ICO Global has failed in its bid to get a judicial review into UK communications regulator Ofcom’s decision to request that the ITU remove the ICO-P global medium earth orbit satellite system from the Master International Frequency Register…
ICO Global has failed in its bid to get a judicial review into UK communications regulator Ofcom’s decision to request that the ITU remove the ICO-P global medium earth orbit satellite system from the Master International Frequency Register (MIFR).
The UK Court of Appeal dismissed ICO’s appeal against an earlier judgment by the Administrative Court which had refused the company’s application for a judicial review to quash Ofcom’s decision.
With Ofcom having delayed sending the cancellation request pending any appeal, the Court of Appeal decision paves the way for the regulator to bring an end to the protracted dispute.
The disagreement stems from ICO’s application to the ITU in 2001 to operate a 10 satellite 2GHz S-band MEO constellation. Due to it being registered in the Cayman Islands, which is a British overseas territory, ICO made its application through a filing with Ofcom.
While ICO F2 was successfully launched in 2001, the other satellites remain partially completed and were placed in storage in 2004 when construction was suspended as a result of ICO pursuing a legal battle with Boeing over the construction and launch contract for the constellation.
In December 2006, Ofcom sent a letter to ICO requesting that it provide the regulator with evidence by mid-2007 that it had contracts in place to complete and launch the remainder of the constellation and had secured the necessary funding to bring the ICO-P system into commercial operation.
With Ofcom deeming that no such evidence had been forthcoming, the regulator informed ICO in April 2008 that it had provisional decided to request the ITU to cancel ICO’s filing with the MIFR subject to further representations by ICO. By February 2009, Ofcom notified ICO that had made its decision to push ahead with its plan prompting ICO’s appeal.
In spite of ICO claiming that such a move was unprecedented and that Ofcom has acted disproportionately, the Court of Appeal sided with the regulator, stating: “Ofcom cannot… 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).”
However, SatelliteFinance understands that the appeals court verdict will not have any impact on the ongoing lawsuit with Boeing. In October 2008, the Los Angeles Superior Court ruled in favour of ICO and awarded it approximately US$603m in damages. The case is now in the appeals process.
In February 2011, ICO agreed to sell its MEO assets to South African investment company Jay & Jayendra (Pty). Under the terms of the agreement, J&J will reimburse ICO for ongoing operating expenses that are directly related to the MEO assets. The South African company will also pay ICO a nominal amount of cash and warrants to acquire a 5% equity interest in the new entity that will own and operate the MEO assets.
Joanne Wheeler, partner at CMS Cameron McKenna, said that the decision highlights the importance of the need for UK satellite operators to engage appropriately and as early as possible with Ofcom, especially in circumstances where the operator’s ability to deploy its satellite system in accordance with the characteristics notified by the operator has changed beyond its control.
