Supreme Court sets aside Court of Appeal decision that suspended switch off date for analogue - digital migration broadcasting

Communications Commission of Kenya & 5 others v Royal Media Services & 5 others

Petition No.14 of 2014

 (Consolidated with Petitions Nos. 14A, 14B & 14C of 2014)

Supreme Court of Kenya at Nairobi

W M Mutunga; CJ, K H Rawal; VP & DCJ, P K Tunoi, M K Ibrahim, J B Ojwang, S C Wanjala, S N Ndungu

Brief facts:
The instant petition had its origins at the High court. At the High Court, the petitioners (now respondents) sought orders to compel the respondents (now appellants) to issue them with Broadcasting Signal Distribution (BSD) licenses & frequencies & an order restraining those respondents from switching off their analogue frequencies, broadcasting spectrums and broadcasting services pending the issuance of a BSD license. However, the trial judge dismissed the petition holding that the petitioners were not entitled to be issued with a BSD license merely on the basis of their established status or legitimate expectation on their part and further that the implementation of the digital migration was not a violation of the petitioners fundamental rights and also that their intellectual property rights had not been infringed.
Aggrieved by that decision, they appealed to the Court of Appeal who set aside the decision of the High court by holding that inter alia;

1. The Communications Commission of Kenya was not the independent body contemplated by article 34(3) (b) & (5) of the Constitution and therefore could not grant the BSD licenses.
2. The direction for the then respondents to air the appellants’ (now respondents’) Free to Air (FTA) programmes without their consent was a violation of the appellants’ intellectual property rights and was thus declared null and void.

Subsequent to the determination by the Court of Appeal, four petitions were filed at the Supreme Court by the appellants (Petitions Nos. 14, 4A, 14B & 14C of 2014) and were all consolidated into the instant petition
Issues

1. Whether Communications Commission of Kenya (CCK) as at the time (then) constituted was the regulatory body (regulating broad casting and other electronic media) envisaged under article 34(5) of the Constitution of Kenya, 2010.
2. Whether CCK violated the intellectual property rights of the content producers (respondents) by authorising the 4^th & 5^th appellants to transmit the respondents’ broadcasts without the respondents’ consent.
3. What is the scope of the “must-carry” rule? And whether the “must–carry” rule infringed upon the intellectual property rights of a content producer.
4. Whether a case involving the violation of intellectual property rights could be addressed by a petition to enforce fundamental rights and freedoms.
5. Whether legitimate expectation for the grant of Broadcasting Signal Distribution (BSD) license can arise on account of substantial/ massive investments in the broadcasting sector

