Arqiva Ltd & Ors v Everything Everywhere Ltd & Ors [2011] EWHC 2016 (TCC)

[2011] EWHC 2016 (TCC)

Case No HT 11-102

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

TECHNOLOGY AND CONSTRUCTION COURT

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

Date 26/07/2011

Before

THE HON. MR. JUSTICE RAMSEY

Between

(1) Arqiva LimitedClaimants

(2) Arqiva Services LimitedClaimant

(43 Arqiva No. 2 LimitedClaimant

(4) Arqiva No. 3 LimitedClaimant

(5) Arqiva Aerial Sites PlcClaimant

(1) Everything Everywhere Limited (formerly T-Mobile(UK) Limited)Defendants

(2) Orange Personal Communications Services LimitedDefendant

(3) Orange Holdings (UK) LimitedDefendant

(4) Mobile Broadband Network LimitedDefendant

(5) Hutchison 3G (UK) LimitedDefendant

David Blunt QC, Juliette Levy (instructed by Charles Russell LLP) for Claimants

Alex Charlton QC, Matthew Lavy (instructed by Bird & Bird LLP) for First, Second and Fourth Defendants

Pushpinder Saini QC, Mark Vinall (instructed by Ofcom) for Ofcom, an interested party

Judgment No. 2

The Hon. Mr. Justice Ramsey :

Introduction

[1]In an earlier judgment handed down on 27 May 2011 (

[2011] EWHC 1411

(TCC)) (“the May Judgment”) I dealt with issues of construction and liability in relation to agreements between the claimants (“Arqiva”) and the first defendant, Everything Everywhere Limited (“EE”), formerly T-Mobile (UK) Limited, the second defendant (“OPCS”) and/or third defendant (“OH”) and the fourth defendant (“MBNL”). I refer to the first, second and fourth defendants (EE, OPCS and MBNL) together as the Defendants.

[2]As set out in paragraph 40 of the May judgment there was a particular issue relating to the spectrum licences which had originally been issued to OPCS but which Ofcom had re-issued in the name of EE on 2 March 2011 (“the Spectrum Licence Issue”). Arqiva contended that the transfer of those licences was invalid under section 30 of the Wireless Telegraphy Act 2006 (“the 2006 Act”) whilst the Defendants contended that the licences had been re-issued by Ofcom and they were entitled to rely on the relevant licences. I held that before I decided a matter which related to the exercise by Ofcom of its powers, I should give Ofcom the opportunity to make submissions on the relevant issue.

[3]As a result, Ofcom served a witness statement and have made submissions on the issue, as have Arqiva and the Defendants.

[4]In addition to the Spectrum Licence Issue, there was also an issue concerning rights under the Electronic Communications Code (“the Code Rights Issue”). There were also a number of other matters which arose out of the May Judgment which I also deal with. The Spectrum Licence Issue Background

[5]Prior to July 2010 OPCS held two Public Wireless Network Licences under the Wireless Telegraphy Act 2006. The first, Licence number 249673, was first issued on 14 February 1994. From the documents it is evident that the licence has been in the name of OPCS since 2 August 2005 and revision 13 of this licence in the name of OPCS was issued on 6 January 2011. The second licence was a third generation mobile licence, licence number 207129, which was first issued to Orange 3G Limited on 1 September 2000 and then was issued as revision 1 to OPCS on 3 June 2003. Both those licences were replaced by licences issued on 2 March 2011 in the name of EE. The issue is whether that transfer or re-issue of the licences to EE was valid.

[6]The basis on which the Spectrum Licences were re-issued was dealt with by Mr Martin Ballantyne in his witness statement. He is employed by Ofcom as a legal adviser. He explains that his involvement with the relevant licences in this case started in May 2010 when Graham Louth, Director of Mobile and Auctions in the Spectrum Policy Group at Ofcom, sent an email explaining that he had been contacted by Ms Robyn Durie of EE and asked whether Ofcom would be willing to change the name on various wireless telegraphy licences held by OPCS and T-Mobile (UK) Limited to EE as part of the process of integration of the OPCS and EE businesses.

[7]Another Ofcom colleague, Mr Mason, proposed effecting EE’s request by revoking the OPCS licence and re-issuing it in EE’s name, as had been done on two previous occasions prior to the coming into force of the European Framework and Authorisation Directives.

[8]Mr Ballantyne responded to Mr Mason highlighting concerns that if Ofcom were to revoke and re-issue the licences this would run the risk of an argument that the frequencies had reverted to Ofcom so that Ofcom should re-allocate the licences using an open award process in accordance with Article 5(2) of the Authorisation Directive.

[9]Mr Ballantyne says that he reached the conclusion in June 2010 that it would be open to Ofcom to change the name on the OPCS licence if OPCS became a member of the T-Mobile/EE corporate group and so under common ownership with T-Mobile/EE based on his view that section 30 of the Wireless Telegraphy Act 2006 would not apply to an intra-group transaction. He explains his reasoning, which is adopted by Ofcom, as follows.

[10]He says that section 30 implements Articles 9(3) and (4) of the Framework Directive, which enable Member States to make provision for undertakings to transfer rights to use radio frequencies with other undertakings, in accordance with procedures laid down by the national regulatory authority, Ofcom. He relies on European law, in particular European competition law as derived from Articles 101 and 102 of the Treaty on the Functioning of the European Union (“TFEU”), and says that the concept of an “undertaking” encompasses all of the individual corporate entities within a group. As a result, in his view, the correct interpretation of Article 9(3) of the Framework Directive was that when it refers to the transfer of rights to use frequencies by one undertaking with other undertakings, it is concerned with the transfer of rights to use frequencies as between distinct corporate groups and not as between individual entities within the same corporate group. On this basis he says that Article 9(3) would not be engaged by a transfer within a group because, as Article 9(3) is implemented by section 30 of the Wireless Telegraphy Act 2006, he considered that section 30 should be interpreted purposively in light of, and consistent with, Article 9(3) so that it too would not apply to a transfer from one group company to another. He points out that under section 10 and Schedule 1 of the Wireless Telegraphy Act 2006 Ofcom has powers to vary wireless telegraphy licences and he considered that changing the name on the licence would amount to a variation for these purposes.

[11]Mr Ballantyne says that he gave no further thought to the matter until late January 2011 when Ofcom was contacted by Mr Julian McGougan, Head of Public Policy & Regulatory Affairs at Arqiva to enquire whether Ofcom could confirm that EE and OPCS still held separate spectrum licences. He says that at around the same time, he noticed that in other cases EE had stated that OPCS was a wholly owned subsidiary of EE whilst he still understood that OPCS was an entity outside EE’s corporate group. He says that on 3 February 2011 he therefore sent an email to EE, asking them to clarify the correct position as to the corporate structure. He also said that if it was now the position that OPCS was part of the EE corporate group, then his concerns about changing the name on the licence would not apply.

[12]He says that Ms Durie responded later on 3 February 201l, confirming her understanding that OPCS was a wholly owned subsidiary of EE and asking what was needed to effect the change of name on the licences. Following discussions with Ms Durie she emailed to Ofcom a certified copy of a group structure chart which showed that OPCS was a wholly owned subsidiary of EE. Mr Ballantyne says that, on the basis that OPCS was a wholly owned subsidiary of EE, he was satisfied that Ofcom could change the name on the OPCS licences without constituting a trade for the purposes of the Wireless Telegraphy Act 2006. In order to be able to demonstrate for the purposes of schedule 1 of the Wireless Telegraphy Act that OPCS as the licence holder had requested Ofcom to vary its licence, Ofcom asked for a letter from Ms Durie requesting that the names be changed and on 2 March 2011 EE formally requested the names to be changed. On the same day, Ofcom changed the name on the licences and sent them as varied to EE. Submissions

[13]Pushpinder Saini QC, who appeared with Mark Vinall on behalf of Ofcom, submitted that, in re-issuing the licences in the name of EE, Ofcom was acting within the broad power that it was given under section 10 of and paragraph 6 of Schedule 1 to the 2006 Act to vary the “terms, provisions or limitations” of a licence. He submitted that, for example, if in error Ofcom issued a licence in the name of the wrong party, Ofcom would have the power to vary the name of the holder of the licence to change the name. He submitted that section 30 of the 2006 Act was to be construed in a purposive manner directed by the underlyingEU legislation which it was intended to implement.

