The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Regulators have moved to ease “the hardship suffered” by Sebas Bastian after the Island Luck chief’s radio launch was blocked by an ongoing court dispute.

Tribune Business can reveal that the Utilities Regulation and Competition Authority (URCA) has permitted Mr Bastian’s radio joint venture to broadcast using a “temporary” FM frequency - a move that has angered rival operators.

Mr Bastian’s majority-owned Paramount Systems joint venture was supposed to use the 103.5 FM frequency formerly employed by ZSR Sports Radio, a station established by Olympic triple jump medallist, Frank Rutherford, and late sports broadcaster, Phil Smith. Mr Rutherford and Mr Smith’s widow are Mr Bastian’s minority partners in Paramount Systems, but they - and the 103.5 FM licence - have become embroiled in a legal challenge that is being mounted by ZSR Sports Radio’s operator.

Navette Broadcasting and its principals, Cheryl Braynon and Van Ferguson, are opposing the station’s majority takeover by Mr Bastian on the basis that they are the true holders of the 103.5 FM licence.

With Navette continuing to broadcast on that wavelength until the court dispute is resolved, URCA has permitted Paramount Systems to temporarily use the 105.3 FM frequency.

Rival radio station operators, though, have blasted URCA’s action as “very ugly” and lacking transparency because no public announcement of the temporary licence and frequency has been made.

They added that URCA had also breached its own 2013 ‘moratorium’ imposed on new radio licences for New Providence, given that the FM market was over-saturated with too many players.

And they also alleged that Paramount Systems and its owners are breaking the law by not broadcasting anything that reveals the station’s identity - a charge URCA confirmed was correct.

One radio station operator, speaking on condition of anonymity, told Tribune Business: “The frequency that the guys have from the sports station was 103.5 FM, but my understanding is that Island Luck is now broadcasting on 105.3 FM.

“I’ve been told that they’ve been granted a temporary licence in another frequency. The reason I have a problem with it is because it’s another frequency in the market, and we don’t need another frequency.

“They were authorised to use 103.5, but the current operator is going to court. These guys are claiming they went and made an investment based on this licence being granted for 103.5 and, as a result, URCA conceded and gave them a temporary frequency.”

The operator added: “It’s very ugly by any stretch of the imagination. URCA is not operating from a transparent position, which is one of the premises its built on. This thing should have been declared to the public.

“These guys are also running music on 105.3 FM 24 hours a day, and are not giving out any station identifiers. That’s a legal requirement to identify themselves, but they’re not.”

Van Ferguson, one of Navette’s principals, added: “How did he [Mr Bastian] get a different frequency? The moratorium has been on since 2013, and there’s a waiting list a mile long for people wanting a licence.”

Stephen Bereaux, URCA’s chief executive, defended the regulator’s action and denied that it had granted special treatment to Mr Bastian and his Brickell Management Group (BMG), which owns a majority 51 per cent stake in Paramount Systems through its Neman Networks subsidiary.

“I can understand the feeling people have that something untoward was done,” he told Tribune Business. “I can understand the feeling that because it’s Island Luck that something special was done.

“But, just because Island Luck was involved, does that mean we would not treat them like this? Anyone in the same position would have been treated exactly the same. It’s the least we could do. I don’t think there’s any question with that. If you go through the files, I’m pretty sure you will find other cases.”

Mr Bereaux said the “extraordinary circumstances” surrounding the 103.5 FM frequency had almost compelled URCA to act, and temporarily licence Paramount Systems to use another frequency until the court process was completed.

He explained that URCA’s primary responsibility with the radio broadcast industry was to ensure no licensee’s legitimate frequency was interfered with.

Given that Navette’s court action had done precisely that, Mr Bereaux said the regulator had temporarily permitted Paramount Systems to use 105.3 FM as a way to minimise the economic losses and damage from not being able to use the frequency it is licensed for.

“We bend over backwards to address anything that looks like interference,” Mr Bereaux told Tribune Business. “The only criminal offence in the Communications Act relates to interference with someone’s frequency. It’s a very serious issue, and we would be addressing that very seriously if the courts had not intervened.

“URCA continues to take whatever steps are necessary to ensure appropriate licensees are able to use their frequency. In the interim, based on the hardship suffered by the licencee [Paramount Systems], we have made available frequency in the short-term; very strictly short-term while we take steps to clear the spectrum they’re licensed for.”

Mr Bereaux said Paramount Systems has been permitted to use the 105.3 FM frequency for three months or until the spectrum it is licensed for becomes available - whichever is sooner.

