People are always asking me’ … what’s going on with Rapture TV??. Russ can’t get enough. Anyway, you’ll be please to know that we have an update. The CAT site may be down, but it didn’t stop them ruling against Rapture yet again.

This time it  refused a request by Rapture TV to appeal the ruling of the Competition Appeal Tribunal (CAT) of 31 March 2008 which roundly dismissed its appeal against an Ofcom decision relating to electronic programme guide (EPG) services. In March 2007, Ofcom resolved a dispute between Rapture and BSkyB, concluding that charges levied by BSkyB for the provision of EPG services between November 2005 and November 2006 were fair, reasonable and non-discriminatory (FRND). In May 2007, Rapture appealed the decision to the CAT, claiming that Ofcom did not conduct a thorough investigation and defined the scope of the dispute too narrowly. In December 2007 the CAT ruled against Rapture describing its claims to be `ill-founded` and `misconceived`.

Rapture appealed on grounds that the Tribunal erred in its application of paragraph 3.5 of Oftel’s guidelines ‘The terms of supply of conditional access: Oftel guidelines’ (the “2002 Guidelines”), and that it erred in failing to take properly into account the nature and size of the Rapture TV. According to the Tribunal, these points merely repeated arguments made by Rapture in the proceedings before the Tribunal, which were rejected, and therefore have no realistic prospect of success. In particular it stated that: ‘It is not enough for the Appellant to assert that it is “self-evidently” a start-up and a small company, and therefore deserving of a lower charge rate, when it has been unable to provide any evidence to Ofcom or to the Tribunal substantiating that assertion or justifying a lower charge.’

The Tribunal also dealt with additional points raised by Rapture’s CEO David Henry in three letters to the Tribunal as part of his attempt to get the case appealed / re-heard so he could put forward new evidence that: (i) Rapture raised and submitted important documents to OFCOM to which OFCOM did not refer in its Determination; (ii) OFCOM failed to check whether Sky’s published accounting information tallied with the figures in the Sky Platform Model; (iii) the Sky Platform Model failed to meet the requirements for accounting separation required by Article 13 of the Framework Directive (Directive 2002/21/EC); (iv) Sky’s customer agreements and contracts show that the provision of the Sky set-top box (”STB”) is dependent on the customer subscribing to Sky and the 2002 Guidelines stipulate that Sky alone should bear the cost of the STB subsidy if the subsidy is tied to a subscription; and (v) the Sky EPG is not a form of conditional access.

The CAT points out that points (i) and (ii) can be dismissed because an appeal can only be made on points of law made in the contested decision, and Mr Henry’s points do not relate to points of law arising from the Tribunal’s decision but rather point out alleged inadequacies with Ofcom’s Determination which could have been but were not raised in the appeal before the Tribunal.

On point (iii) they find that he is clearly wrong as a matter of law. Article 13 of the Framework Directive affords national regulatory authorities, such as Ofcom, the ability to impose certain price control and cost accounting obligations on certain electronic communications providers. However, no such obligations have been imposed by OFCOM on Sky. Article 13 of the Framework Directive therefore appears to be irrelevant to the facts of this case.

As regards point (iv), the question of whether it was reasonable to require free-to-air channels with an EPG listing on the Sky platform, such as Rapture, to contribute towards the STB subsidy was considered both by Ofcom in the Determination and the Tribunal, and the Tribunal held that Ofcom was correct to conclude that the STB subsidy was a common cost to which free-to-air channels like Rapture seeking an EPG listing on Sky’s platform should contribute. the Tribunal concludes that even if Rapture’s arguments on this point amounted to a point of law rather than a new or re-assessment of the evidence (which is debatable), they would, nevertheless, in its judgment have no realistic prospect of success.

On the final point, the Tribunal found that it was too late to raise this point for the first time in an application for permission to appeal having previously expressly accepted that the 2002 Guidelines do apply.

Mr Henry also complained that the Tribunal didn’t get to hear all the pertinent evidence it needed to in the original case, a point dismissed as the tribunal points out the decision on what evidence to present was made by Mr Henry and his lawyers at the time, and the appeal process is not there to allow someone to have a second go, when they decide they could have argued their case better.

Finally, Mr Henry argued that Sky’s STB is in breach of EU law requirements concerning the interoperability of consumer digital television equipment.

The Tribunal notes this point was not considered by Ofcom in their determination and was not raised in the case previously, so is not capable of being appealed. The Tribunal goes on the inform Mr Henry that he could make a new complaint to Ofcom on this point, if he so desired. However, the Tribunal’s opinion is that the interoperability argument appears to be based on a misreading of the relevant provisions of EU law which require that all consumer digital television equipment intended for the reception of television signals is to possess the capability to display signals that have been transmitted ‘in the clear’. It notes that the provisions of EU law now prayed in aid by Rapture do not prevent a platform operator from delisting a channel that has failed to pay EPG charges, particularly in circumstances where the relevant national regulatory authority has investigated the dispute over the charges and determined that the charges are FRND.

Mr Henry, not being someone who takes regularly losing arguments to heart, will no doubt lodge a new appeal with Ofcom, on the issue of whether Sky’s STB is in breach of EU law requirements concerning the interoperability of consumer digital television equipment. He is also preparing a complaint to the EU over Ofcoms failure and the breaches of competition law by BSkyB.

David Henry has posted the following on the Rapture TV site:
Email between Rapture and Sky RE: EPG Charges (December 2006) 
Rapture/Ofcom Memo (February 2007)