The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

CABLE Bahamas is urging the Government to reform the law so as to preserve the Utilities Regulation and Competition Authority’s (URCA) independence and reduce its costs.

The BISX-listed communications provider, in feedback provided to the consultation on URCA’s draft 2024 annual plan, called for several sections in the regulator’s governing Act to be amended so as to prevent its non-executive directors from being terminated prior to the statutory end of their term in office.

Besides potentially compromising URCA’s supposed independence from government, Cable Bahamas argued that this appeared to be increasing URCA’s costs by forcing it to make settlement payments to the impacted directors. And these extra expenses, in turn, were being passed on to itself and other communications providers in the form of higher licensing fees.

Addressing directly the Cabinet ministers responsible for communications and regulations with URCA, Cable Bahamas said in reference to the URCA Act: “There is a need for correction of sections 18 and 20 (Part IV, appointment of non-executive members and reappointment of non-executive members), which appear to have had the unanticipated effect of causing settlement payouts to Board directors likely as a result of their termination prior to their statutory tenure thereby adding to budgetary amounts to be paid by licensees.

“The Cable Bahamas group is of the view that revising these two sections will result in cost savings to the electronic communications sector budget going forward.” Cable Bahamas also urged the Government to reverse previous URCA Act changes, made in 2013 and 2017, which now require that any surplus or excess licence fees be paid over to the Government’s consolidated fund rather than retained by the regulator.

Expanding on these themes, Cable Bahamas added: “Whilst a modest increase in staff costs as part of providing a more attractive package to attract and retain top talent is tolerable, we are constrained to make reference to the amount of non-executive compensation, which bears the explanation that the amount budgeted includes yet again a provision for settlement fees for two non-executive directors further to the earlier settlement with one non-executive Director.

“It should be noted that the amendment of the URCA Act in July 2017 provided for directors to be appointed for continuous three-year terms. In light of this, the Governments of The Bahamas ought

to observe the statutory tenure of URCA directors and the intended staggering of directors’ terms, and refrain from appointing new directors at the start of a new administration’s term and casting out properly appointed directors regardless of the term left to be served.

“Failure to do so results in this unjustifiable financial burden of term pay-outs of directors for the licensees to absorb into licence fees. It is most apparent that it is likely to continue uncorrected. Statutory terms were designed to ensure continuity of service of URCA Board Directors in order to be independent of government changes,” Cable Bahamas added.

“We therefore call on URCA directors as a part of their fiduciary duty to the organisation that they serve to have this fiscal burden corrected if such is the case, forthwith, and for the Government to be educated and to recognize the unique attributes of an URCA Board appointee.”

And, calling for URCA to retain all surplus licence fees, Cable Bahamas added: “We observe that

some $175,404 is collected from licensees in excess of the total operational expenditure. This is, again, a drain on licensees and this excess will likely end up in the Consolidated Fund with no direct benefit to the electronic communications sector.”