Moving on to Whiter and Snowier Pastures

I am pleased to announce that, effective January 4th,  2011, I have taken on the role of Public Policy Counsel at Research in Motion in Waterloo, Canada.  I am now part of the RIM Legal Department and my work is focused on global regulatory and public policy matters.  Since my work is no longer centered on the Caribbean, I do not expect to update this blog on a regular basis.  I hope that you found it to be helpful.  If you have any question, please don't hesitate to contact me at dlaliberte@rim.com.

ECTEL Consultation on Regional Radio Spectrum Plan

On September 28th, the Eastern Caribbean Telecommunications Authority (ECTEL) completed a public consultation on a proposed review of its 2006 Regional Radio Spectrum Plan.  The consultation document, published in August 2010, does not address the 700 MHz band as it was the subject of a separate consultation in 2008-2009 (as previously mentioned on this blog).  It does, however, discuss a number of spectrum-related issues of importance to the Caribbean broadcasting and telecommunication industry, including WiMax.  The modifications to the Plan proposed by ECTEL can be broadly grouped under four headings:

• Television and Radio Broadcasting Services:  ECTEL proposes to modify some of the frequencies allocated to broadcasters including 1605-1705 kHz (AM radio stations), 88.1-88.9 (low-power FM community radio stations), 235-267 MHz (digital audio broadcast services), 335 MHz-399 MHz (studio-to-transmitter links), 454.975-462.5625 MHz and 467.7125-470 MHz (outside broadcast television and radio).

• GSM Services:  The consultation document proposes to allocate the 912-915 MHz band to GSM service in Dominica.  This proposal may prove to be problematic as this band is currently allocated to ISM by the ITU-T in Region 2 countries,  which includes Dominica.  ECTEL also proposes to allocate, in all ECTEL countries, the 1710-1990 MHz band to GSM service and the 1990-2025 MHz band to "future Mobile Services; eg 3G mobile services".

• Broadband Services:  While the wording of the consultation document is somewhat unclear, it appears that ECTEL intends to allocate the 3.4-3.6 GHz band to fixed WiMax service and the 2.3-2.4 GHz band to mobile WiMax service.  There would be provision for licences to be awarded to four providers with 25 MHz each (5 blocks of 5 MHz each), plus one operator with 22 MHz (3 blocks of 5 MHz each, and one block of 7 MHz), in each band.  In addition, 120 MHz of spectrum would be made available in the 2.5 GHz band.  This spectrum would be assigned to a maximum of four operators (2 blocks of 15 MHz each) on a technology-neutral basis as this band can be used for WiMAX, IMT 2000 and MMDS service.

• Land Mobile Services:  ECTEL is proposing to allocate the 148-174 MHz band to VHF land mobile band (with 156-163 MHz allocated for maritime mobile use) in order to facilitate the implementation of a nationwide/regional public-private network for emergency, Government, Police, etc. 

In their respective submissions, Digicel and LIME requested that ECTEL modify these proposals in order to accommodate the spectrum requirements of products they intend to offer in the Eastern Caribbean in the near future (and which they currently offer in Jamaica).  Digicel's submission disagreed with ECTEL's proposal to limit the assignments to 30 MHz per operator within the 2.5 GHz band.  According to Digicel, this is an insufficient allocation of spectrum given the volume of traffic that is expected to be generated by WiMax services.  Instead, it suggested that the available 120 MHz of spectrum be assigned to a maximum of two operators (4 blocks of 15 MHz each).  This suggestion was presumably an attempt by Digicel to harmonize the WiMax spectrum allocation in the Eastern Caribbean with its own WiMax licence in Jamaica.

LIME's submission was more focused on mobile television services.  It requested that ECTEL clarify which of the frequencies set aside for broadcasting services would encompass mobile television service. In addition, LIME requested that the UHF band (470-862 MHz) be made available for mobile TV services.  Again, LIME's arguments appeared to be an attempt to harmonize the frequency allocations in the Eastern Caribbean with its own mobile television licence in Jamaica.

Haiti Regulator Adopts Interconnection Guidelines

Last week, the Conseil National des Télécommunications (CONATEL), the telecommunications regulator in Haiti, adopted new guidelines for the interconnection of telecommunication networks.  These guidelines provide detailed information on the procedure to be followed by new operators seeking to interconnect with existing operators, the content of interconnection agreements and the role of CONATEL in resolving interconnection disputes.

To my knowledge, these are the first interconnection guidelines issued by CONATEL since the Haitian telecommunications market was opened to competition in 1999.  Under their current licences, the operators are required to negotiate interconnection agreements, but little regulatory guidance is provided for the negotiation of these agreements (see, for example, art. 11 of the Teleco licence).  Whilst the operators have done their best over the past few years to negotiate interconnection agreements, the rights and responsibilities of each party (and of CONATEL) were not clearly specified under Haitian law.

