Zockoll Group Ltd v Telecom Éireann

• Jurisdiction: Ireland
• Judge: Mr Justice Kelly
• Judgment Date: 01 January 1998
• Neutral Citation: [1997] IEHC 178
• Docket Number: [1995 No. 9781P]
• Court: High Court
• Date: 01 January 1998

[1997] IEHC 178

THE HIGH COURT

No. 9781P/1995

ZOCKOLL GROUP LTD v. TELECOM EIREANN

BETWEEN

THE ZOCKOLL GROUP LIMITED, DYNO-ROD PLC AND PHONE NAMES LIMITED

PLAINTIFFS

AND

TELECOM EIREANN

DEFENDANT

Synopsis

Competition

Competition; abuse of a dominant position; Telecom Éireann; allocation of telephone numbers; application for particular telephone numbers; criteria applicable to allocation and withdrawal of telephone numbers; whether subscriber entitled to be allocated particular telephone numbers; whether Telecom Éireann entitled to withdraw telephone numbers; whether non-allocation and withdrawal of telephone numbers abuse of a dominant position; whether public law principles applicable to non-allocation and withdrawal of telephone numbers; whether conduct of Telecom Éireann fair and reasonable; s. 5 Competition Act, 1991; Article 86 EEC Treaty; Postal and Telecommunications Services Act, 1983; Telecommunications Scheme, 1994

Held: Telecom Éireann obliged to act fairly and reasonably in allocating and withdrawing telephone numbers; public law principles not applicable; withdrawal of telephone numbers was not fair and reasonable and so was invalid; subscriber entitled to be allocated numbers which had been applied for( High Court: Kelly J.28/11/1997)- [1998] 3 IR 287

Zockoll Group Limited v. Telecom Éireann

1 JUDGMENT of Mr Justice Kelly delivered the 28th day of November, 1997.

INTRODUCTION

2 Easily memorised telephone numbers have long been used by commercial concerns as a marketing tool. Everybody is familiar with the use of such numbers by, for example, taxi companies. Over the years the use of such numbers has increased. The introduction of a freephone facility whereby a customer or potential customer can use such numbers without charge has further enhanced their attraction.

3 This case is concerned with a refinement to this concept. Anyone who has visited the United States of America in the last few years will be familiar with it. It is called alpha-numeric numbering. It works as follows:

4 Each of the numbers on a telephone keypad (with the exception of 1 and 0) convert into letters. There is in existence an international standard for alpha-numeric keypads which has been adopted in all of the major industrial countries. It reads as follows:-

5 2 1:-

6 3 2:ABC

7 4 3:DEF

8 5 4:GHI

9 6 5:JKL

10 7 6:MNO

11 8 7:PQRS

12 9 8:TUV

13 10 9:WXYZ

14 11 0:-.

15 The use of such a keypad enables a number to be translated into a word. Consequently a person who wishes to avail him or herself of a particular service does not have to memorise the telephone number of such a service but merely has to remember a word associated with it. So if one is in the United States and becomes ill it is possible to telephone for the services of a doctor by ringing a free phone number as follows: 1 -800 DOCTOR. A person using an alpha-numeric telephone keypad who dials that number will (probably without knowing it) dial 1800362867. Hopeless romantics may avail themselves of the services of a florist by dialling 1-800 FLOWERS. This number has a particular relevance to this case for reasons which will become apparent.

16 An individual doctor or florist would be unlikely to be able to deal with the number of calls that might be made to their individual practice or business if they succeeded in having the alpha-numeric numbers to which I have just alluded. So what has occurred in the United States is, of course, that many of these services are provided on group or franchise bases.

17 The alpha-numeric concept although widely used in the United States is virtually unknown as yet in this country. It is only a matter of time before the concept becomes as popular here as it is in the United States.

THE PARTIES AND THEIR FUNCTIONS

18 Each of the Plaintiffs are limited companies with registered offices at Surrey in England. James Zockoll is the Chairman of each of the companies. The first Plaintiff (the Zockoll Group) owns the trade marks "Dyno" and "Dyna". The second Plaintiff (Dyno-Rod) is a wholly owned subsidiary of the Zockoll Group. It has a licence from the Zockoll Group in respect of the two trade marks which I have just mentioned. Dyno-Rod in turn licences the use of the trade marks to other companies. Dyno-Rod is a drain cleaning franchise business which has been trading in the United Kingdom for about thirty-three years and in Ireland for about twenty-five years. It has about a hundred licensed franchisees in the United Kingdom and Ireland. It also has an operation in California which has been underway for about the last nine years.

