CA-2024-002837 - [2025] EWCA Civ 1118

In my judgment, Ofcom’s case is to be preferred. For the reasons I have already given, it is the clear meaning of Article 2(4) of the EECC that the content exclusion is applied before determining whether the service consists “wholly or mainly” of the conveyance of signals, and there is nothing in the earlier EU legislation or pre-legislative materials to indicate that Article 2(4) should be read otherwise than it clarified the existing position.

Standing back from the detail of the legislative language, that conclusion is supported by a number of factors.

First, it is supported by the clear separation between the regulation of transmission and the regulation of content. I have already observed that the CRF broadened the scope of communications regulation by encompassing a broad range of new forms of technology, ensuring that regulation was technologically neutral, and that in doing so it established separate, parallel regimes for regulating services providing for the conveyance of signals, and for the content of what is conveyed.

The fundamental purpose of each regulatory regime is different. Regulation of content is to do with matters such as freedom of expression, plurality, impartiality, diversity, respect for human dignity and protection of minors: see for example Directive 2010/13/EU relating to audiovisual media services. Regulation of transmission on the other hand has a competition focus, ensuring customers have a fair choice between competing providers of the services.

Excluding content services in s.32(2) before applying the “principal feature” test best ensures that both the transmission element and the content element are subject to effective and proportionate regulation. Sky’s case, in contrast, would result in the transmission element of its overall service escaping regulation altogether, and would take the transmission element of any mixed service out of the scope of regulation wherever the content element reduces it to 49.9% or less of the overall service. The fact that the overall service remains regulated by reference to its content, to ensure the protection of the public from harmful content and the like, provides no comfort against the fact that the transmission element escapes regulation whose purpose is protection of the public in an entirely different sense, focusing on competition.

I therefore reject Mr Ward’s submission that Ofcom’s case is flawed because it causes a service that is mainly content to be regulated. Nor do I accept his submission that Ofcom’s case uses the content exemption to define the scope of the regulation of the rest. It simply leaves it out of account – consistent with what the parties accept is common ground, that the CRF does not regulate content. It is not (as Mr Ward put it) “the content exception that drives a service like Sky’s into the field of regulation”: that is achieved by the fact that the non-content element of the service consists wholly or mainly of the conveyance of signals. As I have observed above, in connection with the BEREC report, it is Sky’s interpretation that would cause the extent of content to be used to determine whether conveyance of signals falls within regulation. That is counter-intuitive, to say the least, when the regulatory regime as a whole is intended to keep the regulation of content and of transmission separate, given the fundamentally different aims of the two regulatory regimes.

Second, it better accords with one of the key aims of the CRF and the EECC, namely to bring the transmission element of broadcasting networks within the regulatory framework applicable to communication services. We were not presented with any evidence as to the proportion of an overall service provided by any other broadcaster as between transmission and content, but viewed (as Mr Ward accepted it must be) from the perspective of the end-user, it is not difficult to see that the element of most interest will usually be content, rather than how that content is transmitted. Sky’s approach would – to put it at its lowest – create a significant risk of thwarting that key aim. Ofcom’s approach achieves that key aim, whilst ensuring the separate regulation of content and of transmission services.

Third, and contrary to Mr Ward’s submission, the “wholly and mainly” test, on Ofcom’s interpretation, still performs a valuable function: that of ensuring the regulation is proportionate, by balancing the various technical components that make up the service and enquiring whether that which consists of conveyance of signals, by the entity to be regulated, is the principal feature. Mr Ward gave, as an example of a service that would escape regulation because the conveyance of signals element was less than the principal feature, an electricity supply service that included a smart meter. Another example is Pay TV content carried over the open internet: on a purely “tech on tech” balance, this does not qualify as an ECS.

Fourth, Ofcom’s approach also better accords with the objective of legal certainty. I have already observed that if the wholly or mainly test is applied to the service as a whole including content services, then it is likely to take most broadcasting services out of the definition of an ECS, which cannot have been the intention. Even if that is not correct, however, then seeking to balance the relative importance of content and transmission services from the end-users’ perspective involves inherently difficult value judgments. As Green LJ put it in argument, transmission services and editorial control are almost philosophically different. The test could not be answered simply by identifying the amount spent by the broadcaster on different elements.

While it is true that a value judgment is still called for if the test is to be applied to what remains after exclusion of content services, it is a much more straightforward exercise, likely to lead to greater consistency in application and thus greater legal certainty.

This would point even more strongly in Ofcom’s favour if “content service” were to be construed as extending to the provision of content by its transmission, even where that content was produced by third parties, as Mr Holmes suggested. In that case, identifying whether the content or transmission element was the main or principal element would be even more difficult. That, as I have noted above, was not the approach adopted by the ECJ in UPC Nederland and Sky did not develop any argument on the point before us. Mr Ward said that in an effort to invite the Court to decide no more than was strictly necessary it had not made submissions on that point. In those circumstances, and since my conclusion does not depend on it in any way, I need not address the point in this judgment.

For the above reasons, I consider that the Tribunal came to the correct conclusion, and I would dismiss the appeal.

I agree.

I also agree.