Cable Bahamas takes URCA to court
Guardian Business Editor
Published: Oct 10, 2013
Cable Bahamas has launched a judicial review action against the Utilities Regulation and Competition Authority (URCA) over its decision to deny the cable television, Internet and phone service provider the right to increase its cable service prices by close to 30 percent, Guardian Business can confirm.
While Cable Bahamas has made no public mention of the action, Stephen Bereaux, URCA’s director of policy and regulation, said the judicial review action was launched last month.
“They feel strongly about it, we feel strongly about it in the opposite way. We have our decision, which we’ve made and we stand by that, but it is their right to appeal if they feel aggrieved. It’s all a process; we’ll see where it turns out,” he said.
The BISX-listed company has long maintained that URCA’s decision to deny it a price increase it applied for in December 2011 is not fair.
With 70,000 residential and 10,000 commercial basic cable TV subscribers, there was an intended monthly increase of $8 and $13.50, respectively. The decision by URCA to disallow the 27 percent price rise would have cost the company and its shareholders $8.34 million in annual revenue, while conversely creating significant savings for consumers.
In its formal ruling in February 2013 on the request for an increase by Cable Bahamas, URCA linked the decision not to grant the price increase to Cable Bahamas’ failure to comply with its Universal Service Obligations (USOs) under the Communications Act.
Under this act, Cable Bahamas is designated the USO for “affordable basic television services” and is expected to provide such services to all Bahamians – no matter how unprofitable doing so may be.
URCA last month launched consultations on the establishment of a Universal Service Fund into which funding would be placed by all service providers in the market in accordance with their market share once a universal service provider (such as Cable Bahamas or BTC) is able to identify the cost of moving ahead with implementing such a service in a currently “disconnected” island.
Speaking with Guardian Business yesterday, Bereaux said that Cable Bahamas had appealed to the Utilities Appeal Tribunal over the regulator’s decision on pricing earlier this year. It is not clear what the outcome of that application was, although the director said that the judicial review came “in the absence of that appeal being heard”.
“They’ve challenged the decision on the price and the reasoning behind that, and they’ve also separately challenged the whole treatment of Cable Bahamas in relation to Universal Service Obligations,” said Bereaux.
Contacted for comment on the decision to take legal action against the regulator, David Burrows, director of marketing at Cable Bahamas, said yesterday he could not provide further input except to confirm that it has taken place.
Cable Bahamas has recently been moving ahead with the expansion of its business into South Florida.
The company has stated that the acquisition of four U.S. companies will allow the company to achieve economies of scale it cannot obtain in The Bahamas market, and to triple its annual revenue and operating income growth rates over the next five years compared to if it remains solely Bahamas-based.