[14]He submitted that when section 30(1) refers to a process to be set out in regulations for authorising the transfer of rights and obligations arising as a result of a licence from one “person” to another, there is nothing to affect the operation of the powers given to Ofcom under paragraph 6 of Schedule 1 to the 2006 Act. He also submitted that, when read consistently with the Directive which section 30(1) seeks to implement, the term “person” in section 30(1) can only properly mean an “undertaking” as that concept is understood in Community law. As a result, he submitted that the re-issue of a licence from one group company to another does not come within section 30(1) and is to be dealt with under Ofcom’s general spectrum management functions, which under paragraph 6 of Schedule 1 allow variation to give effect to the change. He said that section 30(1) applies to spectrum trading not to arrangements between companies in the same group. In addition, in this case the European Commission had approved the merger and dealt with the concerns by requiring the merged entity to divest itself of certain spectrum, so that there was no reason for Ofcom to be concerned about dealing with the change by varying the name of the licence holder.

[15]Alex Charlton QC who appeared with Matthew Lavy on behalf of the Defendants submitted that Arqiva’s pleaded case that there had been a transfer under section 30 of the 2006 Act was not correct and on this aspect Arqiva should fail. As submitted by Ofcom, he contended that Ofcom had the right to vary the licence under paragraph 6 of Schedule 1 to the 2006 Act. He also submitted that, as a matter of jurisdiction, Ofcom could have revoked and re-issued the licence under the 2006 Act. Further he submitted that consistent with Article 5 of the Authorisation Directive and Article 9 of the Framework Directive, Ofcom had jurisdiction to change the name under section 1(3) of the Communications Act 2003 (“the 2003 Act”). He submitted that there had been no licence transfer or trade and pointed to the terms of the Deed entered into between EE and OPCS on 1 July 2010 (“the July Deed”) which did not transfer the licence. He said that the re-issue of the licence was an act by Ofcom not a transfer within section 30 of the 2006 Act.

[16]David Blunt QC who appeared with Juliette Levy on behalf of Arqiva submitted that what had happened in this case was a transfer of the licence which was only possible under sections 30(1) and (5) of the 2006 Act but otherwise was void under section 30(4) of the 2006 Act. In this case the transfer was not made under regulations under section 30(1) of the 2006 Act nor in accordance with a provision falling within section 30(5) of the 2006 Act and was therefore void. So far as the other statutory provisions were concerned, he submitted that the change of name could not be made as a variation of the licence or under any other general provision. He submitted that a change in the name of the licence holder was not a variation of the “terms, provisions or limitations” of the licence. He said that to make such a change as a variation was inconsistent with the guidance given by Ofcom in their published documents.

[17]Before I deal with those submissions, it is necessary to set out the relevant statutory provisions which have been relied on in this case. Statutory provisions

[18]There are two relevant European Directives. First there is Directive 2002/21/EC on a common regulatory framework for electronic communications and services (“the Framework Directive”) and, secondly, there is Directive 2002/20/EC on the authorisation of electronic communication networks and services (“the Authorisation Directive”). The Framework Directive

[19]Article 1(1) of the Framework Directive sets out the scope and aim of the Directive in the following terms:

“This Directive establishes a harmonised framework for the regulation of electronic communications services, electronic communications networks associated facilities and associated services. It lays down tasks of national regulatory authorities and establishes a set of procedures to ensure the harmonised application of the regulatory framework throughout the Community.”

[20]Article 2(g) defined “national regulatory authority” to mean “the body or bodies charged by a Member State with any of the regulatory tasks assigned in this Directive and the Specific Directives”. In the case of the United Kingdom Ofcom is the national regulatory authority.

[21]Article 3(1) contained provisions relating to national regulatory authorities and provided:

“Member States shall ensure that each of the tasks assigned to national regulatory authorities in this Directive and the Specific Directives is undertaken by a competent body.”

[22]Article 8 dealt with policy objectives and regulatory principles in relation to the tasks of national regulatory authorities. It provided as follows:

“2. The national regulatory authorities shall promote competition in the provision of electronic communications networks, electronic communications services and associated facilities and services by inter alia: ... (b) ensuring that there is no distortion or restriction of competition in the electronic communications sector; 3. The national regulatory authorities shall contribute to the development of the internal market by inter alia: (a) removing remaining obstacles to the provision of electronic communications networks, associated facilities and services and electronic communications services at European level; 4. The national regulatory authorities shall promote the interests of the citizens of the European Union by inter alia: ... (f) ensuring that the integrity and security of public communications networks are maintained.”

[23]Article 9 dealt with the management of radio frequencies for electronic communication services. It provided as follows:

“1. Member States shall ensure the effective management of radio frequencies for electronic communication services in their territory in accordance with Article 8. They shall ensure that the allocation and assignment of such radio frequencies by national regulatory authorities are based on objective, transparent, non-discriminatory and proportionate criteria. ... 3. Member States may make provision for undertakings to transfer rights to use radio frequencies with other undertakings. 4. Member States shall ensure that an undertaking’s intention to transfer rights to use radio frequencies is notified to the national regulatory authority responsible for spectrum assignment and that any transfer takes place in accordance with procedures laid down by the national regulatory authority and is made public. National regulatory authorities shall ensure that competition is not distorted as a result of any such transaction....”

[24]It can therefore be seen that the Directive provided for the United Kingdom as a Member State to have certain obligations in relation to the allocation and assignment of radio frequencies with Ofcom as a national regulatory authority having certain functions. Importantly, under Article 9(3) and 9(4) it permitted the United Kingdom to make provision for undertakings to transfer rights to use radio frequencies with other undertakingsin accordance with procedures laid down by Ofcom and made public. The Authorisation Directive

[25]The background to this Directive can be seen from the recitals. Recital (12) of the Authorisation Directive provided as follows:

“This Directive does not prejudice whether radio frequencies are assigned directly to providers of electronic communication networks or services or to entities that use these networks or services. Such entities may be radio or television broadcast content providers. Without prejudice to specific criteria and procedures adopted by Member States to grant rights of use for radio frequencies to providers of radio or television broadcast content services, to pursue general interest objectives in conformity with Community Law, the procedure for assignment of radio frequencies should in any event be objective, transparent, non-discriminatory and proportionate. In accordance with case law of the Court of Justice, any national restrictions on the rights guaranteed by article 49 of the treaty should be objectively justified, proportionate and not exceed what is necessary to achieve general interest objectives as defined by Member States in conformity with Community law. The responsibility for compliance with the conditions attached to the right to use a radio frequency and the relevant conditions attached to the general authorisation should in any case lie with the undertaking to whom the right of use for the radio frequency has been granted.”

[26]Recital (22) provided as follows:

“Where the demand for radio frequencies in a specific range exceeds their availability, appropriate and transparent procedures should be followed for the assignment of such frequencies in order to avoid any discrimination and optimise use of those scarce resources.”

