The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Cable Bahamas warned regulators that their decision to impose price caps on its pay-TV and Internet services would be “ill-timed, intrusive and disproportionate”, arguing that these controls were unnecessary due to emerging competition.

The BISX-listed communications provider, in a December 30 submission to the Utilities Regulation and Competition Authority (URCA) that highlighted the differences between itself and the Bahamas Telecommunications Company (BTC), slammed the regulator’s chosen controls some give weeks before they were confirmed.

BTC backed the significant market power (SMP) remedy chosen by URCA, calling for price caps on fixed-line phone, broadband Internet and pay-TV retail services in direct contrast to its major rival.

Failing to dissuade URCA from its chosen course of action, the BISX-listed provider warned: “Cable Bahamas does not agree that price caps should be implemented on the retail broadband and pay-TV markets, and considers this to be an ill-timed, intrusive and disproportionate proposition....

“The extension of ex-ante (pre-event) price regulation in the retail pay-TV and broadband markets is not warranted. Both of these markets are either moving towards imminent competition, or are already subject to effective competition.

“These markets should, therefore, be candidates for deregulation (or, at the very least, lighter touch regulation), and not price cap regulation.”

Cable Bahamas added that URCA had provided no evidence that Bahamian consumers were facing “excessive pricing” in either the pay-TV or retail broadband markets.

“It has also ignored the fact that the presence of strong infrastructure competition constrains Cable Bahamas and BTC from engaging in excessive pricing practices in the broadband market,” Cable Bahamas argued, to no avail.

“The existence of infrastructure-based competition will have the same effect in the pay-TV market as soon as BTC’s new IPTV service is operational, which is expected to happen within the next six months.”

Rebutting BTC’s preference for price cap regulation, the BISX-listed provider said “the cost, complexity and significant lead times” required to develop a functioning price cap scheme made this method unsuitable for both the Bahamian Internet and [pay-TV markets.

Cable Bahamas is likely to be more unhappy than BTC over the outcome of the SMP consultation, as URCA has also prevented it from offering ‘product bundles’ that feature its Internet and pay-TV offerings, until it can demonstrate that similar deals can be offered by a competitor. BTC is only subject to such restrictions on its Internet services.

Elsewhere, Cable Bahamas also took issue with BTC’s assertion that including its IPTV product, which will launch in Bimini before year-end, in any analysis of the Bahamian pay-TV market was premature.

Arguing that market reviews should be ‘forward looking’ for 12-18 months, the BISX-listed provider said: “Cable Bahamas therefore contends that URCA must take into account the planned entry by BTC into the IPTV market over the course of the market review period....

“BTC’s failure to even discuss (or mention) its IPTV plans in its response to consultation is therefore hardly defensible, particularly given the recent publicity it has given to this issue.”

Tribune Business previously reported that URCA rejected Cable Bahamas’ assertion that the pay-TV market is easily accessible to new competitors, despite a survey showing 56 per cent of broadband Internet subscribers might sign up to BTC’s IPTV product.

The BISX-listed operator said BTC’s imminent market entrance with its IPTV (Internet Protocol) product meant competition would increase, with other countries exhibiting a “dynamic shift” towards this technology.

To support its arguments, Cable Bahamas conducted a consumer survey, which found that 19 per cent of broadband subscribers were either ‘likely’ or ‘very likely’ to switch to BTC’s IPTV. Another 37 per cent were ‘undecided’.

Rejecting Cable Bahamas’ survey, URCA noted that the remaining 44 per cent of broadband subscribers said they were either ‘unlikely’ or ‘very unlikely’ to make the switch to BTC’s IPTV.

“While it may be true that IPTV has led to dramatic changes in the market shares in the pay-TV market in other countries, BTC has not yet launched its IPTV services in the Bahamas, and URCA is not aware of any concrete plans of BTC or other licensees to launch these services in the immediate future,” the regulator added.