing on other parties and take that into account in reaching its decision finds no support in the instruments establishing the ITU regime or in the Guidance. The ITU system proceeds on the basis that unused filings for frequencies and orbital locations that could be used by third parties will be cancelled. The ITU scheme is designed to ensure that radio frequencies are used in a rational and efficient manner and hence that they are brought into regular use and not simply left on the register unused. In this way the potential effect on third parties is built into the way in which the ITU provisions operate. Nothing in any of the ITU instruments suggests that it is necessary or appropriate to consider the existence or extent of any prejudice to third party applicants or operators before moving to cancellation. On the contrary, the procedures set out in the ITU instruments are inconsistent with any such investigation or assessment.

[106]Similarly, the Guidance, the legality of which has not been challenged in these proceedings, provides no support for the view that an investigation and assessment of the likely impact of the maintenance of a filing on third parties is either necessary or appropriate. Here again, the scheme of the Guidance is inconsistent with any such investigation or assessment.

[107]If filings such as the ICO-P filing continue to be maintained on the MIFR despite not being in operation in accordance with their notified specification, their presence necessarily requires more junior filings to plan for and to co-ordinate with them. That in itself is a significant effect. A system which permits filings to be left on the MIFR, in circumstances in which the expert national regulator has determined that the relevant filing is not in operation and that there is no realistic prospect that it will be within a reasonable timescale, is not an efficient system.

[108]In any event, I am persuaded that such a requirement would be entirely unworkable and would undermine the operation of the ITU regime and the Guidance. It would simply not be feasible for Ofcom to carry out an assessment of the prospects for all the other relevant satellite filings and potential filings. Ofcom has no legal powers to require the necessary information to be supplied. The ITU regime makes no provision for the supply of such information. The scale of the task is demonstrated by the evidence of Mr. Jenne that the ITU information system (a system recording the status of co-ordination and notification of frequency assignments for existing and planned satellite networks) shows that as at 16th October 2009, in respect of the 2 GHz MSS bands, a total of 715 networks have initiated the advance publication stage of which 118 networks have either initiated or completed the co-ordination stage.

[109]For these reasons I consider that the question of possible prejudice to third parties was not a legally relevant factor.

[110]Ofcom’s decision to cancel the ICO-P filing was not dependent on the position of other satellite operators wishing to use the frequencies. Nor has Ofcom sought to justify its decision by reference to the actual effect of the maintenance of the filing on identified third parties. (See the first witness statement of Mr. Jenne at paragraph 14.) Nevertheless, it is appropriate to record that Ofcom did draw the court’s attention to certain specific matters.(1) By letter dated 17th January 2006 Ofcom notified ICO that it had received a formal question concerning the ICO-P filings and the need for other satellite networks to co-ordinate with ICO-P in light of the “externally visible state of the ICO operations”. The identity of the person posing the question is confidential beyond the fact that it was one of the ten interested 2 GHz MSS operator parties identified in the CEPT ECC Report of July 2006.

(2) On 10th January 2007 Parliamentary questions were tabled to the Secretary of State for Trade and Industry as to what steps he had taken to ensure that the S-Band spectrum available for public safety in the United Kingdom would be used by entities capable of fully exploiting its value to the public and inviting him to make a statement on legacy claims on parts of the S-Band spectrum. The questions were answered by Ofcom, as the independent communications regulator, by letter dated 30th January 2007. That letter stated, inter alia, that the ICO-P system had not yet been brought into commercial operation. It further stated that as a result of these developments ICO has claimed that it has acquired legacy rights to approximately 40% of the available bandwidth. “Based on information made available by ICO, Ofcom had proposed that this claim should be supported. Following a further review of the available evidence, Ofcom has concluded that a potential claim by ICO to the assignment of the 2 GHz legacy spectrum is in doubt.”

