Utilities regulator wants more law enforcement muscle

OfReg: Communications providers uncooperative with investigation

Some of Cayman’s communications providers did not provide information sought by the Utility Competition and Regulation Office for an investigation last year, according to the regulator’s acting CEO, Alee Fa’amoe.

To make sure that does not happen again, OfReg wants government to expand its powers to obtain search warrants for the purposes of investigating telecoms companies and other utility providers.

Currently, OfReg has the power to obtain a judicial warrant if utilities companies are suspected of engaging in anti-competitive behaviour, such as price fixing.

But Fa’amoe said OfReg’s investigation in the past year was not looking into anti-competitive behaviour. Therefore, the regulator was limited in the powers it had to compel companies to provide information.

Fa’amoe wants that to change.

“In the past year, OfReg came to the tentative conclusion that some of the sectoral providers in the Information and Communication Technology sector did not fully and properly provide information requested by and needed for an investigation by OfReg; an investigation which did not involve anti-competitive behaviour,” he said. “To better ensure the cooperation of the sectoral provider, OfReg concluded that the additional measure of potentially seeking the assistance of the Court to obtain information from their premises would serve the public interest.”

Another potential situation where OfReg would need a search warrant would be if the regulator is investigating illegal or malfunctioning radio transmitters that are interfering with air traffic control or the police radio band, Fa’amoe said.

“In those circumstances, in the interest of public safety, the Office may need to enter a premises to either inspect or shut down the transmitter,” he said.

The acting OfReg CEO added that seeking a warrant is an “action of last resort”.

In response to OfReg’s proposal, C3 Managing Director Randy Merren said he is fine with OfReg having the power to obtain warrants when investigating illegal practices. But Merren said he also wants OfReg to use its powers to investigate all service providers – not just the licensed ones.

“What about the people who are unlicensed? Are they going to open investigations on them as well?” Merren asked, referencing unlicensed subscription television providers and other unlicensed telecoms companies in the territory.

Flow and Logic did not respond to Compass requests for comment before this issue’s deadline.

Digicel, for its part, said, “We note the OfReg’s proposal to make suggestions to the Minister to make legislative changes across a range of issues. We look forward to the Minister seeking the views of all stakeholders and interested parties before a decision is taken on what changes, if any, are required.”

Along with expanded investigative powers, OfReg also wants government to make other amendments to its underlying legislation. Proposed amendments include the enhancement of the confidentiality provisions, the sharing of information with other regulators in the region for the better regulation of service providers, and the option to report suspicious transactions when discovered in the accounting records of licensees.

OfReg also would like an amendment to the key phrase “administrative determination”, which is the action OfReg takes after conducting a public consultation on an issue. For example, OfReg is currently conducting a consultation on its proposal to issue a set of rules designed to curtail anti-competitive behaviour. Once that consultation is finished, OfReg will issue an administrative determination on what those rules will be.

“Currently, [‘administrative determination’] is defined in a manner which may include a penal determination or a licensing determination,” OfReg states in its 2019 annual plan. “The unintended consequences are numerous, and include, arguably, a need to consult publicly on a fine to be imposed.”

Other amendments sought by OfReg include one to “modernise” the financial records that must be kept by licensees, as well as one to expand reporting requirements in the Dangerous Substances Law to include operators of marinas and permitted vehicles that provide mobile retail fuels sales.

“Also, the administrative fine regime would be improved if it was to be expanded to cover those service providers who have neglected to apply for a licence to operate or have not applied for a renewal or reinstatement of a previous licence,” OfReg’s 2019 annual report states. “It would benefit from clearer due process provisions.”

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