One Communications tackles RAB on transparency

One Communications has accused the telecoms industry watchdog of a lack of openness because it has failed to show the public how it spends its money.

The firm wrote to the Regulatory Authority of Bermuda to outline a string of complaints in response to its proposed work plan for 2019-20.

Michael Tanglao, the company’s general counsel, claimed there was “no public understanding” in relation to aspects of the body’s finances and pointed out that the document appeared to have repeated parts of the previous year’s report.

However, a spokeswoman for the authority, set up to regulate the island’s electronic communications and electricity sectors, said it tried to be clear about its work — but was restricted by legislation.

The watchdog has to release its agenda for the year ahead, including strategic priorities and estimated budget, to allow for public consultation before a preliminary report is submitted to ministers.

But, in a letter posted on the RAB website, Mr Tanglao wrote: “Stakeholders and the minister are not being provided the reasonable information needed to properly inform any comments on the work plan.”

He explained: “As in previous fiscal years, the RA continues to propose work plans that provide no disclosure of past performance for financial outcomes, objectives and work streams in the prior period.

“As a result, there is no public understanding as to whether the RA’s proposed revenues were in fact approximately $3.3 million as forecasted in the 2018-19 work plan.

“There is no public understanding as to how much of those funds were actually spent in the prior fiscal period, nor is there any public understanding as to whether the RA’s use of the monies resulted in completion of the work streams it proposed as the justification for its prior budget.”

The RAB was set up to ensure competition in the regulated industries, to protect customers and promote Bermudian employment, ownership and the economy.

Its income is generated by fees from electricity and electronic communications providers as well as consumers.

Among the tasks outlined for this year was further work on the integrated resource plan — a wide-ranging project for the future of Bermuda’s electricity supply.

The RAB also expected to implement any “remedial actions” after a 2017-18 market review to assess the state of competition in the electronic communications industry.

Mr Tanglao’s letter claimed that the accomplishments touted for 2018-19 matched those said to have been achieved the previous year.

He added: “The same work streams are being proposed for 2019-20 that were proposed for 2018-19.”

Mr Tanglao wrote that more detailed information should be provided on the $3 million-plus of electronic communications fees collected and spent in the previous reporting period.

The RAB said this week the report submitted to ministers had significant changes compared with the public consultation document.

Companies that hold an integrated communications operating licence were required to pay 1.75 per cent of their “relevant turnover” to the RAB last year.

A further 3.5 per cent was set for government authorisation fees.

Although restrictions apply on whether these can be passed on to customers, these levies were expected to play a part in rates.

Mr Tanglao wrote: “The overarching concern raised by OneComm in this letter relates to the lack of transparency in the budget performance and related finances of the RA.

“It is important for the RA, the minister and all other stakeholders to understand the direct costs of the current regulatory regime, as those costs are a significant component of overall industry pricing.”

He highlighted the lack of RAB annual reports online.

The Regulatory Authority Act 2011 ruled that annual reports and financial statements should be posted on the watchdog’s website “as soon as practicable” after they are tabled in Parliament and published in the Official Gazette by the relevant minister.

But the most recent annual report on the RAB site was for the year ended March 2014.

A spokeswoman for the authority said that financial statements for the three years that followed had not been published in the Official Gazette and the 2017-18 documents were under audit.

Mr Tanglao also raised concerns about the timing of the proposed work plan’s publication.

The Act states that the watchdog must open public consultation on its agenda at least six months before the start of the financial year.

Ministers should get a preliminary report and proposed finances no later than three months before the new financial year starts in April.

But the RAB’s work plan was published on October 31, 2018, only five months before the new financial year and with a deadline for responses of November 30 last year.

One’s letter was dated the previous day and the RAB said its preliminary report was submitted at the end of December last year.

Mr Tanglao wrote: “If the consultation period is shortened by a month, the opportunity for iterative public discussions of the issues is essentially eliminated.

“As a result, the policy benefits of the public consultation process are undermined.”

The authority said the deadline was waived by the home affairs minister.

A RAB spokeswoman added that it intended to publish its financial details as soon as possible.

She said: “It remains that the information is not yet publicly available through the authority’s website, a matter which, despite not being within its control, the authority is endeavouring to resolve as soon as practicable.”

She said audited financial statements would show more details comparing the actual costs to what was forecasted.

The spokeswoman added: “The work plan submitted to the relevant ministers included significant changes from the consultation draft, including in relation to past accomplishments and upcoming projects, upon further authority analysis and consideration of public comments.”

She said major projects were “generally published on the website once completed”.

The spokeswoman also explained: “The Minister of Home Affairs concluded that there was good cause to waive the deadline for the authority to begin the public consultation on the authority’s work plan for the 2019-20 financial year, due to synergies with the second anniversary of the start of the Electricity Act 2016 and related legislative deadlines.”

To view the One Communications letter and the Regulatory Authority of Bermuda’s proposed work plan consultation for 2019-20, click on the PDF links under “Related Media”

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Published Feb 14, 2019 at 8:00 am (Updated Feb 14, 2019 at 7:31 am)

One Communications tackles RAB on transparency

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