The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas’ two leading communications operators have urged the Utilities Regulation & Competition Authority (URCA) to move rapidly to alter retail pricing regulations they slammed as “invasive, arbitrary and expensive”.

Both Cable Bahamas and the Bahamas Telecommunications Company (BTC) called on the regulator to adopt “more flexible retail price rules”, arguing that the current regime prevented them from quickly implementing strategies that benefited Bahamian consumers.

Because they are deemed to have Significant Market Power (SMP) in critical segments of the Bahamian communications market, Cable Bahamas and BTC are required to obtain URCA’s prior approval before introducing price changes - whether it be through a short-term promotion or permanent move.

Both are now clearly chaffing at this process, possibly the only thing the two carriers agree upon.

Judith Smith, Cable Bahamas’ in-house legal counsel, writing the company’s reply to URCA’s consultation on its three-year strategy and annual plan, urged: “We suggest that changing the regulation relating to retail pricing should be given a higher priority.

“The process is inefficient and inhibits operators’ ability to react quickly to opportunities which can benefit consumers.

“The process requires URCA to involve itself in an operator’s decision to change prices, whether it is through a promotion, permanent price change or introduction of new services. The process is invasive, time consuming, arbitrary and expensive.”

And Felicity Johnson, BTC’s senior vice-president of legal and regulatory affairs, added: “BTC urges URCA to begin to demonstrate movement to the more light touch regulation anticipated in 2009, and to more flexible retail price rules for the operators deemed to have Significant Market Power.”

She said reviewing the retail pricing regulations was “important” to the industry’s development.

Whether URCA heeds the companies’ promptings remains to be seen. As for the remainder of BTC’s and Cable Bahamas’ consultation responses, they largely consisted of taking pot shots at each other.

Cable Bahamas, for its part, urged URCA to address the need for BTC to rebalance its fixed-line telecommunications rates. With same-island, or local, calls free, the BISX-listed communications provider charged that its rival was providing landline services “below costs” in a market where the two now compete.

“Certainly, if the cellular mobile markets are foreclosed to other licensed operators, then the electronic communications market competitive landscape is skewed heavily in favour of the dominant voice operator,” Cable Bahamas argued.

Not to be outdone, BTC argued that “static” market penetration rates for Broadband Internet and pay/cable TV services between 2009-2011 showed the need for incentives to stimulate investment by rival operators in this area.

And, possibly with some self-interest, BTC called for additional obligations to be imposed on Cable Bahamas, including forcing it to “resell” these services on to other operators.

On the Internet side, BTC told URCA that its “new high speed data services”, including its Long Term Evolution (LTE) technology and 700MHz spectrum licence, would “greatly increase penetration levels, particularly as BTC reclaims market share”.

The newly-privatised carrier said that apart from Cable Bahamas’ rejected application to increase the monthly price for its SuperBasic TV services, all pricing applications submitted to URCA in 2012 originated from BTC.

In a direct jab at its main rival, BTC said that the main broadband Internet provider “does not appear to be aggressively fulfilling its obligations or reselling broadband so as to contribute to increasing penetration in the archipelago”.

As for pay TV/cable services, BTC said: “It is our view that it may benefit this market if URCA were to consider innovative and unprecedented regulatory reforms to encourage the resale of paid TV services, which could involve the obligation on [Cable Bahamas] in paid TV to produce a Reference Access and Interconnction Offer.

“This certainly would encourage and promote interest in the industry, and avoid the continuing monopoly and the growing use of satellite services by Bahamian residents...”

BTC pledged to break that so-called monopoly by launching its own TV product in 2013.