England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
The Hon. Mr. Justice Lloyd Jones
[2010] EWHC 2010 (Admin)

		Royal Courts of Justice Strand, London, WC2A 2LL
		11/10/2011

LORD JUSTICE PILL :

1. This is an appeal against a judgment of Lloyd Jones J dated 30 July 2010 whereby he refused an application for judicial review by ICO Satellite Limited ("the appellants"). The application was to quash a decision of the Office of Communications ("Ofcom"), made on 24 February 2009, to write to the International Telecommunications Union ("ITU") to request the cancellation of the assignments currently recorded in its Master International Frequency Register ("MIFR") in respect of the appellants' ICO-P mobile satellite communications system. Sending the request has been deferred pending the present appeal.

The statutory framework

2. The ITU is an international organisation established by the International Telecommunications Union Convention, which came into force on 1 July 1994. It is responsible for the international arrangements for electronic communications systems, in particular the radio frequencies and orbits used by telecommunications satellites. The United Kingdom is one of 191 states which are members of the ITU. Article 12(1) of the ITU Constitution provides that one of the functions of the radiocommunication sector will be to ensure "the rational, equitable, efficient and economical use of the radio-frequency spectrum by all radiocommunication services". Article 44(2) provides:

"In using frequency bands for radio services, Member States shall bear in mind that radio frequencies and any associated orbits, including the geostationary-satellite orbit, are limited natural resources and that they must be used rationally, efficiently and economically, in conformity with the provisions of the Radio Regulations, so that countries or groups of countries may have equitable access to those orbits and frequencies, taking into account the special needs of the developing countries and the geographical situation of particular countries."

3. ITU Resolution 49, adopted in 1997, is entitled "Administrative due diligence applicable to some satellite radio communication services". It sets out detailed procedures by which the objects of the ITU are to be achieved. These are given effect in relevant national provisions, in the United Kingdom the Communications Act 2003 ("the 2003 Act"), and guidance issued under it.
4. Acting under section 22 of the 2003 Act, the Secretary of State appointed Ofcom as national notifying authority for the United Kingdom to the ITU, with responsibility for the coordination and notification of satellite networks. The general duties of Ofcom are set out in the 2003 Act. The principal duties, stated in section 3(1), are to further the interests of citizens in relation to communications matters and to further the interests of consumers in relevant markets, where appropriate by promoting competition. The matters to be taken into consideration when carrying out those functions are stated in considerable detail in the Act.
5. The international dimension is recognised in the 2003 Act. Section 22(1) provides:

"It shall be the duty of OFCOM to do, as respects the United Kingdom, such of the following things as they are required to do by the Secretary of State -

(a) provide representation on behalf of Her Majesty's Government in the United Kingdom on international and other bodies having communications functions;

(b) become or serve as a member of an international or other body having such functions;

(c) subscribe to such a body;

(d) provide representation on behalf of Her Majesty's Government in the United Kingdom at international meetings about communications."

6. Ofcom performs its functions in accordance with guidance entitled "Ofcom – Procedures for the Management of Satellite Filings" ("the Guidance"). The relevant edition was published on 27 March 2007 pursuant to Ofcom's duties under the 2003 Act. Section 5 of the Guidance provides:

"5.1 ITU Resolution 49 requires national administrations to make submissions to the ITU in respect of the construction and launch (including timings) of its satellite networks. Administrations should, therefore, implement these obligations by imposing administrative due diligence requirements on operators. The purpose of these due diligence requirements is to ensure that filings are only submitted to the ITU where there is a reasonable prospect that the proposed network will be brought into operation within the relevant time period. It also serves to address the problem of reservation of orbit and spectrum capacity without actual use and has an impact, together with other relevant mechanisms, in reducing paper filings and in bringing more transparency to the filing process.