It is not surprising, therefore, that Haiti has faced several interconnection disputes over the past decade.  In the summer of 2006, for example, Le Nouvelliste reported that Digicel was refusing to sign the interconnection agreement previously signed by Comcel et Haitel.  This dispute was eventually resolved, in September 2006, when Digicel, HaiTel and Comcel signed interconnection agreements.  Later, in October 2007, the incumbent fixed-line provider, Teleco (recently purchased by Viettel, the largest Vietnamese telecom operator) ceased all interconnection with Haitel due to non-payment of interconnection fees. This dispute was later resolved, following a ruling of the Haitian courts.

Interconnection disputes will continue to be a fact of life in the Haitian telecommunications market, despite the adoption of these guidelines. However, the adoption of these guidelines will clarify the rights and obligations of the parties.  This, in turn will make Haiti a more attractive and predictable market for investors wishing to enter the telecommunications market.

Digicel to Challenge Bermuda Tower Decision

On Friday, the Bermuda Sun reported that Digicel has launched a court challenge of a decision of the Bermuda Department of Planning, which denied Digicel's request for retroactive approval of a 35ft cellular tower.

According to the Sun's article, the Department determined in 2009 that a 23ft pole had been erected by Digicel on Knapton Hill, Smith’s, with the agreement of the landowner, but without the prior approval of the Department.  A retroactive application was subsequently submitted, but then withdrawn after Digicel realized that this property is not zoned for trade or business.  A few months later, in February 2010, Digicel was ordered to remove the tower.  Instead of complying with this order, Digicel replaced the 23 ft tower with a 35 ft one.    

In March 2010, Compu-Cad Ltd filed a retroactive application on behalf of Digicel to retain the structure.  This request was denied on the basis it was contrary to the zoning order and had an “adverse visual impact” on neighbouring property.  The board also noted that Digicel had shown “a blatant disregard for the planning process”.  Digicel then appealed the decision to the Minister responsible for Planning, Glenn Blakeney, who dismissed the appeal at the beginning of September.

The Department of Planning has now ordered Digicel to remove the tower by the end of this week. If Digicel does not comply with this order, the Department could decide to take enforcement action in the Supreme Court of Bermuda.  Instead of waiting for this enforcement action, Digicel has decided to launch proceedings in the Supreme Court of Bermuda to challenge the denial of its planning application.  

The Sun's article does not specify the legal arguments that Digicel intends to make before the Supreme Court.  Therefore, it is difficult for me to comment on Digicel's chances of success.  In other jurisdictions, however, it is quite common for telecom operators to encounter opposition to the construction of cellular towers and masts.  Digicel has been involved in similar proceedings in several jurisdictions. In December 2003, for instance, an interim injunction was issued (and subsequently rescinded) by the Jamaica Supreme Court to stop the construction of a cell site in Saint Andrew, Jamaica.  

More recently, Digicel was deemed by the chiefs on the island of Pentecost (Vanuatu, South Pacific) to have damaged an historical site when building a cellular tower.  Digicel was sanctioned with the highest penalty the chiefs can impose for wrongdoing: 10 tusked pigs!

URCA Opens New Spectrum Bands

On Friday, the Bahamas Utilities Regulation and Competition Authority (URCA) published a consultation document to solicit views on the proposed opening of new spectrum bands and to invite expressions of interest for frequency assignments from interested parties.  This consultation is described in the news release as a follow up to the publication of the Bahamas National Spectrum Plan in March 2010.

The spectrum bands under consideration in this consultation are 700 MHz, 11GHz, 12GHz and 40GHz.  According to the consultation document, these frequencies are currently unassigned.  URCA will not mandate the use of any specific technology in these bands, provided that the technology to be used conforms to recognized standards, the National  Spectrum Plan and any specific frequency band plan.   It also proposes general procedural guidelines to be followed by URCA when determining to open new spectrum bands and for the issuance of frequencies in such bands

It remains to be seen whether URCA will receive any concrete proposal for the use of 700 MHz band.  ECTEL conducted similar a consultation on the 700 MHz bands in 2008 and the Cayman Islands' Information and Communications Technology Authority did the same in 2009.  In these consultations, Digicel and LIME expressed interest in utilizing this spectrum at some point in the future.  However, they were reluctant to provide specific proposals with short or medium-term deployment timeframes.  This reluctance was likely due to the embryonic nature (at the time) of the Long Term Evolution (LTE) network being deployed by Verizon in the 700 MHz band, and perhaps also Qualcomm's MediaFLO service.  Telecom vendors including Alcatel-Lucent, Ericsson, Huawei, had yet to roll out 700 MHz LTE gears in real-world environments.  Hence, it appears that Digicel and LIME may have decided to wait for these real-world 700 MHz deployments before making firm commitments on the use of this band in the Caribbean. Two years later, these real-world deployments are now a reality.  Therefore, it will be interesting to see how the Caribbean telecom industry responds to the URCA consultation.

