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.

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.

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?