Regulators consider Columbus buyout

BitDepth#967 for December 16, 2014

Representatives of telecommunications operators take questions from moderators that originated from the audience at Wednesday’s meeting of regulators. Photograph by Mark Lyndersay.
Representatives of telecommunications operators take questions from moderators that originated from the audience at Wednesday’s meeting of regulators. Photograph by Mark Lyndersay.

Over the course of two days, specifically last Wednesday and Thursday, regional telecommunications regulators met at the Cascadia Hotel to consider the proposed buyout of Columbus Communications by Cable and Wireless (CWC).

The opening session offered operators in the telecoms market in T&T an opportunity to state their positions on current issues and to offer statements on the impact of the consolidation of these two major business interests in the region.

Held under Chatham House rules, attendees were allowed to make use of the information presented, but not to attribute it to a source or speaker.

Since then, Digicel has released the full text of the speech given by its Chairman, Denis O’Brien to the regulators in attendance.

Despite early calls for “earnest and productive discussions,” at “a watershed event,” a meeting described as “a catalyst for justice,” O’Brien’s speech captures much of the spirit of ruthlessly polite sniping that was prevalent between the major players at this critical showdown.

Described as “an incredible event,” it was observed that “never have we had so many people together in one room discussing what we’re discussing.” At issue, ultimately, is “not how many players are in the market, but how those players compete to the benefit of the region’s customers.”

Clarity was called for in the matter of mergers and acquisitions; the prior fuzziness thrown into sharp relief by a case unprecedented in its scale in the region.

The meeting was seen by most operators as a critical opportunity to streamline the telecommunications regulatory regime in the region, which is today overseen by 20 regional regulators who are tasked with guiding the operations of two multi-national players.

In at least one presentation, the history of cable signal piracy was aired in disturbing detail.  In another, the challenges that Barbados faces as a nascent competitive environment for telecommunications were explained as that country seems set to collapse into a monopoly position again.

Other statements questioned the value of evaluating the future by the standards of the past. 

While cabled solutions are likely to remain dominant as the source of extreme high bandwidth speeds for at least another decade, advances in technology look set to reduce the need for cables to the residence and SME business in favour of newer, faster technologies.

It was also argued that the region’s market for telecommunications solutions though small, is under penetrated.

Making regulatory decisions for the situation as it stands at the moment will be challenging enough, but regional regulators face a situation in which the speed of technology advancements will bring into question even the most sane and sensible decisions that are likely to emerge from last week’s discussions. The back and forth over expensive infrastructure investments also points to other possibilities.

Should the nations of the region seek to begin building national infrastructure to support telecommunications, creating and siting transmission towers and running cabling to support long term competitive investment by telecommunications businesses while optimising and consolidating the necessary intrusions that such technologies impose on our small and attractive landscapes?

There is already a model for that, and it’s one that’s worked well for both the National Gas Company and for Trinidad and Tobago’s natural gas industry.

These and other issues, particularly the thorniest ones that seek to ensure a level playing field for both the two established multinational telecommunications companies provide access points for future entrants into the business and address the concerns of the many smaller local players operating in smaller niches of the now-standard quadplay business approach need to be clarified quickly and clearly.

This is tricky, often region specific business, particularly in the five countries described as “overlapping markets, St Lucia, Grenada, Jamaica, Barbados and T&T. But as all the operators made clear on Wednesday morning; these decisions will reverberate throughout their business and on through the next decade of telecommunications development and investment.