Comments are due on November 1st.

France Telecom Fined For Anti-competitive Behaviour in the French West Indies

On September 23, the Paris Court of Appeal upheld a decision by the French Competition Authority, which convicted France Telecom and its wholly-owned subsidiary, Orange Caraïbe, of anti-competitive behaviour in the Guadeloupe, Martinique and French Guyana.

This case dates back to July 2004, when Bouygues Télécom Caraïbe (later acquired by Digicel, in 2006) lodged a complaint against France Telecom and Orange Caraïbe.  Outremer Telecom followed suit with a similar complaint in 2005.  In their complaints, Bouygues and Outremer alleged that Orange Caraïbe, the incumbent operator with a market share in mobile telephony services of more than 75% (at the times of these events), implemented a series of practices designed to hinder the entry of new competitors in these markets.  These practices included the establishment of exclusive relationships with independent retailers and setting a price difference between on-net and off-net calls. Bouygues and Outremer also complained that France Telecom gave volume-based discounts to business customers for land-line calls going only to the Orange Caraïbe network. In addition, they alleged that France Telecom marketed "land-line to mobile" products to business customers, at costs below what an equally efficient operator would be able to bear in order to offer the same service (a.k.a. margin squeeze).

In December 2009 decision, the Competition Authority ruled that these practices breached articles L420-1 and L420-2 of the Commercial Code and  articles 101-102 of the Treaty on the Functioning of the European Union.  Orange Caraïbe and France Telecom were jointly and severally fined in the amount of EUR 52.5 million.  Further, the Authority imposed a fine of EUR 10.5 million for the practices carried out specifically by France Telecom.  In last week's decision, the Paris Court of Appeal confirmed the EUR 52.5 million fine, but reduced the France Telecom fine from EUR 10 million to EUR 7.5 million.
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Update (September 30, 2010, 12:44 EST):  Yesterday, Outremer Telecom issued a news release indicating that it intends to sue Orange Caraïbe and France Telecom in damages as a result of the Paris Court of Appeal's decision.

Digicel Challenges Constitutionality of Antigua & Barbuda Legislation

On Saturday, the Antigua Observer reported that Digicel has initiated legal proceedings in the Eastern Caribbean Supreme Court to challenge the constitutionality of the monopoly held by LIME on international calls coming in and out of Antigua & Barbuda.

According to article, Digicel is arguing that the Antigua & Barbuda Telecommunications Act (and by extension the monopoly granted to LIME) amounts to an unconstitutional hindrance to free speech and the freedom to receive and communicate ideas, which is protected by section 12 of the Antigua & Barbuda Constitution. This challenge appears to have been initiated in response to an earlier action brought by LIME in July 2010, in which LIME is claiming that Digicel is routing international calls in violation of LIME's exclusive international gateway licence.  This case is scheduled to be heard by the Court on Thursday this week.

Digicel's constitutional argument is not new - it has been tested before the Eastern Caribbean and UK courts, specifically in Cable and Wireless (Dominica) Limited v. Marpin Telecoms and Broadcasting Company Ltd.  In this case, Marpin Communications, a cable television provider in Dominica, expanded into Internet service provision through an agreement with Cable & Wireless. In 1998, its 1-800 connection through C&W was disconnected. Marpin took C&W to court, arguing that the legislation and licence conferring monopoly powers on C&W amounted to a breach of its freedom of expression.

Judge Cenac of Dominica agreed with Marpin, and so did the Eastern Caribbean Appeals Court and, ultimately, the Judicial Committee of the Privy Council.  The presiding judge felt that there was no question that Marpin’s freedom to communicate ideas and information was significantly hindered by the monopoly. They also cited the case of Retrofit Zimbabwe, a company that wanted to set up a mobile cellular system to compete with the state monopoly. In this case, unanimous rulings by Zimbabwe’s Supreme Court declared that the monopoly infringed freedom of speech and that this infringement went further than could be reasonably justified in a democratic society.

However, regardless of the merits of Digicel's position (or lack thereof), there is a more fundamental issue at play here...In this day and age, is there any public policy rationale for maintaining a monopoly on international calls?  Comments are welcome...

ECTEL Publishes Draft Electronic Communications Bill

On Thursday, the Eastern Caribbean Telecommunications Authority (ECTEL) published on its website a draft Electronic Communications Bill.  According to the explanatory notes, the purpose of the Bill is to update the telecommunications legislation in the ECTEL Member States – Dominica, Grenada, St. Kitts and Nevis, Saint Lucia, and St. Vincent and the Grenadines -  and to promote "liberalized and non-discriminatory entry into the electronic communications sector" while enabling a "robust competitive environment in which there is fairness, transparency and accountability on the part of the regulators of the sector".

