The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Regulators last night agreed to “defer” their demand that Cable Bahamas publish separate accounts for its different business units, agreeing that this was unnecessary because the company did not provide services to rival operators.

Noting that it might revisit the issue, and impose separated accounting requirements on Cable Bahamas if it started providing wholesale services to rival carriers, the Utilities Regulation and Competition Authority’s (URCA) decision leaves the Bahamas Telecommunications Company (BTC) as the only operator required to publish separate accounts for its different business streams.

Only BTC and Cable Bahamas were initially going to be subject to the accounting separation requirement, due to both being designated as having Significant Market Power (SMP) in the segments they dominate.

Accounting separation is a device designed to prevent dominant operators, such as those two, from squeezing out rivals by cross-subsidising unprofitable business lines with funds generated by profitable services.

Viewing it as bringing transparency to the Bahamian communications market, URCA said in its results statement on the accounting separation consultation that it rejected BTC and Cable Bahamas’ assertions that this “would not aid in the monitoring of anti-competitive behaviours”.

“URCA has -often used information derived from the separated accounts as the reference point for establishing a prima facie of anti-competitive conduct by BTC,” the regulator added.

“URCA has often complemented this information with additional data and submissions from BTC/Cable Bahamas and other licensees.

“However, URCA’s requests for such additional information only became necessary once a prima facie case was established and more detailed information was required.”

Cable Bahamas had also complained that URCA’s initial decision to impose accounting separation requirements on itself was ‘unprecedented’, as there was only one other country where a cable TV operator was subject to this.

URCA, though, rejected this, noting that Cable Bahamas had been designated as an SMP operator in cable TV and Internet.

“URCA strongly disagrees and rejects the comment that the requirement to prepare separated accounts on a cable TV operator would be disproportionate, unnecessary and unreasonable,” the regulator added.

Cable Bahamas, though, received a warmer reception when it argued that it should not be subjected to accounting separation because it provided no wholesale services, such as interconnection, to other Bahamas-based carriers.

“URCA accepts Cable Bahamas’ argument that a publication requirement to ensure transparency and non-discrimination in wholesale charging would not be applicable to Cable Bahamas at this time,” the regulator agreed.

“URCA, therefore, having considered Cable Bahamas’ comments and recognising that Cable Bahamas currently does not provide cost-based wholesale/interconnection services to downstream competitors, considers that reasons of transparency and non-discrimination are not appropriate grounds for imposing the publication requirement on Cable Bahamas.”