No mobile rate cut from appeal ruling
Published:Friday | June 11, 2010 | 12:00 AM
Mark Titus, Business Reporter
The recent dismissal by the Telecommunications Appeals Tribunal (TAT) of a challenge which telecoms firm Digicel had mounted against a 2004 declaration by utilities watchdog, the Office of Utilities Regulation (OUR), that the leading mobile phone provider and its competitors were dominant in respect of particular call termination arrangements, will not mean cheaper rates for subscribers immediately. The regulator said, this week, that any such positive implication of the TAT ruling would have to await several legislative changes.
"We are hoping that the new policy and legislation that is coming will give the regulator more teeth to deal with the issues that affect the industry," OUR Deputy Director-General Maurice Charvis told the Financial Gleaner, in the aftermath of the ruling and the spin that has been put on it by the various telecoms firms.
The OUR wants the law to be more specific about the requirements for cellular phone companies to disclose information on service levels and prices. The right of consumers to have all the full information about a particular service before subscribing to that network is among a number of competitive safeguard issues to be addressed, Charvis said.
"For competition to operate effectively, there must be information," the OUR official declared.
"One needs to know the size of the network, the quality of service and their prices, so that one can make a reasonable choice, and while the FTC (Fair Trading Commission) can come in if you behave anticompetitive, we should be able to put in rules to prevent the dominant carriers from behaving anticompetitive," he said.
Against the background of the recognition of this need, the regulator is preparing to conduct a service-quality survey and it has already established some minimal reporting requirements from industry players.
Explaining the importance of the utilities regulator having the power to force the publication of quality and price information, Charvis pointed out that, ultimately, the informed decision should be left up to the user.
"It must get to the point (where) it is the consumers who determine whether or not they want to subscribe to a network with low quality, low-cost service or high-quality, high-cost service, rather than us specifying quality and price," he said.
The Telecommunications Act does not specifically allow disclosure of such information and a confidentiality clause has effectively been used to block such a revelation.
"The act could simply say that this is information that should be published rather than putting us through the task of them (the telecoms firms) blocking the release of information through the courts," he pointed out.
The representative of the regulatory agency said that body's intention is to create a level playing field in which competition can thrive.
"People must act fairly and winning must mean that your product is cheaper and have good quality."
Reacting to the tribunal's ruling, Digicel has maintained that the effect of the verdict is that all mobile-phone providers are now regarded as dominant in the termination of calls to their respective networks and, as such, each carrier will be required to comply with enhanced regulatory obligations.
"Digicel is currently assessing the underlying rationale of the decision and our right to appeal same," Richard Fraser, the company's head of legal and regulatory affair has said.
Competitor, LIME has regarded the recent ruling as vindication of its allegation of abuse of dominance by Digicel.
Both LIME and third-place mobile operator by market share, Claro, have complained that market leader Digicel has abused its dominance by setting high charges for calls to Digicel's mobile phones from other networks. This led to the filing of both a complaint to the FTC and a suit in court against Digicel.
For calls to its network, Digicel charges other mobile carriers $7.25 on weekends and $9.50 during peak, with similar interconnection charges levied by LIME. Claro and LIME charges each other between $4 and $5.