Although I have not yet reviewed the Bill in detail, I noticed that it emphasizes the need to create a converged licensing regime.  This appears to be a reference to clause 39(2) of the Bill, which states that "[a] service provider may provide more than one service under a licence in accordance with the terms of the licence".  Therefore, instead of forcing an operator to manage several licences for the various telecom services it offers (for example, in the case of Digicel, one licence to offer wireless voice service, another to offer Internet service, and perhaps perhaps another one for TV service), the legislation would require the operator to manage only one integrated licence. 

This "converged" approach to licensing is an interesting one.  It is similar to the approach taken in the Cayman Islands since 2002 and, more recently, by URCA in the Bahamas.  In addition to simplifying the licence management process for the operators (e.g. payment of fees, quarterly reports, licence renewals, etc), it enables the regulator to focus on the "big picture", rather than micro-managing specific components of the licensees' business. 

The draft Bill is available for public comments, discussions and recommendations and forms part of a wide range of awareness and consultative activities in all the ECTEL Member States. A discussion Board will soon be established to facilitate comments, ideas and suggestions. 

Interestingly, the ECTEL website does not mention any specific deadline for comments, nor does it provide any timeline for the tabling of the legislation in ECTEL countries.

URCA Calls for Comments on CBL-SRG Merger

Yesterday, the Bahamas Utilities Regulation & Competition Authority (URCA) issued a call for comments on a proposed merger between Cable Bahamas Limited (CBL) and Systems Resource Group Limited (SRG).  The Notice of Proposed Merger published on the URCA website does not provide any details on this transaction to assist interested parties in preparing submissions in this proceeding, and neither does the press release issued by CBL on Friday.  The Tribune, however, in an article published yesterday, suggested that CBL intends to exercise a $4.2 million purchase option to acquire 100% of the SRG shares.  This information appears to be based on CBL's 2009 audited financial statements, which include a note referring to a "purchase option which, under certain conditions, allows the company to acquire a portion or all of the outstanding shares in a licensed telecommunications operator".  Anthony Butler, Cable Bahamas president and chief executive, is also quoted in the article as saying that SRG will retain its separate operations, functioning as a wholly owned operating subsidiary of CBL.

This transaction will be an important one for the Bahamian telecommunications sector.  It will combine SRG's fixed-line licence with CBL's Internet and cable TV assets, thus giving the new entity a potential "Triple Play" offering.  This will enable the new entity to compete directly with a privatized Bahamas Telecommunications Company in all of the main industry segments.  Clearly, this is good news for Bahamian telecommunications users.

From a legal and regulatory standpoint, this transaction will also be precedent-setting.  It will be the first opportunity for URCA to apply the merger control provisions of the Communications Act, 2009.  In September 2009, URCA published guidelines to assist in the interpretation of these provisions.  This transaction will be an opportunity for URCA to test the effectiveness of these guidelines in the real world.

Comments are due on Friday October 1st.
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Update:  The deadline for comments has been extended to Tuesday October 5th.  See URCA News Release.

Will Digicel buy Belize Telemedia?

Over the past few months, a number of media outlets have speculated that Digicel is considering a possible acquisition of Belize Telemedia Ltd. (BTL) shares.  Amandala, a newspaper in Belize, noted in an article on Friday "that a Digicel team was given a tour at BTL last week, and they are in the process of exchanging information, under the terms of a non-disclosure agreement between the parties".  

Digicel's interest in BTL is somewhat surprising. Clearly, Digicel is not afraid of political risk.  Indeed, given its presence in markets such as Fiji, Haiti and Honduras (all of whom have faced coup d'états in the not-so-distant past), it is tempting to conclude that Digicel thrives on, and seeks, such risk. However, in the case of Belize, the political risk is different.  While the local parliamentary institutions are relatively stable and democratic, they have an unfortunate propensity to exercise political control over (and interfere with?) the telecommunications industry.  This propensity was at its peak in August 2009, when the Belize National Assembly amended the country’s Telecommunications Act and allowed the Government to seize control of BTL, with shares to be distributed to domestic investors.  This propensity is also demonstrated by the Government's current refusal to sell a controlling interest in BTL to Digicel, thereby limiting Digicel's participation to a minority shareholding.

