FTC rejects Digicel request
AN APPLICATION by mobile phone giant, Digicel, to the Fair Trading Commission (FTC) to review a February 22 decision on rates its main rival, Cable & Wireless (C&W), charges other telecoms to use their network has been denied.In a decision and order on the Consolidated Reference Interconnection Offer (RIO) issued yesterday, the FTC said Digicel had not demonstrated that errors of fact or any other grounds for review exist.“As such, Digicel has not properly supported a modification of the commission’s decision,” the FTC said.
The regulator said it considered the existence of errors raised by Digicel to be unsubstantiated since they were not adequately demonstrated or specified by reference to evidence to allow them to be assessed; and arguments presented “were at some points inconsistent and seemingly contradictory with respect to the nature and extent of the Commission’s process and Digicel’s involvement”. Digicel’s head of Legal and Regulatory, Eastern Caribbean, Helga McIntyre, said yesterday they were reviewing the decision and “we would decide where we go from here”.
How it startedThis latest development had its genesis in a September 25, 2008 FTC request from C&W to file an RIO on which a public consultation was held.The FTC got submissions from Digicel, TeleBarbados Inc., Blue Communications and CARITEL (as an interested party) to which C&W subsequently responded, and the parties were invited to an oral presentation on June 19, 2009.“Many of the carriers in the referenced submissions were of the view that the interconnection charges were too high,” the FTC noted. “C&W subsequently proposed that in the absence of a Long Run Incremental Cost (LRIC) study and until this exercise is completed it would reduce domestic interconnection tariffs for Public Switched Telephone Network (PSTN) Termination Access Service, Public Land Mobile Network Termination Access Service and PSTN Transit Service by five per cent at the time of the new Consolidated RIO is adopted and by another five per cent on the next two anniversaries of that date.”The FTC, after consultation with C&W to resolve any inconsistencies in parts of the Consolidated RIO that had been refused, concluded that a onetime 15 per cent reduction in the rates should be implemented as they had not been changed since 2003 and telecoms costs had decreased.After further discussions, C&W submitted a revised tariff schedule on February 15, 2010.
Points of contention
On March 16, 2010, Digicel filed a Notice of Motion for Review, contending that the FTC breached the rules of natural justice in that it was under a duty to act judiciously and it did not when it failed: • to follow the correct process before approving the Consolidated RIO; • to provide Digicel with details and specifics of each and every amendment made to the Consolidated RIO submitted by C&W or by the FTC since the submission in December 2008;• to disclose to Digicel that it was in discussion with C&W on the Consolidated RIO and to invite Digicel to those discussions; • to give Digicel a fair opportunity to correct or contradict or challenge any relevant statement prejudicial to its interest and/or comment on material put forward by C&W and other material which the FTC acted upon in arriving at its decision but which had not been previously disclosed to Digicel; and• to provide Digicel with the amended drafts of the Consolidated RIO which C&W submitted to the FTC and to which Digicel was making comments.The FTC said Digicel misinterpreted the relevant provisions of the Telecommunications Act dealing with the process for determining the Consolidated RIO, and failed to set out any relevant legislation to support their processes.