The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Telecommunications Company (BTC) breached a key condition of its licence during last June’s island-wide network outage, regulators said yesterday, levelling implicit criticism at majority shareholder Cable & Wireless Communications (CWC).

Unveiling its preliminary findings on the June 18, 2012, network outage, the Utilities Regulation & Competition Authority (URCA) said the causes ultimately lay with BTC - a lack of “preventative maintenance” and a failure to provide for adequate redundancy and contingencies in its network design.

The communications industry regulator also issued a thinly-veiled criticism of CWC and its LIME regional affiliate, saying BTC knew it had “limited geographic redundancy” in its network since April 2011 - the date when it was privatised but failed to correct them.

And URCA added that prior to June 18, 2012, BTC had no business continuity plan - something vital to ensuring the continued, uninterrupted operations of a company. Given BTC’s vital role as a communications infrastructure provider, business continuity is essential.

The URCA findings are likely to be somewhat embarrassing for CWC, and could not come at a worse time given the continued attempts by the Christie administration to regain majority ownership of BTC.

The network outage, and subsequent regulatory findings, could be exploited by a government that is clearly eager to obtain any leverage it can in seeking to reduce CWC’s 51 per cent shareholding.

However, the lack of maintenance, and absence of network redundancy and a business continuity plan, are all legacy issues that pre-date the BTC privatisation, meaning this, too, is hardly an advert for majority government ownership and control.

In its preliminary verdict, URCA found that BTC had “breached Condition 27.1.1 (a) of its individual operating licence by failing to take all reasonably practicable steps to maintain, to the greatest extent possible, the proper and effective functioning of its public telephone network”.

As a result, it had issued a preliminary determination and draft order to BTC on December 21, 2012, giving it until January 25, 2013, to respond to URCA’s position.

URCA said it had made three principal findings on the network outage, which itself was sparked by a Bahamas Electricity Corporation (BEC) power cut the same day.

BTC, though, should have had back-up power and network systems/contingencies in place to ensure it kept operating as normal in the event of a power outage, but these all failed.

Laying out its findings, URCA said the causes were: “BTC’s failure to establish adequate redundancies, resiliencies and contingencies in its network design.

“BTC reported having knowledge of the limited geographic redundancy of the network platforms since April 2011. However, prior and up to the date of the network outage, BTC failed to take measures to effectively rectify and/or correct this critical network concern.”

The other faults, as identified by URCA, were: “Inadequate preventative maintenance of the network equipment at the Poinciana Drive Technical Complex and its back-up systems.

“There was no evidence in the preventative records submitted by BTC to URCA of processes and procedures to sufficiently test and maintain back-up batteries, nor were there measures to address generator and automatic transfer switch faults.

“The failure of BTC’s entire bank of batteries, the generator and automatic transfer switch hindered the restoration of power to the Technical Complex and services to the public.”

Finally, URCA noted “BTC’s failure to implement an effective business continuity plan”.

It added: “Up to June 18, BTC had neither established nor implemented such a plan. Business continuity plans and measures are necessary to guarantee continuous, uninterrupted operation of electronic communications networks and services.”

Reaction to URCA’s findings yesterday was muted. Jerome Sawyer, BTC’s spokesman, said the carrier would release a statement on the issue at some point, but this was being delayed because its vice-president of legal affairs, Felicity Johnson, was not in office.

Tribune Business understands, though, that any official reaction is likely to mirror the press statement that BTC issued last June when the outage happened.

BTC chief executive, Geoff Houston, did not respond to Tribune Business e-mails or phone messages before press time.

On the Government side, Bradley Roberts, one of its BTC Board directors and the PLP chairman, said he had yet to read the URCA statement.

He added: “I’ve got to first of all see what the majority shareholder’s response on the matter is.”

Meanwhile, URCA said its draft order served notice of its intention to impose four obligations on BTC as a result of the outage.

These include conducting “an impact analysis and risk assessment in order to reduce all major weaknesses and vulnerabilities in its network infrastructure”.

This will involve building redundancy capacity, and extra resiliency and contingencies, into its network design; alternative traffic paths; network security and stand-by equipment; and “alternative paths” for communications traffic.

BTC is also being required “to establish an adequate back-up power supply at its Poinciana Drive Technical Complex (batteries and generators) on or before February 28, 2013”.

This “will support continuous electronic communications network functionality and services at all times in the event of power outage”.

As for the final two obligations, BTC is being required to “systematically conduct” preventative maintenance on its network and stand-by equipment according to schedules agreed with URCA.

The newly-privatised carrier will also have to test its stand-by equipment in accordance with “international standards and best practice”, again using a schedule agreed with URCA.

The regulator said it would issue its final decision within 30 days, after receiving BTC’s response.

It added: “Once this Order is made final, BTC will have 30 days to comply. Failure to comply with the Order in part or whole could attract a fine not exceeding 10 per cent of BTC’s relevant turnover or other penalty that may be determined by URCA.”

The network outage, which impacted BTC’s landline and cellular services, lingered on into June 19, 2012.

However, the URCA findings rule out deliberate sabotage as the cause of BTC’s network outage. Tony Rice, CWC’s global chief executive, had been in Nassau the same day meeting with Prime Minister Perry Christie.