EDITORIAL – Are OfReg’s troubles ‘growing pains’ or something more?

“If we’re paying for something with the objective of lowering costs, and the costs aren’t going down, it means in essence that we’re paying for nothing. The real question, then, is: What’s the use?”
– MLA Chris Saunders

Legislators’ narrow vote to provide supplementary funding for the Utilities Regulation and Competition Office this month should be a wake-up call for Cayman’s troubled super-regulator.

As the Compass reported earlier this month, lawmakers were nearly evenly split over OfReg’s request for a $1.3 million budget boost for its fuels-regulation operations, with approval coming only after Finance Committee chair Roy McTaggart voted ‘yes’ to break the tie.

The funds infusion was necessary because OfReg does not generate any revenue from the fuels sector, OfReg Acting CEO Duke Monroe explained. But lawmakers, rightly, took the opportunity to question what returns Cayman’s residents have thus far reaped from government’s considerable investment in OfReg.

Since its launch in January 2017, OfReg has travelled an exceptionally rocky road marked by sudden leadership changes, questionable priorities and exorbitant expenditures.

In its first year, alone, OfReg ran nearly $1.5 million in the red, spending $2.2 million on salaries and benefits for 22 employees, an additional $1 million in consultancy and professional fees and nearly an additional quarter million on travel-related expenses.

The regulator flirted with, then abandoned the idea of requiring licensing for retailers that offer wireless internet hot spots for customers. It suggested that government take on the Herculean task of installing fibre optic networks in the Eastern districts – offering a pie-in-the-sky vision of universal access to internet connection speeds many times faster than those found in major first-world nations – and send private telecommunications companies the bill.

Yet, OfReg’s leaders inexplicably publicly declared it was “not worth starting a war” to collect fees legally owed by government broadcasters and considered it “futile” to hold cable companies to a requirement that they provide free access to local content.

Blessedly, OfReg appears to have abandoned its impractical broadband proposal – which was widely and decisively panned by industry experts during consultation. As the Compass reports, OfReg’s 2019 annual plan now indicates it intends instead to set minimum standards for broadband service, including internet speeds and a timeline by which those speeds should be reached

But there is little other evidence that OfReg has gotten its priorities in order, broadly speaking.

In February, in what appears to be a solution looking for a problem, the regulator released for comment a Byzantine 41-part set of draft regulations intended to crack down on deceptive or unfair marketing practises by companies under its purview. Currently, as Opposition Leader Ezzard Miller pointed out, the regulator is undergoing a study of the colour and nozzle size of the territory’s fuel pumps, a seemingly minor detail Monroe defended by saying his office has received complaints from customers confused by variations between fuel providers.

At the same time, as lawmakers noted, the territory’s fuel prices are undiminished.

Premier Alden McLaughlin has defended the regulator, calling OfReg’s troubles mere “teething issues”.

But he and OfReg’s leaders must understand they are running out of time to set things right.

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