The Tribune

By NEIL HARTNELL

TribuneBusinessEditor

nhartnell@tribunemedia.net

CABLE Bahamas “takes exception” with its regulator blaming it for “an increase in bad debt” due to challenging its ability to licence and regulate the company’s Freeport operations.

The BISX-listed communications provider in its response to the consultation on the Utilities Regulation and Competition Authority’s (URCA) 2024 draft annual plan, said it was justified in withholding fee payments to the supervisor until the Supreme Court provides “clarity” on whether its lawful jurisdiction extends to the Hawksbill Creek Agreement area.

URCA, in its annual plan, had blamed a 71 percent increase in general and administrative expenses to $1.64m on “increased bad debt due to continued non-payment of major licensees”. It added: “In the prior year, bad debt was under budget, thereby requiring recovery of the deficit in the current year.”

However, Cable Bahamas immediately hit back arguing: “In the interest of transparency, and with reference to URCA’s explanation under general and administrative expenses that the increase in bad debt budgeted is due to a “..major licensee that has not paid the assessed fee due to litigation’, it is likely that the major licensee is a member of the Cable Bahamas group....”

It added that the BISX- listed provider initiated legal action in 2019 over “specific concessions provided to telecommunications operators in the Freeport, Grand Bahama area by the Hawksbill Creek Agreement Act (as amended) and is similar in its content to the litigation being conducted by the Grand Bahama Power Company”.

Cable Bahamas reiterated: “We take issue with URCA on the explanation for increased bad debt due to ‘continued non-payment of major licensees’. URCA is all too aware of the issues surrounding its ability to fully regulate aspects of telecommunications in the Port area due to the existing provisions of the Hawksbill Creek Agreement Act.

“Port licensees are entitled by law to exercise their legal rights in this regard until a court of law decides otherwise and the Cable Bahamas group takes exception to this rather inartful statement. This is a mater that has been litigated through the courts without resolution for many years and we trust that recent litigation which also includes the Grand Bahama Power Company will bring some clarity shortly.

“In the meantime we are of the view that there is justification for the withholding of specified revenues. Otherwise the group has challenged specified categories of definitions on what constitutes relevant turnover as a part of the licence fees’ calculation.”

This Hawksbill Creek Agreement, as Freeport’s founding treaty, stipulates that the Grand Bahama Port Authority (GBPA) is responsible for utilities regulation in Freeport, including electricity, communications and water, rather than a national supervisor such as URCA. This has already created issues for URCA’s regulation of the communications industry.

For the Supreme Court ruled in 2011 that it had no jurisdiction to levy fees on Cable Bahamas’ Internet earnings in Freeport because the BISX-listed provider operated in the city via its wholly-owned subsidiary, Cable Freeport. The latter entity is licensed by the GBPA, not the Government.

Cable Bahamas (and Cable Freeport) won their 2011 case on the basis that the former Telecommunications Act permitted URCA’s predecessor, the Public Utilities Commission (PUC), to levy fees only on its licensees. Cable Freeport, of course, did not fall into that category because it was a GBPA licensee, and the PUC’s demand for $78,747 was thus quashed.

Then-Justice Hartman Longley, though, declined to rule on the wider issues - whether the PUC, and by extension URCA, had jurisdiction in Freeport, and whether Cable Freeport should be licensed by URCA.

These questions go to the heart of the issue over who should regulate utilities in the 230 square mile Port area - the GBPA or a nationwide regulator such as URCA. The issue also strikes at the Hawksbill Creek Agreement, the Port and its supporters likely fearing that giving up regulatory responsibility in Freeport would undermine the Act/agreement that is the very basis for the city’s existence.

The former Telecommunications Act has since been repealed by the Communications Act 2009, and in his ruling Justice Longley suggested this opened the door to further legal challenges by URCA - an observation that appears extremely accurate.

And, subsequent to that, Grand Bahama Power Company in 2016 sought a Supreme Court injunction to prevent URCA “from regulating, or seeking to exercise licensing and regulatory authority” over it. This, matter, as indicated by Cable Bahamas, remains live before the courts.

GB Power’s action is founded on the basis that, as a GBPA licensee, it is licensed and regulated by the latter via the Hawksbill Creek Agreement - and not by URCA and the Electricity Act 2015.

It is arguing that the Electricity Act’s sections 44-46, which give URCA the legal right to licence and oversee energy providers, “are inconsistent, and conflict with, the rights and privileges vested in [GB Power] and the Port Authority” by the Hawksbill Creek Agreement.

GB Power’s statement of claim argues that itself and the GBPA “have been vested with the sole authority to operate utilities”, including electricity generation and transmission and distribution, within the Port area until the Hawksbill Creek’s expiration in 2054.