[27]Recital (34) provided as follows:

“The objective of transparency requires that service providers, consumers and other interested parties have easy access to any information regarding rights, conditions, procedures, charges, fees, and decisions concerning the provision of electronic communications services, rights of use of radio frequencies and numbers, rights to install facilities, national frequency usage plans and national numbering plans. The national regulatory authorities have an important task in providing such information and keeping it up to date. Where such rights are administered by other levels of government the national regulatory authorities should endeavour to create a user-friendly instrument or access to information regarding such rights.”

[28]Article 5 of the Authorisation Directive dealt with the rights of use for radio frequencies. It provided at Article 5(2) as follows:

“Where it is necessary to grant individual rights of use for radio frequencies and numbers, Member States shall grant such rights, upon request, to any undertaking providing or using networks or services under the general authorisation, subject to the provisions of Articles 6, 7 and 11(1)(c) of this Directive and any other rules ensuring the efficient use of those resources in Accordance with Directive 2002/21/EC (Framework Directive). Without prejudice to specific criteria and procedures adopted by Member States to grant rights of use of radio frequencies to providers of radio or television broadcast content services with a view to pursuing general interest objectives in conformity with Community law, such rights of use shall be granted through open, transparent and non-discriminatory procedures. When granting rights of use, Member States shall specify whether those rights can be transferred at the initiative of the right holder, and under which conditions, in the case of radio frequencies, in accordance with Article 9 of Directive 2002/21/EC (Framework Directive). Where Member States grant rights of use for a limited period of time, the duration shall be appropriate for the service concerned.”

[29]Article 6 dealt with conditions attached to the general authorisation and to the rights of use for radio frequencies and specific obligations. Article 6 (1) stated as follows:

“The general authorisation for the provision of electronic communications networks or services and the right of use for radio frequencies and right of use for numbers may be subject only to the conditions listed respectively in parts A, B and C of the Annex. Such conditions shall be objectively justified in relation to the network or service concerned, non-discriminatory, proportionate and transparent.”

[30]Part B of the Annex provided for “Conditions which might be attached to rights to use radio frequencies” and included the following:

“1. Designation of service or type of network or technology for which the rights of use for the frequency has been granted, including where applicable, the exclusive use of a frequency for the transmission of specific content or specific audiovisual services. ... 4. Maximum duration in conformity with Article 5 of this Directive, subject to any changes in the national frequency plan. 5. Transfer of rights at the initiative of the right holder and conditions for such transfer in conformity with Directive 2001/21/EC (Framework Directive).” 5. Transfer of rights at the initiative of the right holder and conditions for such transfer in conformity with Directive 2001/21/EC (Framework Directive).”

[31]It can be seen that this Directive set out the matters to be dealt with in granting licences and referred, in particular at Article 5(2), to the need to specify whether those rights could be transferred at the initiative of the right holder and under which conditions, in the case of radio frequencies, in accordance with Article 9 of the Framework Directive. Relevance of the Directives

[32]In the case of the United Kingdom, the provisions of the Directives have been given domestic legislative effect by the provisions of the 2003 and 2006 Acts. The function of Directives is helpfully summarised in Mathijsen, A Guide to European Union Law (10th Edition) at 31 to 32 as follows:

“Directives are issued by the Council jointly with Parliament or the Commission. They constitute the appropriate measure when existing national legislation must be modified or national provisions must be enacted, in most cases for the sake of harmonisation. Directives are binding upon the Member States to which they are addressed, as to the results to be achieved. Although this means that Member States are obliged to take the national measures necessary to achieve the results set out in the directive, they are free to decide how they “transpose” this piece of Union legislation into national law. A directive is, for instance, indifferent whether the national measures are administrative, as opposed to legislative, in nature as long as they are binding and as long as they fully meet the requirements of legal certainty. … Furthermore, when implementing the measures transposing the directive, the authorities and courts of the Member States must not only interpret their national law in a manner consistent with the directive, but also make sure that they do not rely on an interpretation which would be in conflict with those fundamental rights or with the other general principles of Union law, such as the principle of proportionality.”

[33]In Alemo-Herron v Parkwood Leisure Ltd

[2010] ICR 793

the Court of Appeal had to consider the relationship between domestic Regulations and a Council Directive. Rimer LJ giving a judgment with which the other members of the Court of Appeal agreed said at [56]:

“As it seems to me, the language of regulation 5(1) and (2) sits harmoniously with that of article 3(1) and gives effect to it. The duty of the domestic courts is to interpret it consistently with article 3(1), the meaning of which is, in the present context to be found in Werhof v Freeway Traffic Systems GmbH & Co KG (Case C-499/04) [2006] ECR I-2397. ... Judge McMullen QC [2009] ICR 703 made the point that TUPE does not include a provision that mirrors article 3(2), which played a material part in the ECJ's interpretation of the limits of article 3(1) . That is literally correct, although TUPE does contain regulation 6, which reflects that (save in the prescribed circumstances referred to) collective agreements are conclusively presumed to be unenforceable, as they were in the present case and probably will be in most cases. Mr Linden did not place any emphasis in his argument on regulation 6 and I would not regard it as providing any basis for a conclusion that, in enacting regulation 5, Parliament intended to do more than implement article 3(1) of the Directive, whose limits the Werhof case has since explained.”

[34]The decision of the Court of Appeal was dealt with in the judgment of the Supreme Court

[2011] UKSC 26

Lord Hope said at [32]:

“It is open to the national court, as the Court of Justice said in para 98 of Lindqvist, to extend the scope of the national legislation implementing the provisions of the Directive to areas not included within its scope, provided that no other provisions of Community law preclude it. In the present context this means that it would be open to the national court to give regulations 5(1) and 5(2) their ordinary and natural meaning so long as there was nothing in Werhof that indicates that it is not open to do so.”

[35]Another principle was established by the European Court in Marleasing SA v. La Comercial Internacional de Alimentacion SA

[1990] ECR I-4135

at paragraph 8:

“...the Member States’ obligation arising from a Directive to achieve the result envisaged by the Directive and their duty ... to take all appropriate measures, whether general or particular, to ensure the fulfilment of that obligation, is binding on all the authorities of Member States, including, for matters within their jurisdiction, the Courts. It follows that, in applying national law, whether the provisions in question were adopted before or after the Directive, the national court called upon to interpret it is required to do so, as far as possible, in the light of the wording and the purpose of the Directive in order to achieve the result pursued by the latter...”

[36]As a result, the provisions of the 2003 and 2006 Acts must be construed in a manner consistent with the Directives and so that the interpretation does not conflict with the Directives or with any other general principles of European law.

[37]I now turn to consider the legislation in the 2003 and 2006 Acts. The Communications Act 2003

[38]Section 1 of the 2003 Act deals with the functions and general powers of Ofcom. At section 1(3) it provides:

“OFCOM may do anything which appears to them to be incidental or conducive to the carrying out of their functions, including borrow money.”

[39]The general duties of Ofcom are dealt with in section 3 and sections 3(1) and (2) provide as follows:

“(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; ...” (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; ...”

[40]Section 168 of the 2003 Act dealt with spectrum trading and subsequently became section 30 of the 2006 Act. In the explanatory notes prepared by Government in respect of section 168, the following explanation is given:

“372. This section gives Ofcom a power to make regulations authorising the holder of a wireless telegraphy licence or the holder of a grant of RSA to transfer the rights and obligations under their licence or grant of RSA to another person. This will enable the development of a secondary market in licences and grants of RSA where this is permitted by OFCOM ... 376. This section implements Article 9(3) and (4) of the Framework Directive and condition 5 of Part B of the Annex to the Authorisation Directive.”

The Wireless Telegraphy Act 2006

[41]Part 1 of the 2006 Act sets out provisions about radio spectrum and sections 1 to 6 set out the radio spectrum functions of Ofcom.

[42]Under section 9(1) it provides:

“A wireless telegraphy licence may be granted subject to such terms, provisions and limitations as OFCOM think fit.”