(3) On 30th June 2008 the European Parliament and the Council adopted Decision No. 626/2008/EC which creates a Community procedure for the common selection of operators of mobile satellite systems that use the 2 GHz frequency band, including the frequencies within the ICO-P filing. On 13th May 2009 the European Commission adopted Decision 2009/449/EC selecting Inmarsat Ventures and Solaris Mobile Limited and authorised them to use those frequencies. ICO was unsuccessful in that competition. ICO is currently challenging both decisions before the General Court of the European Communities inter alia on the ground that they fail to respect the legacy rights arising from the ICO-P filing with the ITU. (2). The adverse impact of the decision on ICO.

[111]ICO submits that OFCOM wrongly failed to have regard to a relevant consideration in failing to take account of the nature and scale of ICO’s investment in the ICO-P system which would be lost if the filing were cancelled. In this regard Mr. Bagley, in his second witness statement, explains that ICO made an enormous investment in excess of $3 billion in the development of the ICO-P network. He states that, when completed, the satellites will still be fit for the purpose for which they were originally constructed. He also explains that the major part of the ground network system remains viable and valuable.

[112]There is nothing in the instruments establishing the ITU regime nor in the Guidance which supports the view that the impact of cancellation on an operator is a relevant consideration. Indeed, I have the greatest difficulty in seeing how the need to take account of such a consideration could be accommodated within those schemes. So far as the ITU regime is concerned, this operates by the application of objective criteria. For example, under the ITU scheme failure to make notification that a system has been brought into use within the stipulated period has the effect of automatic cancellation of the allocation. Similarly, the Ofcom Guidance establishes an objective scheme designed to achieve the efficient use of spectrum, in accordance with the ITU scheme and in the public interest.

[113]In the present case, Ofcom was entitled to impose on ICO the requirements set out in the letter of 13th December 2006. Ofcom provided ICO with ample opportunity to meet those requirements. Thereafter, the undoubted failure of ICO to comply with either of those requirements entitled Ofcom to cancel the filing without any need to consider the financial impact on ICO of doing so. The fact that ICO had invested immense sums into a filing which was not being used in accordance with its specification could not provide any immunity from cancellation. On the contrary, to attach any weight to such considerations would be inconsistent with the object and purpose of the ITU scheme and Ofcom’s regulatory scheme and might frustrate their objectives. (3). The possibility that the dispute with Boeing might be resolved during the appellate process in California.

[114]On 21st October 2008 the jury in the proceedings brought by ICO against Boeing awarded ICO damages of $371 million, with a further award of punitive damages in the sum of $236 million. On 31st October 2008 the jury awarded a further $100 million in interest. Boeing is appealing this ruling. ICO failed in its claim for specific performance and is not cross-appealing on this point. At the date of the decision Ofcom had been made aware by ICO of the jury’s award and that Boeing’s appeal would take approximately two years.

[115]ICO accepts that the only entity capable of completing the manufacture of the satellites to complete the ICO-P system and launching them into orbit is Boeing. In opening this application before me Lord Pannick explained that ICO’s position is that it may be able to resolve the matter by a negotiated agreement with Boeing whereby Boeing would complete and launch the satellites.

[116]Against this background ICO criticises Ofcom for failing to take into account the possibility that ICO may be able to resolve its dispute with Boeing.

[117]I am satisfied that Ofcom did in fact give careful consideration to the possible outcome of the dispute with Boeing up to the date of its decision on 24th February 2009. In that decision it sets out at paragraphs 82 – 101 its exchanges with ICO in relation to the Boeing litigation. Furthermore in the operative section of the decision at paragraphs 102 – 108 it assesses the information provided by ICO in relation to that litigation.

[118]Moreover, as ICO accepts, such a settlement involving completion of the original contract by Boeing remains no more than a possibility. The highest Mr. Bagley is able to put the matter is to say (at paragraph 51 of his second witness statement):

“Though ICO has not secured an agreement at this time to complete and launch the ten satellites, most of which are substantially complete, this remains an attainable goal in light of the fact that ICO won the trial and continues to carefully store the satellites.”

[119]This issue was properly considered by Ofcom which was clearly entitled to come to its conclusion (at paragraph 104) that there was no evidence that ICO would be able to conclude the relevant contracts.