19 Whilst the Dyno-Rod business is the flag-ship of the Zockoll Group's fleet, that company has also established franchise businesses in other services and indeed in other countries. It has such businesses in Germany and the Benelux countries for a variety of services ranging from ice-cream sales on the one part to silencer shops and mobile car tuning.

20 The third Plaintiff (Phone Names) is also a wholly owned subsidiary of the Zockoll Group. It has been set up to promote and market the alpha-numeric concept. That involves the education of consumers concerning the use of standard telephone keypads and the production of templates to fit over existing keypads which do not have an alpha-numeric facility. The Zockoll Group leases telephone numbers from service providers and licences them to third parties through Phone Names. Phone Names identifies companies" products and services which fall into a specific business sector for example Building Societies. It then identifies the generic words used everyday in that business such as "mortgage" or "home loans". It then requests from a service provider the telephone number on an alpha-numeric keypad that corresponds to the letters making up the words "mortgage" and "home loans". When that number is secured, it creates service marks and marketing slogans (known as "strap lines") allied to the Building Society. These ideas are then packaged and presented to Building Societies to be operated on foot of a licensing arrangement. The Plaintiffs have been working on this concept and its development in the United Kingdom by making presentations and attempting to interest other parties in the business.

21 The Defendant is a limited company which was set up pursuant to the provisions of the Postal and Telecommunications Services Act, 1983(the Act). That Act brought about a fundamental reorganisation of the postal and telecommunications services of the State. The principal objects of the Defendant, pursuant to the provisions of Section 14 of the 1983 Act, are:

22 (a) to provide a national telecommunications service within the State and between the State and places outside the State,

23 (b) to meet the industrial, commercial, social and household needs of the State for comprehensive and efficient telecommunications services and, so far as the company considers reasonably practicable, to satisfy all reasonable demands for such services throughout the State, and

24 (c) to provide such consultancy, advisory, training and contract services inside and outside the State as the company thinks fit.

25 Under Section 15 of the same Act there is a general duty imposed upon the Defendant to conduct its affairs so as to ensure that charges for services are kept at the minimum rates consistent with meeting approved financial targets and that revenues of the company are not less than sufficient to meet its charges, generate a reasonable proportion of capital needs and remunerate capital and repay borrowings. Nothing in either of those two sections is, however, to be construed, as imposing on the Defendant, either directly or indirectly, any form of duty or liability enforceable by proceedings before any Court to which it would not otherwise be subject. Some further statutory provisions are relevant from the Defendant's point of view.

26 Under Section 87 of the Act it is given the exclusive privilege of offering, providing and maintaining telecommunications services for transmitting, receiving, collecting and delivering telecommunications messages within the State up to and including a connection point in the premises of a subscriber for any such service. That privilege is granted to it in view of its primary purpose of providing a national telecommunications service and of the general duty imposed on it by Section 15. The privilege is furthermore provided in recognition of the fact that a privilege of this kind is appropriate having regard to the area and population of the State and the state of development of telecommunications technology and furthermore because a viable national telecommunications system involves subsidisation of some loss-making services by profit-making services.

27 Section 90 of the Act entitles the Defendant to make, as respects any of the telecommunications services provided by it, a scheme providing for the charges which are to be made by it and also the other terms and conditions which are to be applicable to the services provided by it. Any such scheme made by the company under the section may revoke or amend a previous scheme. A scheme once promulgated by the Defendant comes into operation on such date as is specified therein. The only fetter which is placed upon the Defendant in bringing such a scheme into operation is that it may not increase any charge without the concurrence of the relevant Minister. It is clear therefore that the Defendant has power by statute to, in effect, write its own terms and conditions which will be applicable to services provided by it. Finally, under Section 96 of the Act certain powers are given to the Defendant for the control of telecommunications services. The one which is relevant for the purposes of this litigation is the power to suspend or interrupt a telecommunications service or refuse to implement or...