R (Hutchison 3G) v Ofcom and R (BT/EE) v Ofcom

The auction will make significantly more spectrum available to mobile network operators and may enable them to meet demand for mobile data, or launch 5G services.

Hutchison 3G argued that Ofcom had failed to achieve its own regulatory objective of limiting the spectrum shares of any mobile network operator to 37% of usable spectrum, because the effect of its decision was permit BT/EE to hold a persistently greater share until further spectrum bands became available. Ofcom had acted unlawfully in imposing too high a cap and should have imposed a lower one.

BT/EE argued that Ofcom had failed to justify the imposition of any cap at all with respect to 3.4 GHz spectrum and had acted on the basis of putative competition concerns which had no basis in evidence. It further contended that Ofcom had failed to consult fairly on a decision with respect to the contiguity of licences in the 3.4 GHz band, and that that decision was wrong on the merits.

The Court rejected these arguments. It found that the decision to permit BT/EE a flexible period of time to bring itself within the 37% cap was a deliberate and considered policy decision by Ofcom. On the evidence it made good sense and allowing BT/EE a degree of tolerance to retain a spectrum holding exceeding the 37% cap for a period of time did not present an unacceptable risk to competition and was proportionate. The Court further held that Ofcom’s decision was properly reasoned and based on sound evidential findings and that there had been no unfairness with respect to Ofcom’s procedure.

The judgment contains a discussion of the approach the Court should take in a judicial review consisting in an appeal under Article 4 of the Framework Directive (2002/21/EC). Green J held that the instruction under that provision to take due account of the merits could be factored into the traditional but flexible approach of the Court to a judicial review claim.

Dinah Rose QC, Jessica Boyd and Tom Coates appeared for Ofcom.

Brian Kennelly QC and Daniel Cashman appeared for Hutchison 3G.

Michael Fordham QC and Tristan Jones appeared for Vodafone.

Emily Neill appeared for Telefonica.

Click here to read the full judgment.