Dissatisfied with the speed in which local telecommunications companies are expanding their fiber-optic cable networks to the island’s under-served eastern districts, Premier Alden McLaughlin has announced government’s intention to have the Utility Regulation and Competition Office (OfReg) build its own network throughout that area.
Mr. McLaughlin’s plan would provide residents in the eastern districts with access to the same high-speed broadband internet as people have in the George Town and West Bay areas.
Such service is long overdue, the premier said. All the telecommunications companies, besides Flow, have deadlines in their licensing agreements to expand their fiber networks across Grand Cayman and the Sister Islands. Those deadlines passed more than a year ago.
“All these years, we keep struggling unsuccessfully to get [the telecom companies] to deploy the fiber they agreed to, so we’re going to abandon that approach,” Mr. McLaughlin said on Friday in the Legislative Assembly. “We’re going to build the fiber network and we’re going to charge the licensees for it.”
The premier set an ambitious timeline for OfReg to build out the network, saying he wants fiber to cover the entire island within 18 months. However, his announcement contained few details about how that plan will be implemented.
His statements took the telecom companies by surprise.
“As I have not had any communications from OfReg stating anything remotely close to this, it would be inappropriate for Flow to comment on this topic at this time,” Flow’s interim managing director, Daniel Tathum, said in an email response to the Compass.
Similarly, Logic CEO Rob McNabb said government providing a universal service has always been an option, but that the plan has not been discussed in detail.
“Where do we start [the universal service] would be a question,” said Mr. McNabb. “How is that going to work for the competitors? Is OfReg going to sell the companies service? Is the government making money off of it, and splitting it back to us? Does [OfReg] have to tender [the build-out]? Does it have to be a third party? There’s just so many questions based on [Premier McLaughlin’s] announcement.”
The Logic CEO added that to expand broadband to everyone in the territory, future technological developments such as 5G wireless internet might be more feasible than to build out fiber cables to every single home, even those in sparsely populated areas.
Sacha Tibbetts, the CEO of DataLink – a Caribbean Utilities Company subsidiary created to manage the installation and maintenance of fiber-optic cables attached to CUC-owned poles – said that based on previous discussions with OfReg, he believes that OfReg will likely put the construction of the fiber network out to tender and then manage the payment processes for its use.
“I would be surprised if we have a regulator that’s going to come in and take ownership of assets and force the sale of those assets to the entities it regulates. It sounds like a bit of a potential for conflict of interests, but I think the full story hasn’t been told yet,” said Mr. Tibbetts. “From what I understand, I don’t believe they were looking at being the owners, but they were going to be the facilitators of the process.”
OfReg, for its part, told the Compass on Monday that it will “provide a press release in a day or so to address the issues raised,” but did not provide that press release before press deadline. Currently, the regulator is in the consultation process of formulating a broadband policy, which will define the term broadband and set a target for licensees to make broadband available to all residents by a certain date.
That consultation period ends on April 18, and both Mr. McNabb and Mr. Tibbetts said they believe it will be a precursor to OfReg determining exactly how it will implement universal broadband service.
If implemented correctly, Mr. Tibbetts said, he believes a universal service in the eastern districts would be more economical than having multiple telecom companies build out their networks separately in a sparsely populated area.
“There are only so many homes here, which means that there’s a limited amount of sales available for the service. If you have multiple providers putting up multiple networks, you’ve got a lot more costs involved, when one network could be sufficient,” he said. “So the universal service can make a lot of sense if it’s done correctly.”