Regulators throw out $85m Cable warning


Tribune Business Editor


Regulators yesterday rejected Cable Bahamas’ warning that the fine imposed on it for poor pay-TV service quality would “detract” from its $85m capital investment in network infrastructure upgrades.

The BISX-listed communications provider, responding to the Utilities Regulation and Competition Authority’s (URCA) decision to levy a fine equal to 2.025 percent of its “monthly recurring” TV revenue for 2021, hinted darkly that its multi-million investment plans would be undermined by the regulator’s actions even though it has admitted the sum involved is not material.

Touting its good deeds, including a $45.1m investment in network upgrades during a time of declining revenues due to the COVID-19 pandemic, URCA said Cable Bahamas responded to its findings and decision by arguing that any sanctions would contravene the central thrust of the Government’s communications sector policy.

“While Cable Bahamas has committed $85m to network upgrades, Cable Bahamas explained that it had not paid dividends to shareholders for the past five years,” URCA said of the company’s response. “Therefore, a fine of this magnitude would significantly impact or detract from its ability to continue with its fibre-to-the-home capital investment to upgrade its existing network.

“Such a consequence would not advance one of the primary objectives of the electronic communications sector policy, which is to promote investment and innovation in electronic communications networks and services, Cable Bahamas argued.”

The BISX-listed communications provider, detailing its capital investments, said it had “installed fibre-to-the-home infrastructure to over 5,000 households. Sixty-five percent of these households are in Abaco and the HFC network was replaced with a fibre network after Hurricane Dorian”.

Pegging its fibre-to-the-home investment within the last three to four years at $5.1m, URCA added of Cable Bahamas: “During its fiscal year 2022, it invested $40m in the phase one deployment of fibre-to-the-home in Nassau. It has already commenced a planned $85m investment in fibre-to-the-home with the objective of improving the customer experience. Cable Bahamas added that there will be little to no return on investment for its fibre network investments.”

URCA, though, was not moved by Cable Bahamas’ arguments. “URCA notes Cable Bahamas’ investments in network upgrades and ongoing migration from its existing hybrid fibre coaxial (HFC) network to fibre-to-the-home. URCA considers that the 2.025 percent fine to be applied would not detract Cable Bahamas from investing in its network and/or using funds to eliminate the faults on its network,” the regulator hit back.

“Regarding Cable Bahamas mention of the electronic communications sector policy objective to promote investment and innovation in electronic communications networks and services, URCA reminds Cable Bahamas that it is also guided by the sector policy objective to further the interests of consumers.

“URCA endeavours to strike a reasonable balance between these objectives. URCA remains concerned that Cable Bahamas has failed to explain what customers who still experience service issues should do in the meantime while paying a monthly bill for unreliable service. Accounting for all of these factors, URCA considers a fine is still justified but as stated earlier, the amount of the basic fine has been reduced.”

Cable Bahamas had earlier blasted URCA’s probe, and associated findings, as “unfair, disproportionately punitive and repugnant to the principles of due process”. It argued that it was impossible for the company to respond to the concerns and accusations levied against it because the consumer complaints were never specified - their nature, when and who was affected, and for how long.

“In Cable Bahamas’ view, URCA failed to provide basic information about the complaints including the account numbers, phone numbers, times and places of the incidents. Cable Bahamas also claimed that URCA never disclosed any details of its investigation and/or supporting evidence to verify the veracity of the complaints,” URCA said in its determination.

“Cable Bahamas claimed it was only able to provide general explanations for the type of faults, the possible root causes, steps required to resolve the faults, and the timelines for doing so. Cable Bahamas was therefore confounded as to how URCA arrived at its conclusions given the lack of evidence that a proper and fulsome investigation took place.

“Again, referring to what it deemed as URCA’s failure to identify any particular customer, Cable Bahamas claimed it was denied a fair and reasonable opportunity to investigate any specific complaint, ascertain the root cause and make a proposal for resolution for/resolve that complaint pursuant to CBL’s own internal complaint process..... and the consumer protection regulations,” the regulator added.

“Overall, Cable Bahamas considered the process by which URCA arrived at its preliminary findings to be procedurally flawed and patently unfair to Cable Bahamas.” URCA rejected these arguments on the basis that, based on responses to Cable Bahamas’ TV repackaging, multiple consumers were experiencing the same issues repeatedly which made the company’s insistence that specific customer complaint details be provided “irrelevant”.

“Also, Cable Bahamas’ claim that it requires specific customer details contradicts its own August 31, 2021, response to the investigation where Cable BahamaS listed the actions its team was taking to address the signal quality issues with respect to the channel error messages and pixelated channels,” URCA added.

“Cable Bahamas did not ensure its staff was aware of the potential remedies available to resolve the complaints. Based on multiple calls to Cable Bahamas’ technical support, the staff contacted were not aware of the set-top box replacement initiative and/or how to resolve the channel error messages and pixelation.”

And URCA added: “In regard to Cable Bahamas’ claim that it has fully cooperated with URCA’s investigation, URCA disagrees with this assertion due to Cable Bahamas incomplete submissions. Cable Bahamas provided a ‘Report of Tickets’ workbook for only the month of August 2021 instead of the requested outage or disruption reports.

“The Report of Tickets workbook did not provide any data on the ‘error 200’ messages but included a spreadsheet on loading ‘error 301’ messages instead. It was unclear whether these error messages are the same as Cable Bahamas did not accompany the spreadsheet with descriptions or explanations. Cable Bahamas did not provide any documentation to demonstrate the actions being taken or that were taken to address the issues.

“The maintenance report spreadsheet included dates and times of maintenance exercises that occurred during 2021 with a brief one-line summary of what the maintenance entailed. However, there was no explanation on which issues the exercises addressed in relation to URCA’s investigation and what progress was made to resolving the issues.

“URCA can assume these exercises are in relation to pixelated channels due to the mentions of node splits and congestion relief but, again, Cable Bahamas did not provide any details or supporting evidence. These omissions are in addition to Cable Bahamas not providing detailed explanations to URCA’s queries.”

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