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  A retroactive application was subsequently submitted, but then withdrawn after Digicel realized that this property is not zoned for trade or business.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 In December 2003, for instance, an interim injunction was issued (and subsequently rescinded) by the Jamaica Supreme Court to stop the construction of a cell site in Saint Andrew, Jamaica.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!

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.

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.

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.