COMMUNICATIONS-CARIBBEAN: Privy Council to Rule on Telecom Monopoly

By IPS Correspondents Reprint | | Print |

Richard Samuel

KINGSTON, Jamaica, Feb 25 2000 (IPS) - A standoff between several Caribbean governments and one of the world’s leading telecommunications companies over monopolistic practices appears close to a legal resolution.

A dispute between Cable & Wireless of the United Kingdom and a Dominican telecommunications firm will be heard by the UK Privy Council in London, the highest court of Dominica and other Commonwealth countries.

Regional governments expect the Privy Council decision to determine the outcome of efforts to break Cable & Wireless’s monopoly in some Caribbean countries, opening the market to competition and leading to improved services at more competitive rates.

“If there is no resolution to this impasse, the government has a plan which involves meetings with both companies,” said Rosie Douglas, who was installed as Dominica’s prime minister earlier this month.

“We want an amicable solution which will increase competitiveness of telecommunications services in Dominica and attract more business,” Douglas said.

In their request for negotiations to reform Cable & Wireless’s operations and end its monopoly, Caribbean governments contended that the current licences and the lack of competition violate World Trade Organisation rules on telecommunications services.

They also say that the terms of the company’s operations should be changed to allow competition for a range of services and interconnection by other providers.

Cable & Wireless says it is not averse to change, but hopes that proper regulation of an open market will allow fair competition.

“Times are changing,” said Odie Donald, the company’s chief executive for the Caribbean.

“The expectations of our customers and stakeholders are becoming ever more sophisticated. We must become more responsive to the changes in our marketplace,” he told company executives in an update on the negotiations with regional governments.

Cable & Wireless has a good track record, Donald said, but there is a need to move forward.

Cable & Wireless is also in negotiations with Trinidad and Tobago and the eastern Caribbean governments, following an agreement late last year with Jamaica to prematurely end its exclusivity on telecommunications in the island.

“The licence granted by Jamaica to Cable & Wireless in 1988 was for 25 years, and was renewable until 2038,” said Percival Patterson, Jamaica’s prime minister.

“It soon became clear that the terms and conditions of the licences were incompatible with the need for development in telecommunications,” he said. “With the advent of the World Trade Organisation, there were international obligations which Jamaica could not meet because of the nature of the existing licences.”

However, there has been contentious debate in the Jamaican parliament over the legislation to change the company’s license.

Opposition parties contend that rather than opening the market to competition, the new arrangements ensure continued dominance over the island’s telecommunications services by Cable & Wireless.

Governments have been encouraged by the Eastern Caribbean Court of Appeal’s recent affirmation of a Dominican High Court ruling against Cable & Wireless’s monopoly.

The legal action in Dominica was brought by Marpin Telecomms after Cable & Wireless last year disconnected circuit lines which the company had leased to Marpin for Internet service provision.

Cable & Wireless argued that Marpin had bypassed its telephone network and was operating independently as an Internet service provider.

Marpin Telecomms argued successfully that Cable & Wireless’s action violated constitutional provisions guaranteeing fundamental rights and freedoms to communicate ideas and information without interference.

“The ruling by the Privy Council on this matter will be landmark,” said a leading lawyer in Barbados. “If the ruling is upheld, the monopolies of the company in the Caribbean will be quickly dismantled.”

“But if the company wins, the governments will have a hard time ending the exclusive licences and encouraging competition. Cable & Wireless will have exacted a high price,” the lawyer said.

In deregulating their telecommunications markets, the governments of Dominica, Grenada, St. Kitts, St. Lucia and St. Vincent plan to set up a regional regulatory body for the services.

The body will “implement the rules for competition, prevent abuse by dominant operators, set cost-related tariffs, adjudicate and settle disputes, protect consumers’ interests, approve equipment for use by customers and manage a numbering system for the region,” say the governments.

The government of Trinidad and Tobago, which is negotiating an end to Cable & Wireless’s 49 percent stake in the local provider, is keen for the market to be opened to other companies, say officials.

“The current discussions are to inform the company of the government’s plan to liberalise the telecommunications sector,” said Ganga Singh, the public utilities minister.

“We are discussing the future role of TSTT, the local company, in a competitive market environment,” he said.