[43]In relation to terms, provisions and limitations, section 9(6) provides:

“The terms, provisions and limitations of a wireless telegraphy licence granted to a person must not duplicate obligations already imposed on him by general conditions set out under section 45 of the Communications Act 2003...”

[44]Section 9(7) then states:

“In imposing terms, provisions or limitations on a wireless telegraphy licence, OFCOM may impose only those that they are satisfied are- (a) objectively justifiable in relation to the networks and services to which they relate; (b) not such as to discriminate unduly against particular persons or against a particular description of persons; (c) proportionate to what they are intended to achieve; and (d) in relation to what they are intended to achieve, transparent.” (a) objectively justifiable in relation to the networks and services to which they relate; (b) not such as to discriminate unduly against particular persons or against a particular description of persons; (d) in relation to what they are intended to achieve, transparent.”

[45]Under Section 30, dealing with Spectrum Trading it is provided that:

“(1) OFCOM may by regulations authorise the transfer to another person by- (a) the holder of a wireless telegraphy licence, or (b) the holder of a grant of recognised spectrum access, of rights and obligations arising as a result of such a licence or grant.” (4) The transfer of rights and obligations under a wireless telegraphy licence or grant of recognised spectrum access is void except to the extent that it is made- (a) in accordance with regulations under this section; or (b) in accordance with a provision falling within subsection (5).” (a) the holder of a wireless telegraphy licence, or (b) the holder of a grant of recognised spectrum access, of rights and obligations arising as a result of such a licence or grant.” (4) The transfer of rights and obligations under a wireless telegraphy licence or grant of recognised spectrum access is void except to the extent that it is made- (a) in accordance with regulations under this section; or (b) in accordance with a provision falling within subsection (5).”

[46]Section 10 provides that “Schedule 1 (which makes provisions about the grant, revocation and variation of wireless telegraphy licences) has effect.”

[47]Schedule 1 contains the following provisions: (1) At paragraph 6 as to revocation or variation:

“OFCOM may revoke a wireless telegraphy licence or vary its terms, provisions or limitations- (a) by a notice in writing given to the holder of the licence; or (b) by a general notice applicable to licences of the class to which the licence belongs, published in such a way as may be specified in the licence.” (b) by a general notice applicable to licences of the class to which the licence belongs, published in such a way as may be specified in the licence.” (2) At paragraph 8 as to the restriction on powers of revocation and variation: “(1) The terms that OFCOM may include in a wireless telegraphy licence include terms restricting the exercise by them, of their power to revoke or vary the licence. ... (5) Despite any term or provisions included in a wireless telegraphy licence in accordance with this paragraph, OFCOM may at any time by giving the holder of the licence a notice in writing revoke the licence or vary its terms, provisions or limitations, if it appears to OFCOM to be necessary or expedient to do so- (a) in the interests of national security;or (b) for the purpose of securing compliance with an international obligation of the United Kingdom.” (b) for the purpose of securing compliance with an international obligation of the United Kingdom.”

[48]There has been further legislation under the provisions of the 2006 Act.

[49]First, under the Wireless Telegraphy Act 2006 (Directions to OFCOM) Order 2010 the Secretary of State gave directions which included, at Article 7, a direction in relation to Spectrum Trading in these terms:

“OFCOM must exercise their powers under section 30 of the WTA to amend the Wireless Telegraphy (Spectrum Trading) Regulations 2004to make provision to permit the transfer of all or part of the right and obligations arising as a result of 900 MHz, 1800MHz, and 2100 MHz licences from the licensee to another person.”

[50]Secondly, under the 2006 Act Ofcom made the Wireless Telegraphy (Licensing Procedures) Regulations 2010 which dealt with a number of aspects of licensing by Ofcom. Regulation 6 deals with “Particulars of the terms, provisions and limitations of licences” and provided:

“(1) Licences are granted subject to- (a) a limitation as to the type of equipment which is authorised; (b) a limitation as to the circumstances of use; (c) a term providing for the licence to commence on the date of its grant and continue in force until revoked by OFCOM or surrendered by the licensee; (d) terms as to the circumstances in which OFCOM may revoke or vary the licence;... (2)Licences are also granted subject to other terms, provisions and limitations in the case of any particular licence which are contained in the publication Wireless Telegraphy Act Licences (Terms, Provisions and Limitations) 2010 published by OFCOM.” (a) a limitation as to the type of equipment which is authorised; (b) a limitation as to the circumstances of use; (c) a term providing for the licence to commence on the date of its grant and continue in force until revoked by OFCOM or surrendered by the licensee; (d) terms as to the circumstances in which OFCOM may revoke or vary the licence;... (2)Licences are also granted subject to other terms, provisions and limitations in the case of any particular licence which are contained in the publication Wireless Telegraphy Act Licences (Terms, Provisions and Limitations) 2010 published by OFCOM.”

[51]Arqiva sought to rely on Regulation 6(2) and contend that certain provisions in section 2 of Ofcom’s publication Wireless Telegraphy Act Licences (Terms, Provisions and Limitations) 2010 applied to the relevant 2G and 3G licences in this case. Ofcom and the Defendants did not accept this and after the hearing I received further written submissions from the parties.

[52]Having considered those submissions, I have concluded that Ofcom and the Defendants are correct. The provisions of the publications only apply, as Regulation 6(2) makes clear, “in the case of any particular licence”. The fact that the publication only applies to licences specified in that publication, which do not include 2G and 3G licences, is confirmed by section 1 of the publication which states that (emphasis added):

“This publication details the terms, provisions and limitations which apply to each class of licence listed below, and includes sample licences and, where applicable, the terms and conditions booklets with relate to those licences. … The terms contained in the General Licence Conditions Booklet (the “Booklet”) (see section 2, below) are incorporated into and form part of the terms, provisions and limitations of each wireless telegraphy licence to which the Booklet applies. (Each such wireless telegraphy licence is referred to as “the Licence”). …”

[53]As a result, I have not taken account of the terms of the publication when coming to my conclusions.

[54]Thirdly and for completeness, the Wireless Telegraphy (Mobile Spectrum Trading) Regulations 2011 have now been made which, from 4 July 2011, do allow for the transfer of 2G and 3G licences under section 30(1) of the 2006 Act. They however have no effect on the matters which I have to decide. Decision

[55]As identified by Mr Blunt QC there are essentially three aspects to consider. The first is the “variation issue” which is whether the re-issue of the licence by Ofcom on 2 March 2011 was something that they were permitted to do under paragraph 6 of Schedule 1 to the 2006 Act. The second is the “undertaking issue” which is whether section 30 should be read so that it does not apply to transfers between intra-group companies because such companies are not separate economic units but are all part of the same undertaking. The third issue is the “trading issue” which is whether what occurred here was spectrum trading to which section 30 of the 2006 Act applies so that a transfer could only take place, if at all, if permitted under sections 30(1) or (5). The variation issue

[56]Ofcom has wide powers in relation to its functions. As section 1(3) of the 2003 Act states, Ofcom may do anything which appears to it to be incidental or conducive to the carrying out of its functions. In relation to licences then Ofcom has similar wide powers as set out in section 9(1) of the 2006 Act to grant licences, subject to such terms, provisions and limitations as Ofcom thinks fit. Once a licence has been granted, then the powers of Ofcom to deal with that licence are contained in Schedule 1 to the 2006 Act. In particular, paragraph 6 gives Ofcom a power to revoke or vary a licence. In relation to varying a licence, the power is to vary its “terms, provisions or limitations.”

