The Tribune

By NEIL HARTNELL Tribune Business Editor CABLE Bahamas has blasted the proposed licensing plan for a key wireless spectrum band for giving an "unfair advantage" to the Bahamas Telecommunications Company (BTC), urging that the latter at least not be granted any space "until two years" after a second cellular licence was awarded. Responding to the Utilities Regulation & Competition Authority's (URCA) consultation on the proposed policy for spectrum wireless bands, the BISX-listed communications provider argued that allowing BTC to obtain three 'blocks' in the 700 MHz band would further buttress the latter's cellular monopoly, with no competition likely until 2016. Urging that URCA instead create "a level playing field" and adopt "pro competitive behaviour", Cable Bahamas argued that a 'best case scenario' would be for the Bahamian communications regulator not to open the 700 MHz band until BTC's cellular monopoly had expired. It described the monopoly's existence as "unconstitutional". Explaining its rationale, Cable Bahamas argued in its letter to URCA, published yesterday: "URCA's proposal for licensing the 700 MHz band gives an unfair advantage to BTC. "BTC is already protected in the cellular mobile market, and the earliest realistic opportunity for competition is 2016. BTC already has spectrum (assigned for mobile services) in the 800 MHz and 1900 MHz. It is unfair that BTC is now given preferential treatment for another swathe of spectrum." When it came to the prospects for competitors in the Bahamian cellular market, currently dominated by BTC's three-year post privatisation monopoly in the fastest-growing sector of global telecommunications, Cable Bahamas, in the response written by in-house legal counsel Judith Smith, said the winner of the second licence would immediately incur the cost of building its own network. BTC, already entrenched with its own systems, did not face this prospect - a further advantage. The BISX-listed rival to BTC, which is almost certain to be among the 'front runners' for that second cellular licence once it comes on to the market for bidding, suggested that URCA follow the US in using a 'spectrum cap' to encourage competition and prevent incumbent operators from dominating the market. "We believe this precedent could be useful given the protectionism afforded to BTC," Cable Bahamas told URCA. "To mitigate the deleterious effect on competition that BTC's monopoly poses, URCA should make BTC ineligible for spectrum in the 700 MHz until two years after the award of the cellular mobile licence. It is a means to level the playing field for operators." Noting that BTC had expressed an interest in using the 700 MHz spectrum band for its newly-launched 4G services, Cable Bahamas argued that since the latter had already happened, there was no reason why its main rival should get access to a new band, since its existing spectrum blocks appeared more than adequate. "If URCA rejects the proposal to make BTC ineligible for an allocation in the 700 MHz band, then Cable Bahamas suggests that the opening of this band is deferred until the end of BTC's monopoly. The proposed 'caste' system for this band seems to be contrary to the principles of competition, non-discrimination and international best practices," Cable Bahamas added. Just in case URCA did not get Cable Bahamas' message, the BISX-listed operator added in a further broadside: "We believe the [cellular] monopoly is unconstitutional and has no place in modern society, and URCA's policy should be to ensure a level playing field among competitors. "However, the continuing imposition of an unconstitutional monopoly on cellular telephony means that the electronic communications market is faced with idiosyncrasies that the modern world has left behind." Cable Bahamas, via Ms Smith, added that such "protectionism" would thwart the main goals of the Communications Act and sector policy in stimulating competition. And it also objected to URCA's interim pricing proposal for spectrum blocks in the 700 MHz band, saying prices for those allocated to restricted mobile services be the same as those in bands already opened. Cable Bahamas suggested that 700 MHz blocks allocated to restricted mobile services be priced at $800 per MHz on New Providence, with discounts of 40 per cent for Grand Bahama, 12.5 per cent for Abaco and 8 per cent for the other Family Islands. Cable Bahamas was not without support. Edison Sumner, president and chief executive of Internet Protocol (IP) Solutions (IPSI), said reserving the proposed 700 MHz blocks for BTC's cellular services would hit other operators requiring them for non-cellular services, such as the Fixed Wireless Terminals his company planned to use. "IPSI further expresses its concerns that BTC is still allowed to reserve all the 'prime' spectrum in the 700 MHz in its monopoly as the Bahamas' only mobile operator to the disadvantage of other licensed operators," Mr Sumner said. And there was more evidence, if any were needed, that among Cable Bahamas' top competitors for that second cellular licence will be Digicel, the pan-Caribbean operator, which also responded to the latest URCA consultation. "We understand that a new mobile licence will be issued in 2014. We thereby assume that the 700 MHZ band will be reserved for the new operator to allow for a level playing field among competing operators," Digicel said. "As URCA describes the 700 MHz band in the Bahamas as 'entirely unused and available', every opportunity should be given to the new licensed operator to acquire portions of this band in 2014, if not before."