Cayman 27, which ceased operations on Friday, is not the only licensee threatened to have their licence suspended for failing to pay outstanding fees to the regulator OfReg.
As of Friday, 30 Aug., there were five licensees, including Hurley’s TV, the parent company of Cayman 27, that remained delinquent of their licence fees and royalties.
Alee Fa’amoe, the acting CEO of OfReg, noted in an email to the Cayman Compass that all five licensees had been issued enforcement notices on 31 July and were due to have their licenses suspended as of yesterday, Sunday, 1 Sept. He did not identify the licensees.
Fa’amoe added that he would not make any further public statements until after a meeting with Cabinet this week. Cabinet typically meets on Tuesdays.
Randy Merren, managing director of Hurley’s TV. Ltd., cited the lack of cooperation from regulator OfReg as the main reason for the closure of Cayman’s only local TV news station, which had faced financial difficulties for almost a decade.
The company owed more than $100,000 in unpaid regulatory and licence fees to OfReg for a period going back to the final quarter of 2016.
Licensees are expected to pay 6% of their revenues every quarter, in addition to a regulatory fee.
This year, OfReg expects to collect about $4.6 million from regulatory fees overall and $1.97 million from ICT licenses.
Hurley’s TV had been at odds with the regulator over its ability to charge other cable TV operators for Cayman 27 programming.
Cable TV providers are under the obligation to offer public television at no cost to subscribers 24 hours a day every day of the year and provide at least 20% local content.
Merren said he had raised the financial viability of Cayman 27 with the regulator even before buying the TV station in 2015. But a fee or special fund paid for by each licensed subscription TV operator to carry Cayman 27 was never created by the regulator, contrary to the company’s expectations.
Ultimately, Hurley’s TV said it had “no choice but to terminate the channel’s current programming, as it is unsustainable under its licence requirements”.
TV providers have long claimed that local TV production was not profitable and the requirement of offering it free-to-air via analogue channels was outdated.
In 2014, Infinity Broadband, which trades as C3, said in its submission to the regulator’s public consultation on the future of local television broadcasting that it was subject to more stringent obligations in relation to public service television than other operators.
“No other licensee is required to provide 30% local content (C3 is the only licensee obligated to provide 30% local content whilst all other licensees are only required 20% or ZERO). It should also be noted that no other licensee is obligated to spend at least CI$400,000 on their studios for the production of local content programming,” Merren, who is also the managing director of C3, stated in its letter.
One year later, the TV licence issued to Hurley’s TV stipulated at least four hours of public content a day with at least two hours of first-time content and four hours per week of free community slots.
The licensee also had to operate a local studio from which to broadcast the service and produce its public content. Although the minimum expenditure of $400,000 was no longer required, no other subscription TV operator had to run a local studio as part of their licence requirements.
In Hurley’s TV’s case, the regulator defined public content as 60% local news, 25% local arts and culture, which includes talk shows and 15% local educational programmes, for example, college presentations.
How all of this is enforced is unclear. Premier Alden McLaughlin acknowledged in 2018 that the regulator is not enforcing that every licensee maintains a free-to-air analogue channel, because most of the population had access to cable television or streaming devices. Instead the regulator insists that they carry local content.
Without Cayman 27, this will become more difficult as simply carrying government television channel CIGTV will not be sufficient, according to OfReg.
Responding to questions in the Legislative Assembly, Premier McLaughlin said last year: “It is complex and expensive to set up and operate a TV station in a small market. With new technology, it is possible to create local content without the overheads associated with a television station, and there are several sources of video content carried on various channels.”
Some clarity is expected following OfReg’s public consultation on changes to ICT licences, which was first extended from 8 July to 29 July and then again to 16 Aug.
However, this will come too late for Hurley’s TV which was issued an enforcement notice before the end of the consultation period. Cayman 27 aired its final show Friday, with a blend of reporting on its closure and a nostalgic look back at its 27 years on the air.