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Thought we were out of the Woods – CONSUMERS TAKE CHARGE

(A column of the Information Unit of the Ministry of Commerce, Business Development, Investment and Consumer Affairs)

THE official word around the Caribbean is that Cable & Wireless, trading as LIME has bought over FLOW/COLUMBUS; a competitor in the telecommunications sector in most of the islands. This purchase which is said to be worth over US$3 billion, now gives LIME almost total control over Landline, Internet and Cable TV Services.

This revelation sent shockwaves which reverberated from one island to the next, where consumers of the aforementioned services thought they were “out of the woods” regarding the availability of landline, internet and cable TV services from multiple service providers.

Consumers’ reaction in these territories may have been déjà vu. In 2002, the liberalization of the telecommunications sector took effect in Saint Lucia.

At the dawn of the new millennium, this vital sector which impacts most aspects of our country’s development was liberalized with the emergence of Digicel and AT&T. Given that the latter’s stay was short lived, consumers were pleased that another player was allowed into the market significantly reducing the cost of these services to them.

In 2003, consumers’ irritation and frustration reached fever-pitch against an increase in telephone rates by Cable & Wireless. Two protest marches were organized in Castries and Vieux Fort by Mr. Andrew Antione, the then President of the National Consumers Association (NCA), one year after its formation.

At that time, Antione said his organization was concerned that the rates, which the telecommunications company had published in the local media, were being introduced contrary to an existing agreement between Cable & Wireless and the member states of the Eastern Caribbean Telecommunication Authority (ECTEL). Information was that “both parties agreed that in the intervening period between May 2002 and March 1, 2003, the two parties would negotiate price caps to determine the new rate regime for increases in telecommunication services” – Antione was quoted as saying back then. He went on to say that “by advertising those rates, Cable & Wireless was telling consumers here that irrespective of what rates are negotiated with ECTEL, these are the rates Saint Lucians will be required to pay.”

The determination by consumers to have a say and to be consulted should have brought to the attention of that telecommunication company; that consumers were in agreement with the NCA in obtaining better services and prices given the liberalization of that sector in 2002.

That was followed by the advent of another Cable TV Network – Karibe Cable TV, which may have saved consumers some more money thereby increasing their disposable income.

However, after Karibe Cable TV settled down in Saint Lucia the perennial complaints such as poor and/or bad service and incorrect billing was pinned on the “new kid on the block”. Some consumers went back to “the devil they knew”. Ditto others who were/and are contemplating doing the same, which is what their ultimate and inadvertent destiny may be as it pertains to Cable TV given the recent turn of events with the buy-out by LIME of FLOW/COLUMBUS.

In light of the above, consumers are craving for information on the legitimacy or the lack thereof as it pertains to what seemingly looks like a monopoly in the making.

Mr. Philip Mc Clauren, the Deputy Programme Manager at the Caribbean Community Secretariat; attached to the CARICOM Single Market & Economy (CSME) based in Barbados shared some thoughts with us on the latest discussions.

Mr. Mc Clauren, who is a former Director of Consumer Affairs in Saint Lucia, informed that “there are no merger control regulations in the Revised Treaty of Chaguaramas (RTC)…” He went on to imbue hope for consumers by stating: “there is a project currently being undertaken by the CARICOM Secretariat that will review proposals for merger regulations and rules which will ultimately be incorporated in the RTC once approved by Member States.”

Despite he being on secondment from his substantive position at the Ministry of Commerce, Business Development, Investment and Consumer Affairs, McClauren who can best be described as a consummate regionalist on such issues guided us thus: “This means that the CARICOM Competition Commission at this time would not be able to take action on any merger case whether by way of pre-notification or intervening in a merger arrangement with cross-border effects. The CARICOM Competition Commission will only be able to take action when the merger control regulations are incorporated in the RTC.”

He added: “Notwithstanding, Member States such as Barbados and Trinidad and Tobago which have enacted Fair Competition Legislation have merger control regulations provision in their legislation. Therefore, these Member States through the national competition authorities are in a position to ensure companies that intend to merger would have to before the merger is concluded, seek the approval of the Competition Authority. These Competition Authorities in Barbados and Trinidad and Tobago can only take action in their respective jurisdictions…”

Never mind the advocacy that is expected to be solicited from consumers by their respective consumer organizations in this region, he admonished: “unless the governments in Member States enact this critical legislation, consumers will always be at the receiving end.”
Mc Clauren was of the view “…there is a potential for the emergence of either a monopoly or a dominant player in certain segments of the market, for example: internet and cable. We should also fear the possibility of bundling of services which can become an option since the merger or acquisition can result in a dominant player in certain market segments.”

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