The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Telecommunications Company (BTC) and Cable Bahamas have been accused of doing “nothing substantial or meaningful” to lower charges levied on niche providers for using their networks.

Theofanis Cochinamogulos, chief executive of Wicom Bahamas, responding to a consultation on the pricing and commercial terms the two communications “giants” must offer to small, niche Internet Service Providers (ISPs) such as himself, alleged that their respective failures to undertake the necessary technology upgrades is a cost now “being carried” by the Bahamian economy.

Signalling that he was unimpressed with both companies’ opening Direct Internet Access (DIA) offers, Mr Cochinamogulos said: “We are of the view that nothing substantial or meaningful was done by either BTC or Cable [Bahamas] to reduce prices. The suggested prices can not be profitably sold by WISPs (wireless Internet service providers) or ISPs.

“The profit withdrawals by owners over the years, and poor quality of investments by BTC and Cable, while failing to upgrade obsolete technology, is now a cost being carried by residential and commercial operations in The Bahamas.

“It would be unfair for URCA not to use best competition price modelling to allow small ISPs better prices given the history of declining DIA prices and the significant contribution to GDP of internet penetration.”

Mr Cochinamogulos previously argued that wholesale direct Internet access rates charged by the BTC and Cable Bahamas are “in excess of 150 times” greater than comparable US prices and squeezing out competition, suggesting there was “little rationale for these elevated costs” with prices not having changed for ten to 15 years. 

The Utilities Regulation and Competition Authority (URCA) launched the consultation in a bid to ensure BTC and Cable Bahamas provide truly competitive access to small ISPs, who want to use the duo’s networks to offer wholesale Internet services to their own customers, but otherwise fear being squeezed out by pricing and practices that have already been criticised for being anti-competitive.

BTC says it is offering a 21 percent discount to what it charges its own retail customers for using its network infrastructure, while Cable Bahamas has also unveiled its own offer based on the megabits per second desired by smaller ISPs.

In unveiling the BTC and Cable Bahamas offers, URCA said BTC planned to levy both non-recurring and recurring charges on niche ISPs wanting to use its network to provide wholesale broadband Direct Internet Access for their own clients.

“The monthly recurring charges (MRC) are based on the retail minus approach, representing a 21 percent discount on the monthly price of BTC’s retail DIA product,” URCA said. “The non-recurring charges (NRC) for all wholesale DIA products include installation and equipment charges, and are determined on a case-by-case basis.”

Cable Bahamas, too, is offering a structure involving recurring and non-recurring charges. “The monthly recurring charges (MRC) are based on Cable Bahamas’ costing analysis of wholesale DIA services,” URCA added. “The non-recurring charges (NRC) for all wholesale DIA products include installation charges. They are determined on a case-by-case basis (based on a field survey).”

Comparisons between the two offers are difficult based on the information made available by URCA, as BTC’s figures are based an ‘all-in’ price that includes installation and equipment costs whereas Cable Bahamas only breaks out the monthly recurring charge.

For niche ISPs seeking a speed of 500 Mbps, BTC’s all-in cost is $18,466 per months while Cable Bahamas’ recurring monthly cost is $11,853. For one GigaByte per second (Gbps), BTC’s all-in monthly cost is just under $37,000, while for Cable Bahamas it is $23,514.

However, the latter’s figures do not include installation and equipment costs, making comparisons somewhat meaningless. URCA has moved to regulate the wholesale DIA market after finding that both Cable Bahamas and BTC have what it refers to as “significant market power” in this segment.

Left unchecked and to their own devices, the fear is that the duo could use the dominance created by their national network infrastructure and stronger balance sheets to squeeze out weaker rivals via anti-competitive practices.

Such a development could harm the interests of Bahamian business and individual consumers, especially since Internet access at competitive prices has become vital in the modern economy even before COVID-19.