Concerns that customers are not getting the internet speeds they are paying for is one of the items to be reviewed by the Regulatory Authority of Bermuda (RAB) during the coming fiscal year.

The Consumer Affairs Board has discussed the matter with the authority and believes customers are not getting the speeds they are paying for, in breach of the Consumer Protection Act. In a submission to the authority the board said there is “no justification for broadband prices to remain high for what is being sold to consumers when compared to other like jurisdictions”.

In its proposed work plan for 2016/17, the RAB said it has been actively seeking to address the issue of pricing through competition between providers. It will conduct a review of advertised broadband speeds to determine to what extent customers get what they are paying for, and consider what the authority can do to address any issues uncovered.

Kyle Masters, the interim chief executive officer of the RAB, told The Royal Gazette the authority shared the concern that customers are potentially not getting the speeds they are paying for.

“The authority started work on this issue in 2015. It has set aside resources to build on that work in the upcoming year,” he said, explaining that the RAB plans to commence this further work as soon as possible after April 1, the start of its next fiscal year.

“The public will be updated with more details closer to the start of the project,” he said.

The watchdog organisation will also review the number of companies providing telecommunication services in Bermuda, and how competitive the market is, and then consider whether or not there needs to be an increase or decrease in the number of licensed operators.

Mr Masters said the key question is whether or not there is currently good competition in Bermuda.

“After the authority has reached some conclusions on this question, it will go on to consider the issue of the number of ICOLs [integrated communication operator licences] in the market and whether, or to what extent, this should be modified in some way,” he said.

The RAB has proposed a budget of $3,375,000 for 2016/17, which is $182,000 lower than its budget for the current fiscal year. A large portion of the savings will achieved by curbing expenditure on consulting services, office space, and provision of mediation and litigation.

The authority is proposing a near $300,000 increase in employee costs to ensure it can “recruit and retain the necessary staff to enable some key regulatory functions to be carried out in-house”.

These details are outlined in the RAB’s preliminary report to Bob Richards, the Minister of Finance, and Grant Gibbons, the Minister of Economic Development.

The plan has been prepared based on the assumption that the authority will continue to only have oversight for the telecommunications sector. However, at some point in the near future it is set to take over responsibility for regulating the energy sector. The Electricity Act 2015, which will make this happen, has been tabled in Parliament.

In preparation for the added responsibilities, the authority appointed Robert Watson as CEO at the beginning of 2015. Mr Watson had previous experience heading up telecoms and electricity companies in Canada. However, he resigned in September, citing personal reasons.

The authority has yet to appoint a permanent replacement.

When asked how the RAB would deal with budgeting for energy-sector responsibilities, should circumstances change during the forthcoming financial year, Mr Masters said: “The authority anticipates that the transition of the electricity sector out of the various government organisations into the authority will be developed and managed as a joint effort between the Ministry of Economic Development and the authority. Budgeting, which is a part of that process, will be a part of that joint effort.”

The RAB’s budget is covered by fees paid to it by companies that hold an ICOL. The authority is anticipating that the taxable turnover of those companies will be lower during the coming year, and consequently is requesting that the fees be increased from 1.5 per cent to 1.75 per cent of taxable income to ensure its budget requirement is met.

Mr Masters said the authority had made its financial projection of ICOL holders’ incomes by assessing revenue trends and projecting them forward. Should those projections prove to be off target, the interim CEO said: “If we spend less than what we take in we are required by statute to deal with the surplus by paying some to government, some into our reserve fund and some into our paid-up capital.

“The authority can adjust its fee for the following year to correct a large surplus. It did this in the current financial year. I cannot say with certainty if this will happen again, but it is an option open to the authority.”

Beyond the proposed 0.25 of a percentage point increase in the fees paid to it by ICOL holders, the authority has recommended there be no increase in the government authorisations fees imposed on electronic communications companies. During the coming fiscal year it is projected that government will receive $11.5 million in revenue from the sector through licences and fees.