The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Telecommunications Company (BTC) has blamed its immediate parent for regulatory breaches caused by changes to its TV line-up that were “beyond its control”.

The carrier said the “ultimate break down” of contract negotiations between Cable & Wireless Communications (CWC) and various TV content providers meant it was unable to avoid violating the retail pricing rules and consumer protection regulations governing the industry.

BTC thus joins Cable Bahamas as the second carrier to run afoul of the Utilities Regulation and Competition Authority (URCA) by making abrupt changes to its channel line-up without giving Bahamian consumers the minimum one month’s notice as required by the consumer protection regulations.

URCA, unveiling its full determination yesterday, said the issues stemmed from two alterations to BTC’s Flow TV package. The first occurred when BTC added Discovery World and Discovery Theatre to its line-up on December 1, 2018, which was followed one month later by the removal of six other channels with effect from New Year’s Day 2019.

The channels involved were Big Ten Network, Fox Deportes, Fox Sports Racing, National Geographic, National Geographic Wild and BBC America. While BTC is not deemed to have significant market power (SMP) in the provision of TV services, URCA argued that their bundling with its fixed-line services - where it is presumed to have dominance - as part of a Triple Play package brought it under the sector’s retail pricing rules.

This required BTC to seek URCA’s approval for the channel line-up changes - something the regulator found it did not do. And it also failed to give consumer’s the necessary one month’s notice, with URCA saying: “Despite these obligations, BTC advertised the changes to the public and implemented them without receiving URCA’s prior written approval.”

These violations also meant BTC had breached its operating licence, which requires it to comply with the Communications Act and associated regulations.

“BTC did not dispute whether it was in breach but instead explained the circumstances leading up to the alleged breach, which BTC claimed were beyond its control,” URCA’s determination found.

Much of the details are “blacked out”, which is likely to protect details that BTC alleges are commercially sensitive and should not be seen by competitors. However, what is made public suggests that the carrier’s problems were caused by unsuccessful negotiations CWC conducted in a bid to reach new licensing agreements with TV content providers.

Flow TV is a CWC product that is present in all markets it operates, including The Bahamas. This means that the immediate parent, not BTC, is responsible for negotiating content and the channel line-up, hence the latter’s argument that the situation was out of its hands.

“BTC explained that it intended to be totally transparent with both URCA and its customers in respect to the changes to the Flow TC channel line-up,” the regulator’s determination added.

“While BTC recognised there should be strict adherence to the rules and its individual operating licence, BTC believed that the circumstances in this case should be treated as an exception as BTC took all appropriate steps to inform URCA and its customers of the changes.”

BTC said it was now speaking to CWC to ensure it avoids further “potential breaches”, and argued that the impacted subscriber base was “quite minimal” and that customers were informed of the changes 30 days in advance with the option to exit their contracts without penalty.

However, URCA found that the customer notice was “null and void” because it had not approved the changes itself. It also rejected BTC’s contention that the impact was “minimal”, given that only three of the six channels were removed from the Spark Triple Play package that most customers subscribe to.

As a result, URCA ruled that BTC must pay a fine equivalent to 5.15 percent of the total revenue earned from its pay-TV bundles during the months of November 2018, December 2018 and January 2019.