Besides political risk, an investment in BTL would involve a significant degree of legal risk for Digicel.  As a result of the recent nationalization of BTL, some of the former shareholders of BTL have instituted proceedings before the Belize Supreme Court challenging the constitutionality of the legislation which expropriated their shareholdings.  They argued that there was no legitimate public purpose for the compulsory acquisition of the shares, that it was not necessary to compulsorily acquire the shares in order to achieve the public purpose stated in the legislation, that the acquisition was disproportionate and discriminatory, and that - in reality - the real purpose of this acquisition was to target Michael Ashcroft's alleged interest in BTL. The Supreme Court issued a judgment in this matter in July 2010 dismissing the challenges to the constitutionality of the nationalization, but directing the Government of Belize to pay compensation without delay.  This decision is currently under appeal.

In early September, Digicel received a formal notification by the shareholders' attorneys indicating that:

In the event that any shares in BTL were to be transferred prior to the final determination of our clients' rights on appeal, such transfer would be liable to be set aside in the event that the appeal court finds that the compulsory acquisition was unlawful and invalid.  In such circumstances, the [Government of Belize] would have no title to the shares which could be validly transferred.  

Therefore, in addition to the political risks, as demonstrated by the recent nationalization of BTL, Digicel is also faced with the legal risk that its investment in BTL could be invalidated on appeal.  

Lastly, and perhaps most importantly, this investment does not appear to fit Digicel's overall business strategy of going head-to-head with incumbent telecom operators in recently liberalized markets.  In this case, rather than being an "incumbent fighter", Digicel would become a minority shareholder in the incumbent operator.  This could  restrict Digicel's ability to replicate the formula it used successfully across the Caribbean, Central American and Pacific, namely to target budget-conscious prepaid users with intense local marketing and sponsorship.  It is precisely for this reason that Digicel decided to delay its entry into the Bahamian telecom market earlier this year (see article in the Nassau Guardian).

Clearly, Digicel will have to think twice before making an investment in BTL...

Trinidad and Tobago consultation on point-to-point radiocommunications systems

The Telecommunications Authority of Trinidad and Tobago (TATT) has initiated a public consultation on point-to-point radiocommunications systems.  According to the consultation document, the TATT is seeking firstly to identify the various frequency bands of operation deployed globally and, in particular, by International Telecommunications Region 2 countries, taking into consideration the frequency bands and assignment plan presently used by point-to-point systems locally. Secondly, the TATT seeks to analyze and summarize the current spectrum availability for the associated frequency bands in Trinidad and Tobago. Finally, based on the above information, the TATT proposes frequency bands and associated assignment plans for the accommodation of point-to-point radiocommunications systems and indicates the appropriate licensing process for the assignment of spectrum to users.

The specific bands discussed in this consultation documents are 1.4 GHz, 2.4 GHz, 5 GHz, 5.7 GHz, 5.8 GHz, Lower 6 GHz, Upper 6 GHz, 7 GHz, 8 GHz, 10 GHz, 11 GHz, 13 GHz and 15 GHz. As a general rule, the TATT appears to have rejected the idea of a competitive licensing process for this spectrum and is proposing instead to adopt a "first-come, first served" licensing process (with the exception of the 2.4, 5.7 and 5.8 GHz bands, where the TATT is proposing a class licensing regime and the Upper 6 GHz band, which the TATT is proposing to set aside for Studio-to-Transmitter Links). This approach is consistent with international best practice.

While backhaul has traditionally been carried on copper wire or fiber, telecom operators worldwide are increasingly turning to wireless technology for capacity to meet the increased demand created by growing numbers of bandwidth-hungry mobile devices and applications. Wireless backhaul is particularly desirable in the Caribbean, where laying wire or fiber is often cost-prohibitive. Telecommunications regulators around the world are attempting to come to grips with this important component of modern telecommunications infrastructure. The U.S. Federal Communications Commission, for instance, is currently in the midst of a proceeding on this topic.  The TATT is therefore to be congratulated for tackling such an important issue.

Comments are due October 13, 2010. 

Jamaica Supreme Court Dismisses LIME Application for Injunctive Relief

Jamaica Supreme Court Justice Ingrid Mangatal

Yesterday, Justice Mangatal of the Jamaica Supreme Court dismissed an application by LIME for injunctive relied against Digicel as part of an ongoing court proceeding over fixed-to-mobile termination rates.  Justice Mangatal's decision provides a good overview of the legal test for injunctive relief in Jamaica (and other common law jurisdictions). She concluded that, while there appears to be serious issues to be tried in this proceeding, LIME did not provide sufficient evidence to demonstrate that the balance of convenience justifies injunctive relief.

In the main proceeding, LIME claims that Digicel's conduct in setting higher rates for the termination of fixed line calls from other networks to call Digicel's mobile network, while setting lower rates for calls from Digicel's fixed network to Digicel's mobile network, is an abuse of dominant position under the Fair Competition Act.  LIME also alleges that, under section 30 of the Telecommunications Act, Digicel did not comply with the obligation to provide interconnection on a non-discriminatory basis.  Accordingly, LIME argues that it has a private cause of action under section 48 of the Fair Competition Act and section 67 of the Telecommunications Act.

