Would-be competitors of GT&T face difficulties

Consumers Concerns
By Eileen Cox
Stabroek News
July 1, 2001

The Stabroek News of Friday, June 22, 2001, published a letter by Joseph Tyndall, CCH under the caption 'The bungling of CTL's interconnection application." The letter is of great importance to consumers as it concerns an application by a cellular provider for operation in Georgetown. The company, Caribbean Telecommunications

Limited, could not operate without arrangements being made with Guyana Telephone and Telegraph Company (GT&T) and, of course, GT&T did not welcome a competitor in the field of cellular service.

It was for the Public Utilities Commission (PUC) to approve the application. In December last year the lawyers for CTL were pleading with the PUC for an early decision as CTL was losing money with each day's delay.

In his letter, Mr Tyndall writes:

"The ability of providers of telecommunication services to interconnect their systems with GT&T's network, on terms and conditions that are fair and reasonable, is of critical

importance to the introduction of competition."

Mr Tyndall advises that...

"In the absence of effective competition, the primary objective of regulation is to ensure that the services provided by public utilities are fair and reasonable in terms of price, quality and the availability of choice. Competition is recognizably the best means of achieving these ends."

We fully understand when Mr Tyndall says that, "An incumbent telephone company with a dominant market position would have every

incentive to forestall or limit competition by delaying or even refusing interconnection to potential competitors."

CTL complained that the rates and services (originally demanded by GT&T were so outrageous that it amounted to outright refusal. (At one PUC hearing in connection with CTL' s application, one of GT&T's lawyers asserted that there would be no arrangement concluded until permission was granted to GT&T to lower its mobile cellular rates.)

Mr Tyndall, in his letter, referred to paragraph 13.5(a) of GT&T's licence which stipulates that the cost of any service provided by GT&T under the agreement should be based on "fully allocated costs attributable to the services to be provided and taking into account relevant overheads and a reasonable rate of return on attributable assets." He shows his readers that "the Commission has ignored this crucial requirement of cost?based pricing."

Mr Tyndall asserts that "Subscriber rates are not matters to be dealt with under interconnection agreements." This, he said, would amount to price?fixing. Yet "The Commission approved subscriber rates for CTL in violation of Condition 13."

Mr Tyndall argues that there is no economic justification for fixing the rates of non dominant providers. He then deals with the Commission's bungled interconnection orders and comes out with the forthright statement:

"The Commission's order that GT&T should share airtime revenues, as a basis of compensating GT&T for interconnection services is a flagrant breach of Condition 13.5(a), which stipulates that the charges should reflect fully allocated costs attributable to the specific services to be provided plus relevant overheads and a reasonable rate of return."

Mr Tyndall states that the "one?time payment of US$5,000 before the interconnection is made is a flagant violation of the Condition 13.1(b) of GT&T's licence." Then he concludes:

"The obvious conclusion from the consideration of the two orders is that Order 3/2001 is, in part, superfluous and, therefore, unnecessary and, in part, unlawful. Moreover, with respect to Order 4/1997, only the order concerning physical interconnection of CTL's system to GT&T's network is lawful and sustainable."

Mr Tyndall then deals with, "The PUC's strange request for information from CTL." We are told that the PUC requested CTL to furnish audited financial statements "prepared in accordance with internationally accepted accounting principles in Guyana" as well as detailed information on salaries and wages, taxes and rentals, prices paid by consumers and a copy of the contract entered into between [the] company and the customer.

When CTL failed to provide the information within the time stipulated in the order, criminal charges were instituted against the owner or principal shareholder and not against the company or the CEO to whom the information request was addressed.

Mr Tyndall sums it up as follows:

"To ask CTL to provide the Commission with information that is completely irrelevant to the determination of interconnection charges, while not requesting GT&T to provide information that is absolutely necessary for this purpose is beyond comprehension."

It is hoped that the above snippets will have whetted the reader's appetite so that he/she will be induced to read the full text of the letter published on June 22. Every consumer who is concerned about the lack of competition in the telecommunication industry should note what difficulties are faced by would?be competitors.

Consumers in Guyana who wish to see fair play on a level playing field should be eternally grateful to Mr Joseph Tyndall for his invaluable work. His knowledge of utility regulation is unsurpassed by anyone else in Guyana.