5.2 The ITU-BR relies on the confirmation provided by administrations, under No. 11.47 of the Radio Regulations that a frequency assignment has been brought into use, to assess compliance with the regulatory time period set out in No. 11.44. The latter provision states that the notified date of bringing into use of any assignment to a space station of a satellite network will not be later than seven years following the date of receipt by the ITU-BR of the complete API [Advance Publication Information] information under No. 9.1 or 9.2 of the Radio Regulations. Any frequency assignment not brought into use within the required period will be cancelled by the ITU-BR after informing the relevant administration.

5.3 In addition to the requirements of Resolution 49, Ofcom requires to receive commercial information from applicants, as set out in Table 1, for the purposes of due diligence in order to be satisfied that a proposed satellite network has an adequate financial backing, that all relevant commercial and other contracts are in place or are about to be entered into and that there is a reasonable probability that the network will be brought into operation."

The requirement in 5.3 to provide commercial information goes beyond the ITU due diligence requirements in Resolution 49.

7. ITU-BR, referred to in the Guidance, is a Bureau set up by the ITU to administer the scheme internationally. The Radio Regulations referred to in article 44(2) of the ITU Constitution and the Guidance are the means by which the ITU has established a system of frequency coordination. Regulation 13 gives instructions to the Bureau including making it "solely responsible for maintenance of the Master Register in accordance with the Rules of Procedure". By virtue of regulation 13.6(b):

"whenever it appears from reliable information available that a recorded assignment has not been brought into regular operation in accordance with the notified required characteristics as specified in Appendix 4, or is not being used in accordance with those characteristics, the Bureau shall consult the notifying administration and, subject to its agreement or in the event of non-response after the dispatch of two consecutive reminders, each within a three-month period, shall either cancel, or suitably modify, or retain the basic characteristics of the entry. A decision of the Bureau to cancel the entry in the event of non-response shall be confirmed by the Board."

8. Section 2.46 of the Guidance provides:

"As required by No. 11.44.1 of the Radio Regulations, the bringing into use of the assignments and receipt by the ITU-BR of notification information and Resolution 49 data must all have occurred before the expiry of the seven year regulatory period. Failure to do this will normally result in the filing being cancelled by the ITU-BR."

9. ITU Resolution 49 is also considered at paragraph 2.47:

"In the majority of cases for proposed networks in FSS, MSS and BSS the submission of due diligence information to the ITU-BR is required in accordance with ITU Resolution 49 of the Radio Regulations. Resolution 49 requires administrations to impose certain administrative due diligence requirements on satellite networks for which they act as the notifying administration, including specific information relating to the contractual status of the satellite and launch vehicle. Therefore, before registering a prospective system with the ITU-BR, it is incumbent on an administration to satisfy itself that there is a realistic likelihood that the satellite will be launched and will not block a valuable orbital slot or frequency assignment because it subsequently fails to be developed. It is also incumbent on an administration to monitor progress against pre-specified milestones for the deployment of the satellite network."

10. Section 12 of the Guidance deals with cancellation, relinquishment and reassignment of UK satellite network filings by Ofcom. Under the heading Cancellation and Reassignment due to Non-Compliance with Due Diligence Requirements, it is stated:

"12.6 As stated in section 5 of this document, applicants will provide Ofcom with due diligence documentation and progress reports for each satellite network indicating any variations from the previously submitted business plan and also details of their coordination progress and status, including whether the original network is likely to enter into commercial service according to the timescale envisaged. Ofcom will use such information to assess whether the applicant's project is meeting the criteria that had been set and will be completed within the satellite network's regulatory time period. Ofcom will assess the facts, circumstances and next stages of each case individually.

12.7 If, in Ofcom's opinion, there is insufficient evidence of progress as against the milestone commitments on the basis of the information supplied by the operator, Ofcom will consult with the relevant operator. Ofcom will provide the operator with an opportunity to remedy the situation, to ensure that progress is brought into line with the milestone commitments, within a specified timeframe.

12.8 Ofcom would expect that if the operator fails to remedy the situation within the specified timeframe, referred to in section 12.7, Ofcom may cancel the filing or may seek to reassign it to another operator in accordance with the procedures set out in sections 12.1 to 12.3.