He confirmed that URCA had imposed a moratorium on issuing new FM licenses due to “congestion” within the frequency band, but said it had the ability to vary this at any time. The URCA chief also argued that the ban on new licences would not be broken because Paramount Systems was taking over an existing one.

“There is a moratorium, but it’s not about the market; it’s about availability of frequency,” Mr Bereaux said. “There is a moratorium because of congestion in the band. We can’t issue more licences.

“These are extraordinary circumstances, bearing in mind the existing licence is not subject to a moratorium, and URCA says it is being used in breach of the law. But because of the court action it’s not prudent for URCA to enforce what it says is a breach.

“Because URCA is unable to enforce the breach, we have taken the extraordinary step of allowing temporary use. There are specific provisions in the law that allow temporary orders to alleviate hardship in the short-term,” the URCA chief executive continued.

“The risk of special damage allows us to go around the moratorium we have put in place. In these circumstances, an interim order is the way to go. We have not issued a new licence, and we will not issue a new licence.”

Mr Bereaux added that URCA had already contacted Paramount Systems over its failure to play ‘station identifiers’, and added: “We have reached out to them to address that.

“We only became aware of that yesterday. We have written to them to do what they’re supposed to do..... We have sort of corrected the issue of station identification. It’s important but not critical.”

Mr Bereaux indicated that while URCA had previously been content for Navette’s legal challenge to play out before the Supreme Court and Utilities Appeal Tribunal (UAT), its patience was now starting to wear thin.

“We have various powers to clear the frequency and are exploring - mindful of the matters going on in court - how we use those powers and ensuring we do it right,” he told Tribune Business.

“We do have due respect for the courts and Utilities Appeal Tribunal, so we cannot take action to remove the people using it [the 103.5 FM frequency] as long as they have the possibility of exercising their rights before the courts.

“We don’t have to let it all play out, but we were up until the Utilities Appeal Tribunal matter.... It’s dragging on for longer than we expected, so we had to take some steps to ease their [Paramount Systems] losses in the meantime until it’s sorted.”

Navette’s Mr Ferguson told Tribune Business that he and Ms Braynon were now planning to launch a Judicial Review action before the Supreme Court to challenge URCA’s verdict that Mr Rutherford and Mr Smith’s widow - not themselves - were the true owners of the 103.5 FM licence.

He added that the matter had to-date been ‘batted’ between different fora, explaining: “URCA has argued that it should be heard by the Utilities Appeal Tribunal and not the Supreme Court.

“It went to the Utilities Appeal Tribunal, and they opposed jurisdiction. They said it should have gone to arbitration first.” The ‘arbitration’ remark is understood to refer to a clause in the contract between Navette and Messrs Rutherford and Smith about how disputes should be resolved.

“We are now back at the Supreme Court,” added Mr Ferguson. “I think it’s a Judicial Review. Our argument is that it’s not the contract; it’s what URCA did to us, and that needs to be heard.

“We are still appealing their decision, and fighting that. We are still appealing the ownership of Sports Radio 103.5. We are still trying to take the case to court and have it heard. We have an excellent argument if that happens.

“Our main complaint and issue is they have no right to interfere with the licence... We’ve been taken for a ride, and they’ve interfered with our programming for two months, but we’re rebuilding now and hopefully will be successful whenever that court date comes.”

Mr Bereaux declined to go into detail on the court proceedings, although he confirmed that Navette’s legal challenge had “bounced around” between the Supreme Court and Utilities Appeal Tribunal.

Paramount Systems is another component of Mr Bastian’s efforts to build a media empire, given that it will combine with his existing TV station to cover the electronic broadcast spectrum.

The Island Luck chief and his company have been on a recent recruitment drive, hiring several journalists from ZNS and other media houses, to staff his new businesses.

Island Luck and BMG’s foray into media has caused some disquiet among established companies, as witnessed by Tribune Business during a Government House media dinner over the Christmas holidays, when Wendall Jones, Jones Communications’ owner, accosted the Prime Minister over the licences being issued to Mr Bastian.

The web shop chief, with his ‘deep pockets’ from gaming profits, will likely prove a direct competitor for Jones Communications and other media houses once his radio station is fully operational.

Mr Bereaux, meanwhile, reiterated of the temporary licence: “That’s what you’d expect if there was a licensee suffering interference with their frequency. I don’t see how it’s special treatment.

“It’s unfortunate for us. It’s not an ideal situation for anyone, especially the licensee. I’m sure they’d like their own frequency. It’s unfortunate, but it’s where we are.”