The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE FNM’s deputy leader yesterday said he could not support Cable Bahamas’ bid for a 27 per cent increase in the price of its basic pay-TV package, suggesting it delay this for “another year or so”.

 K Peter Turnquest, who is also the   East Grand Bahama MP, said it was “disappointing” that Cable Bahamas had relaunched its bid for an increase given the current financial reality faced by most Bahamians.

However, he backed the BISX-listed communications provider’s decision to launch its ‘Prime Local’ package of six channels, as the $10 per month service would be accessible to lower income families.

“I agree with the local package, I agree with that. I think that is something that can be accessible to lower income families,” Mr Tuenquest said.

“Of course, it would be good if they could service the entire Bahamas. Be that as it may, I think the limited package would work for lower income packages.”    

Simultaneously with ‘Prime Local’s launch, Cable Bahamas has reintroduced its bid for a 27 per cent increase in the price of its basic pay-TV package.

The ‘Prime Local’ compromise seems to have (for the moment) won over the regulators. The Utilities Regulation & Competition Authority (URCA) rejected Cable Bahamas’  December 11, 2012, application for this exact same increase, and ‘Prime Local’ is clearly designed to counter the rationale that URCA employed in its February 2013 rejection of Cable Bahamas’ first bid for price increases related to its basic TV package.

URCA’s logic then was founded on the fact that Cable Bahamas had failed to comply with its legal obligations to provide ‘affordable basic television services to all populated areas and specified institutions’.

Cable Bahamas, though, argued that the regulator was mistaken to link its universal service obligations (USO) to the basic pay-TV price increase bid, with the BISX-listed company appealing the decision to a recent hearing of the Utilities Appeals Tribunal (UAT).

Mr Turnquest sided with URCA’s previous decision, saying: “The increase they are trying to get on the basic package is certainly disappointing given the current circumstances.

“With the addition of VAT on top of that, who are the people supposed to be able to afford these increases? BTC is coming along with its product, and maybe the competition will be good, but an increase at this stage is not something I can support.

“I don’t think it’s an economic matter for them [Cable Bahamas]. I think they ought to concentrate on the service and the product they are delivering to the Bahamian people, and let’s talk about these increases in another year or so, but with all that is going on this  is not the time for any increases.”

The current strategy is for Prime Local to be launched into the four islands where Cable Bahamas is seeking the 27 per cent basic pay-TV price increase - New Providence, Grand Bahama, Abaco and Eleuthera.

Bahamian consumers would be facing the prospect of $8 and $14 monthly increases in the cost of basic pay-TV services here only.

Together, these fouyr islands comprise 91 per cent of the Bahamian population, but Cable Bahamas’ market/island segmentation strategy means that the current monthly basic prices of $30 and $50, respectively, for business and commercial customers would remain unchanged on Andros, Bimini, the Berry Islands, San Salvador, Great Inagua and Long Island.

Cable Bahamas has argued that the losses incurred in providing the basic pay-TV service will continue to grow and threaten “the economic viability of the service”.

It has consistently argued that the monthly basic pay-TV price has remained unchanged since 1994, and increased programming costs make it impossible to comply with URCA’s requirements when it comes to the regulated cost of capital employed on the service.

 Prime Local’s line-up, though, may not be sufficiently attractive to Bahamians. It will only offer ZNS, Jones Communications (JCN), a weather channel, PBS, the Parliamentary Channel and the Bahamas Christian Network.

While agreeing that the monthly $10 charge for Prime Local appeared affordable, URCA said Cable Bahamas needed to offer more flexible payment arrangements for one-off, upfront costs such as security deposits and installation. The issue will now go to public consultation.