Bahamas Leads Caribbean On Broadband Internet Costs


Tribune Business Editor


CABLE Bahamas is arguing that this nation has the lowest monthly fixed broadband Internet charges in the Caribbean, coming in at just 0.7 per cent of average household income.

The BISX-listed communications provider cited this and other data to support its argument that the Utilities Regulation and Competition Authority (URCA) does not need to regulate the broadband Internet market at the supplier (wholesale) level.

It suggested already-intense competition with the Bahamas Telecommunications Company (BTC) had caused its revenue per giga byte (GB) to fall by around 87.5 per cent over five years, dropping from almost $8 in 2011 to $1 in 2016.

Cable Bahamas also produced data purporting to show that its monthly $49 subscription charge was among the lowest in the Caribbean, and only bettered by providers in Jamaica, the Dominican Republic and Barbados. Suggesting this showed Bahamian consumers were enjoying the benefits of competition, Cable Bahamas used the data to support its argument that URCA does not need to implement 'ex-ante' regulation - remedies that seek to anticipate, and prevent, market distortions - at the broadband Internet supplier level.

"The retail broadband market is clearly competitive," Cable Bahamas argued in response to URCA's preliminary findings. "This confirms that the ex-ante regulation of the associated upstream wholesale broadband access market is therefore no longer necessary.

"This market is currently subject to strong infrastructure-based competition between two well-established network operators, Cable Bahamas and BTC. Cable Bahamas argues that the existence of these two infrastructure owners is sufficient to ensure effective retail competition in the Bahamian broadband market, and therefore urges URCA to withdraw current regulation from the wholesale broadband market as it is no longer required."

URCA is proposing to regulate the 'offers' or terms at which other providers can rent BTC's and Cable Bahamas' networks to provide rival Internet services.

The regulator, in unveiling its review of the 'resale' obligations imposed on BTC and Cable Bahamas in 2010, noted there had been "no take-up of these resale broadband offers over the course of the last eight years".

It added that "several industry players have informally raised concerns about the nature of the current offers", implying rival niche providers were suggesting BTC and Cable Bahamas were using their Significant Market Power (SMP) to squeeze them out of the market by offering terms that rendered their services economically non-viable.

Yet Cable Bahamas, in its response, said it had received no requests from other companies to use its network to provide Internet services.

"Regulatory remedies should never be based on unverified claims from 'more than one' survey responses," the BISX-listed operator argued. "Since 2010, Cable Bahamas has a published wholesale offer for the provision of resale cable broadband access services to retail customers on the network of Cable Bahamas.

"However, until today, there has not been any request from service providers to make use of such service. The overall market in the Bahamas is limited in size and prices are highly competitive among the existing operators as shown above.

"In light of this non-existent demand for wholesale services, the obligation to prepare an updated resale offer every six months seems highly disproportionate. URCA may consider a revised obligation, which only requires the development of an updated resale offer, in case of a reasonably serious request from another service provider."

Backing its rival's stance, BTC said: "Both BTC and Cable Bahamas have offered a resale broadband service for eight years now, and throughout this time there has been no serious demand for it.

"More importantly, the PD [URCA determination] provides no evidence-based rationale for the need for mandated resale broadband as far as the retail market is concerned - i.e., based on an assessment of the potential competition problems and consumer harm absent the proposed wholesale ex-ante remedies in the retail broadband services market."

In similar responses, BTC and Cable Bahamas said URCA had failed to account for market changes since 2010 while ignoring the "strong competition" for retail consumers that made wholesale regulation unnecessary.

In particular, they argued that the regulator had omitted the impact of mobile Internet services which were launched last year by both BTC and its rival, Aliv, for which Cable Bahamas has Board and management control.

"From a supply-side perspective, both BTC and Aliv have 4G/LTE networks in place that cover the vast majority of the population of the Bahamas," BTC said in its submission to URCA.

"These networks provide not only extensive coverage but also transmission speeds and data capacity that are competitive with and, in some cases, even superior to fixed broadband networks. It is important to also recognize that 5G mobile technology is on the horizon which will provide even greater speeds and capacity.

"Therefore, unlike the situation in 2010, BTC considers that mobile broadband services are now clearly substitutable with fixed broadband services from both a demand and supply-side perspective and, therefore, fall into a single relevant product market including both fixed and mobile wireless broadband services."


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