by Felicity Johnson
On October 7, four days after the exit of Hurricane Joaquin, the Utilities Regulation and Competition Authority (URCA) announced a $1million-plus donation to official relief efforts.
Given the collective national shock at the devastating aftermath of Joaquin, few paid any attention to the media announcement or the televised press conference at the Office of the Prime Minister, likely dismissing it as a generous gesture on the part of URCA.
This "gesture" however, for those who appreciate the purpose and functions of a regulator, amounted to a wholesale misuse of the proper purpose of the utilities regulator.
In March of this year, URCA fined BTC a total of $1,581,384.61.The fine was a penalty against BTC, firstly, for its March 2014 15-hour island-wide mobile and landline networks outage and, secondly, for BTC's refusal and/or failure to comply with an earlier URCA Order, which was related to the network outage in June 2012. From that time BTC had been required to take certain specific remedial maintenance actions.
BTC paid one third of the fine in cash. URCA then ordered that BTC make a proposal to URCA on the remaining two thirds to show how the fine could be used to benefit consumers directly.
Fast forward to the post-Joaquin national disgust with NEMA for its poor performance in advance of the hurricane and its muddled molasses like response thereafter. Given the massive ground swell of mobilization for the relief effort by the private sector, it probably became apparent very quickly to the powers that be that no one was likely interested in donating anything to NEMA, which was probably not properly funded by the government for the hurricane season in any event.
And so, I surmise, the OPM went looking to see who they could influence into donating urgently needed monies to NEMA. And of course, the first line of sight was the self-sustaining financially independent coffers of URCA.
In August 2009, the government introduced a modern, robust and transparent regulatory framework designed to encourage competition in telecommunications in anticipation of a privatized incumbent and a fully liberalised mobile sector.
The Communications Act of 2009 established URCA as a multi-sector (telecoms, broadcasting, water and electricity) converged regulator and competition authority with far greater powers than its predecessor, the Public Utilities Commission.
The new legal structure of the regulator and its funding by regulated industry was to ensure that its independence and autonomy would be free of external interference. In fact, URCA was modelled after the legal structure of the Central Bank of the Bahamas.
This separation from the government was also deemed essential to assure foreign investors that their multi-million-dollar investments would be free of political interference and whim. URCA opened for business on August 1, 2009 as an independent regulator according to international best practices.
Shortly after URCA's inception, however, opposition political operatives (in 2011), attacked the non-Bahamian director of regulation and policy, eventually hounding him out of the country - primarily because he had terminated the "wrong" staff member. URCA as an organization was maligned as being too powerful by people who, in their ignorance, failed to understand URCA's mandate.
A prestigious institution was reduced to public odium and distrust by the slanderous attacks and one questions whether URCA ever really recovered its standing.
And since this administration came into office in 2012 it has meddled with and further diminished the authority and stature of URCA. It has interfered with URCA's original financial structure by amending the URCA act to have all surplus monies after the external auditor's reconciliation of the URCA budget paid into the Consolidated Fund rather than credited to licensees for the next fiscal year
It has also ensured that spectrum licence fees, which are collected by URCA on behalf of the ngovernment have been significantly increased, and it has influenced URCA to amend and redefine the meaning of a licensee's "relevant turnover" upon which the licence fee is calculated to further gouge an excessively taxed and overcharged industry.
Additionally, the failure to fill the third URCA board seat - 15 months after it became vacant deprived URCA of expert advice at a crucial time in the sector, which speaks to a serious dereliction of duty on the part of the minister responsible and sends a message that URCA's business is not a priority.
In fact, as URCA’s non-executive members are appointed solely by the governor-general, perhaps the Board can take a courageous stand and select an appointment within the confines of the URCA Act for approval, given the Minister's failure to act!
And now we have the press conference of October 7, where it was announced that URCA, with BTC’s "co-operation” determined that it would donate the balance of the BTC fine money to NEMA - an apparent decision of the URCA Board, according to its chairman.
As previously pointed out, URCA is an autonomous regulator. The inappropriate press photographs of the prime minister, BTC's CEO and URCA executives sets a disturbing precedent for the prestige of the Office of the Regulator in the circumstances.
I question BTC's presence at the press conference. BTC was heavily fined by URCA for egregious breaches of its licence conditions. Why then would BTC be brought to the table to showboat and give the appearance of some godsent financial benefactor deigning to agree to allow URCA, its regulator, to make a financial contribution to NEMA with BTC's money?
The $1,054 million balance of the fine, according to the Order, was to be used by BTC to benefit consumers DIRECTLY. For example, by applying free cell minutes or credits to customer bills. URCA chose not to collect the additional cash from BTC but to appropriately ensure that those affected by the outages were compensated, using the balance of the money.
Under what authority then, is this $1,054 million being sent to NEMA? Certainly, the Board's “[mindfulness] of the devastation to our brothers and sisters..." is insufficient reason. It is exactly to prevent this type of manipulation of URCA's finances or worse, that an autonomous regulator was created.
URCA is not a government agency or department or corporation. It is a body corporate and a public authority which is funded by the sector it regulates and it is accountable for those monies in specific and transparent ways. URCA is not to be interfered with in its business operations and URCA's accounts are not a piggy bank to be used to assume the government's financial responsibility for funding NEMA.
Indeed, URCA's bank accounts are for the purpose of supporting URCA's financial independence from the government and to efficiently and effectively function as a regulator. And if URCA's Board and staff are so moved to contribute to hurricane relief then, respectfully, they should contribute out of their own pockets or hold a fund-raising event.
Legislation, regulation and policy can set all of the necessary standards, guidelines and objectives for an institution. At the end of the day, however, it is those who lead that institution from within and their appreciation, or lack thereof, of the role of the institution who will determine the standing of that institution and the consequent degree of respect with which it is regarded by the community.
This administration, whether deliberately or in ignorance, is eroding the esteem and independence of URCA in its refusal to acknowledge the special conventions attached to URCA as a regulator of an important sector.
Leave URCA alone to function as it was intended to function. A regulator that is perceived to be in the government's back pocket will not bode well for any potential foreign investment. Investment money which this government does not have to take this sector to the next level and beyond.
URCA, respectfully, should guard its autonomy and independence jealously. It is more than equipped legally with what it needs to operate with minimal reference elsewhere. URCA, like the Central Bank is self-contained. Shame on those who misuse and those who allow the misuse of URCA. The price to be paid by all of us for this misuse will ultimately be a costly one.
Felicity L. Johnson is an attorney who was employed at The Bahamas Telecommunications Company from 1998 to 2013 as corporate secretary and ultimately senior vice president-legal, regulatory and carrier services. She has a particular interest in the telecommunications regulatory sector. She was also a lecturer and assistant ahairperson in the Humanities Division of the College of the Bahamas (1978-84) and has written articles on various topics during the course of her career.
Comments