The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Cable Bahamas has “genuine and grave concerns” that mobile competition could be thwarted by regulatory demands mandating that the second operator co-locate its network on the Bahamas Telecommunications Company’s (BTC) existing infrastructure.

The BISX-listed operator warned that this requirement, contained in the Utilities Regulation & Competition Authority’s (URCA) draft infrastructure sharing guidelines, was “discriminatory, disproportionate and anti-competitive”.

Cable Bahamas, which has a particular interest in the issue as one of the three bidders on the Bahamas’ second mobile licence, said requiring the winner to share infrastructure with BTC rather than build-out its own would entrench the latter’s monopoly advantage.

“Cable Bahamas is keen to engage URCA constructively on this regulatory initiative, and has many genuine and grave concerns with the draft Regulations in their current form,” read its response to URCA’s consultation on the proposed infrastructure regulations.

The BISX-listed provider warned that forcing the second mobile operator to infrastructure share with BTC would limit ownership of its own network, and force it into “a potentially long and involved” negotiation with the incumbent.

While agreeing that a new access and interconnection arrangement with BTC was necessary, given impending mobile liberalisation, Cable Bahamas warned that the advantages from this process could be lost if facilities sharing was mandated by URCA.

“It would be discriminatory, disproportionate and anticompetitive for the infrastructure sharing regulations to force the new entrant (with zero mobile market share) to use BTC’s mobile network infrastructure where self-build is a feasible option,” Cable Bahamas warned.

“That would be tantamount to codifying the substantial and unfair “first-mover” advantage that has been accorded by law to BTC as the monopoly cellular provider in the Bahamas for so many years.

“It would also have the perverse effect of forcing the new entrant to adhere to the incumbent’s network topology design, which may not be optimal for the new entrant’s network requirements. There would appear to be no statutory basis upon which such a sweeping and draconian obligation could be imposed on a new entrant in line with URCA’s powers under the Act.”

Cable Bahamas said its assessment of the four largest Bahamian islands - New Providence, Grand Bahama, Abaco and Eleuthera - indicated there were either few, or no, restrictions to the second mobile operator establishing a quality network of its own.

“As long as the new entrant has the ability to make a build/buy decision in relation to building own infrastructure or sharing with BTC, it will have negotiating leverage if it elects as the first- best solution to try to reach co-location arrangements with BTC on a commercial basis in some or all areas on the four larger islands,” Cable Bahamas added.

It also expressed concern that URCA was exacerbating “a lengthy and cumbersome tower construction application process” through its proposed guidelines for the building of new mobile infrastructure.

“Because BTC’s mobile network is already constructed, and considering that the new entrant will have to start from scratch, the combined effect of these proposed rules would leave BTC in an unjustifiably advantageous and anti-competitive position vis-a-vis the second cellular licensee,” the BISX-listed operator argued.

“Under the draft regulations, the new entrant would be prevented from building new towers except in very limited circumstances, and in those limited cases, it would be subject to more lengthy and complex permitting procedures than are currently in place.”

This, it added, would force the winning mobile bidder into co-location and infrastructure sharing with BTC when it was not in its best interests to do so, plus embroil it in “protracted dispute resolution proceedings” with the incumbent.

“The proposed approach therefore carries many serious risks,” Cable Bahamas warned.

“If adopted as proposed, it will hamper the ability of the new entrant to deploy an independent network infrastructure by preventing it from rolling out RAN infrastructure in areas that are optimal from a network design and engineering standpoint, which may not correspond with BTC’s sites.

“This could have a negative impact on the new entrant’s network quality and its ability to compete with BTC. Moreover, the draft regulations are predicated on an incorrect assumption that the new entrant mobile operator will always find it more attractive to share infrastructure,” it added.

“By advocating what amounts to a blanket co-location obligation on the new entrant, URCA is, in fact, proposing to remove a critical element of the new licensee’s commercial independence and choice, which are essential to fair competition in a liberalised market.”

Cable Bahamas also urged URCA to rapidly investigate whether BTC’s existing mobile towers could accommodate a second mobile operator, especially the latter’s desired height and radio frequency design.

It urged that the regulator mandate that any new cellular towers proposed by BTC be suitable for infrastructure sharing, and expressed concern that URCA had “undertaken too broad a mission at this stage” by mandating the sharing of fixed network infrastructure.

Cable Bahamas, not surprisingly, want it to focus its efforts on the mobile sector.