The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Cable Bahamas yesterday described as “completely unfounded” claims that its proposed basic cable TV rate rise was only intended to finance its $65 million Florida expansion, adding that the increase was necessary to meet Bahamian regulatory requirements.

Responding to comments by former DNA candidate Rodney Moncur, who had been extremely vocal in his opposition to the $8 per month SuperBasic rate rise at recent Town Meetings, the BISX-listed communications provider said the two events were not linked.

David Burrows, Cable Bahamas’ head of marketing, told Tribune Business: “That’s completely unfounded.

“If anyone looked at the consultation document for the SuperBasic increase, they would see it’s unfounded. This price increase is based on the criteria set by URCA.

“Regardless of anything that may be happening on the outside, this [rate increase] has to happen.”

Cable Bahamas has previously said it had no choice in applying for the $8 rate increase for basic cable TV, as it was currently not meeting the URCA-mandated 10.86 per cent rate of return on capital.

This rate had been set to enable competitors to enter the market, and not be squeezed out by predatory pricing from Cable Bahamas using its basic cable TV package as a loss leader.

“It’s decided. Full stop. There’s no ambiguity as to what has to happen based on URCA’s own consultation,” Mr Burrows said.

“I will completely and utterly deny that this assertion has any basis in fact. Not outside process could change that. This is URCA’s own requirement.”

Mr Moncur previously told Tribune Business that Cable Bahamas’ deal to acquire the two Florida-based communications providers proved the company “had the means” and did not need an increase in its rates.

Cable Bahamas has unveiled a proposed $65 million deal to acquire south-Florida based Marco Island and its mainland affiliate, NuVu, plus Orlando-headquartered Summit Broadband. While Bahamian and US regulatory approvals are pending, the deal would give the company access to more than 18 million people.

“It would appear that the true reason behind these proposed increases are now emerging,” Mr Moncur had said.

“Cable Bahamas has had a monopoly from inception. They have made a tremendous profit after paying all of their expenses. We know that they are making a tremendous profit just on basic cable rates. We now see, with their attempt to acquire this gold mine in Florida, that they have the means and obviously they are charging us to help subsidise this purchase.”

Cable Bahamas is seeking a 27 per cent increase in the monthly charge for SuperBasic (RevTvPrime) cable, which represents an increase of $8 per month for residential consumers and $13 for commercial customers.

The current monthly rates of $30 and $50, respectively, have not changed since Cable Bahamas introduced the service in 1995. The BISX-listed communications operator applied for a price increase to its SuperBasic cable television service, currently marketed as its RevTv prime cable television package, last December.