The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

REGULATORS yesterday rejected Cable Bahamas’ renewed concerns that it is competing on an “unlevel playing field” against Elon Musk’s Starlink satellite Internet service.

The Utilities Regulation and Competition Authority (URCA), in unveiling feedback to the consultation on its draft annual plan for 2024, disclosed that the BISX-listed communications provider is “unconvinced” that it is receiving regulatory treatment comparable with that enjoyed by the Tesla and Twitter (X) magnate’s new market entrant.

“The Cable Bahamas group believes satellite regulation must be equitable and comparable to the telecommunications regulatory regime. The Cable Bahamas group added that it is unconvinced that the playing field is level for the Cable Bahamas group,” URCA revealed of the company’s stance.

Cable Bahamas based this on how much Starlink is paying to URCA for its annual class licence, and queried how much the satellite Internet provider is contributing to the regulator’s budget in percentage terms. It also challenged if “an initial licence award fee was charged and paid for the granting of a licence”, and added that a spectrum-based service was equivalent to introducing a new cellular mobile operator.

URCA, in reply, said Starlink’s licence restricts it to providing broadband Internet services and it is not permitted to offer mobile services in conformity with a policy that restricts the sector to just two operators - Aliv (Cable Bahamas) and the Bahamas Telecommunications Company (BTC).

“Regarding satellite regulation and the specific inquiries raised, URCA clarifies that Starlink currently provides broadband Internet services at fixed locations in The Bahamas but is not licensed for voice telephony or traditional mobile services,” URCA added.

“The licence conditions imposed on Starlink align with the Government’s policy to refrain from introducing additional competition in the cellular- mobile market. To address concerns regarding transparency, URCA has made the Starlink licence conditions available on our website for public access....

“Starlink is subject to the applicable fees as set out in its licences. On a related note, URCA does not discuss a company’s individual revenue numbers and licence fee payments.” URCA added that, unlike Cable Bahamas and BTC, Starlink does not have a dominant market position - known as significant market power (SMP) - in any of the segments in which it operates.

“URCA reminds the industry that the SMP conditions/obligations currently imposed on the Cable Bahamas group and BTC are disproportionate for a new entrant that is not found to hold SMP in The Bahamas,” the regulator added.

“Starlink began offering LEO-based broadband Internet service in The Bahamas in 2023. Currently, Starlink does not hold a dominant position in a relevant market. As set out in Section 5.2 of the consultation document for the retail fixed market review, Starlink is not a SMP operator of retail fixed broadband services. As such, the new SMP conditions proposed for dominant operators are not applicable to Starlink.”

URCA, meanwhile, defended its plans to recover some $5.315m in operating costs from its electronic communications licensees - chiefly Cable Bahamas and BTC - in 2024 as “a balanced approach to financial management” amid concerns that it was failing to take into account their financial challenges.

“There is a notable decreasing trend in the total operating budget recovered from 2017 to 2022. In 2017, the recovered amount was the highest at $8.199m due to purchasing Frederick House on Frederick Street, which serves as URCA’s main office. The following two years, 2018 and 2019, show a slight decrease in the recovered budget to $6.979m and $6.654m, respectively,” URCA added.

“The year 2020 shows a more significant drop to $6.518m. The downward trend continued with a sharper decrease in 2021 to $6.218m and then a substantial drop in 2022 to $4.147m, reflect- ing URCA’s decision to cut budget acknowledging the financial challenges faced by licensees because of the COVID-19 pandemic.

“However, in 2023 there was a minor increase to $4.844m as URCA gradually transitioned to its pre-COVID operating budget. The trend continued in 2024 with a recovery of $5.315m, which is still significantly lower than the 2017 peak,” the regulator continued.

“URCA stresses that the 2024 budget is below the pre-pandemic levels and remains below the average of $5.911m for the 15 years of URCA’s life......URCA reminds licensees that URCA is an independent regulator and URCA fees are a significant source of URCA’s operating budget.

“The respondents should appreciate that the substantial drop in 2022 to $4.147m in response to financial realities during the pandemic is not sustainable and, if not addressed, could adversely impact the organisation’s financial health and regulatory effectiveness. We advised that increases in 2023 and 2024 reflect the necessary recovery to pre- COVID operational costs.”