Judgment of the Tribunal in relation to an appeal by Sky UK Limited (“Sky”) against a confirmation decision of the Office of Communications (“Ofcom”) under section 96C of the Communications Act 2003 (the “2003 Act”) dated 19 August 2022 entitled “Investigation into Sky’s compliance with the obligation to provide end-of-contract notifications” (the “Decision”).
As set out in the Decision, Ofcom found that Sky’s pay TV services, which rely in whole or in part on a digital satellite transmission service, constitute an electronic communications service (“ECS”) within the meaning of that term in section 32(2) and (2A)(c) of the 2003 Act and Sky contravened Condition C1 of the General Conditions of Entitlement as of 15 February 2020 because it had not sent end-of-contract notifications (“EoCNs”) to customers of its pay TV services whose commitment period ended between 26 March 2020 and 19 August 2022.
Sky challenged the Decision by contending that its pay TV service consists mainly in the provision of content and, on a proper interpretation of section 32 of the 2003 Act, it is not an ECS. Thus, Sky’s pay TV service is not subject to the EoCN requirement under Condition C1. Sky argued that Ofcom erred in law in its application to Sky TV of the test for an ECS because:
As a matter of construction of section 32(2) and (2A) of the 2003 Act, it is necessary to apply the “principal feature” test under section 32(2A)(c) to a single unified service first, before considering the ‘content exclusion’ in section 32(2).
If contrary to the foregoing, as a matter of construction of section 32(2) of the 2003 Act it is necessary to exclude the content element of the service before applying the “principal feature” test in section 32(2A)(c) to the Sky Pay TV service, Ofcom failed to consider in the Decision whether, leaving out of account the content element, the transmission by satellite element of the Sky Pay TV service predominates over the other non-content aspects of the service.
For the reasons set out in the Judgment, the Tribunal unanimously decided that:
Ofcom did not err in law in its construction of section 32(2) and (2A) of the 2003 Act. As a matter of the construction of the language of section 32(2) and (2A), and against the background of the legislative context and purpose, the first question when applying section 32(2) to any particular service is whether the ‘content exclusion’ applies, such that if it does, section 32(2A) is applied only to that part of the service which is not a content service.
The Sky Pay TV service is an ECS within the meaning of section 32(2) and (2A)(c) of the 2003 Act and the overall conclusion in the Decision was correct. However, Ofcom erred in not considering in the Decision whether the element of conveyance of signals predominates over the other non-content aspects of the Sky Pay TV service.
The Tribunal also invited the parties to provide post-Judgment submissions on the appropriate remedy.
This is an unofficial summary prepared by the Registry of the Competition Appeal Tribunal.