3. Whether or not there exist circumstan  

HELD

1. Article 34(3) of the Constitution of Kenya, 2010 guaranteed the freedom of establishment of broadcasting & other electronic media but subject to licensing procedures that were necessary to regulate the airwaves and other forms of signal distribution. Article 34(5) commanded Parliament to enact legislation for the establishment of a “body” that had to be independent of governmental, political and commercial control. However, such a body could not disengage from other players in public governance.
2. The shield of independence could be attained in a number of ways. The main safeguard was the constitution and the law. Other safeguards in place to attain independence could range from the manner in which members of the said body were appointed, to the operational procedures of the body and even the composition of the body. However, none of those “other safeguards” could singly guarantee “independence”. It took a combination of those and the fortitude of the people who occupied office in the said body to attain independence.
3. Under section 6 of the Media Council Act, one of the listed functions of the council was the setting of journalistic standards, ethical and professional standards, and the regulation and monitoring of compliance with those standards. Section 7 thereof on the composition required that the nominees had to reflect the interests of all sections of the society. Section 11 thereof provided that the Council had to be independent of control by Government, political or commercial interests.
4. Section 5 of the Kenya Information & Communication Act described the Communications Commission of Kenya (CCK) as a licensing and regulatory body but made no mention of a “standard setting” function. Therefore, from the two statutes above, the body contemplated by article 34(5) of the Constitution was the Media Council of Kenya and not the successor to CCK.
5. That notwithstanding, articles 34(3) & (5) of the Constitution could not be the basis for declaring CCK unconstitutional as there could to be no vacuum occasioned by the failure or delay on the part of the legislature. That was why all existing laws were given the leeway to continue operating, on condition that they were construed with necessary alterations, adaptations, qualifications and exceptions to bring them into conformity with the Constitution.
6. At the time the Constitution came into force, CCK was the body mandated to license broadcasting and other electronic media. CCK had a lawful existence & its functions were not unconstitutional.  Unless it was demonstrated that the legislation establishing CCK was incapable of being construed with the necessary alterations and exceptions, so as to bring it into conformity with the constitution, pending the three year legislative intervention, then it would have been improper in law and in principle to declare CCK unconstitutional.
7. From the various agreements and letters between the parties, the 1^st, 2^nd and 3^rd respondents had given the 4^th & 5^th appellants (Signet ltd & PANG ltd) consent to transmit their content.
8.  Under the “must-carry” rule, transmission frequencies for radio or television broadcasting and telecommunication were considered national resources for the public interest. That rule required cable television companies to carry locally-licensed television stations on their cable system. That obligation could only be imposed if the respective networks were the principal means of receiving radio and television channels for a significant number of end users of those networks. The rationale for the rule was to preserve the free circulation of information through access to the most important television channels such as national public television channels as well as the principal private television channels such as those owned by the 1^st, 2^nd & 3^rd respondents.
9. The appellants were not “re-broadcasting” the content of the 1^st, 2^nd & 3^rd respondents because they were not broadcasting organizations, since they did not take financial and editorial responsibility for the selection and arrangement of, and investment in the transmitted content. That was to say, the appellants did not interfere with the broadcast-content of the 1^st, 2^nd and 3^rd respondents. The content was delivered digitally without any interference from the signal distributors. As they were not rebroadcasting the content, therefore the appellants did not infringe on the intellectual property rights of the respondents.
10. The exceptions on the law of copyright were conventionally referred to as fair dealing. Fair dealing was thus a defence against copyright infringement. What amounted to fair dealing depended on the facts of each case. Therefore the “must-carry” rule which required the appellants to carry the signals of the 1^st, 2^nd & 3^rd respondents was by no means inconsistent with the requirement of fairness. Indeed it was clear that the appellants’ dealings with the 1^st, 2^nd and 3^rd respondents did satisfy the “fair dealing” defence, and therefore did not infringe upon the copyrights of the 1^st, 2^nd and 3^rd respondents.
11. CCK did not infringe upon the 1^st, 2^nd & 3^rd respondents intellectual property rights, in effecting the “must-carry” rule. That rule was essentially consistent with the terms of article 7 of the constitution which required the state to protect & promote diversity language in Kenya; article 10 which listed sustainable development as one of the national values & principles that bound persons & entities interpreting the constitution as well as article 11 which required to promote all forms of national and cultural expression through communication, information and mass media; and also article 35 which gave citizens access to information; and article 46 which protected the rights of consumers.
12. The principle of constitutional avoidance entailed that a court could not determine a constitutional issue when such a matter could properly be decided on another basis. The 1^st, 2^nd & 3^rd respondents claim in the High court, regarding infringement of intellectual property rights was a plain copyright – infringement claim, and it was not properly laid before that court as a constitutional issue. That was therefore not a proper question falling to the jurisdiction of the appellate court.
13. CCK had exclusive powers under section 5(1) of the Kenya Information & Communications Act to issue broadcast licenses. Section 5B thereof guaranteed the independence of CCK in the performance of its functions. However the promises made to the respondents on account of their substantial investment in broadcast infrastructure, and upon which they claimed legitimate expectation for the grant of BSD licenses emanated from the Permanent Secretary, Ministry of Information, Communications & Technology. Under the Kenya Information & Communications Act, the Permanent Secretary had no role in the granting or cancellation of a BSD license or any other broadcast licenses. It was therefore unlawful for the Permanent Secretary to make such promises to the 1^st and 2^nd respondents.
14. Although the Public Procurement Administrative Review Tribunal was not a court of law, the administrative proceedings (the appeal by National Signal Networks) that took place before it were judicial in nature. Section 112 of the Public Procurement and Disposal Act provided that a party could seek a review of the Tribunals decision at the High court within 14 days of the decision being rendered. In the instant case, the National Signals Network chose not to exercise their right to appeal against the tribunal’s decision at the High court. It was therefore fair to hold that the 1^st & 2^nd respondents were bound by the decision of the Tribunal regarding the BSD license. That finality gave rise to estoppel.
15. Although CCK deployed the procurement procedure in the Public Procurement & Disposal Act, in granting a BSD license to the 5th appellant (Pan African Network Group Kenya, Limited) and denying the same to the 1^st, 2^nd & 3^rd respondents, that decision was not informed by the imperatives of the values of the Kenyan Constitution as decreed in article 10. Given the fact that the subject matter of the license was a critical public resource and whose capitalization the Kenyan public had an interest in, CCK was bound to conduct its affairs more responsibly & transparently. Instead CCK chose to be hamstrung by the technicalities of procedure as if it were an ordinary procurement of goods and services. It was operating as if the constitution did not exist.