[120]In any event, as Mr. Vajda points out, the requirement in relation to contracts for the completion and launch of the satellites was only one of the requirements imposed by Ofcom. The other was a requirement in relation to the funding necessary to finance the bringing of the ICO-P network into operation. Here again, Ofcom was clearly entitled to come to its conclusion that its requirement had not been met. It had shown considerable forbearance to ICO and had, in effect, granted extensions of time to permit ICO to produce the evidence it required. However, there is no dispute that ICO failed to do so.

[121]In this regard, it is significant that in its letter to Ofcom dated 16th May 2008 ICO stated that:

“The outcome of the trial or our ongoing mediation sessions … could fundamentally alter the current situation. In particular, Boeing may agree to finish and launch the satellites or be ordered to do so, and the large cash damages ICO is seeking would further allow ICO to succeed in completing its MEO system.”

[122]However, on 1st August 2008 Ofcom sent a letter to ICO with a list of questions relating to the Boeing litigation. In particular, Ofcom asked for details and evidence of any management decisions to show that the proceeds of any settlement would be used for the completion of the construction and deployment of the remaining ICO-P satellites by either Boeing or another manufacturer. In response ICO provided limited answers and referred to a letter from their attorneys which stated that they could not authorise their client to elaborate beyond these answers until the case had been concluded. Similarly, when asked to supply an updated business plan ICO stated that it would do so after the litigation. Following the jury’s verdict Ofcom wrote to ICO on 12th November 2008 requesting that it now answer the questions set out in its letter of 1st August 2008 and inviting ICO to submit any further information it wished Ofcom to take into account before making its final decision. ICO responded on 3rd December 2008 that it remained unable, on the advice of counsel, to answer those questions.

[123]Thus, ICO repeatedly failed to provide to Ofcom documentary evidence of management decisions to show that the proceeds of any settlement would be used for the completion of the construction and deployment of the remaining ICO-P satellites by either Boeing or another manufacturer. While certain of the failures to provide information sought by Ofcom may possibly be justified on the basis that the matters remain sub judice, there can have been no sensible objection to the provision of the specific information requested in relation to the use of the proceeds of any settlement for the completion and deployment of the ICO-P satellites.

[124]This failure assumes a particular importance when considered in conjunction with ICO’s statement to the SEC on 30th September 2007 (cited at paragraph 74 of the decision) that “we may or may not proceed with the development of our physical regulatory MEO assets.” (The text is set out at paragraph 35 above.)

[125]Ofcom as a specialist regulator was clearly entitled to come to the conclusion that its requirement in relation to the funding had not been met. This provides an independent basis on which OFCOM was entitled to make its decision to cancel the filing. (4). Article 13.6.

[126]ICO argues that Ofcom failed to take account of a relevant consideration in that it overlooked the fact that Article 13.6, Radio Regulations contemplates a range of courses of action of which cancellation is only one. This submission is considered in the context of proportionality later in this judgment. For the reasons set out there, I conclude that Ofcom has not failed to have regard to a relevant consideration. Conclusion on Ground 2.

[127]For these reasons, I reject the submission that in coming to its decision Ofcom failed to take account of relevant considerations. Ground 3. The decision was in all the circumstances disproportionate.

[128]Section 3(3), Communications Act, 2003 provides that in performing its duties under Section 3(1) Ofcom must have regard in all cases to, inter alia, “the principles under which regulatory activity should be … proportionate, consistent and targeted only at cases in which action is needed”. On this basis both parties accepted before me that proportionality was an appropriate standard of review in this case.

[129]The Claimant had previously advanced under this ground an argument that it enjoyed both absolute and contingent property rights and that Ofcom had failed to comply with Article 1, Protocol 1 of the European Convention on Human Rights. However, in the course of argument Lord Pannick accepted, rightly in my view, that this line of argument adds nothing to his ground on proportionality. If Ofcom did not act disproportionately, reliance on Article 1 Protocol 1 adds nothing to the Claimant’s case.