12.9 Ofcom will consult with the Secretary of State prior to taking any action to cancel a filing in accordance with section 12.8."

Submissions

11. There are three grounds of appeal. The first ground, as put in the oral submissions of Lord Pannick QC for the appellants, is that, in making its decision, Ofcom failed to take into account relevant considerations, namely the impact of the decision on third parties and also its impact on the appellants themselves. The second ground is that Ofcom had regard to an irrelevant consideration, namely an erroneous belief that the ITU regime required cancellation of the assignments. The third ground is that the decision was not proportionate in the circumstances.
12. Lord Pannick conceded that the appellants have not notified required characteristics in accordance with the Radio Regulations and that the failure is substantial. The issue in the appeal is as to the consequences of the failure to comply with the Regulations. Lord Pannick posed the question:

"The appellants have not complied with the Regulations. What should Ofcom do?"

13. The sanction of cancellation is draconian and, submitted Lord Pannick, the consequences of cancellation for persons affected must be considered. Ofcom must take into account the impact, or lack of impact, of cancellation on third parties. Ofcom has a discretion because the expression used in 12.8 is that "Ofcom may cancel the filing or may seek to reassign it" (emphasis added). That reflects article 44.2 of the ITU constitution, submitted Lord Pannick, which refers to the "limited" availability of resources and plainly has in mind comparative needs, or lack of needs. In making its decision, Ofcom has failed to have regard to a relevant factor, it was submitted, that is the absence of detriment to third parties by the appellants' conduct and delay in bringing the assignment into use.
14. Lord Pannick relied on paragraph 12 of the statement of Mr C.A. Jenne, Director of Spectrum Policy at Ofcom, as demonstrating the lack of regard for the position of third parties:

"Ofcom's procedures in its Guidance similarly do not make the absence of disruption to another identified operator a factor in deciding whether to cancel an assignment. This has always been the approach (as far as we understand it) underlying the ITU regime."

Moreover, in summary grounds for contesting the claim, Ofcom stated, at paragraph 36, that "whether or not there is evidence of other persons wishing to use the assignments granted to ICO-P is irrelevant to the question of whether Ofcom, consistently with the Guidance, was entitled to cancel the assignments because of ICO's failure to comply with Ofcom's requirements".

15. Ofcom erred in law, Lord Pannick submitted, in holding that the impact, or lack of impact, on third parties was incapable of being a material factor in a decision. There was an obligation to consider it. Detriment to third parties was absent. Ofcom has conceded that "currently no one else (within the EU) is being displaced, disturbed or inconvenienced" [by the appellants' delay]. While it was for Ofcom to decide what weight should be given to material factors, they were not entitled to exclude this factor from consideration, it was submitted. It was capable of being a relevant factor and that should have been recognised. Paragraph 13.6 of the Radio Regulations does not exclude the impact on third parties as a consideration material to a decision.
16. The impact of the decision on the appellants themselves is also a material factor, it was submitted. Ofcom does not dispute the very high level of expenditure sanctioned and incurred in relation to the ICO-P system but submitted that "the level of investment is not a criterion for whether or not a filing should be withdrawn if it is not being used in accordance with its notified characteristics". The cancellation will have a very damaging impact on the appellants and was capable of being a relevant factor in the decision. Ofcom was entitled to consider the facts in a particular case and cancel notwithstanding the damage to the appellants but was not entitled to exclude damage to the appellants as a material factor.
17. Lord Pannick relied on the principle of proportionality to reinforce his submission. In a further statement on procedures, Ofcom's summary of its functions in relation to the management of the radio spectrum included, at paragraph 2.11, the function of "seeking the least intrusive regulatory mechanisms to achieve the policy objectives." Lord Pannick accepted that if the lack of an adverse effect on third parties was incapable of being a relevant consideration, it was difficult to quash the decision on the ground of proportionality but he submitted that a lack of proportionality could, in all the circumstances, be established.
18. In the circumstances, it was disproportionate to cancel the filing, it was submitted. There could have been a modification, for example, requiring cooperation by the appellants with other parties. It was further submitted that the problem was not one of the appellants' making but was alleged to be the fault of Boeing and was the subject of litigation in the United States. It was hoped that settlement would be achieved and that Boeing would discharge its obligations to the appellants.
19. It was submitted that the judge, when upholding the decision, had erred in law at paragraph 109 of his judgment in finding that "the question of possible prejudice to third parties was not a legally relevant factor". The judge also erred in finding, at paragraph 113 of his judgment, that to attach any weight to ICO's investment of "immense sums" in a filing "would be inconsistent with the object and purpose of the ITU's scheme and Ofcom's regulatory scheme and might frustrate their objectives".
20. Lord Pannick noted that the Ofcom decision was based on a conclusion that the appellants had no prospects of implementing the assignment and that funding was not available. These findings, he submitted, did not circumvent the need to consider all material factors. Moreover, it was at least possible that the Boeing dispute would be resolved, funds made available, and the satellite launched. Very substantial funds had been raised in the past.
21. Mr Vajda QC, for Ofcom, referred to Ofcom's skeleton argument in the High Court. The claimants' case, it had been alleged, amounted to saying that Ofcom cannot request cancellation of an assignment unless it has evidence that a specific third party is being adversely affected by the maintenance of that assignment. That is a substantive challenge to the policy underlying both the ITU regime and the Guidance, it was submitted. It finds no support either in the ITU's rules and regulations or in the Guidance.

