Dealers’ livelihoods ‘destroyed’ by ‘illegal’ 1999 GSM gateways ban

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Six telecoms dealers had their livelihoods “destroyed” after the UK government allegedly breached EU rules by banning the commercial use of GSM gateways (COMUGS) in 1999, the High Court has heard

As reported in a previous issue of Mobile News (542), the six firms – Floe Telecom, Recall Support Services, EasyAir, Packet Media, VIP Communications* and Edge Telecommunications** – are attempting to reclaim damages of £413 million from the Department for Culture, Media and Sport.

On July 1, Lord Justice Rose heard from Monica Carss-Frisk of Blackstone Chambers, counsel for the six firms, that there was “very little evidence” the government had taken EU law into consideration when making its 1999 decision.

EU rules state that member states cannot restrict the use of telecoms equipment unless it causes harmful interference. Carss-Frisk said UK laws passed in 1999 breach these rules by prohibiting the use of commercial GSM gateways.

Carss-Frisk said: “This is a story about a number of thriving businesses that were utterly destroyed by a decision which was in breach of EU law. The government, astonishingly, did not consider EU law when it decided to ban GSM gateways.

“The 1999 regulations were designed for cordless phones, and short-range devices, but ended up applying to gateways. There is no evidence to suggest any thought was given to why this happened at all.

“We believe the intention was never to include COMUGS, and that any prohibition was made accidentally.”

Evidence 

Extracts from emails sent by the Radiocommunications Agency (RA, now Ofcom) to operators in 2002, stating it did not believe GSM gateways caused harmful interference, were also read out in court.

These included an email sent by the RA on June 27 asking network operators whether they felt it would be in the public interest to prosecute GSM gateway operators who continued the trade, “given there seems to be no interference caused”.

Later that year, the RA began a consultation into whether GSM gateways should be legalised, because they caused “little or no interference”.

Carss-Frisk told the court the RA was dissuaded from legalising GSM gateways by the operators, who were concerned about the financial implications it would have on their business.

She showed the judge a presentation by Vodafone outlining the financial impact of legalising GSM gateways, but court restrictions prohibit its contents from being reported.

She said: “GSM gateways can bring advantages for consumers as it means there is increased competition, so the RA wanted to liberalise them. But curiously, there is no analysis of the UK’s EU obligations.

“We do not know what the UK government’s thinking was. We asked for an explanation from the government on how they implemented EU laws on the use of radiocommunications equipment and the short answer is, there is nothing.”

 

*No association with Hull-based VIP Communications Group

**Not Surrey-based Edge Telecom (UK) Ltd

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