The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE Bahamas' two major communications players have united to slam their regulator's "flawed review", instead urging it to lift current demands on their broadband Internet services.

Both the Bahamas Telecommunications Company (BTC) and BISX-listed Cable Bahamas are urging the Utilities Regulation and Competition Authority (URCA) to remove regulation at the 'wholesale' level - including the 'offers' or terms at which other providers could rent their networks to provide rival Internet services.

URCA, in unveiling its review of the 'resale' obligations imposed on BTC and Cable Bahamas in 2010, noted there had been "no take-up of these resale broadband offers over the course of the last eight years".

It added that "several industry players have informally raised concerns about the nature of the current offers", implying rival niche providers were suggesting BTC and Cable Bahamas were using their Significant Market Power (SMP) to squeeze them out of the market by offering terms that rendered their services economically non-viable.

But BTC and Cable Bahamas, in similar responses, said URCA had failed to account for market changes since 2010 while ignoring the "strong competition" for retail consumers that made wholesale regulation unnecessary.

In particular, they argued that the regulator had omitted the impact of mobile Internet services which were launched last year by both BTC and its rival, Aliv, for which Cable Bahamas has Board and management control.

Pushing back on regulatory remedies based on what might happen in the future, BTC said there was "very little information" on the provider concerns referred to by URCA, which were never "verified" with itself. "In BTC's view, the PD [URCA preliminary determination] is based on a flawed review of the broadband services market in the Bahamas," the carrier argued. "The PD largely ignores the retail broadband services market and focuses almost exclusively on the wholesale broadband services market, with the sole purpose in mind of reconfirming URCA's past SMP findings in that market.

"However, in doing so, the PD misses key developments in the broadband services market - namely the recent introduction of standalone 4G/LTE mobile broadband services - that affects the relevant definitions of the retail and wholesale broadband services markets, as well as findings regarding SMP in both markets. If the market review were conducted correctly, there would be no finding of SMP in either the retail or wholesale broadband services markets and, therefore, no need for a wholesale remedy in the form of mandated resale broadband."

Cable Bahamas echoed similar concerns, adding: "Cable Bahamas has a number of serious concerns about the preliminary conclusions reached by URCA in the consultation document. At a time when URCA should be considering deregulatory approaches in order to stimulate investment and incentivise innovation in the sector, URCA is instead proposing to maintain or increase regulation at unsustainable levels.

"Cable Bahamas considers that the wholesale broadband market is not susceptible to ex-ante regulation, and that the regulatory obligations which currently apply to Cable Bahamas should be withdrawn. "In the broadband market, the existence of strong competition at retail level obviates the need for continued wholesale broadband regulation. There is strong end-to-end competition between CBL and BTC in the broadband market, and there is no reason for any regulation at all in this market."

Both Cable Bahamas and BTC argued that the mobile Internet services offered by the latter and Aliv were an "effective substitute" for fixed-line broadband Internet, with monthly data usage on Aliv's network "quickly approaching" that of landline subscribers.