The decision

22. Ofcom's requirements were set out in a letter of 13 December 2006. Documentary evidence was required by 30 June 2007. Following further meetings and correspondence, a minded to cancel letter was sent by Ofcom to the appellants on 16 April 2008. It gave the appellants an opportunity to make further observations. In support of the proposed decision to cancel it was stated, at paragraph 90:

"Ofcom does not accept ICO's contentions that it has met the relevant milestones. Neither does it accept it has imposed additional unnecessary, untargeted or disproportionate obligations on ICO. In exercising its functions Ofcom accepts that it is required to have regard to the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed. As explained earlier, the aim of the filing system is to ensure that the most efficient use is made of spectrum which is a scarce and valuable resource. The RA and Ofcom Guidance sets out a scheme which is appropriate and necessary to meet this objective. In this context Ofcom has set lawful and appropriate requirements with which ICO has failed to comply. Cancellation of the filing as a result of ongoing failure to comply with those requirements is therefore no more than is necessary to secure the objective which they were designed to achieve."

23. The appellants made representations to the Secretary of State stating that cancellation "would have adverse and serious consequences to the £2 billion our company has invested in providing global mobile satellite services . . . This action if carried out will lay to waste £2 billion of investment and cause the loss of many direct and indirect jobs." Reference was made to the Boeing litigation. The appellants added that "this cancellation will also send a clear signal that innovators and pioneers in the United Kingdom must pay a dear price indeed for their foresight and early investment."
24. The consultation with the Secretary of State took the form of a letter dated 14 March 2008. Having set out the history of the assignment and what was described as the exercise of Ofcom's due diligence process, it was stated:

"25. It is now more than seven years since the original planned date at which the ICO-P system was supposed to commence operations and four years since Ofcom accepted ICO's assurances that it would bring its system into operation in 2005 and notified the ITU that the frequency assignments were in operation.

26. Given the continued lack of evidence of any realistic prospect of ICO bringing the ICO-P satellite network into commercial operation by any of the dates it has suggested, we have concluded that we have no alternative but to cancel the ICO-P frequency assignments, thereby removing this obstacle to other operators making productive use of this spectrum.

27. Subject to the Secretary of State's comments, Ofcom proposes to notify ICO as soon as possible thereafter of our intention to cancel the ICO-P frequency assignments. This decision will be implemented after a grace period. This grace period will give ICO reasonable time to consider our notice before the irrevocable step of cancelling the filing is made. A draft of this letter is attached.

