BANGO FTC written submission on Price Cap Mechanism Review

Prepared by Roosevelt King and Chris Halsall

The application of the PCM [in Barbados] of the PCM, including assigned values to the formula and the incentives in the baskets, is a mystery to the exercise of regulatory authority.

It would seem that there is a deliberate attempt by the [Fair Trading Commission] to favor the company in its approach to the functioning of the PCM as a regulatory mechanism at the level of policy, because the PCM parameters have been set contrary to all the statutory provisions for exercising regulatory authority.

In any forum this level of ineffectiveness, and failure to consider the costs to the consumer in setting the rates, could naturally be described as a gross dereliction of duty; total incompetence.  What makes this case different is that we know from experience that we are dealing with highly qualified professionals who are in possession of the facts and who know the rigours of regulation.

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Is cost really outstripping revenue?

By Randy Howard

IS the actual cost of providing domestic residential fixed line service to Barbadians really more than the revenue that is being generated from the retail price for this service?

This was the question asked by Chris Halsall, Director of Ideas 4 Lease (Barbados), an independent consulting group, at the Fair Trading Commission’s “Educational Forum on the Price Cap Mechanism” held last Tuesday.

During the presentation section of the forum, the Commission stated that the domestic residential fixed line service was set at a fixed 7 percent increase per year so that consumers would be able to know they can expect the expense will be. But during the question and answer section, Halsall asked if the reason might also be “because Cable & Wireless are claiming that the cost of providing the service is currently less than the retail price”.

“So my question to the Commission is, do you know what the actual cost is? As in, how many more years of 7 percent increases are consumers going to suffer before those curves cross?” These curves being representative of the cost of providing the service in relation to the revenue generated from customer use.

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Release information

By Randy Howard

A call is being made for the national Fair Trading Commission (FTC) to release information regarding the prices of services being provided by telecommunications provider Cable & Wireless.

Speaking to the Business Monday, Chris Halsall, Director of Ideas 4 Lease, an independent consulting group, and a voting member of the Telecommunications Act Revision Committee (TARC), argued that the Commission is not releasing information necessary for persons like himself to properly analysis the performance of the Price Cap Mechanism, and subsequently submit comments via the public consultation response paper.

Halsall, who attended last week’s educational forum put on by the FTC, stated that “The most important thing in my mind that has come out of these sessions is the fact that they are having this public consultation and yet are not really giving the public any information that can be used to analyze the current situation.”

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