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Appeal Court: TV menu decision was irrational, but not unfair

Since when have shopping channels been rational, anyway?

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A broadcasting platform did not break the rules on the placing of stations in its electronic programme guide (EPG) even though its decision was partly irrationally based and it used criteria not specifically listed in its policy.

The Freesat platform is a satellite service broadcasting free to air stations. Television shopping channel company JML asked for slots on the platform for two of its channels and entered into a contract with Freesat for two slots on its EPG.

Platform operators must abide by a code of practice on the operation of EPGs produced by media regulator Ofcom and must publish their own policies on how they allocate EPG slots.

A low-numbered slot within a genre is highly prized by broadcasters who are aware that viewers often do not scroll far beyond the channels that are initially displayed.

JML was initially allocated slots that put it on the second page of listings in its genre. It took Freesat to court to argue that the decision was in breach of the Ofcom code and Freesat's own policy because it was based on some irrational judgements and involved criteria not listed in Freesat's policy.

The High Court last year rejected the arguments and said that Freesat was entitled to make the decision as it had. The Court of Appeal has just ruled in agreement with the High Court.

JML objected to the fact that Freesat based its decision on where to place its channels on the audience ratings for the various channels vying for positions in the EPG and on where channels were already listed on the Freeview TV platform.

Freesat's policy had said that it would allocate channels taking several things into account, including "viewer convenience and expectations". The Ofcom code said that broadcast platforms had to "publish and comply with an objectively justifiable method of allocating listings".

JML said that its use of TV ratings figures and the Freeview positioning violated both of these requirements because those considerations were not listed in Freesat's policy.

"In my view the first question for decision so far as the Code is concerned is whether a criterion framed in terms of 'viewer convenience and expectations' is expressed at too high a level of generality to satisfy its requirements," said Lord Justice Moore-Bick in his ruling. "I do not think it is, because the whole tenor of the [Ofcom] Code is such as to indicate that broad criteria will suffice, provided they comply with the requirement for an objectively justifiable method of allocating listings."

The judge said that this part of Freesat's policy was in line with the Ofcom code. "The criteria, taken individually or together, represent a rational and objective set of factors by reference to which allocations are to be made. The weight to be given to each factor is left to Freesat, which must make its own judgement," he said.

He rejected JML's argument that if Freesat was going to take ratings and Freeview positionings into account it should state that specifically in its policy.

"If the Code required a detailed description to be published of the method by which listings would be allocated or the factors that would be taken into account, it could easily have made that clear. Instead it simply calls for platforms to publish and comply with an objectively justifiable method of allocating listings," said the ruling.

JML also argued that when Freesat said it would consider a list of factors, including when it agreed a contract with various applicants, it was obliged to give at least some weight to each of them. Freesat had said that it had not considered the timing issue at all.

Partly this was because of negotiations with channel producers which delayed the signing of some contracts, and partly because Freesat had difficulty in establishing the dates of some of the agreements.

JML said that this was an irrational basis for a decision and that because the decision was based on one irrational factor it was, therefore, an irrational decision.

The Court of Appeal accepted that this was irrational but said that it did not have enough influence on the company's decision about which slots to allocate to JML to undermine that decision making process.

"I do not think that the [High Court trial] judge's findings go so far as to establish that [Freesat's] decision was significantly influenced by the perceived difficulty in identifying the dates of the EPG contracts," said Mr Justice Moore-Bick. "JML is therefore unable to establish a breach of contract because it has failed to show that the decision to place no weight on [the time issue] was affected by any irrational or arbitrary factor."

Copyright © 2010, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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