The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Cable Bahamas has hit back by arguing that this nation has “among the lowest and most affordable” entry-level broadband Internet prices in the Caribbean to help make its case for easing regulation.

The BISX-listed communications provider, in its response to the Utilities Regulation and Competition Authority’s (URCA) review of fixed Internet, pay-TV and voice services, argued that increased competition and reduced barriers to market entry mean it should no longer be designated as having significant market power (SMP) or subjected to more stringent regulation.

Drawing on the International Telecommunications Union’s (ITU) benchmarking of entry-level broadband Internet prices for the Caribbean, which shows The Bahamas as having the fifth cheapest cost in the region for 5 Gbps (gigabytes) speed behind Puerto Rico, St Maarten, Dominican Republic and Puerto Rico, Cable Bahamas argued that consumer protection concerns are better addressed via universal service mandates.

“Entry level fixed broadband prices in The Bahamas are amongst the lowest and most affordable in the Caribbean region. Like the TV market, the broadband market is therefore effectively competitive and there is no SMP,” Cable Bahamas alleged.

“The reality is that prices for broadband services have largely remained flat in The Bahamas and broadband prices are also low when compared to other countries in the region... Fixed broadband prices in The Bahamas are well below those charged in most other Caribbean countries, and Cable Bahamas is disappointed that URCA did not reference any regional benchmarks in its discussion of excessive pricing.

“Indeed, in its discussion of potential remedies, URCA alleges that excessive pricing occurs in fixed broadband markets when the evidence of the regional benchmark above points to the opposite conclusion.”

Hitting back at URCA’s comparison of BTC and Cable Bahamas’ pricing, the latter added: “URCA observes that for the three price points considered, Cable Bahamas is consistently charging a higher retail price than BTC ranging from 38 percent to 52 percent higher.

“URCA makes the point that the observed differences in retail prices could suggest that Cable Bahamas ‘is able to price independently of the market’ and that ‘this may explain Cable Bahamas’ increasing market share over time’. This analysis is fundamentally flawed.

“Cable Bahamas has been subject to the retail pricing rules for its broadband services since 2014, and any broadband prices would therefore have been approved by URCA or by its predecessor, the Public Utilities Commission (PUC). Cable Bahamas is therefore not in a position to price independently of the market,” the BISX-listed communications provider added.

“It is more likely that the table is indicative of BTC’s commercial strategy relative to Cable Bahamas. Where Cable Bahamas, as the market leader, offers significant discounts for its bundles relative to its standalone services, BTC as the challenger in the broadband and TV markets would logically deploy a market penetration strategy with lower prices to entice standalone customers to switch between providers. This is not an indication of independent pricing, but an example of competition at work.”

Calling on URCA to address consumer protection issues via a universal service review, Cable Bahamas added: “Cable Bahamas urges URCA to align itself with international best practice and deregulate these fixed retail markets, as URCA has previously done in the mobile retail markets. This would reduce the regulatory burden on the market, improve innovation, stimulate investments and further enhance competition....

“Cable Bahamas also notes that URCA no longer appears to have concerns about predatory pricing in any market, no concerns about undue bundling in any market, no concerns about undue price discrimination in any market and no margin squeeze concerns that require ex-ante regulation. URCA appears to be primarily concerned with consumer protection issues facing standalone customers.

“Cable Bahamas agrees with URCA that there are likely to be small and declining user groups in the market that rely on standalone TV and fixed telephony services, in particular. With younger segments of the market opting to use streaming and mobile services, these customer groups are likely to be older and they continue to make use of services they trust and value.

“This is not to say that they are all vulnerable customers and that these customers have affordability issues in relation to the services they purchase. These matters should be examined by URCA as part of its universal service review.”