The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Questions were yesterday raised over whether the Utilities Regulation and Competition Authority (URCA) could approve a 27 per cent rise in Cable Bahamas’ SuperBasic price in Freeport, given that a 2011 Supreme Court ruling found the regulator could not levy fees on the company’s Internet earnings in that city.

Garvin Gibson, in an e-mail sent to URCA for its public consultation on the proposed price increase, suggested that “Cable Bahamas can’t have its cake and eat it, too”.

The e-mail, which was copied to Tribune Business, pointed out that after successfully winning its case against URCA over the question of fees payable on its Freeport Internet earnings, the BISX-listed communications provider was now effectively performing a 100 per cent U-turn by agreeing the regulator had jurisdiction over its operations in the Port area when it came to the price increase application.

“Legally, and to the advantage of Cable Bahamas’ bottom line, Cable Bahamas does not operate locally in Freeport city,” Mr Gibson wrote.

As detailed by Justice Hartman Longley’s judgment, released in July 2011, Cable Bahamas’ instead operates in Freeport through its wholly-owned subsidiary, Cable Freeport.

The latter is licensed by the Grand Bahama Port Authority (GBPA), not URCA, and Cable Bahamas challenged the fee demands by the latter’s predecessor, the Public Utilities Commission (PUC), on the grounds that the regulator had no jurisdiction to regulate Cable Freeport or the wider communications industry in the city.

Picking up on this point, Mr Gibson wrote: “I believe URCA was just defeated in a landmark case in Freeport over taxes due by Cable Bahamas for its Freeport operations

“The court ruled that URCA could not, I say ‘NOT’, legally collect taxes from Cable Freeport. So I wonder, if URCA can’t collect taxes from the Freeport arm of the Cable giant, then how can URCA authorise Cable Bahamas to increase the cable bill for all the people who live and pay bills in the Freeport area?”

He added: “A judge of our Supreme Courts has already ruled on this issue. URCA has no power over Freeport area cable operations, and URCA should and must respect the court and its decision.

“In closing, I understand that URCA has no legal reason to disallow the rate increase nationwide, but URCA has no authority over Cable Freeport. The operation in Freeport is run by Cable Freeport, and Cable Freeport is not applying for any increase because they can’t.”

Obtaining a legal opinion on the issue proved difficult yesterday. Neither Robert Adams, attorney and partner at Graham Thompson & Co, nor Fred Smith QC, attorney and partner at Callender’s & Co, returned Tribune Business’s calls seeking comment before press time.

The duo had represented Cable Bahamas and Cable Freeport, respectively, in the Supreme Court case. A voice mail message left for URCA spokesperson, Gabriella Fraser, was not returned, while the regulator’s attorney, Ferron Bethell of Harry B. Sands & Lobosky, was said to have left his office for the day prior to Tribune Business trying to contact him.

Cable Bahamas (and Cable Freeport) won their case on the basis that the former Telecommunications Act permitted the then-PUC to levy fees only on its licensees. Cable Freeport, of course, did not fall into that category because it was a GBPA licensee, and the PUC’s demand for $78,747 was thus quashed.

Justice Longley, though, declined to rule on the wider issues - whether the PUC, and by extension URCA, had jurisdiction in Freeport, and whether Cable Freeport should be licensed by URCA.

These questions go to the heart of the issue over who should regulate communications and utilities in the 230 square mile Port area - the GBPA or a nationwide regulator such as URCA.

In turn, this also strikes at the Hawksbill Creek Agreement, the Port fearing that giving up regulatory responsibility in Freeport would undermine the Act/agreement that is the very basis for the city’s existence.

The former Telecommunications Act has since been repealed by the Communications Act 2009, and in his ruling Justice Longley suggested this opened the door to further legal challenges by URCA.

In light of all this, one well-known businessman who is a keen student of the Hawksbill Creek Agreement told Tribune Business yesterday that Cable Freeport should have applied separately to the GBPA for the 27 per cent SuperBasic increase in the Port area.

Agreeing that it appeared as if URCA could only approve an increase for the rest of the Bahamas, but not Freeport, the businessman described the situation as a classic “Catch-22”.

Speaking on condition of anonymity, he added that if the GBPA remained silent - and Cable Bahamas continued with seeking URCA’s approval for the price increase in Freeport - it would give the regulator an opportunity to re-open the case.

“They could find that gives grounds for URCA to re-open the case, if they seek approval from URCA for a rate increase where they don’t have jurisdiction,” the businessman said.