Digicel today welcomed the decision of the Barbados Fair Trading Commission (‘FTC’) regarding the application for merger approval filed by Cable and Wireless Communications and Flow/Columbus.
In its decision published on March 27, 2015, the FTC confirmed its view that the merger would create ‘… anti-competitive effects … in the Fixed-voice (landline) telephony and Fixed Data (broadband internet)….’ markets. Accordingly, the FTC imposed 14 separate significant conditions on its merger approval compelling Cable and Wireless to promptly divest of significant overlap fibre assets in Barbados to a third party or parties to be approved by the FTC.
These compulsory divestments include fibre assets relating to 27,000+ homes passed by the Karib Cable network and an additional 28,000+ homes outside of the Karib Cable network; but within the combined LIME / FLOW networks. The FTC also made its approval conditional on other specific conditions, including guaranteed consumer choice on service contracts, provision of pole and duct access to third party providers and retail price tariffing in the product markets affected by the strongly anti-competitive effects of the merger.
Digicel regards the FTC’s decision as being vitally important in terms of helping to prevent the retrograde creation of highly anti-competitive Cable and Wireless monopolies in Barbados in the markets for fixed voice and broadband internet.
However, in order for the decision to have the desired effect of preventing the creation of such overwhelming monopolies, the conditions as set out in the decision must be fully implemented by Cable and Wireless. As such, the mandatory divestments to the approved third party or parties must be properly monitored and put into effect.
This implementation must be comprehensive and completed expeditiously. It is critical that both the spirit and the substance of the FTC’s decision is complied with, without delay, by Cable and Wireless in Barbados. This will require on-going determined vigilance on the part of all relevant authorities; including the FTC itself to ensure that the interests of consumers in Barbados are fully protected from the anti-competitive effects of this new Cable and Wireless monopoly in fixed voice and broadband services.
Under the Fair Competition Act in Barbados, a party that fails to comply with merger conditions commits a criminal offence and may be convicted on indictment to a fine of $500 000 or to 10 per cent of the turnover of the enterprise for the financial year preceding the date of the commission of the offence; whichever is the greater.
Digicel Group CEO, Colm Delves, commented; “We applaud the FTC for the diligent and comprehensive manner in which it conducted this critical merger analysis. We agree with the fundamental findings of the FTC in relation to the requirement that Cable and Wireless promptly divest of significant fibre assets to third parties in order to seek to maintain competition in Barbados in key markets.”
“It is absolutely vital however that having made the decision, that all concerned ensure that the decision is quickly and fully implemented and that all relevant conditions regarding divestment to a third party or parties are complied with by Cable and Wireless without exception.”
“The expressed will of the FTC must not be thwarted, delayed or otherwise frustrated by this new Cable and Wireless monopoly. We believe that the FTC’s decision sets the groundwork for the creation and maintenance of a vibrant, competitive environment to protect customer choice and competition in Barbados.”
