C&W fighting ICTA

Cable and Wireless (Cayman Islands) Limited was granted leave to apply for judicial review with respect to a decision made by the Information and Communications Technology Authority last Friday.

At the core of the issue was the ICTA’s refusal to grant an application made by Cable and Wireless last October to determine a mobile termination rate.

An MTR is the interconnection fee one telecommunications company charges another for terminating a telephone call between two telecommunications companies.

Cable and Wireless has argued that the current MTR in the Cayman Islands of CI$0.1845 per minute is not cost oriented as required by the Information and Communications Technology Authority Law. Instead, it believes that CI$0.11 per minute is the cost-oriented rate, it having been determined using its own Fully Allocated Cost model. As a result of the difference, Cable and Wireless claims mobile customers in the Cayman Islands are paying more than they should for calls made to a carrier other than their own.

Estella Scott-Roberts, a spokesperson for Cable and Wireless, said now that leave to apply for judicial review had been granted, the company intended to follow the application through.

‘We made a commitment to our customers to do everything we could to get lower rates,’ she said. ‘This is part of the process.

‘We’re pleased with the Court ruling and we intend on proceeding.’

When the ICTA denied Cable and Wireless’ MTR determination request on 14 December, it pointed out that Cable and Wireless and Digicel had set out the MTR of CI$0.1845 per minute in an agreement between them dated 27 July 2004. The ICTA said Cable and Wireless should rely on the dispute resolution provisions of that agreement if it wanted to change the agreed MTR.

In its Notice of Ex Parte Application for Leave to Apply for Judicial Review, Cable and Wireless stated that the Interconnection Regulations to the ICTA Law or the ICTA Law itself require that interconnection charges must be cost-oriented, non-discriminatory and reciprocal.

Cable and Wireless contends that the ICTA is not entitled to refuse to determine the MTR which is applicable to all telecommunications licensees, or to defer such a determination because it would be unlawful.

The whole issue would have most likely been moot had a new costing model been established as envisioned.

The development of this Forward Looking Long Run Incremental Cost model, which was called for in the July 2003 licence agreement between Cable and Wireless and the ICTA that ended the telecommunications monopoly here in the Cayman Islands, was originally contemplated to be completed by July 2005.

When Cable & Wireless and Digicel agreed to the CI$0.1845 MTR in 2004, it was thought the FLLRIC model would be completed by July 2006.

To date, because of a series of delays, the FLLRIC model has yet to be completed. In view of that fact, Cable and Wireless believes the ICTA should not have denied its application for a determination of the MTR.

ICTA Managing Director refused to point fingers for the delay in establishing the FLLRIC model.

‘Nobody is innocent though,’ he said.

Mr. Archbold said Hurricane Ivan also played a big role in the delay.

The process for developing the FLLRIC model is complicated and long. After a public consultation that involved the entire telecommunications industry on the principles that were to be adopted in the model, Cable and Wireless had to develop it. The ICTA then had to audit what Cable and Wireless submitted to make sure it is accurate.

Because of difficulties in getting someone qualified to conduct the audit, the ICTA ended up hiring a consultancy firm to do the work, which started in late December.

‘We anticipate the final report from the [FLLRIC auditor] will be available in March,’ Mr. Archbold said.

If the FLLRIC auditor finds Cable and Wireless’ model to be accurate, the new MTR will be established almost immediately. If the auditor finds the model inaccurate, it will be send back to Cable and Wireless for revision, thus potentially delaying the process further, Mr. Archbold said.

In the interim, Cable and Wireless has refused to pay Digicel interconnection charges based on the CI$0.1845 per minute MTR since last September, and has instead paid only CI$0.11 per minute.

There is currently an arbitration process between Digicel and Cable and Wireless taking place to attempt to resolve the issue.

As an affected party, Digicel might also get involved in the Judicial Review action instigated by Cable and Wireless once the proceedings commence.

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