A judicial review hearing began on Monday over a dispute between Caribbean Utilities Company subsidiary DataLink and the Utility Regulation and Competition Office, known as OfReg. The case revolves around a long-standing issue that telecommunications officials say is delaying the islandwide rollout of broadband internet.
DataLink is challenging a 2017 decision by OfReg that prohibits it from charging telecoms companies fees to reserve unused space on its telephone poles, and ordered it to refund reservation fees that have been charged in the past.
At Monday’s hearing, DataLink attorney Helen Mountfield, QC, outlined a roughly 13-year history that led to the OfReg decision and Datalink’s subsequent challenge.
In 2005, the telecom company C3 entered the internet market with a licensing agreement that required it to rollout a fiber-optic cable network throughout the entire island within 18 months. C3 struck a pole-use agreement with CUC – DataLink did not exist at the time – but did not roll out its fiber network.
By 2012, Digicel and Logic had also entered the internet market, and those companies also wanted space on DataLink’s poles to roll out their fiber network. Flow already has a cable network islandwide, having been in existence before the other companies.
With not enough space on the poles to service all the companies, the reservation fees were introduced in 2012 as a method to economize limited pole space, according to Ms. Mountfield.
In fact, in order to make sure it had enough pole space to fulfill its licensing requirements, C3 was a willing participant in an agreement with DataLink to pay the reservation fees, said Ms. Mountfield. (The telecom companies have still not rolled out their fiber networks to the entire island, and earlier this year, government proposed to address this failure by building its own fiber network in the eastern districts and making the companies pay for it).
Despite entering into an “above-board agreement” with DataLink to pay reservation fees, C3 would later dispute the agreement with the territory’s regulator.
In an OfReg consultation document over the issue, C3 argued that the fees are discriminatory because some companies pay more than others, and that “there is no objective justification for these fees, and they should be removed from the C3 and Logic agreements.”
OfReg sided with C3 in July 2017, ruling that DataLink’s reservation fees did not enhance the efficiency of pole usage, and that they were discriminatory in practice.
However, Ms. Mountfield argued in court on Monday that OfReg did not follow proper procedures in making its determination against DataLink. The attorney said that OfReg was required to submit a draft determination before its final determination. OfReg was also supposed to get feedback from DataLink in its draft determination and take that into account when making its final decision, she said.
OfReg is arguing that its consultation constitutes a draft determination, but this is erroneous reasoning, said Ms. Mountfield.
“A consultation is supposed to help the regulator formulate its position,” she said. “This is completely different from the determination, which provides reasons to justify a position the regulator has already formulated.”
Ms. Mountfield also argued that OfReg’s determination against DataLink should be overturned because the regulator only has power to make amendments to agreements between licensees that are forward-looking – in other words, OfReg may be able to prohibit DataLink from charging reservation fees in the future, but cannot overturn fees that have been charged in the past.
As of this article’s publication deadline, Ms. Mountfield was still making her arguments to the court. The judicial review hearing is scheduled for five days, concluding on Friday. More than 15 lawyers and telecoms officials were present at the hearing.