There are news reports at the moment that Telefonica O2 is threatening Ofcom with legal action over the Commission’s decision to permit T-Mobile/Everything Everywhere to provide 4G services on some existing frequencies before the end of the year.
There is no doubt that whoever gets in to a new better data environment will have an advantage with consumers. Telefonica just cannot stand the thought that it will not be the one with the advantage.
What chances does it have? There is no doubt that Ofcom has, over the last few years, done much better in front of the CAT in the courts than it did in say the first two or three years of its existence. The hardened cardre of Blackstone silks and juniors it was, as far as most commentators are concerned, put up a pretty good show from time to time of defending what its economists and generalists have got it into. Even when it has had a notable failure and is the 08X case it has brought things back in the Court of Appeal.
Prima facie, however, the decision to let T-Mobile jump the gun seems quite difficult to defend. Telefonica has got two choices: either an appeal to the CAT, or going for judicial review (JR). The second, however, presents a much bigger hurdle that it has to show that Ofcom has acted with no reasonable authority would have acted in the circumstances. Although Ofcom does not have a duty to promote new technology it has got general duties to improve the lot of the consumer/stakeholder (i.e. the likes of you and me). There is no doubt that the UK generally benefits quite considerably from being at the forefront of the rollout of new technologies as quickly as possible particularly as these provide significant advantages. On the grounds that to go the JR route, very probably Telefonica would have to show that Ofcom was a Wednesbury unreasonable, I do not think it is going to succeed in that unless perhaps it combines judicial review with some form of blocking injunction relating to competition law.
Telefonica could apply to the CAT for interim measures and an on the merits appeal of the decision. The trouble is that the CAT is very, very loath to provide interim measures that include stopping implementation of a decision and I reckon Telefonica would have to rely on an agreed standstill while the appeal was fought out. If I were Everything Everywhere, I just would not agree to that.
So if I was Telefonica, what would I do? It is time I think for a bit lateral thinking on this and an approach to the Competition Director at General of the European Commission would be on my list of possibilities with a touch of spoiling operations. Putting Ofcom and T-Mobile into a mire of competition investigation with the prospect of fines at the end of it seems a better bet, perhaps even combined with allegations of breach of general duty under the Framework Directives. The interesting thing will be to see how Ofcom reacts and the degree to which Telefonica will push matters.