[57]The provisions of the 2006 Act show, as Mr Blunt QC submitted, that a licence is granted to a person subject to terms, provisions and limitations: see sections 9(1) and 9(6). The terms of the 2G and 3G licences originally granted to OPCS show that the licences authorise OPCS to establish, install and use radio transmitting and receiving stations and/or radio apparatus as described in the schedule to the licence, “subject to the terms set out below”.

[58]The issue is whether under the variation provision in paragraph 6 of Schedule 1 to the 2006 Act the identity of the holder of the licence can be changed so that a different person can be substituted as the holder of the licence. In general the party granted rights and obligations under a document, such as a contract, would not be described as a term of the contract or a provision of the contract or a limitation of the contract. Nor do I consider that in this case the name of the holder of the licence can be described as a term or provision or limitation of the licence. I consider that paragraph 6 is directed at varying the terms, provisions and limitations on which a party takes the licence. It seems to me that a change in the identity of the holder of the licence is such a fundamental change that it would require something express to give Ofcom the power to make that change.

[59]This interpretation, it seems to me, is consistent with the terms of the licence which deal with licence variation and revocation separately from changes. Both licences under the heading “changes” say that the licence may not be transferred and say that notice must be given of any changes to the details of the licensee or the address recorded in the licence. Matters of change of company name where the company remains the same registered company or change of address of a company would be administrative changes which do not seem to me to vary the terms, provisions or limitations of the licence although colloquially they may be described as a variation to the licence. Such administrative changes would be the type of matters which would, in my judgment, come within the general power to do anything “incidental or conducive” to the carrying out of their functions under section 1(3) of the 2003 Act. I do not consider that such a general provision could though be relied upon to effect the change of licence holder in this case and Ofcom does not contend otherwise.

[60]Mr Blunt QC referred to the guidance given by Ofcom in a publication “Wireless Telegraphy Act Licensing Policy Manual”, Issue 6 of which was published in January 2007. It stated in section 1, Introduction, that the manual “lays out the provisions of the Wireless Telegraphy Act 2006 and Ofcom’s role in managing the radio spectrum and granting licences under the Wireless Telegraphy Act.”

[61]At Section 7 when dealing with “Persons who may be licensed”, it states:

“Under the terms of the WT Act, the licence is the instrument by which Ofcom authorises the use of radio apparatus to “a person” in a clearly defined way. In legal terms “a person” may be an individual operating a business on their own premises, two or more people acting together in partnership, or a company or an incorporated association.”

[62]In the following paragraphs the manual states that when, for instance, there is a change in partnership, a new licence is required. It states that in relation to licences for companies, thelicence must be held in the full registered name of the company and Ofcom requires the company registration number. It also makes provision for joint ventures to be licensed.

[63]In section 9 of the manual it deals with the question of whether licences can be taken over. It states:

“As outlined in the previous section, Ofcom has introduced procedures for trading the rights of certain licence classes. For classes where trading has not yet been introduced, the following paragraphs still apply. Radio systems may be bought/sold but depending on circumstances may not be re-licensable. The intention to take-over should be notified to Ofcom in advance for a ruling on that point. Frequencies may or may not be re-licensed to a new person/company/other corporate body. There is no obligation on Ofcom to re-licence. Take-overs of radio systems and frequencies are often referred to incorrectly as take-overs of licences. The current arrangement is that the licence is revoked (the licence of the current holder), and a new licence issued by Ofcom for the prospective owner. Because in essence this is a ‘take-over’ of the service, confusion can occur, and on occasion this technicality can be important. It should be noted then, that as the licence is technically revoked and a new one issued, spectrum management policies/requirements may mean that the same (or any) frequencies are not available to the future owner. Accordingly transferability of identical frequency and continuity of technical parameters or equipment in service is not guaranteed (e.g. parameters may need to meet more recent guidelines). However Ofcom generally does undertake to make every attempt to provide authorisation for the same frequency/technical parameters/ equipment in service where possible. The only difference to this ‘take-over’ procedure is where the prospective owner already holds a licence of the same class as that being taken over. If this is the case then the new assignments/service/can be simply added to the existing licence, with no need for an entirely new licence to be issued (although in some cases a new licence will be needed). Again transferability is not guaranteed.”

[64]In relation to licence variations, the manual states at section 15 that: “Ofcom may vary licences from time to time. This may be at the request of the licensee or where Ofcom wishes to make a change. Most customer requests fall into two categories:• Customer Details eg. a request to change the administrative details of the company

• Technical Details eg a request for an additional station or service Licensees must not make changes of any kind that would take them outside the boundaries of the licence unless authorised by a licence variation or new licence. Applications for variations should be made using the appropriate licensing forms or through correspondence. In accordance with a new provision of the Wireless Telegraphy Act, where Ofcom proposes to vary (or revoke) a licence, Ofcom will send a notice to the licensee. This notice may give a month in which the licensee can state any objection or concerns about the proposed change. Ofcom must consider these representations before confirming whether or not the variation will be made.”

• Customer Details eg. a request to change the administrative details of the company

• Technical Details eg a request for an additional station or service

[65]The provisions of the manual confirm the general principle that the name of the licence holder is a unique part of the licence and something which cannot be changed except, for instance, in relation to administrative changes of the details of a company.

[66]In summary therefore I do not consider that the provisions of paragraph 6 of Schedule 1 to the 2006 Act, which permit Ofcom to vary the terms, provisions or limitations of a licence, allow Ofcom to change the identity of the licence holder from one person or legal corporate entity to another person or entity. If that were to be done then, as set out in the manual and as stated by Mr Ballantyne, the process would normally be the revocation of the licence and the re-issue of the new licence but without any guarantee as to transferability. The undertaking issue

[67]This issue is raised by Ofcom and by the Defendants although the approach they took appeared at one stage to be different.

[68]Mr Saini QC submitted, essentially, that the concept of an undertaking in European law is wider than the concept of a company in English law. As a result he submitted that section 30 of the 2006 Act had to be read in the context and so as to be consistent with Articles 9(3) and 9(4) of the Framework Directive. He said that, in accordance with the approach in Alemo-Herron v Parkwood, section 30 should be construed in the light of Articles 9(3) and 9(4). Article 9(3) makes provision for undertakings to transfer rights among one another under domestic law and Article 9(4) makes such transfer subject to Ofcom's supervision. In the light of that, he submitted that it was difficult to see the rationale for applying the provisions of section 30 to trading between companies within the same economic unit which would be treated as an undertaking in European law.

[69]Mr Charlton QC submitted that in construing section 30, the reference to “person” has to take account of the full width of that word in the context of a domestic statute implementing the Framework Directive. He submitted that, in accordance with the approach in Marleasing, Clause 30 had to be construed in the light of Articles 9(3) and (4) so that it achieved the result pursued by the Directive. On this basis the effect of the submission was to read “undertaking” in place of “person”. On this basis he submitted that there was no transfer from one undertaking to another undertaking when OPCS’s licence was re-issued in EE’s name. Further, he submitted that where, as here, the merger had been approved by the European Commission, it would be bizarre if Ofcom could not give effect to what had been approved.

[70]Mr Blunt QC submitted that the use of the word “person” in section 30 of the 2006 Act was not inconsistent with the word “undertaking” in Article 9(3) of the Framework Directive. He submitted that Article 9(3) was not mandatory and that, in any event, it did not say that there was some limitation in terms of undertakings as construed in European competition law. He said that the holder of the licence under section 30 could be an undertaking as could the party who took over the licence. He submitted that it was necessary for there to be a named party as the licensee to be consistent with the provisions of the 2006 Act, including the provisions as to criminal liability. He submitted that there was nothing to prevent named undertakings being the relevant parties but that was not what had happened here.

[71]The starting point for considering this issue is Article 9(3) which, as Mr Blunt QC points out, is not mandatory. I accept that section 30 should be read as being consistent with Article 9(3) as set out in Alemo-Herron. What then is the effect of Article 9(3) referring to Member States being able to “make provision for undertakings to transfer rights to use radio frequencies with other undertakings”.

