A legal challenge launched by Government in protest of a satellite network notice on behalf of the Isle of Man — which ultimately failed — cost taxpayers $635,121, Telecommunications Minister Terry Lister told the House of Assembly on Friday.

Updating Parliament on the judicial review, Mr. Lister — who is Minister of Energy, Telecommunications and E-Commerce, said Bermuda took the action against the UK regulator, the Office of Communications (Ofcom), while the Isle of Man and ManSat Limited intervened as interested parties.

Mr. Lister said Ofcom decided to submit a satellite network notice to the International Telecommunications Union (ITU) on behalf of the Isle of Man over Bermuda's objections.

Ofcom held that Man's network had been modified to prevent interference with frequencies allocated to Bermuda but Government believed the methodology used by Ofcom in coming to this decision was flawed as it was designed to analyse large countries rather than small island states.

"The Government believed (and still believes) that Ofcom's decision was in contravention of the UK Communications Act and that its intended actions were contrary to its specific duty to represent the interests of all Overseas Territories to the ITU," Minister Lister said.

The legal challenge was launched in May but on August 13, the Court ruled against Bermuda.

"In brief, the judgment interpreted that the Memorandum of Understanding between the UK Secretary of State for the Department of Business, Enterprise & Regulatory Reform and Ofcom had given Ofcom the power which it claimed to have, and this power was implied by the statutory framework," the Minister told Parliament.

"The Court dismissed Bermuda's technical concerns about interference, and did not find it necessary to examine Ofcom's assertion that it had powers to rectify interference if it arose in the future. Bermuda was held liable for the costs of both Ofcom and the Isle of Man, which totalled £354,330.22 ($635,121).

Minister Lister said that while Government still disagrees with this position, no further action will be taken against this judgment.

"Ofcom is now free to file the notice on behalf of ManSat Limited and the Isle of Man with the ITU," he said.

Government, however, intends to seek further clarification directly from the ITU on the analysis which gave rise to the technical concerns.

"In addition, there are still a number of questions to be answered about Ofcom's statutory powers and duties, which include clarification of Ofcom's representational role and the effect on Ofcom's decision and the judgment which upheld it, on all the Overseas Territories and Crown Dependencies," Minister Lister said. "We will therefore consult with the Foreign and Commonwealth Office in order to seek answers to these questions."