The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Cable Bahamas and the Bahamas Telecommunications Company (BTC) have united in opposition to regulators’ proposals to gradually lower call termination rates over a three-year period.

The giant communications rivals, together with the former’s Aliv mobile operator, lashed the Utilities Regulation and Competition Authority’s (URCA) plan for such a “glide path” as “unnecessary and unreasonable” given that it has had ample time to develop final rates.

Cable Bahamas, pointing out that termination rates were already “grossly outdated”, argued that any transition should last no longer than one year, while Aliv said it would only add to the “substantial delay” caused by the review being one year late.

“Cable Bahamas strongly disagrees with a glide path, especially of three years,” the BISX-listed operator said. “Cable Bahamas is of the view that a glide path should be no more than one year, and finds interim rates acceptable given that the current termination rates are grossly outdated.

“Current rates are obsolete, and a rational operator would have forecast a termination rate reduction and planned for its impact. Cable Bahamas proposes a much faster correction of rates to ensure they are cost-based. Any time lag results in over-recovery of costs for operators at the expense of consumers as long as service unit costs of production keep falling.”

Cable Bahamas added: “Current rates are at least three years out of date, and the implementation of the proposed rates may take another year. Adding a three-year glide path towards cost-based rates implies at least a seven-year delay before the Bahamian market can benefit from cost-based rates.

“Cable Bahamas is aware of three-year glide paths in other jurisdictions, but notes that in the cases it has looked at the total delay until cost-based rates were ultimately reached was substantially shorter than at least seven years.”

This was echoed by Aliv’s response to URCA, which said: “Aliv furthermore does not support URCA’s proposal for a three-year glide path to update the rates because it is unnecessarily long, and based on prior URCA commitments operators’ expectations have been set for the immediate introduction of rates given the passage of time......

“The rates applied currently are largely based on cost studies carried out between five to 10 years ago and/or based on methodologies that are not typically used for termination rate setting purposes. Therefore, they have not represented efficiently incurred costs for a long time and should be corrected as soon as possible.”

Call termination charges are fees levied by communications carriers for accepting calls originating on a rival’s network that are made to their own customers and terminate on their own system,

BTC, meanwhile, agreed that it was “unreasonable and unnecessary” to phase-in adjustments to these rates over a three-year period given that the current mobile termination levy had itself been set on an “interim” basis in 2016.