[72]I also accept that the concept of an undertaking in European law can be wider than the concept of a person in English law. As Mr Saini QC submitted, undertaking has been considered in the context of EU law, in particular, competition law and what are now Articles 101 and 102 of TFEU. He referred to the decision of the European Court in Corinne Bodson v Pompes funèbres des régions libérées SA (Case 30/87) where the court considered a reference from the French Cour de Cassation which raised the question of the applicability of Article 85 of the Treaty (now Article 101 of TFEU). In considering that aspect the European Court said:

“With regard to the applicability of Article 85 to regulations between holders of concession belonging to the same group of undertakings, it must be borne in mind that, as the Court has held (judgment 31 of October 1974 in case 15/74 Centrafarm v Sterling Drug [1974] ECR 1147) that provision is not concerned with agreements or concerted practices between undertakings belonging to the same concern and having the status of parent company and subsidiary, if the undertakings form an economic unit within which the subsidiary has no real freedom to determine its course of action on the market, and if the agreements or practices are concerned merely with the internal allocation of tasks as between the undertakings. It is for the national court to ascertain whether such a situation exists in this case. The mere fact that holders of concessions belong to the same group of undertakings is not decisive in that regard. Account must be taken of the nature of the relationship between the undertakings belonging to that group. In this case, the nature of that relationship is not apparent either from the questions submitted for a preliminary ruling or from other information in the documents before the Court. In particular, it is not apparent that the undertakings pursue the same market strategy, which is determined by the parent company.”

It is for the national court to ascertain whether such a situation exists in this case. The mere fact that holders of concessions belong to the same group of undertakings is not decisive in that regard. Account must be taken of the nature of the relationship between the undertakings belonging to that group. In this case, the nature of that relationship is not apparent either from the questions submitted for a preliminary ruling or from other information in the documents before the Court. In particular, it is not apparent that the undertakings pursue the same market strategy, which is determined by the parent company.”

[73]Mr Charlton QC also referred me to the decision of the European Court in Hydrotherm Geratebau GmbH v Andreoli

[1984] ECR I-2999

where in the context of EU competition law it was stated at [11] that:

“the term 'undertaking' must be understood as designating an economic unit for the purpose of the subject-matter of the agreement in question even if in law that economic unit consists of several persons, natural or legal” and the decision in Viho Europe BV v Commission[1996] ECR I-5457 where the European Court held at [16] that Article 101 of the TFEU did not apply to the behaviour of Parker Pen Ltd and its wholly owned subsidiaries because they were “a single economic unit within which the subsidiaries do not enjoy real autonomy in determining their course of action in the market.”

[74]That however does not seem to me to lead to the conclusion that section 30 must be read so that the word “person” is construed as “undertaking”. The principle of an undertaking, as those decisions concerning competition make clear, depends on whether, for instance, a parent company and a subsidiary are a single economic unit within which the subsidiary has no real freedom to determine its course of action on the market, and if the agreements or practices are concerned merely with the internal allocation of tasks as between the undertakings. Those are relevant considerations when deciding whether, for instance, there are anti-competitive agreements and concerted practices between undertakings.

[75]The present case is concerned with transfers of licences. In the case of section 30 a person includes a natural person, a company, a partnership or joint venture. The statute therefore deals with transfers between undertakings and is consistent with Article 9(3). If the licence is in the names of an undertaking, such as a parent company and a subsidiary which form a single economic unit, then there will be no need for a transfer of the licence. If, however, the licence holder is a parent company and it wishes to transfer the licence to a subsidiary or vice versa, then there will need to be a transfer for the other to become a licence holder and there is no reason why Ofcom should not be involved in the process, as envisaged by Article 9(4). There is no inconsistency between the Directive and the statute.

[76]Accordingly, I do not consider that the concept of an undertaking established in European competition law affects the meaning or effect of section 30 of the 2006 Act by, effectively, meaning that there is no transfer of a licence under section 30 where one company wishes to transfer the licence to another company, even if they are parent and subsidiary in an economic unit. The Trading Issue

[77]Section 30 of the 2006 Act applies to spectrum trading, as stated in the heading. Mr Saini QC submitted that spectrum trading is transferring a licence between two economic units not a transfer between OPCS and EE in this case. He submitted that Articles 9(3) and 9(4) concern only spectrum trading where there is a transfer of rights to use frequencies from one undertaking to another and at the initiative of the former, as stated in Article 5(2). He said that an entirely unregulated private market for spectrum could have undesirable results so that Article 9(4) required Member States to regulate it so that national regulators are aware of what is happening and there is no distortion of competition. He submitted that Article 9(4) was not intended to limit what actions national regulators, as opposed to licence holders, can take in relation to licences, nor was it intended to regulate transactions that take place within a single licensed undertaking. He referred to the explanatory notes to section 168 of the 2003 Act, now section 30 of the 2006 Act, and submitted that the purpose of these provisions was to develop a secondary market in licences rather than to affect Ofcom’s decisions under other powers to vary licences.

[78]Mr Charlton QC submitted that the arrangements between EE and OPCS did not lead to a transfer of the spectrum licences under the July Deed. He submitted that the position was that there was no transfer by OPCS to EE on 2 March 2011 because it was Ofcom who at the request of OPCS, the licence holder, updated the licence into EE’s name.

[79]Mr Blunt QC submitted that what amounted to spectrum trading had to be considered by reference to section 30(4) of the 2006 Act, which referred to atransfer of rights and obligations under a wireless telegraphy licence. He submitted that this is what had happened in this case; there was not simply a name change but an attempted transfer of the rights and obligations of OPCS under the licences to another party, EE.

[80]In any event, Mr Blunt QC submitted that, in a broader sense, what had happened here was a trade. He referred to the July Deed under which the assets of OPCS were transferred to EE and which provided that because it was thought that the transfer of licences was impossible the “legal interest and title in the Radio Spectrum Licences” was an Excluded Asset but that what was transferred was the“beneficial interest in each of the Radio Spectrum Licences provided always that the legal title and legal interest in the Radio Spectrum Licences shall remain vested in the Transferor.” He said that although the consideration for the transfer of the assets was redacted in the copy of the July Deed provided, in evidence it was referred to as billions of pounds. On this basis he submitted that the transfer which had taken place was plainly a trade.

[81]Mr Blunt QC referred to the manner in which matters had been arranged. OPCS was a wholly owned subsidiary of Orange Jersey Limited. The one share in Orange Jersey Limited was then acquired by T-Mobile (UK) Limited, now EE, on 1 April 2010 and so OPCS became a member of the T-Mobile Group. There was then the asset transfer from OPCS to EE under the July Deed.

[82]Mr Blunt QC also referred to the statement in Ofcom’s trading guidance notes where it poses the question:

“What if a company which holds a WT Act licence is taken over by another company?”

It then states:

“A licensee which is a corporate entity and which is subject to take-over by share purchase will not have to notify a transfer to us. However, where a company sells its business, which includes the business relating to the WT Act licence, the licence holder will have to follow the spectrum trading process as set out in these guidance notes in order to transfer the WT Act licences.”

He submitted that this is consistent with his submissions but contrary to what Ofcom did in this case. Otherwise, he submitted that if companies within an economic unit did not have to comply with the requirements section 30 it would be possible to by- pass that procedure by transferring the licence to a single purpose vehicle and then selling that vehicle.

