The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Telecommunications Company (BTC) is accusing regulators of breaching the industry's governing law in proposing new regulations to prevent "anti-competitive behaviour" in the broadband internet market.

The former state-owned monopoly is alleging that the Utilities Regulation and Competition and Authority's (URCA) "unfair, inappropriate and discriminatory" consultation process did not permit itself and its main rival, BISX-listed Cable Bahamas, to respond to allegations of excessive pricing, margin squeezes and supply refusal made against them by small, niche internet service providers (ISPs).

Slamming the "one-sided" process, BTC argued that URCA's consultation process violates sections four and five of the Communications Act which mandates that the regulator can only implement new regulations in a way that is "fair, transparent and non-discriminatory". As a result, it is claiming that the regulator has acted illegally and breached the law underpinning all industry activity.

BTC hit out after URCA unveiled its plans to impose additional regulations upon both itself and Cable Bahamas in the wholesale broadband internet market, which is where smaller Bahamas-based ISPs buy capacity or bandwidth on the two dominant players' networks so that they can deliver services to their clients.

Based upon the complaints from niche players such as Bahamas WiMax, Wicom Bahamas and Coakster, URCA aims to force both BTC and Cable Bahamas to make a specific wholesale dedicated internet access (DIA) product available to these niche players at prices and commercial terms that are pre-approved by the regulator.

Pushing back, BTC argued that itself and Cable Bahamas had been "denied natural justice" by the nature of URCA's consultation process. Arguing that there was no evidence of "market failure" under the existing wholesale broadband internet regulatory framework, BTC said itself and its BISX-listed rival had neither been presented with the niche ISP's specific complaints nor given an opportunity to present their case.

Cable Bahamas, in its own response, branded URCA's consultation process and findings as "exceptional and therefore well outside the international mainstream". Describing the new regulatory measures as "too onerous and heavy handed", the BISX-listed communications provider warned darkly that URCA's plans would place its future and present network investment plans "at risk".

"The impact of such extravagant measures is untested, and URCA itself has not even bothered to carry out an impact analysis. Had it done so, it would have realised that its proposal comes at a potentially high cost to the Bahamian economy and, more specifically, Cable Bahamas' investment plans," Cable Bahamas warned.

It added that URCA had failed to properly segment the wholesale broadband Internet market into two. The dominant sector player said there were two types of DIAs - input DIAs for the delivery of services by other ISPs, and "simple resale DIA" which was sold on to clients.

Cable Bahamas argued that treating resale DIA in the manner proposed by URCA is "internationally unheard of" and poses a "substantial risk factor" for its investment strategy. "Regulating resale DIA in the proposed manner is entirely unjustifiable, and a strong push back from Cable Bahamas should be expected. It would also put Cable Bahamas' current and future investment plans at risk," the company reiterated.

As for BTC, it branded the allegations made by the smaller ISPs as "vague in nature and, as they stand, are untested and unsubstantiated". It argued that they should be investigated through URCA's formal complaints mechanism rather than used as the basis to impose new regulatory measures that will come with additional costs.

"BTC considers that URCA's reliance on unsubstantiated and untested other licensed operator (OLO) claims and allegations, discussed in private meetings and communications, as the basis for introducing the proposed DIA obligation is unfair, inappropriate, discriminatory and denies BTC and Cable Bahamas an opportunity to be heard and, in this case, the fundamental right to know what the details of the accusations against them are," BTC said.

Arguing that the process "makes a mockery" of established consultation principles, BTC rejected claims of excessive pricing and said no evidence to support such allegations had been presented. It said some of the material presented had been turned down by URCA itself as "unusable and unreliable" while branding other assertions as "vague".

One of the niche ISPs, Coakster, had alleged that BTC failed to respond to its application to obtain wholesale DIA services in a timely manner, leaving it unable to launch services "and creating uncertainty for its business planning".

Arguing that URCA had "made a leap in its processes", BTC added: "Without having ventilated the complaint in question whatsoever, URCA proceeded directly to issuing a one-sided preliminary determination aimed at remedying the matter. BTC sees this as ultra vires URCA's powers, and that the process is unfair and discriminatory against BTC and Cable Bahamas.

"At this stage, Coakster's allegations are unsubstantiated and, as such, should not be used as supporting rationale for the proposed DIA obligation. That said, BTC believes it is familiar with the DIA service and tower sharing requests to which Coakster's complaint relates...

"In brief, at this stage, BTC would say that at all material times it fully cooperated with Coakster to meet its requests for DIA service and tower access. Any delays in timing were not BTC's fault, but rather due to Coakster and the impact of Hurricane Dorian.

"Coakster's claims that BTC failed to respond to its service request in a timely manner are false. In fact, it was Coakster who failed to respond to BTC's service proposals and, as understood by BTC, one of the reasons for Coakster's delay was that it was attempting to play off BTC and Cable Bahamas offers to get the lowest price possible."