Two more telecoms giants have sued the industry regulator for millions of dollars over claims that fees imposed on them were illegal.
The move by Flow and Logic follows C3 Pure Fibre winning a legal challenge against the Utility Regulation and Competition Office, known as OfReg, after Justice Ian Kawaley determined the company did not have to pay about $1.6 million in unpaid royalty and regulatory fees.
Flow, an arm of Cable and Wireless, lodged its Grand Court case against the levying of royalty and regulatory fees from when it was granted a licence in 2003 to 2024, when legislation to validate the charges came into force.
The royalty fee is equivalent to 6% of quarterly revenue, and regulatory fees are the pro-rata share of OfReg’s costs to regulate the information, communications and technology sector.
The document also names the attorney general as a defendant as the legal representative of the government.
‘No power to collect fees’
Flow said in its December writ, “The levy and collection of the royalty fees and the regulatory fees … was entirely unlawful until 19 December 2024, the commencement date of the Validation Act.”
It added, “The Validation Act is ineffective to validate the levy or collection of any of the royalty fees by the ICT Act, or by OfReg, from the date of the issuance of the plaintiff’s 2003 licence, since the levy or collection of royalty fees cannot be prescribed by regulations where there is exists no primary legislative power to make regulations to levy or collect the royalty fees and the levy or collection of any regulatory fees from the commencement days of the Validation Act.”
Flow asked the court to rule that there was no lawful authority to charge or collect the royalty fees from 2003.
It also asked for a judgment that OfReg had no legal authority to charge or collect regulatory fees from the start date of the Validation Act.
Flow said it wanted “restitution or an order that the defendants repay to the plaintiff all royalty fees paid by the plaintiff since the issue of Flow’s 2003 licence to date”.
It also seeks a ruling that the defendants repay regulatory fees paid by the plaintiff from the commencement date of the Validation Act.
Flow asked the court to include interest and award costs against OfReg and the attorney general.
Millions at stake
The amount of money sought was not revealed in the writ, but will amount to millions of dollars.
Logic, part of the WestTel group, also argued for the return of its fees and charges in a writ filed in November, and highlighted that the C3 case in August had shown there was “no legislative authority for the defendants to demand, collect or receive the regulatory fees or the royalty fees”.
The Logic writ said, “With respect to the regulatory fees, the ICT (Validation) Act by its terms validates regulatory fees up to the commencement of the Act. There is no legislation validating regulatory fees subsequent to the commencement of the Act. There is no legislation validating the royalty fees.”
The writ added that Logic wanted “restitution for royalty fees it has paid … when there was no statutory authority to demand, collect or receive such fees”.
Logic’s lawyers wrote, “The plaintiff further seeks declaratory relief that the defendants had and have no lawful authority to demand, collect or receive the royalty fees; any demand for, or attempt to recover, royalty fees, including alleged arrears, is unlawful and of no affect.”
The writ said, “Following the commencement of the ICT (Validation) Act 2024, there is and was no lawful authority to demand, collect or receive regulatory fees unless and until duly prescribed by law and any demand for, or attempt to recover, regulatory fees for any period after the commencement of the Act in the absence of such lawful prescription is unlawful and of no effect.”
Logic added it also wanted interest on money paid, as well as their costs.
Digicel took separate legal action against the same parties earlier in December asking for $1.6 million in fees it claimed had been levied illegally.
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This is a curious situation and will likely end in success for the telecom firms.
However, if one had the resources to examine ALL Government laws, regulations and practices it would reveal tgst many are simply “illegal” and shouldn’t be enforced.
Government has a history of losing legal challenges because laws are poorly written and poorly enforced.
What is this saying about our entire public legal system and those who are it’s “leaders”?
Attorney Myers’ case is waiting in line to be another failure for Government.
Fees and levies are ultimately paid by the public.
Does OfReg provide value for money for the fees they charge?
What exactly have they done for the consumer over the last few years?
OfReg: please tell us.