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.