28. We would be grateful if the Secretary of State could provide us with views by 4 April 2008."

25. In the letter, reference was made, at paragraph 7, to Ofcom's approach:

"There is some limited, and generally accepted, flexibility in the way that satellite operators are allowed to meet these requirements. For example, it might be considered disproportionate for an administration to cancel a filing when an operator is very close to bringing their satellite service into operation as intended, recognising that a cancellation in these circumstances could destroy significant future value (on the back of very significant investments up to that point in time)."

26. The international dimension was also stated, at paragraph 9:

"The UK has played an important role in encouraging administrations to abide by the spirit of the rules through tightening up rules in the past (notably to promoting the adoption of Resolution 49 at the 1997 World Radio Conference which established the due diligence requirement referred to above) and by challenging situations where we believed that the rules have not been followed. In addition, we have always had a set of due diligence requirements on satellite operators filing through the UK in order to manage the risk of paper filings and in order to allow us to act in cases where assignments are not being brought into use. We also have a set of additional reporting requirements to monitor ongoing use after a filing has first been notified as having been brought into operation. This is important in terms of:

maintaining the fundamental integrity and ongoing viability of the arrangements for managing satellite operation across the world; as well as

freeing up scarce spectrum resources in individual cases where an operator is sitting on a filing, and thereby denying other satellite operators the opportunity to create value through use of that spectrum."

27. By letter of 31 March 2008, the Secretary of State stated that he was content that Ofcom "should proceed with the cancellation process and send the letter to the ICO informing them that you are minded to cancel the finding". A further consultation letter was written to the Secretary of State on 6 February 2009, referring in some detail to the Boeing litigation and stating, at paragraph 7, that the litigation "is not likely to be resolved in the near term and is likely to remain active for some time (a couple of years further seems probable)". At paragraph 10, it was stated: "Ofcom has no evidence on whether or how the proceeds of any settlement would be applied" and at paragraph 12, it was added:

"Having reviewed the information provided by ICO since Ofcom's letter of 16 April 2008, Ofcom is of the opinion that ICO does not have in place contracts for the completion and launch of the remaining ICO-P satellites and has not provided any evidence that funding is in place to bring the ICO-P network into commercial operation. It remains the case that there is no evidence of any realistic prospect of ICO bringing the ICO-P satellite network into commercial operation by any of the dates it has suggested and it is likely that it won't be able to within the next few years."

28. Conclusions adopting those of 14 March 2008, with the substitution of 8 years and 5 years for the 7 years and 4 years in paragraph 25 of the earlier letter, were stated. It was added, at paragraph 14:

"In view of ICO's failure to operate in accordance with its recorded characteristics and business plan; the continued lack of evidence of progress towards bringing the ICO-P system into operation; and the absence of any evidence that the ICO-P network will be brought into commercial operation within a reasonable timescale, we have concluded that we have no alternative but to cancel the ICO-P frequency assignments."

29. Responding, in a letter dated 18 February 2009, the Minister stated:

"Having carefully considered the arguments you have put forward and the background to the proposed action, I am content with your decision to proceed with the cancellation and to send the letter to ICO informing them of that decision."

30. In the decision letter of 24 February 2009 it was stated that Ofcom had decided to write to the ITU to request that the ICO-P assignments currently recorded in the Master Register ("MIFR") be cancelled. The Boeing litigation was mentioned, the appellants' representations and answers to Ofcom's earlier questions, and the consultation with the Secretary of State for Business, Enterprise and Regulatory Reform.
31. In an annex of 108 paragraphs, the history of the ICO-P satellite filing and subsequent events was set out. In view of the concessions made by the appellants for the purposes of this appeal, it is unnecessary to set the history out in great detail. Mr Vajda QC, for Ofcom, referred to it to demonstrate the extent and duration of the appellants' failures and the opportunities they were given to remedy the situation. Long delays were involved. Publication of the API by ITU was in 1995, fourteen years before the decision to require cancellation. Significant and relevant defaults by the appellants are conceded and there is no procedural challenge. Mr Vajda submitted that Ofcom was not under an obligation to take the factors relied on into account.
32. Reference was made in the annex to article 12(1) of the ITU Constitution and Article 44 of the ITU Convention. At paragraph 87, it was stated:

"It was clear to Ofcom that ICO had made insufficient progress against key milestones for the ICO-P network as shown by ICO's failure to provide satisfactory evidence in response to its letter of 13 December 2006. However, as ICO had raised its litigation with Boeing as the reason for its inability to fulfil Ofcom's requirements, and as the trial had now commenced, Ofcom decided to seek further information in order to consider the impact of the US proceedings on ICO's ability to satisfy Ofcom's requirements before deciding whether to write to the ITU to cancel the ICO-P filing."

33. Ofcom concluded (paragraph 106), that it was unclear whether any proceeds of a settlement with Boeing "would be used for completing and bringing into operation of the ICO-P network". It was concluded (paragraph 107) that "the necessary funding was not in place".
34. Enquiries had been made of the appellants about the Boeing litigation but replies were limited, the appellants' attorneys stating that "we cannot authorise our client to elaborate beyond these answers until the case has been concluded" (annex paragraph 90). It was accepted by Lord Pannick that the appellants' approach to the Boeing issue at the regulatory stage had been to wait and see. It had been requested that a decision to cancel should be deferred pending the conclusion of the litigation and not that an alternative way forward be adopted. A modification, as distinct from a cancellation, had not been suggested by the appellants.
35. In his statement for the court, Mr Jenne stated that Ofcom's decision:

". . . was based squarely on ICO's failure to provide evidence of compliance with the conditions for the maintenance of its assignment. As explained above the use of scarce spectrum and orbital resources is controlled by ensuring that those operators that benefit from assignments are using them in accordance with their notified characteristics rather than by attempting to identify specific operators who may be affected by the filing, which may be impossible."

36. In his second witness statement, Mr Jenne referred to the appellants' reliance on the absence of another potential operator:

"22. As a practical matter, it would not be remotely feasible for one national administration to carry out an assessment of the prospects for all other relevant satellite filings coming into use within the seven year regulatory period, even were we able to obtain the necessary information relating to each filing . . . there are 715 filings at the API stage, and 118 at or beyond the coordination stage, in respect of the 2 GHz MSS frequencies covered by ICO-P. Quite apart from the scale of the task, and the degree of judgement likely to be required (bordering on the speculative in some cases), we have no powers to obtain relevant due diligence information from the other 190 administrations around the world and the satellite operators themselves would be very unlikely to supply the information to us (both for reasons of commercial confidentiality and because they have no incentive to subject themselves to due diligence by administrations other than the administration through which they file)."

37. At paragraphs 24 and 25, Mr Jenne added:

"As explained above, notifications to the ITU operate on a first come first served basis. Attempting to second guess what another operator further down in the list of satellite filings may or may not do when determining whether or not to cancel a filing that is ahead of it in the 'queue' could distort the ITU filing system. . . Maintaining a filing that is not in use in these circumstances plainly defeats the basis on which priority in the MIFR is intended to operate, namely that filings will be brought into use in accordance with their notified characteristics. This is also consistent with Article 44 of the ITU Constitution which requires the efficient use of radio frequency bands. In the view of Ofcom it cannot be consistent with the efficient use of those frequency bands to allow them to be blocked by an assignment that is not being used in any real sense . . . . or that has in Ofcom's judgment no realistic prospect of being used.

What Mr Bagley [who made a statement for the appellants] is really suggesting is that unless Ofcom can prove the negative that there is no affected third party ICO is entitled to retain its assignment and the priority that goes with it. Given the difficulties in this regard this could make it effectively almost impossible to cancel the ICO-P assignment irrespective of whether or not it is not being used in any real sense or there being any realistic prospect that it will be, as Ofcom judged to be the case here."

