By NATARIO McKENZIE
Tribune Business Reporter
nmckenzie@tribunemedia.net
The Utilities Appeal Tribunal (UAT) will hear Cable Bahamas’ protest against the rejection of its request for a 27 per cent increase in the price of its basic (PRIME) pay-TV package over a three-day period in October.
The BISX-listed communications provider is appealing on the grounds that the Utilities Regulation & Competition Authority (URCA) incorrectly linked its decision to the company’s failure to comply with its Universal Service Obligations (USOs) under the Communications Act.
Tribune Business was informed that October 14, 15 and 16 have been set for the substantive hearing following a UAT meeting headed by attorney Cathleen Hassan yesterday, where attorneys for URCA and Cable Bahamas sought to work out pre-trial issues.
The BISX-listed communications provider is being represented by attorney Ferron Bethell from Harry B Sands, Lobosky & Co, with attorney Diane Stewart from McKinney, Bancroft & Hughes representing the regulator. Both sides are expected to call expert witnesses, both local and from abroad.
URCA had rejected Cable Bahamas’ application for a rate increase back in February 2013. The BISX-listed company has long maintained that URCA’s decision to deny it a price increase that it applied for in December 2011 was not fair.
Based on Cable Bahamas’ 70,000 residential, and 10,000 commercial, basic cable TV subscribers, the failure to obtain URCA’s approval for monthly increases of $8 and $3.50, respectively, has cost the company and its shareholders and $8.34 million in annual revenues.
But 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 the USO obligations, URCA said Cable Bahamas was supposed to provide ‘affordable basic television services to all’ in the Bahamas. While it is providing over-the-air TV services in some Family Islands free of charge, URCA said “more than 70 per cent of the population” in the Bahamas - islands including New Providence, Grand Bahama, Andros, Eleuthera and Exuma included - did not have access to such a service.
Cable Bahamas’ position has consistently been that the two issues - a Basic Television Service (BTS) to meet its USO obligations on one hand, and an increase in the monthly price of its SuperBasic service on the other - were completely separate, and should not be connected or bound together.
And the company has also argued that URCA’s decision was anti-competitive - going against one of the regulator’s central philosophies and reasons for being.
This is because Cable Bahamas, by earning less than the stipulated 10.86 per cent minimum return on mean capital employed (RoMCE) in its SuperBasic product, is in a position to use it as a ‘loss leader’, and undercut/squeeze potential rivals out of the market via predatory pricing.
Comments
digimagination 9 years, 7 months ago
Interesting! Not a10,12 or 15% increase but a whopping 27% - and then 7.5% VAT will be added on top of that. So PRIME, presently $30, will go up to $38.10. Then add the VAT and it rounds off to $40.96!
proudloudandfnm 9 years, 7 months ago
Raise their basic? The one with no Monday Night Football?!?!?
Man screw Cable Bahamas. Direct TYV boooyyyy!! It is the bomb, excellent picture, way more choices, true surround sound all for the BASIC price....
DonAnthony 9 years, 7 months ago
Cable deserves every penny of this increase and more. The cost of prime to the customer has not increased since it began 20 years ago. During these 2 Decades the cost of programming has increased tremendously. How can cable provide a quality product (better channels) etc without the increased revenue to pay for it when costs are increasing and profit margins whittled down to almost nothing on prime?
ihadit 9 years, 7 months ago
I say NO increase for Cable Bahamas (CB), How can you expect to get approval for an increase, when you do not abide by the terms of your agreement and/or international laws. CB needs to honour its contract to provide Cable throughout the Bahamas first and stop being greedy for money. We should not reward bad behavior. CB will loose its case hands down. I wonder if CB still stealing satellite TV signal and selling it to the Bahamian people or are they now paying?
proudloudandfnm 9 years, 7 months ago
Simple DonAnthony. It's called a MONOPOLY. They were given a permanent monopoly, gift wrapped in gold paper. I don't care what they need, they have a monopoly. Pay for it them damned selves....
DonAnthony 9 years, 7 months ago
One can have a monoply but if the rates are regulated and below costs you are losing money and have no incentive to improve your product, in this case prime. As for a permanent monopoly cable has no such thing. That expired several years ago. The low or no profitability associated with basic cable services, along with high capital costs, explains why there has been no current competition offering basic cable. Increased rates would encourage competitors and result in improved services for everyone.
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