The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

REGULATORS have fined the Bahamas Telecommunications Company (BTC) almost $31,000 for violating pricing and consumer protection rules, rejecting its claim that the breaches were "trivial".

The Utilities Regulation and Competition Authority (URCA), in a March 22 ruling, upheld complaints by BTC's mobile rival, Aliv, that the incumbent operator had breached the time allowed for price-related promotions and failed to inform consumers of all charges/terms and conditions associated with these offers.

Strict regulations were imposed on BTC as the former monopoly mobile provider, due to the Significant Market Power (SMP) this gave it, and Aliv's complaint to URCA accused its rival of "anti-competitive conduct" designed to prevent it seizing market share.

URCA, though, said it "did not see evidence that the alleged breaches were harmful to competition and customers, prompting it to "lower the base penalty rate" and impose a punishment that one source told Tribune Business amounts to "a slap on the wrist" for BTC.

The communications regulator's determination only dealt with BTC's breaches of the retail pricing rules, and did not address Aliv's complaints about the anti-competitive behaviour.

"URCA identified a series of breaches apparently committed by BTC during the period of November 2016 through June 2017," URCA's determination said, while dismissing BTC's argument that only two violations were relevant.

"URCA reiterates that BTC offering a promotion beyond its expected expiry date and the communication of inaccurate, incomplete and potentially misleading information to the public are non-trivial breaches of the relevant obligations," the regulator added, "having regard to BTC's unique position as an SMP operator, amongst other factors.

"Further, BTC's actions contravene the strategic objectives of the Communications Act and resulted in Aliv asking URCA to investigate BTC's compliance with a number of procedural aspects of the rules." URCA added that BTC's breaches were "repeated", and that it had to demand "corrective action on numerous occasions".

It concluded that BTC breached section 35 of its own operating licence, as well as the communications sector's retail pricing and consumer protection rules, by displaying "outdated tariffs and details" for mobile post-paid plans; running promotions and discounts beyond the maximum 90-day limit; and failing to publish all charges and service terms and conditions.

The retail pricing rules are designed to prevent SMP operators, such as BTC, from using their power to engage in predatory pricing and other tactics that are anti-competitive and designed to marginalise rivals - which would also undermine consumer interests.

BTC, in responding to URCA's initial findings, argued that these rules and their consumer protection counterparts were not intended to be "prescriptive" as this would impede "the creative ingenuity of each operator's marketing team".

This argument was given little credibility by URCA, which shot back that "full compliance" was essential for market transparency and the provision of accurate, complete information to consumers.

"URCA observes that the obligations did not inhibit the creative ingenuity of BTC's marketing team prior to Aliv's entry to the market, and the 2016 modifications to the.... rules would have provided BTC with greater marketing flexibility in light of Aliv's entry to the market," URCA said.

The regulator added that, by April 10, 2017, it had already seen various breaches by BTC "upon Aliv's entry to the market". BTC, though, blamed a "temporary discrepancy" involving post-paid mobile tariffs and plans on a dispute with the third-party operator of its mobile website.

"In early 2017, BTC decided to maintain the mobile website in-house. However, cancelling the agreement became contentious and time consuming," the company said. "During the interim period from January to April 2017, the third-party did not release control of the mobile website and was not updating it."

Unimpressed, URCA rejected BTC's description of the breaches as minimal, and added: "URCA emphasises that the repeated and ongoing transgressions by BTC, despite warnings by URCA (the April 10, 2017, and May 25, 2017, letters) demonstrate a troubling disregard for URCA's regulatory actions and the relevant obligations, and therefore warrant regulatory and enforcement action."

The offers where all charges and terms were not published included BTC's 'free fixed to mobile'; several pre-paid mobile bundles; two pre-paid mobile data plans; and discounted calls to Haiti and Jamaica.

Many of the same plans were also involved in BTC's breach of the maximum 90-day limit imposed on its promotions and discounts. Some promotions ran for as long as two and four months beyond this limit, with BTC admitting these were "material overruns".

The carrier attempted to argue that these were "inadvertent", and that no harm was caused to consumers. URCA, though, said there was "clear evidence that BTC intentionally ignored the directive in" its April 10, 2017, letter to cease the 'free fixed to mobile' offer.

"While customers may have benefited from the promotions being in the marketplace beyond the expected dates, it is still a non-trivial breach of the relevant obligations having regard to BTC's unique position as an SMP operator," the regulator concluded.