Telecoms level stinging criticisms of RA review
Bermuda’s two dominant telecommunications companies believe the Regulatory Authority of Bermuda is acting heavy-handedly and in some cases, beyond its purview.
The two companies have listed a large number of areas in which they believe the RA does not have it right.
One Communications and Digicel do not agree with the RA that there are high and non-transitory barriers to entry into the Bermuda telecommunications market.
These were among initial reactions to the RA’s original proposals in the consultation document, Market Review of the Electronic Communications Sector.
The technical review was published in January and the entire island was given an opportunity to respond within less than a month.
Few did, including only one member of the public. The entire review including the final report has just been released.
It has forced Digicel and OneComm to slash the cost of entry-level packages for mobile and broadband services to a fixed rate as of October 1.
It introduces maximum rates of $80 per month for fixed broadband (100 megabits per second/20 Mbps) and $50 per month for mobile plans with at least ten gigabytes of data.
And while the island’s two largest telecoms are likely unhappy with that, they were already at loggerheads with the RA before the final decisions were made, including about whether the telecoms market should be regulated at all.
On administrative issues alone, OneComm was highly critical, suggesting the RA had misinterpreted the language in the Electronic Communications Act 2011 about the meaning of barriers to entry for new market competitors.
“No barriers can be said to exist,” OneComm’s statement read. “The language differs from [European Union] law. Therefore, there is no legal basis for ex ante remedies on that basis.
“Furthermore, the RA’s language with respect to barriers reflects that it has already taken a decision on this point for all the markets it has proposed. But the RA is required to be open minded with respect to the consultation.
“The ECA requires that it reaches decisions only after considering the comments it receives, providing justifications based on the evidence from the market.
“We also note that the RA has not provided the market information that is required by stakeholders to respond properly to a market analysis and therefore the consultation is not compliant with the regulatory framework. The last Annual Market Analysis published was for 2022 only.
“In other words, by the time the RA reaches decisions, the information made available to respondents to provide their views on regulation will be over two years old. That is over 50 per cent of the duration of the permitted four-year market review cycle … That does not meet the legal standard required.”
OneComm also complained the RA provided no Annual Market Analysis for 2023 or 2024, forcing respondents to rely on out-of-date information, excluding anything related to Paradise Mobile, which launched in November 2023.
The RA is accused of too much meddling in a market where “fixed and mobile voice and broadband provision is ubiquitous and near, or at, the cutting-edge of technology island wide”, where universal service has been achieved.
“There are now multiple competing providers in both markets,” the telecom states. “Consequently, the basis for regulatory intervention no longer exists. The market can deliver, undisturbed by the most demanding regulation going forward.
“Despite the existing competitive market circumstances, out of the benchmarked island jurisdictions and Liechtenstein, Bermuda has a significantly higher number of regulatory interventions based on [significant market power] or dominance findings.”
One Communications has proposed its own rules structure which they see as fairer and simpler, based on a “rule of three test”.
If three wholesale providers and three retail providers of a service were present, then the RA would not regulate unless certain conditions were met. If they were met, the RA could regulate.
A stepped approach could also be taken, where all retail regulation stops and if all goes well, wholesale regulation would stop later.
The telecom proposed: “This test is clear and simple for both the RA and operators, dramatically lightens the regulatory load on all parties, and still provides the RA with the assurance that it can regulate where absolutely necessary. It aligns with Bermuda’s small size, competitive reality and investment needs.”
• For more on the sectoral review and final decision, order and determination, See Related Media
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