URCA fines BTC 5.15 percent over retail pricing

URCA fines BTC 5.15 percent over retail pricing

NASSAU, BAHAMAS – The Utilities Regulation and Competition Authority has levied a 5.15 percent fine on the Bahamas Telecommunications Company’s (BTC) total revenue over pricing of triple play bundles.

URCA ruled the company had breached retail pricing rules in relation to changes made to BTC’s Flow TV channel line-up effective 1 December 2018 and 1 January 2019.

The regulator ordered that BTC pay a fine under section 109 of the Communications  Act equal to 5.15 percent of the company’s total revenue derived from its bundles that include pay television for the months of November 2018, December 2018, and January 2019.

That fine must be paid not later than 30 calendar days from the issuance of the order.

According to the regulator, BTC added two channels to its Flow TV channel line-up effective 1 December 2018. The channels added were Discovery World and Discovery Theater.

BTC however removed six channels from its channel line-up effective 1 January 2019. The channels removed were Big Ten Network, Fox Sports, Fox Sports Racing, National Geographic, National Geographic Wild, and BBC America.

URCA noted that BTC’s Flow TV products are offered on both a standalone basis and as part of a bundle. Because the Flow TV products are bundled with BTC’s fixed voice services which are price regulated, the bundles are subject to the Regulation of Retail Prices for SMP Operators.

It ruled the company’s  modifications constituted changes to the non-price terms and conditions of a price regulated bundle thus requiring BTC to obtain URCA’s written approval before introducing such changes.

“Additionally, the Consumer Protection Regulations require BTC to give customers not less than one month’s notice of any proposed modification, amendment or variation to a contract which is likely to be of material detriment to the customer,” URCA said.

“BTC’s Individual Operating License (OL) mandates BTC to adhere to specific regulatory obligations and any determination made by URCA. Despite these obligations, BTC advertised the changes to the public and implemented them without receiving URCA’s prior written approval. As a result of BTC’s actions, URCA commenced an investigation to determine whether or not BTC breached its obligations.”

The regulator issued a preliminary determination to BTC back on November 6 2019.

It continued: “According to BTC, it is required to provide URCA with a minimum of 30 business days for non price changes to the terms and conditions for a Price Regulated Bundle as per the Retail Pricing Rules, and its IOL requires BTC to provide an additional 30 days to notify its retail customers of changes that are likely to be of a material detriment.

“Overall, BTC did not dispute whether it was in breach but instead explained the circumstances leading up to the alleged breach which BTC claimed were beyond its control,” the regulator added.

BTC contended that it had made the required application as soon as it was able to notify the public. BTC also noted that it adhered to URCA’s guidance by making the suggested submission to URCA and it was never BTC’s intention to trivialize or disregard URCA’s authority under the Retail Pricing Rules.

URCA said: “While BTC recognized there should be strict adherence to the Rules and its IOL, BTC believed that the circumstances in this case should be treated an exception as BTC took all appropriate steps to inform URCA and its customers of the changes.

“BTC is in dialogue with CWC to ensure that, going forward, BTC avoids having to respond to any potential breaches relating to its compliance under the Rules and other measures. BTC stated that URCA’s breach notice applies to BTC’s Triple Play bundles which of BTC’s pay television customers subscribe to.

“BTC considers the impacted subscriber base to be quite minimal, noting that customers were informed 30 days before the pending changes took effect and customers had the option to exit their contracts without penalty.

URCA added: “Thus, BTC deduced that the adverse impact of the breach was minimal.”

URCA noted that BTC had advertised the changes 30 days in advance of the effective date; however deemed that since the advertisements were done without URCA’s prior approval and therefore in breach of the rules.

CORRECTION: An earlier version of this article incorrectly stated the fine represented 15 percent of BTC’s total revenue derived from its bundles that include pay television for the months of November 2018, December 2018, and January 2019.