Interestingly, as part of its defence in the main proceeding, Digicel denied the existence of  "market to terminate calls on Digicel's mobile network".  This position is consistent with Digicel's arguments before the Telecommunications Appeals Tribunal (as previously discussed on this blog).  It is clearly at odds, however, with the conclusions of the Telecommunications Appeals Tribunal, as well as the position taken by the International Telecommunications Union and telecommunications regulators around the world, most of whom have concluded that mobile termination is a distinct market that requires regulation.  In her decision, Justice Mangatal seemed reluctant to delve into such a detailed and complex economic analysis.  It will be interesting to see if the trial judge will rule on this important issue.

Mobile Phones and Driving Safety

According to the Guardian, the Trinidad and Tobago Cabinet has endorsed amendments to the motor vehicle legislation to ban the use of mobile devices while driving.  These amendments will soon be tabled in the Trinidad and Tobago Parliament.  In a post-Cabinet news conference on July 29, Works and Transport Minister Jack Warner noted that these amendments are intended to increase road safety in  Trinidad and Tobago.  Both Digicel and TSTT expressed their support for these amendments.
 
These amendments should be a no-brainer for all Caribbean nations.  Several studies have demonstrated clearly  that using a mobile device while driving a motor vehicle entails a similar risk as driving while intoxicated.  A significant number of nations have already adopted and implemented legislation to prohibit this practice.  One can only hope, therefore, that the other Caribbean nations will follow Trinidad and Tobago's lead in the near future.

Barbados FTC Denies Digicel Motion to Review Consolidated RIO Decision

The Barbados Fair Trading Commission has denied a motion by Digicel for review of a February 2010 decision on Cable & Wireless' Consolidated Reference Interconnection Offer (RIO).  In its submissions, Digicel alleged that the FTC's February 2010 decision was reached in breach of the principles of natural justice and, in particular, that the FTC failed to adequately consult Digicel on certain amendments to the Consolidated RIO requested by Cable & Wireless. 

As part of its motion for review, Digicel submitted that the FTC should communicate to Digicel any changes made, no matter how minor, to the Consolidated RIO.  In its decision, the FTC concluded that this is not required by the Barbados Telecommunications Act.  The FTC also noted that, as part of the proceeding leading up to its February 2010 decision, Digicel had been given ample opportunity to make submissions on the amendments to the Consolidated RIO and therefore that there was no breach of the principles of natural justice.

This decision is a good illustration of the fact that telecom regulators, when adjudicating interconnection disputes, must ensure that all parties are given an opportunity to be heard.  This is particularly true in the Caribbean context, where the telecom industry is becoming increasingly litigious (especially in interconnection matters).

Bermuda Telecom Bill Delayed

In early July, the Ministry of Energy, Telecommunications and E-Commerce (METEC) in Bermuda announced that the tabling of the new telecommunications legislation would be delayed.  METEC Minister Michael Scott had previously told the industry that he would table the legislation prior to the summer recess.  According to a July 2 report in The Royal Gazette, "The Minister will update industry on its new time table as early as possible". 


As previously mentioned on this blog, the telecommunications legislation in Bermuda is in serious need of modernization. The fact that Bermuda does not have an independent regulatory body responsible for telecom and broadcasting regulation is clearly at odds with international best practices.  The International Telecommunications Union, for instance, in its most recent report on Trends in Telecommunication Reform (2009), describes the need for independent regulatory agencies as follows (see page 7 of Executive Summary):

The creation of separate ICT regulators has been one of the main building blocks of regulatory
reform worldwide since the 1990s. Regulators have played a leading role in creating an enabling
environment fostering innovation and investment. They have gradually opened fixed line services to
competition totaling 124 competitive markets for basic fixed-line services as of 2009, almost
inevitably privatizing the national fixed-line incumbent along the way. The overall objective of
regulators has been to ensure that public policy objectives for the sector continued to be met and
even exceeded.

Despite the need for legislative change in Bermuda, METEC's decision to delay the tabling of this legislation appears to be reasonable, given the feedback received from industry stakeholders.  The cost of the new regulatory agency was estimated to be approximately US $9 million per year.  This amount was heavily criticized by industry stakeholder, both in their regulatory submissions and media reports.  Indeed, this amount seems very high when compared to similar jurisdictions such as the Cayman Islands, where the regulator's annual budget is US $1.8 million (see page 269 of this budget document).  In the Bahamas, where the population is 330,000, or five times the Bermuda population, the annual budget of the telecom regulator is approximately $5 million (see page 21 of this draft annual plan).  Hopefully, the Government of Bermuda will rectify these issues in the near future to ensure that Bermuda's telecom regulatory framework is consistent with international best practices.