38. A circular letter from the ITU to administrations of Member States was sent on 1 May 2009, that is after the decision challenged in this case. Mr Vajda relied on it as demonstrating the nature of the ITU regime. All administrations were urged to remove unused frequency assignments and networks from the MIFR. It was stated:

"In parallel with this request and in line with the well known principles which the membership has deemed important enough to embed in the ITU Constitution, Convention and Radio Regulations calling for the equitable, efficient and rational use of the limited spectrum/orbit resources and their use to the minimum extent essential to meet requirements – the Bureau also considers itself bound to have recourse to certain provisions of the Radio Regulations (e.g. No. 13.6), and where appropriate, to enforce the removal of unused frequency assignments from the MIFR when their use has not been suspended in accordance with the Radio Regulations. This is in the best interest of all administrations and operators and, at the initiative of some administrations, the Bureau is currently pursuing action along these lines in several cases.

I take this opportunity to inform you that, in parallel with the above, the Bureau also intends to undertake similar action at its own initiative in application of the relevant provisions of the Radio Regulations in appropriate cases (e.g. cases in which there are fewer satellites than the GSO positions of satellite networks 'activated' by those satellites, the bringing into use of several GSO networks on the same date by the same administration and operator, etc.).

The Bureau urges your and all other administrations to cooperate in these efforts that employ the scrupulous and diligent application of the principles and provisions of the ITU Constitution, Convention and Radio Regulations, in order to reduce, and to the extent possible remove, the obstacles impeding the development and bringing into operation of new satellite networks."

Second ground of appeal

39. I turn to the second ground of appeal, Ofcom's alleged reliance on an ITU expectation. In support of the submission, Lord Pannick relied on a statement by Mr Jenne, in his first witness statement:

"Equally if an assignment has been brought into use, it is required to remain in use in accordance with the registered characteristics in order to maintain its status in the MIFR. If it does not do so, the national administration is expected to cancel the assignment in order to fulfil its obligations under the ITU Constitution . . ." (emphasis added)

Later in the statement, Mr Jenne referred to "the obligation to cancel assignments in such circumstances in the general interest of the system . . . " (emphasis added). Lord Pannick accepted that the reference was to a different stage in the procedure.

40. Lord Pannick accepted that the decision letter did not adopt or incorporate that approach but submitted that Ofcom cannot disassociate itself from Mr Jenne's reference to "expectation". The ITU regime, it was submitted, did not create such an expectation.
41. Lord Pannick also referred to a personal email from the Secretary General of the ITU to an officer of the appellants dated 11 May 2010 at 18:42, that is the evening before the hearing by the judge. It was stated:

"As you know we are trying our best to clean the MIFR from the paper satellites but this particular case would be an action in completely opposite direction if we implement any type of cancellation.

We have also received communication from other administrations expressing their desire to avail MSS from the ICO-P hence we would like to see ICO-P become fully operation ASAP."

Lord Pannick accepted that the message can be relevant only if it is concluded that the decision was based on an "expectation" of the ITU's position.

42. Mr Vajda submitted that the decision was based on no such expectation. No application was made to cross-examine Mr Jenne on his use of the word in a somewhat different context. The decision letter, while describing the international context of the arrangements, made no reference to any such expectation of the ITU, or that it was a factor in the decision.
43. In my judgment, the decision cannot be challenged on this ground. The international regime, reflected in the national regime, does contemplate that there may be cancellations following non-compliance and, in context, Mr Jenne was saying no more than that. The grounds of the decision are stated with clarity in the relevant letter. I also agree with the judge that the e-mail sent by the Secretary General to an official of the appellants on the evening before the hearing cannot be treated as an authoritative statement of the institutional view of ITU.

