C&W set to submit costs information
Telecommunications Commission to present a comprehensive costing for the provision of overseas telephone service.
The information was requested by the Commission last July, but has remained a major bone of contention with competitor TeleBermuda International (TBI) recently demanding to know where the report was.
C&W spokesman John Instone confirmed yesterday: "We are very close to submitting information along the lines requested by the Commission.'' And Edgar Dill, C&W manager of marketing and corporate affairs, added: "It specifically contains cost-related information. That was the initial request that came from the Commission. This information is to enable the Commission to have a basis for looking at any submission for rate changes.'' C&W emphasised yesterday that it will be providing costing information -- not a comprehensive rate structure -- to the Commission. TBI has been calling for a rates structure, but C&W said this was not what the Commission requested.
Meanwhile, Government has not yet decided how long it will exercise new price controls over Cable & Wireless as a telecommunications carrier. And C&W has conceded some discomfort with that notion.
Mr. Dill said: "We know that our competitor has more than 15 percent of the long distance connections, right now. They've quoted between 15 and 20 percent. That is, 15 percent of the long distance calls originating from Bermuda are now through TBI.
"The question begs, how much of the market is enough? At what stage do the controls come down?'' The controls were put in place to avoid predatory pricing, for example by Cable & Wireless as a former monopoly in international telecommunications traffic, against TeleBermuda.
A recent war of words between the two firms has been described by Government officials as a natural consequence of the new competition.
And while Telecommunications Minister, Sen. E.T. (Bob) Richards, concedes that the public could be confused by their public squabble, he said today's unsettled market should lead to a more competitive one in the future.
Sen. Richards said: "We're trying to promote sustained competition. There is no point in us licensing new companies and allowing them to get blown out of the water in a matter of months by incumbents who start out with 100 percent market share and an arsenal of weapons including financial strength and familiarity.
"There has been no specified length of time for this interim period, but it is something that the Ministry will constantly monitor. We will get regular data from the carriers to assess what the level of competition is, what type of in-roads the new entrant is making, and then make an assessment to proceed accordingly.'' The Minister said: "We are, to some extent, on virgin territory here. We have to continually assess what the conditions are out there. I don't expect this thing to be totally smooth sailing.
"Competition, by it's very nature, can be a struggle, and I think we will continue to hear noises as a result of that struggle. But, in the long run, it will be to the benefit of the Bermudian public.
"Our goal is to ensure that predatory pricing or any other anti-competitive measure is not introduced to derail our move toward competition. Once we take the controls off of the incumbents, the public can be assured of competition in the long run. Otherwise, the whole exercise would have been a very expensive and rancorous waste of time.'' TeleBermuda director Ken Spurling made no secret of his displeasure with Cable & Wireless' recent interest in rate adjustment.
He said: "If TeleBermuda is allowed to be squashed by Cable & Wireless by them just throwing money at it, then Bermuda is being done a disservice.'' Mr. Spurling said: "We object to these ad hoc, short term, discounts, because it was our belief and understanding that the Government was insisting that they come up with a floor and ceiling for rates.
"The Thanksgiving rate decrease was interesting because it wasn't really lower than existing rates. For seven days a week in the morning and the evening, we are at 76 cents a minute to the US and Canada. And at night, we are at 63 cents a minute. So their 75 cents a minute rate wasn't that great, anyway.
"But if we object every time they propose one of these short term reductions, it is only because this was not the way it was meant to be. We are the forerunner of lower rates, so that is not our objection. Cable & Wireless are just not supposed to be doing this.'' Meanwhile, Cable & Wireless said yesterday that Government's move toward competition has come with a vague and ill-defined policy.
Mr. Instone said: "Nobody's ever defined what predatory pricing is. Remember, we objected to the competition. We have an Act of Parliament that said we were an exclusive carrier.'' That issue is currently before the courts in a matter brought against Government by C&W.
But said Mr. Instone: "We've been asking for a definition. We've never been told how this is to be determined, how long the controls will be on. People say when they (TeleBermuda) have a certain market share then we will be allowed to compete freely.
"But nobody's ever determined what that percentage of market share is, or in fact, how market share is to be determined. Our position is that it is a very vague policy, and although we have a lot of angry words with TBI, I think you'll find they agree it's vague.''
