Arqiva Ltd & Ors v Everything Everywhere Ltd & Ors

A licensing regulator’s power to vary the terms, provisions or limitations of a wireless telegraphy licence does not ordinarily permit it to substitute a different legal entity as licence holder. A transfer of rights and obligations between group companies remains a transfer for spectrum-trading purposes. The concept of an undertaking in European competition law does not remove that requirement. Where statutory provisions implement EU directives, they must be construed consistently with those directives, but the domestic legislation cannot be rewritten to pursue a purpose which its wording and structure do not support. An unauthorised transfer of licence rights is void, and a variation power cannot be used to bypass the statutory spectrum-trading regime.

The claimants challenged Ofcom’s re-issue of two wireless telegraphy licences, originally held by OPCS, in the name of Everything Everywhere Ltd. The re-issue followed intra-group arrangements under which the beneficial interests in the licences were transferred to Everything Everywhere.

The court considered whether Ofcom could change the licence holder under paragraph 6 of Schedule 1 to the Wireless Telegraphy Act 2006, whether the European-law concept of an undertaking excluded intra-group transfers from section 30 of that Act, and whether the arrangements constituted spectrum trading. The judgment also addressed consequential contractual and Code-rights issues arising from an earlier judgment.

1. The court held that paragraph 6 of Schedule 1 to the Wireless Telegraphy Act 2006 permits Ofcom to vary a licence’s terms, provisions or limitations, but does not permit it to substitute a different person or corporate entity as licence holder. A change of company details may be administrative and fall within Ofcom’s incidental powers under section 1(3) of the Communications Act 2003, but a change of licence holder is fundamental and requires express authority.

2. The domestic provisions must be construed consistently with the Framework Directive and the Authorisation Directive. That interpretive obligation does not require section 30 of the 2006 Act to be read as if “person” meant “undertaking” in the European competition-law sense.

3. The competition-law concept of an undertaking concerns whether entities form a single economic unit for purposes such as Articles 101 and 102 TFEU. It does not mean that a licence may pass between parent and subsidiary companies without compliance with section 30. A transfer between separate corporate licence holders remains a transfer, even where they form part of one economic group.

4. The arrangements between OPCS and Everything Everywhere transferred the beneficial interest in the licences and were intended to transfer the licences themselves. They therefore constituted spectrum trading within section 30. Because no operative regulations authorised the transfer at the relevant time, the purported transfer of rights and obligations was void.

5. Ofcom could not use paragraph 6 of Schedule 1 to bypass section 30. The original 2G and 3G licences in the name of OPCS therefore remained valid, and the re-issued licences in Everything Everywhere’s name were ineffective to effect the transfer.

6. The court declined at that stage to make the proposed declaration concerning use of the former OPCS spectrum. It confirmed that Everything Everywhere was in breach of clause 28.1 of the MSSA in respect of 2G roaming up to 2 March 2011, and that OPCS/OH breached clause 14.1 of the Orange MSSA because Everything Everywhere was not a Sub-Client. The court also found a breach of clause 20.14 of the Framework Agreement in relation to use of sites for traffic of an Other Licensed Operator.

This was a further first-instance judgment following the court’s earlier judgment of 27 May 2011, reported as [2011] EWHC 1411 (TCC). The court determined the spectrum-licence issue and consequential matters arising from that judgment. Relief was to be addressed at a subsequent Relief Hearing.