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URCA rejects claims it hinders telecoms rates reduction

The Utilities Regulation and Competition Authority(URCA)is coming out strong against union claims that its regulation of the telecommunications sector was to blame for high Bahamas Telecommunications Company(BTC)rates–arguing its not hindering the telecoms company from reducing rates.

“Prior to 1 September 2009, when the Communications Act came into force and URCA acquired a new mandate, it is URCA’s view that it was[the Bahamas Telecommunications Company’s]commercial decision not to reduce rates so as not to impact on the financial returns or employment,” said a statement obtained by Guardian Business. “Under the new regime, URCA would prohibit rate decreases only if they are proven to be anti-competitive.

“However, there are no regulatory impediments imposed by URCA to entertaining rate rebalancing proposals.”

If BTC chose to independently reduce mobile calling rates today, and the proposed rates are not anti-competitive, and in accordance with retail price rules, CEO Usman Saadat said,”URCA and all Bahamians would welcome the reduction of such rates.”

The statement comes in response to the Bahamas Communications and Public Managers Union’s(BCPMU)claims that despite attempts to lower rates, URCA dictates the range on what is charged.

“URCA deals with the rates,”Rex Grant, BCPMU vice-president, toldThe Freeport Newsrecently.”They are the ones that say BTC cannot go lower than its competitors right now, because we are the incumbent carrier.”

Grant, who is in strong opposition to the sale of BTC to Cable and Wireless(CWC), said that as URCA is the entity that governs rates, if lower rates were proposed at this time it would be rejected.

“If we proposed lowering our rates who is to say that our competitors and new entrants would not start to complain again that BTC is trying to knock them out of business… so it’s really nothing we can do from this end.”

Prime Minister Hubert Ingraham has said that”the Bahamian people would like to have services that cost less money and that are on the cutting edge of technology… I have no doubt that privatization would have a reduction on the cost that consumers pay.”

According to Kathleen Riviera-Smith, URCA’s senior case officer and person in charge of retail price regulation,”the current high rates of incumbent operators are an outcome of long-standing social and telecoms policy in The Bahamas and internationally.

“Historically, the incumbent financed network rollout/investment of the access network(fixed lines)through high international long distance charges(and more recently mobile). Additionally, high rates in monopoly markets typically mask inefficiencies within the incumbent operator; this experience was a global trend, and The Bahamas is no exception.”

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