Bahamas Consultation on Content Regulation

Over the past few months, the Bahamas Utilities Regulation and Competition Authority (URCA) has been conducting a consultation on content regulation. Under the newly-promulgated Communications Act, 2009, URCA is mandated to issue new Codes of Practice for audiovisual media services and to develop complaints-handling procedures for dealing with complaints by the public regarding alleged breaches of the Codes. These Codes are intended to cover areas such as the protection of children, harm and offence, taste and decency, accuracy and fairness, political broadcasts, advertising and sponsorship, and guaranteed access to certain kinds of content and services (e.g. relating to national emergencies and disasters).

In the consultation document, published last February, URCA indicated that it was inclined to delegate this task to an industry Working Group, composed of representatives of the broadcasters, cable operator, independent production companies and the public at large. However, if the Statement of Results published last week is any indication, URCA may have some difficulty in generating sufficient interest from these stakeholders to make this process work. This paragraph from the Executive Summary is particularly revealing:

(...) URCA is disappointed with the low number of responses received to an important consultation that will affect all Bahamian radio and TV broadcasters. It is particularly discouraging that none of the broadcasters took the opportunity to formally respond to the consultation. As URCA is proposing a co-regulatory framework to develop the Codes of Practice, it does not auger well for the proposed framework if the industry did not respond to the public consultation, the first phase of the process. For such a model to be effective, it is necessary for regulated companies to participate actively in the regulatory process, for example by responding to consultations that directly affect them. The fact that no broadcasters responded to URCA’s consultation on developing Codes of Practice highlights the fact that Bahamian companies might not yet be accustomed to playing their required role in the development and implementation of public policy.

Unfortunately, this lack of participation in regulatory proceedings is common across the Caribbean. This is particularly true in regulatory proceedings involving broadcasters. Contrary to the Caribbean companies operating in the telecommunications sphere (e.g. Digicel, Cable & Wireless/LIME, etc), the Caribbean broadcasters are generally quite small and localized. As a result, they suffer from a lack of scale and resources, which prevents them from employing dedicated legal or policy experts – either in-house or through industry groups – to manage regulatory affairs. In smaller countries such as The Bahamas, companies have limited resources, making it harder for them to devote time and effort to regulatory affairs. One solution to this conundrum may be for broadcasters to pool their resources on a regional basis. Perhaps this is a gap that could be filled by the Caribbean Broadcasting Union?

Jamaican Tribunal Confirms Mobile Operators' Dominance in Termination Services

Earlier this week, the Telecommunications Appeals Tribunal (TAT) of Jamaica dismissed an appeal by Digicel of a 2004 ruling by the Office of Utilities Regulation (OUR) that Digicel, Claro and LIME are dominant with respect to mobile voice termination services. As a result, the three mobile operators will continue to be subject to the more stringent regulatory framework applicable to "dominant public voice carriers".

The end result of this appeal is hardly surprising. The vast majority of regulators in Calling Party Pays (or CPP) jurisdictions in the Caribbean and around the world have reached similar conclusions. It is difficult to argue with the premise that all mobile operators are dominant in the provision of termination services. As the ITU noted in its ICT Regulation Toolkit:

The premise is that mobile operators are able to sustain high fixed-to-mobile prices because they have market power in setting prices for fixed-to-mobile calls. This market power derives from that fact that the fixed subscriber who places a call to a mobile subscriber has no influence over which mobile network is used. Mobile subscribers make this decision when they decide to join a network. Under Calling Party Pays mobile subscribers do not pay for fixed-to-mobile calls, so they may not take the price of these calls into account in selecting a network.

What is surprising, therefore, is not the ultimate conclusion reached by the TAT, but the manner in which the this conclusion was reached. In its 38-page decision, the OUR provided a detailed economic analysis to justify its conclusion. This analysis included a product and geographic market definition, as well as a detailed description of the factors affecting the mobile operators market power (including market shares, barriers to entry, prices, etc). As part of its appeal, Digicel questioned several aspects of this economic analysis, including the market definition. The TAT's decision, however, did not address any of these grounds of appeal. Rather, the TAT appears to have focused exclusively on whether the OUR's ultimate determination of dominance was consistent with other jurisdictions. Digicel submitted that the TAT should not rely on the the positions in other jurisdictions, given the differences with the Jamaican market, but the TAT disagreed.

When will Cable & Wireless rollout its IPTV service in the Caribbean?

Yesterday, Cable & Wireless Communications made several references to its forthcoming Caribbean IPTV rollout during the presentation of its 2009/2010 financial results. Whilst much of the discussion was focused on CWC's TV service in Panama, the rollout of TV services across the Caribbean was also mentioned on a couple of occasions, including during the Q&A's with financial analysts. It was described as one of CWC's 2010/2011 priorities on page 30 of the slides.