Conclusions on first and third grounds of appeal

44. The decision of Ofcom was made in the context of its duties under the 2003 Act and the Guidance given under it. These provisions were enacted pursuant to treaty obligations of the United Kingdom under the 1994 Convention and subsequent international instruments. These have now been considered in some detail as have the events leading to the decision challenged. Every opportunity has been given to the appellants to make the assignments recorded in the MIFR fully operational. The delay has been very substantial and has taken the project well beyond the timescale envisaged in the Guidance. The appellants have not sought to minimise the extent of their default. The requirement to implement the assignments is upon the appellants and, in the present context and on the present facts, attributing the delay to the default of a third party, Boeing, does not improve the appellants' case.
45. In my judgment, Ofcom was not required to treat either the absence of evidence of another contender for the assignment, or the financial loss to the appellants, as factors required to be taken into account. There are practical difficulties in obtaining information from other jurisdictions, as stated by Mr Jenne, but, quite apart from that, Ofcom cannot, in my judgment, be criticised for basing a decision on the clear and major default of the appellants in the context of an international regime requiring cooperation between states in the rational, efficient and economical use of limited natural resources (article 44(2) of ITU Constitution).
46. Ofcom has a legitimate interest in complying with the letter and spirit of the United Kingdom's international obligations and thereby promoting that compliance with timetables which may, in other cases, work in favour of United Kingdom consumers and United Kingdom providers of these services. The international regime was understood and described by Ofcom. There is a national interest in promoting the efficient operation of the international regime according to its terms and the terms by which it is implemented in the United Kingdom.
47. The decision was carefully reasoned and relevant factors, including the international dimension, were taken into account and explained. The reasons given for cancellation, the absence of prospect of fulfilment and the absence of evidence of finance were lawful and sufficient reasons. Necessary funding was not in place.
48. The decision was also proportionate in the circumstances. The concept of proportionality is inherent in the scheme and the use of the word does not, in context, create a separate head of claim. The need for some flexibility was accepted by Ofcom and I am not discouraging Ofcom from showing flexibility in borderline cases. In the discussions before the decision was taken, possible modifications to the assignment were not suggested by the appellants, their case being that Ofcom should simply wait upon the outcome of the Boeing litigation.
49. I accept that when stating, at paragraph 109 of his judgment, that "the question of possible prejudice to third parties was not a legally relevant factor", the judge has elided the question whether it was capable of being a legally relevant factor with whether it was a factor the decision maker was required to take into account. The distinction was considered, in relation to a quite different statutory regime in Re Findlay [1985] AC 318. At page 333H, Lord Scarman, with whom the other members of the Committee agreed, cited with approval the statement of Cooke J in CREEDNZ Inc v Governor General [1981] 1 NZLR 172, at 183:

"What has to be emphasised is that it is only when the statute expressly or impliedly identifies considerations required to be taken into account by the authority as a matter of legal obligation that the court holds a decision invalid on the ground now invoked. It is not enough that a consideration is one that may properly be taken into account, nor even that it is one which many people, including the court itself, would have taken into account if they had to make the decision."

50. Cooke J added, at page 183, that "there will be some matters so obviously material to a decision on a particular project that anything short of direct consideration of them by the Ministers . . . would not be in accordance with the intention of the Act".
51. That approach has been approved in more recent cases. In R (Hurst) v London Northern District Coroner [2007] 2 AC 189, Lord Brown of Eaton-under-Heywood stated, at paragraph 57:

"Some considerations are required to be taken into account by decision makers. Others are required not to be. But there is a third category: those considerations which the decision maker may choose for himself whether or not to take into account."

52. In R (Corner House Research) v Director of the Serious Fraud Office [2009] AC 756, Lord Bingham of Cornhill stated, at paragraph 40:

"A discretionary decision is not in any event vitiated by a failure to take into account a consideration which the decision-maker is not obliged by the law or the facts to take into account, even if he may properly do so."

53. On the evidence, as Mr Jenne for Ofcom was entitled to conclude, there was no realistic prospect of this assignment being used in any real sense. In the present statutory context and on the present facts, Ofcom was not obliged to take into account the impact or lack of impact of the decision on third parties, which amounts in this case to an absence of evidence of third parties being deprived of, or seeking, an assignment. Neither was it obliged to take into account the financial effect of the decision on the appellants.
54. I would dismiss the appeal.

LORD JUSTICE TOULSON :

55. I agree.

LORD JUSTICE SULLIVAN :

56. I also agree.