Court of Appeal rejects Viasat appeal concerning spectrum use authorisation

The Court of Appeal said that even though Inmarsat had not met requirements in its original spectrum allocation by the European Commission, that authorisation was not void.

The Court of Appeal has rejected an appeal in Viasat UK Ltd and another v Office of Communications and another [2020] EWCA Civ 624. Viasat UK Ltd and Viasat Inc had appealed against the judgment of the Competition Appeal Tribunal in which it rejected Viasat’s original appeal against Ofcom’s decisions.

In 2009, the European Commission selected Inmarsat to provide mobile satellite services (MSS). 

In the UK, Ofcom granted Inmarsat an authorisation and licence to use 2GHz spectrum for complementary ground components (CGC) in relation to a satellite to provide MSS.

Inmarsat did not launch those MSS. Later, Ofcom granted Inmarsat a further authorisation for CGC to use with a different MSS.

Viasat complained on the basis that Inmarsat had gained an advantage by “having the benefit of moved goalposts”. It maintained that the intention of the scheme was for a satellite focused system which would provide useful benefits for people on the ground in the form of a signal which would not otherwise be available for them because commercial providers had not provided it. The spectrum which was the subject of the application was valuable, but the selection mechanism did not require any payment to be made for it, presumably on the basis that there was an element of public benefit in the use of the spectrum. Inmarsat had now departed from that scheme by providing a commercial service, using valuable but free (to Inmarsat) spectrum, to a limited number of paying airlines (or their customers), and it had done so by devising a service with heavy use of ground based components which was not originally anticipated. If that sort of use had been apparently on offer at the time then others, including Viasat, would have wished to be able to apply for the free use of the spectrum as well. Viasat said this was unfair and anti-competitive.

Viasat took court action in several EU jurisdictions including in the UK. It appealed the Ofcom decisions to the Competition Appeal Tribunal under section 192 of the Communications Act 2003. The CAT rejected Viasat's appeal in December 2018. Viasat appealed the CAT's decision to the Court of Appeal.

Separately, the CJEU had ruled in Viasat UK Ltd, Viasat Inc. v Institut belge des services postaux et des télécommunications (IBPT) (C-100/19) that a MSS operator could not be refused authorisation by a member state because it had not fulfilled coverage commitments. Complying with coverage commitments was not a requirement for authorisation. Separate EU legislation provided for their enforcement.

Court of Appeal decision

The first category of grounds of appeal flowed from the fact that Inmarsat did not observe the conditions in the initial authorisation and, instead, sought authorisation for an entirely new and different service to that envisaged when it applied for selection and authorisation. The court said that Viasat's argument that the non-observance of conditions automatically disqualified Ofcom from taking its decision was wrong in law. There was no inexorable connection between breach of conditions and authorisation.

Next, there was the argument that had Viasat known that the system would permit an operator, such as Inmarsat, to acquire scarce spectrum and then avoid its commitments and conditions, it also would have participated in the selection process. The court rejected this on the basis that the system did operate in a flexible way and Viasat had made a mistake about the law and not applied. The court therefore rejected the argument that there had been any breach of the principle of equality or transparency.

In a second group of issues, Viasat argued that the CGC and the satellite are not "complementary" as required by the definition of an mobile satellite system and a CGC. It also argued that the EAN system was not a "mobile satellite system" because there was no "mobile earth station". 

The Court of Appeal rejected both these arguments and dismissed the appeal.


Published: 2020-05-19T13:00:00

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