These comments are consistent with a press release issued last fall, in which CWC announced a partnership with U.S.-based Move Networks for a rollout of IPTV services across CWI’s global operations. Yesterday, Telecommunications Services of Trinidad and Tobago (TSTT), which is owned jointly by the Government of Trinidad and Tobago and CWC, announced a similar partnership with another U.S.-based IPTV provider, Calix Inc.

Entering the Caribbean TV market will not be easy for CWC. In addition to the challenges associated with securing the intellectual property rights for popular US programming, CWC will need to convince the local population that its service is superior than the grey and black market satellite services, which are currently rampant across the Caribbean. Perhaps one way to accomplish this objective is to deliver a comprehensive list of local Caribbean TV channels and to focus on IPTV's ability to deliver advanced TV services which are not available on satellite, including interactive services, VOD services and "TV Everywhere" services.

Jamaica Considering Registration and Intercept Legislation

The Jamaican government is apparently considering the possbility of creating a system of mandatory registration of subscriber information for telecom operators. According to an article in The Gleaner, the three mobile operators in Jamaica are currently in discussions with the Jamaican government on this topic. Whilst Claro appears to be receptive to this idea (perhaps due to its experience with a similar system in Mexico), Digicel appears to be concerned about the cost of this initiative (perhaps due to its experience in Guyana).

The article in the Gleaner is vague about the specific measures under consideration in Jamaica. It does not specify whether these measures will be limited to mobile operators or include other telecommunications operators such as internet service providers. It is also unclear whether these measures will expand the law enforcement authorities' ability to intercept communications, or be limited to the disclosure and registration of subscriber information. Also, it remains to be seen whether these measures will have any impact on other Caribbean jurisdictions, given the fact that certain pan-Caribbean operators (e.g. Digicel) are headquartered in Jamaica.

What is clear, however, is that Jamaica is NOT the only Caribbean jurisdiction considering this type of measure. A number of other Caribbean jurisdictions have expressed an interest in similar measures in order to facilitate the gathering of evidence and combat the worsening crime situation across the Caribbean. Bermuda's recently-completed public consultation on CALEA legislation is one example. Stay tuned...

Consultation on Number Portability in Trinidad and Tobago

The Telecommunications Authority of Trinidad and Tobago is currently conducting a public consultation on number portability. Comments are due on May 28th.

After several years of delay (compared to the rest of the world), the Caribbean telecom regulators in the Caribbean are now finally forging ahead with NP. Although the French West Indies (French Guyana, Guadeloupe and Martinique) have already done so, most of the other jurisdictions are expected to follow suit in 2011 and 2012. The Cayman Islands are expected to have NP available for both mobile and fixed telephony within the next few months. Bermuda has completed two separate public consultations on this topic (in 2008 and 2009) and the Bahamas Utilities Regulation & Competition Authority has indicated in its latest annual report that it intends to do the same in Q3 2010. Jamaica has issued a request for expressions of interest from potential vendors.

It will be interesting to see what impact NP will have on Cable & Wireless/LIME dominance in the Caribbean fixed telephony sector.

New Telecom Legislation in Bermuda

The Bermuda Government has issued a consultation paper on new legislation that seeks to "fundamentally reform the regulatory regime applicable to the electronic communications sector". The consultation paper is available here and the draft legislation is available here. The Bermuda Government is proposing to enact two statutes, one to create an independent telecom regulatory authority and another to create an integrated regulatory framework for all electronic communications.

It is good to see that, after five years of consultation, Bermuda is finally getting close to modernizing its telecom legislation.

Digicel v. C&W

The London High Court has dismissed (for the most part) a lawsuit by Digicel alleging that LIME conspired to delay its entry in various Caribbean markets. Digicel was seeking several hundred million dollars.

As part of the discovery process, the parties disclosed more than 1.1 million documents (including the entire e-mail accounts of 85 “Relevant Individuals” at C&W, and even the back-up tapes of e-mail servers). The hearing itself ran 75 days and the legal costs will be in the tens of millions of dollars.

This judgment is not binding on Caribbean regulators. However, it provides a detailed overview of the interconnection regime in various Caribbean jurisdictions. It is mandatory reading for anyone involved in Caribbean telecom regulation!

Welcome to Caribbean Communications Law and Regulation Blog!

Welcome to Caribbean Communications Law and Regulation Blog! Over the coming days, I will begin posting my thoughts and commentary on recent developments in Caribbean Communications Law and Regulation. I expect these postings to be somewhat irregular (perhaps once a week?), but I will do my best to find the time to do it as often as possible. I hope you enjoy it.