Mobile phone operators objecting to the sale of new spectrum must take their case through the courts and not the Competition Appeals Tribunal (CAT), the Court of Appeal has said. The CAT should not judge the legislative powers of Ofcom, it said.
Telecoms regulator Ofcom plans to sell off two bands of spectrum but mobile network operators O2 and T-Mobile have opposed the process. They claim that they may lose some spectrum in the future when Ofcom conducts a spectrum review, called 'refarming', and that until that happens they cannot decide whether or not to bid for new spectrum.
They claim that the sell-off of the two new bands of spectrum should only take place after the 'refarming' process.
Some Ofcom decisions can be appealed through the CAT, but Schedule 8 of the Communications Act contains a list of kinds of decisions that cannot be appealed in that way. This list includes decisions made under the part of the Wireless Telegraphy Act which allows Ofcom to make regulations regarding spectrum auctions.
The CAT ruled in July that it did not have jurisdiction in the case, and the mobile networks appealed the jurisdiction decision to the Court of Appeal.
O2 and T-Mobile argued in court that while the making of regulations for the sell-off of spectrum might be outside of the CAT's jurisdiction because it is covered by Schedule 8 of the Communications Act, the decision to proceed with the making of the regulations was separate to that, and it was that decision to which they objected.
"To say that regulations cannot be challenged by appeal but the decision to make them can be so challenged is absurd and cannot have been intended by the statutory exclusion of jurisdiction," said Lord Justice Jacob in the ruling. "Taken to its illogical conclusion one could have a challenge to the decision to make regulations running side by side with a [court case] challenging the regulations so made. Parliament must have intended that the exclusion from the CAT's jurisdiction covered both regulations made under [section 14 of the Wireless Telegraphy Act] and the decision to make such regulations."
Lord Justice Jacob said that he agreed with Ofcom's lawyer when she said that Ofcom's legislative powers must be appealed through the courts by a judicial review, not by the CAT.
"I accept her overriding contention about the nature of the matters excluded from CAT appeal jurisdiction," he said. "It is that all the legislative powers of Ofcom to make regulations have been systematically included in Schedule 8."
"In her words 'Parliament did not intend legislative and quasi-legislative decisions to go to the CAT.' It is not the function of a statutory tribunal to impugn statutory instruments or regulations made pursuant to statutory powers. Challenges to these are classically matters for [judicial review] and that is so in the case of the Award [of the spectrum]," said the ruling.
Lord Justice Jacob recommended that when the case is heard in the courts it be heard by the President of the CAT, Barling J.