[83]In my judgment the spectrum trading referred to in section 30 of the 2006 Act covers any situation where there is a transfer of rights and obligations under a wireless telegraphy licence. This is also, I note, the position adopted by Ofcom in its publications. In this case the July deed sought to split the legal interest and title in the Radio Spectrum Licences which remained in OPCS from the beneficial interest in each of the licences which was transferred to EE. There was also the letter of 1 July 2010 from OPCS to EE in which Mr Caldwell wrote to Mr Gurdenli, who countersigned the letter, in the following terms:

“Orange shall transfer the Licences to EE as soon as it is able to do so however in the mean time Orange has transferred the beneficial interests in the Licences to EE pursuant to the Asset Transfer Agreement between Orange and EE dated 1 July 2010.”

This shows quite clearly that the arrangements between EE and OPCS included an agreement to transfer the licences to EE. This was all part of the arrangements under the multi-billion pound agreement to transfer assets from OPCS to EE.

[84]There was therefore to be a transfer between the licence holder, OPCS and another person, EE. This took place after Ms Durie of EE had contacted Ofcom and, as recorded in the Ofcom internal email of 23 February 2011, “EE requests that we re-issue the Orange 2G and 3G operating licences in EE’s name”. That was clearly to give effect to the transfer which had taken place under the arrangements by which OPCS and EE had traded the 2G and 3G spectrum licences which were held by OPCS.

[85]In those circumstances, I consider that what happened in this case fell fairly and squarely within the definition of spectrum trading under section 30 of the 2006 Act and that the transfer of the rights and obligations under the licences from OPCS to EE was void. On this basis, as stated by Mr Saini QC and I accept, if the transfer did come within section 30 of the 2006 Act, then any power in paragraph 6 of Schedule 1 to the 2006 Act to vary, could not by-pass the provisions of section 30. Overall conclusion

[86]I can now summarise my overall conclusion in relation to the three overlapping issues relating to Ofcom’s power to vary licences, the concept of an undertaking and the provisions as to spectrum trading.

[87]For the reasons set out above I do not consider that Ofcom had the power under paragraph 6 of Schedule 1 to the 2006 Act to vary the 2G and 3G licences so as to enable them to re-issue those licences in the name of EE rather than OPCS, the name of the original licence holder. There is no general power given to Ofcom to vary a licence to substitute a new person as the licence holder and whilst the provisions of section 1(3) of the 2003 Act may enable administrative changes to be made to licences where company details change, that provision does not enable Ofcom to change the identity of the licence holder to a different company. Ofcom could revoke the licence under paragraph 6 of Schedule 1 to the Act but they would then have to deal with any re-issue in accordance with the provisions of the 2006 Act. That is not something that they did in this case and would not have guaranteed that EE would have received the same licences as were previously held by OPCS.

[88]There is nothing in section 30 of the 2006 Act which conflicts with or is inconsistent with the provisions of Articles 9(3) and 9(4) of the Framework Directive. The provisions of section 30 make provision for “for undertakings to transfer rights to use radio frequencies with other undertakings” and for transfers to take place “in accordance with procedures laid down by the national regulatory authority”, Ofcom. This is not a case where the principles in Marleasing require section 30 to be read so as to achieve a purpose in any Directive which it would not otherwise do. As Mr Saini QC fairly accepted, if I rejected his submissions on the power of Ofcom to vary the licence, section 30 could be properly interpreted as implementing the provisions of Article 9 without any problems.

[89]Whilst in the context of European competition law the concept of an undertaking may lead to certain agreements not falling within Articles 101 and 102 of TFEU, I do not consider that the concept of an undertaking assists where there is a transfer of a licence from one company in a group to another company in the same group. I do not consider that the concept of an undertaking allows companies such as OPCS and EE to transfer licences without complying with the requirements of section 30. In the light of my decision on the powers under paragraph 6 of Schedule 1 to the 2006 Act then absent an ability to transfer the licence under section 30 of the 2006 Act, there would have to be a revocation and re-issue of a licence with the necessary uncertainty that there would be a transfer in this way.

[90]Rather, I consider that what happened in this case was a clear spectrum trade between EE and OPCS and that this falls plainly within the provisions of section 30 of the 2006 Act. As there were, at the time, no operative regulations under section 30(1) authorising the transfer from OPCS to EE and as section 30(5) does not apply, it follows that the purported transfer of the rights and obligations under the 2G and 3G licences from OPCS to EE was void.

[91]The result, in my judgment, is that the re-issue of the 2G and 3G licences in the name of EE was not something that Ofcom was entitled to do under paragraph 6 of Schedule 1 to the 2006 Act. As Mr Saini QC fairly accepted, in any event, in circumstances where there was a spectrum trade, the provisions of paragraph 6 of Schedule 1 could not be used to effect a transfer for which section 30 made provision. As section 30 applied to the circumstances of this case, the purported transfer was void and the re-issue of the licences so as to effect a transfer between OPCS and EE was not something that Ofcom was permitted to do.

[92]As a result, the re-issued licences are not effective to make the transfer by way of a spectrum trade and it follows, in my judgment, that the original 2G and 3G licences in the name of OPCS remain valid. Code Rights

[93]By letter dated 23 June 2011 Arqiva accepted that EE is an “operator” for the purposes of Schedule 2 of the Electronic Communications Code (“the Code”) and accordingly has rights under the Code. At the hearing I made an order that EE’s application for temporary relief pursuant to paragraph 6 of the Code in the Mayor’s and City of London Court should be transferred to the Technology and Construction Court and that I should sit as a County Court Judge to hear it pursuant to section 41(1) of the County Courts Act 1984. Matters arising from the May Judgment

[94]There were a number of matters arising from the May Judgment. They were:(1) Whether I should make the declaration sought under paragraph 105.4 of the Amended Defence and Counterclaim;

(2) Clarification of paragraph 119 of the May Judgment where the second sentence refers to “Whether this engages Clause 28.1 depends, again, on whether OPCS was a Mobile Licensed Operator after 2 March 2011.”

(3) Clarification of paragraph 153 of the May Judgment where I concluded that in relation to Clause 14.1 of the Orange MSSA:

“In this way I consider the arrangements between OPCS and EE involve a sub-licence of the rights granted under the Orange MSSA” and whether there was a finding of breach of Clause 14.1 of the Orange MSSA. (4) In relation to paragraph 83 of the May Judgment where I found that “OPCS was, on any view, an “Other Licensed Operator” until 2 March 2011 because it had the relevant spectrum licences”, Arqiva seek a finding of breach of Clause 20.14 of the Framework Agreement by EE and MBNL. (5) In relation to the paragraph 119 of the May Judgment where I found that “It follows that the 2G roaming which has been carried out by OPCS on EE’s network has been a further consolidation by EE of its Mobile Electronic Communications Network. Whether this engages Clause 28.1 depends, again, on whether OPCS was a Mobile Licensed Operator after 2 March 2011. It is evident that up to that date it was and therefore the roaming carried out up to that date was not something which EE was entitled to do under Clause 28.1. Whether that position continued depends on the validity of the re-issue to or transfer to EE of the original OPCS licence”, Arqiva seek a finding that EE was in breach of Clause 28.1 of the MSSA. (6) With regard to prospective breaches relating to further roaming and RAN consolidation, whether such matters are to be dealt with at the Relief Hearing. Paragraph 105.4 of the Amended Defence and Counterclaim 95. In this paragraph the Defendants, in particular EE, seek a declaration in these terms: “Under the terms of the MSSA and Framework Agreement, Everything Everywhere is entitled (a) to use the spectrum which was formerly licensed to OPCS for its main network and (b) migrate its customers to such network.” 96. Mr Charlton QC submitted that as a result of my findings at paragraph 116 of the May Judgment the Defendants were entitled to the declaration in (b) that EE was entitled to migrate its customers to the network formerly licensed to OPCS. He accepted that the declaration would have to be stated to be “Subject to the provisions of clause 16.5 of the MSSA...” asthe declaration was not intending to deal with the consent required under clause 16.5 of the MSSA. He submitted that whilst Arqiva contended that spectrum was part of a network and that by using what they contend to be OPCS’ spectrum EE would be consolidating its network with an “Other Mobile Network Operator”, such a contention was rejected in paragraph 116 of the May Judgment where it was held the consolidation with which clause 28.1 of the MSSA was concerned was a consolidation of the Unconsolidated Equipment. Accordingly, he submitted that I had determined that use by EE of OPCS’ spectrum is not consolidation contrary to clause 28.1 of the MSSA. 97. Mr Blunt QC submitted that the issue depends on my findings in this judgment and that the term “migrate” is too vague and has no legal definition. He also submits that given the other findings of breach of the MSSA and the FA, I ought not to issue any declarations pending the conclusion of the Relief Hearing. 98. In paragraphs 116 and 117 of the May Judgment I held that: 116 In my judgment given the background to the Suite of Agreements the concern was that EE and H3G should not be permitted to consolidate their mobile electronic communications networks with that of another Licensed Operator and that concern was based on the fact that EE and H3G were consolidating their mobile electronic communications network by using the MORAN system of RAN Share. The focus of the consolidated and unconsolidated network rights concerned the installation, use and maintenance of equipment and facilities at site and the rights to occupy and access each site. I consider that the phrase Unconsolidated Equipment which means Equipment that uses a single set of equipment hardware to provide mobile network services to either EE or H3G “but not both of them”, strongly supports a construction that the concern was use of the equipment by another Licensed Operator. It therefore envisages the use of equipment by that other Licensed Operator. 117 In this case the voice or data traffic of a customer of OPCS would pass through the RAN equipment on its way to the Core Network. In passing through EE’s equipment I consider that the ability of the customer of OPCS to use the Unconsolidated Equipment of EE would amount to consolidation of the network of EE with the network of OPCS. I do not consider that it is necessary for there to be the introduction of new equipment or other physical changes to the RAN. Rather I consider that there is consolidation whenever there is a sharing or combination of networks or any part of them in relation to the equipment which forms part of the RAN. In the case of roaming EE uses its equipment on Arqiva sites to receive and send voice and data traffic to Orange brand customers on the OPCS network. I consider that, in doing so, EE is sharing the EE RAN part of the network. 99. I have come to the conclusion that I should not at this stage make the declaration sought which relates to part of the relief and which needs, in any event, to take account of the provisions of Clause 16.5 of the MSSA. I am not persuaded that on the basis of my findings in paragraph 116, particularly in the light of what I have said in paragraph 117, I should make this declaration part of which relates to the issue I have determined in this judgment. Thus the declaration sought refers to “such network” which on the basis of part (a) of the declaration is EE’s main network which uses the spectrum which was formerly licensed to OPCS. 100. I have come to the conclusion that I should not make the declaration at the present stage of the proceedings and should only consider making any declarations when I look at matters in the round after the Relief Hearing Paragraph 119 of the May Judgment 101. Clarification is sought of paragraph 119 of the May Judgment. I found that “2G roaming which has been carried out by OPCS on EE’s network has been a further consolidation by EE of its Mobile Electronic Communications Network.”

That related to the situation up to 2 March 2011 and I stated that up to 2 March 2011OPCS was a Mobile Licensed Operator. Therefore on that basis up to 2 March 2011 there had been further consolidation by EE of its Mobile Electronic Communications Network with that of OPCS which was an “Other Mobile Licensed Operator.” 102. Under Clause 28.1 EE was not entitled “to consolidate further than as contemplated under this Agreement its Mobile Electronic Communications Network with that of any Other Mobile Licensed Operator” and therefore on the basis of the findings in the May Judgment EE was in breach of Clause 28.1 of the MSSA up to 2 March 2011. Paragraph 153 of the May Judgment 103. In this paragraph I stated that in relation to Clause 14.1 of the Orange MSSA:

“the arrangements between OPCS and EE involve a sub-licence of the rights granted under the Orange MSSA”

. Clause 14.1 states that EE may not...sub-licence the Agreement or the rights granted under it.” 104. However, under Clause 14.3 of the Orange MSSA, it then states that:

“Without prejudice to the generality of General Condition 14.1 above, and for the avoidance of doubt the prohibition on assignment shall include a prohibition on the Client assigning, subletting or sharing any of the Facilities, provided that where the Client is either:- (i) operating a single Telecommunications Service on its own behalf, or on behalf of its Sub-Clients, from the antenna system comprised in the Client’s Equipment; or (ii) operating more than one Telecommunications Service, on its own behalf, or on behalf of its Sub-Clients from the same antenna system comprised in the Client’s Equipment, but within a different frequency allocation; then such use and such Sub-Clients’ services shall not be deemed a breach of General Condition 14.” (i) operating a single Telecommunications Service on its own behalf, or on behalf of its Sub-Clients, from the antenna system comprised in the Client’s Equipment; or (ii) operating more than one Telecommunications Service, on its own behalf, or on behalf of its Sub-Clients from the same antenna system comprised in the Client’s Equipment, but within a different frequency allocation; 105. Therefore whether there is a breach of Clause 14.1 of the Orange MSSA depends also on whether or not one of the two provisions in Clause 14.3(i) or (ii) applies. 106. In relation to Clause 14.3(i), Arqiva submitted that in allowing EE to roam now or in the future or use OPCS’s sites for the purpose of a joint RAN or single network OPCS is and will be operating a single telecommunications service on behalf of both itself and EE and not, as permitted, only on behalf of either itself or a Sub-Client. In relation to Clause 14.3(ii) Arqiva submitted that OPCS is and will be operating more than one telecommunications service on behalf of both itself and EE, and not, as permitted, only on behalf of either itself or a Sub-Client. 107. The Defendants submitted that if OPCS were an MNO providing a roaming service to EE’s customers, it would be doing no more than using the facilities to provide a Telecommunications Service as it is permitted to do. 108. The question is whether EE is a Sub-Client. OPCS has entered into an arrangement allowing the voice and data traffic of EE’s T-Mobile brand customers to use the OPCS equipment which is located at the Station. I do not consider that EE can be described as a Sub-Client. The arrangement between EE and OPCS goes, in my view, well beyond that of a Client and Sub-Client. In those circumstances, the exceptions in Clause 14.3 of the Orange MSSA do not apply and I find that OPCS/OH was in breach of the terms of Clause 14.1 of the Orange MSSA. Paragraph 83 of the May Judgment 109. In paragraph 83 of the May Judgment I found that “OPCS was, on any view, an “Other Licensed Operator” until 2 March 2011 because it had the relevant spectrum licences”

. Under Clause 20.14 of the Framework Agreement it was provided that the grant of rights pursuant to the MSSA “shall not enable the Operator to enter into any arrangement for the carriage (using the licensed frequencies of either T-Mobile or H3G) of voice or data traffic of any Other Licensed Operator for whom the Arqiva Provider provides network infrastructure services”. As I stated in paragraph 81 of the May Judgment it is not the entering into of the arrangement but it is the making use of the sites and other matters for the carriage of voice and data traffic which is not permitted. 110. It follows that there was a breach in this case because, as set out at paragraph 83 of the May Judgment, OPCS was an “Other Licensed Operator” until 2 March 2011 and made use of the sites and other matters for the carriage of voice and data traffic. I do not accept, though, that if after the arrangement was made OPCS ceased to be an “Other Licensed Operator” that would be irrelevant. In such circumstances, I do not consider that the prohibited operation under Clause 20.14 would give rise to a continuing breach. Conclusion 111. On the basis of the matters set out in this judgment, I shall now deal with the question of the appropriate relief at the Relief Hearing.