[130]In Huang v Secretary of State for the Home Department

[2007] 2 AC 167

at paragraph 19 Lord Bingham adopted the formulation of the Privy Council in de Freitas v Permanent Secretary of Ministry of Agriculture, Fisheries, Lands and Housing

[1999] 1 AC 69

, 80 of the questions generally to be asked in deciding whether a measure is proportionate:

“whether: (i) the legislative objective is sufficiently important to justify limiting a fundamental right; (ii) the measures designed to meet the legislative objective are rationally connected to it; (iii) the means used to impair the right or freedom are no more than is necessary to accomplish the objective.”

Lord Bingham added to these requirements a further requirement to balance the interests of society with those of individuals and groups.

[131]The judgment of Barling J. in Tesco v Competition Commission

[2009] CAT 6

at paragraph 137 is to very similar effect. He identified the requirements of proportionality as follows:

“These are that the measure: (1) must be effective to achieve the legitimate aim in question (appropriate), (2) must be no more onerous than is required to achieve that aim (necessary), (3) must be the least onerous, if there is a choice of equally effective measures, and (4) in any event must not produce adverse effects which are disproportionate to the aim pursued.”

[132]On behalf of the Claimant Lord Pannick accepts that this court’s role is confined to one of review and that, moreover, it is appropriate to accord the specialist regulator a discretionary area of judgement. (Wilson v First County Trust Limited (No. 2)

[2004] 1 AC 816

at paragraph 70 per Lord Nicholls of Birkenhead; R (Nicholds) v Security Industry Authority

[2007] 1 WLR 2067

at paragraph 85-87.) Furthermore, in the particular circumstances of this case it is appropriate to have regard to the particular expertise of Ofcom in the regulation of telecommunications.

[133]In the present case the Ofcom Guidance is directed at achieving an orderly and efficient allocation and use of telecommunications frequencies. Section 1 explains that spectrum and orbital positions are valuable and limited resources which are in great demand. If they are not used efficiently, competition, innovation and growth in communication services will be hindered to the detriment to consumers and businesses. Furthermore, spectrum has to be managed and planned in order to avoid interference. The general policy of the Guidance, which was summed up by Mr. Vajda as “use it or lose it”, is to my mind clearly a legitimate objective. It is not suggested here that the policy of removing filings which are not operated in accordance with their notified characteristics is not in the public interest. Moreover, the decision of which complaint is made in this case, i.e. the decision to cancel a filing, is rationally connected with that objective.

[134]The real issue between the parties here is whether the decision to cancel the filing is more than is necessary to accomplish the objective.

[135]In support of its case that cancellation of the filing is disproportionate, ICO submits that the decision was not “targeted only at cases in which action is needed” and that cancellation was not the least onerous option, the benefits of cancellation being outweighed by the costs. In this regard ICO relies on a range of matters which may be considered in turn.(1) ICO quite correctly makes the point that we are not concerned here with a “paper filing” which never reaches the register but with a registered filing. Moreover, ICO has one satellite in orbit. However, the fact remains that the filing in question has never been brought fully into operation in accordance with its notified characteristics and the ICO-P network has never been brought into full commercial operation. Many years after the date at which they should have been achieved these objectives have still not been attained. Ofcom was reasonably entitled to come to its conclusion as to the prospects of their being attained in the future.

(2) ICO submits that the delay is not its fault but that of Boeing which has been held liable in the Californian proceedings. However, the essential question for the regulator is whether the filing is being operated in accordance with the notification and, if not, whether the position can be remedied. In this regard Ofcom has been generous in extending time so as to allow ICO to provide evidence that the position can be remedied. In the result, Ofcom was entitled to conclude that there was no evidence of ICO being able to meet the requirements which Ofcom had properly and fairly set.

(3) ICO submits that to cancel the filing would destroy the value of ICO’s investment that is represented by the ICO-P filing. However, as Ofcom points out, that value is dependent, inter alia, on ICO’s ability to maintain the conditions of its filing. More fundamentally, for the reasons set out earlier in this judgment, the impact of the decision on ICO is not a relevant consideration.

