ICO Satellite Ltd, R (on the application of) v The Office of Communications

A specialist communications regulator may impose due-diligence and milestone requirements exceeding those required by the international frequency-allocation regime. It may cancel a satellite filing where the operator fails to satisfy those requirements and there is no realistic prospect of timely compliance.

The regulator need not investigate actual prejudice to identified third parties or compensate for the operator’s investment. Cancellation may be proportionate where maintaining an unused senior filing would require junior filings to co-ordinate with it. A domestic court should not finally determine a disputed question concerning the meaning of non-implemented international instruments where the international regime provides its own processes. Review should ordinarily be confined to whether the regulator adopted a reasonably tenable view.

ICO challenged Ofcom’s decision of 24 February 2009 to request cancellation from the ITU’s Master International Frequency Register of the ICO-P satellite frequency assignments. ICO argued that Ofcom misunderstood the ITU regime, failed to consider relevant matters, and acted disproportionately.

The challenge concerned the effect of the ITU Constitution and Radio Regulations, Ofcom’s satellite-filing Guidance, the absence of immediate prejudice to other operators, ICO’s investment and the pending Boeing litigation. The central questions were whether Ofcom’s decision was based on irrelevant or omitted considerations and whether cancellation was proportionate.

1. The application was refused. Ofcom’s decision was based on ICO’s failure to satisfy two lawful requirements imposed under its Guidance: contracts for completion and launch of the remaining satellites, and funding sufficient to bring the network into commercial operation.
2. Ofcom was entitled to impose commercial due-diligence and milestone requirements beyond the requirements of the ITU regime. The Guidance had not been challenged, and Ofcom had followed the procedure it prescribed, including consultation and opportunities for ICO to remedy the deficiencies.
3. Ofcom had not proceeded on the basis that the ITU regime imposed a duty to cancel the filing. Although Ofcom maintained that cancellation was expected where a filing was unused and there was no realistic prospect of timely use, that was not the basis of the decision. The informal statements attributed to ITU officers were not authoritative institutional statements.
4. The court declined finally to determine the disputed meaning and effect of the non-implemented ITU instruments. Applying the approach discussed in R (Corner House Research) v Director of the Serious Fraud Office [2009] 1 AC 756, the court confined itself to whether Ofcom’s view was reasonably tenable. It was, having regard to Article 44(2) of the ITU Constitution, Radio Regulation 13.6(b), the scheme’s purpose and the ITU Bureau’s formal policy letter.
5. Possible prejudice to third parties was not a legally relevant factor which Ofcom had to investigate. The system itself addressed third-party interests by preventing unused senior filings from obstructing junior filings. ICO’s investment was likewise not a required consideration. The possibility of settlement or success in the Boeing litigation had been considered, but ICO had supplied neither the required contracts nor evidence that any damages would fund completion of the network.
6. Cancellation was proportionate. Efficient use of scarce spectrum and orbital resources was a legitimate objective, cancellation was rationally connected to it, and, given the absence of realistic prospects of timely operation, no equally effective and less onerous remedy was available. The alternatives of retaining or modifying the filing were unsuitable on the evidence.