The concurring judgment of H K Rawal, DCJ & Vice President

16.  Article 34 of the constitution of Kenya, 2010 was a whole package of rights, obligations and protection against undue intervention by the government in respect of the freedom of the media. It guaranteed institutional freedom against other individual freedoms enshrined in the constitution.
17. Content provision and signal distribution were designed to be separate market segments. The separation of broadcasting and signal distribution by law and policy could be understood in the history of the media development in Kenya. During the analogue system, broadcasting and signal distribution were diagrammed into a single entity thus only allowing those of substantial means to share and disseminate ideas. Therefore, that separation was envisaged to allow other broadcasting entities capable of content development to distribute it through the medium of a common indiscriminate entity (the Broadcast Signal Distributors)
18. The migration from the analogue to digital terrestrial television introduced the signal distributor whose only mandate was to provide a channel for the transmission of the broadcaster’s content to the public. The distributor did not develop but only distributed the content. As such the signal distributor required a broadcasting signal distribution (BSD) license to carry the content.
19. The issuance of the license under article 34(3) of the Constitution of Kenya, 2010 was an administrative action that had to adhere to the prerequisites of articles 47 of the Constitution on the principles of administrative propriety. However issuance of the license was itself not a right under article 34 but a process to actualize that right and whose conduct was sanctioned by article 47 to the benefit of all who were subject to the process including the 1^st, 2^nd and 3^rd respondents.
20. The intention of the constitution through article 47 was to strengthen the procedural fairness expected when dealing with public administrative processes. Those processes had to be conducted in the sanctity of imperative principles such as expedition, efficiency, rule of law, reason and procedural fairness.
21. The 1^st, 2^nd and 3^rd respondents mistakenly asserted a guaranteed entitlement to a BSD license ignoring the required procedural processes to vindicate their grievances as provided by the constitution and the Act.

 

The orders of the court of appeal made on March 28, 2014 were set aside.

The declaration by the Court of Appeal annulling the issuance of a BSD license by the 1^st appellant (CCK) to the 5^th appellant (Pan African Network Group Ltd) was set aside.

The order by the court of appeal directing the independent regulator to issue a BSD license to the 1^st, 2^nd & 3^rd respondents was set aside.

The 1^st appellant, within 90 days to consider the merits of applications for BSD licenses to the respondents

The 1^st appellant (CCK) was to ensure the BSD license awarded to 5^th appellant (Pan African Network Group Ltd) was duly aligned to constitutional and statutory imperatives

The 1^st appellant (CCK) in consultation with all parties to set the time lines for digital migration for the digital migration pending the international deadline of June 17, 2015