(4) ICO submits that to cancel the filing will deter investment by others in innovative satellite technology and infrastructure. However, as Ofcom points out, the whole purpose of the Guidance is to create, in conformity with the ITU regime, a predictable system for the management of satellite filings which will encourage efficient and orderly participation. In this regard I note that paragraph 1.2 of the Guidance expressly refers to innovation and growth in communications services and the extent to which they would be hindered if the spectrum were not used efficiently.

(5) ICO submits that any other operator who now wishes to use the S-Band, especially in the frequencies cleared by ICO, has the very considerable advantage of the work done by ICO in persuading States to shift their usage away from the S-Band or to limit their use of that spectrum so as not to cause harmful interference. This may well be a result of the decision. However, I have difficulty in seeing how this can have any bearing on the proportionality of the decision.

(6) ICO advances a series of arguments to the effect that the decision is disproportionate because the maintenance of the filing would have no immediate effect on other operators. In particular, it maintains that other operators interested in using the system can do so by co-ordinating with ICO and that no other satellite operator has yet approached ICO-P to seek co-ordination. It submits that no other operator is close to providing a service on the S-Band spectrum. However, for reasons set out earlier in this judgment, I do not consider that these considerations assist ICO. The ITU regime requires junior filings to co-ordinate with senior filings. As the experience of ICO itself demonstrates, this can often be a lengthy, expensive and onerous process. However, where there is no prospect of a senior filing being brought into operation in accordance with its notified specification within a reasonable timescale, junior filings should not have to co-ordinate with it.

[136]ICO draws attention to Regulation 13.6(b), Radio Regulations, which refers to possible courses of action other than cancellation, namely a suitable modification or retention of the basic characteristics of the entry. For its part, Ofcom accepts that there are circumstances where a course of action other than cancellation might be appropriate. For example it might be appropriate to retain the basic characteristics of an assignment if a satellite has a temporary problem capable of being rectified in a short time. Similarly, where a satellite is operating in an efficient and sustainable way but using less frequency resources than expected, then it might be appropriate to modify the assignment so as to reflect this. However, as Mr Jenne points out in his second witness statement, where the administration comes to the view that the filing is not being used in any real sense and there is no evidence to suggest that this position will change, then neither retention nor modification would be appropriate. For the same reasons I am unable to accept the submission of ICO that Ofcom failed to have regard to a relevant consideration, namely the range of options indicated by Regulation 13.6(b).

[137]The particular alternative advanced by ICO is that Ofcom should have awaited the outcome of the Boeing litigation to see if matters could be resolved, while requiring ICO, in the interim, to cooperate with any co-ordination requests and not to impede any other operators who wish to move towards provision of MSS services in the S-Band. However, to follow such a course could not possibly have furthered the legitimate objective of the system. On the contrary, OFCOM had good grounds for concluding that the fundamental aim of the system could be achieved only by cancelling the filing. Accordingly, cancellation of the filing was strictly necessary and there was no other effective remedy available. Further submission: transfer.

[138]In its submissions dated 28th June 2010 ICO seeks to argue, for the first time, that Ofcom should, as a matter of proportionality, have considered the option of transferring the ICO-P filing to another national administration. Although ICO appears to have been pursuing this possibility at the level of the ITU, ICO has never previously sought to challenge the decision of Ofcom on this basis. The ground is not pleaded, there has been no application to amend to include a challenge on this ground and the point has not been argued before me. In any event, I consider that any such transfer would be a matter for the ITU; for its part, Ofcom was entitled to approach ICO’s failure to meet Ofcom’s requirements in accordance with the Guidelines and to decide to request the cancellation of the filing.

[139]For these reasons I conclude that the decision was not in all the circumstances disproportionate.

Conclusion

[140]For these reasons the application for judicial review will be refused.

ICO Satellite Ltd, R (on the application of) v The Office of Communications [2010] EWHC 2010 (Admin)

Use of Radio-Frequency Spectrum and of the Geostationary Satellite and Other Satellite Orbits

(b) of the Radio Regulations provides:

Administrative Due Diligence - Resolution 49

The decision

Conclusion

Dr. Hamadoun I. Toure

Lord Brown expressed his concerns in the following terms:

Conclusion

Cited in 3 later judgments