Editor’s Note: In Jamaica, responsibilities for regulation and competition in telecommunications are shared between the sector-specific regulator — the Office of Utilities Regulation — and the competition authority — the Fair Trading Commission. This note summarizes the respective roles of both agencies and is based on the Telecommunications Act, 2000 and the Fair Competition Act, 1993.
Introduction
Jamaica’s Telecommunications Act, which came into force on 1 March 2000, provides a transitional timetable towards full competition in the telecommunications sector. The Act establishes an overlapping jurisdiction for addressing competition issues in the sector. Promoting “….fair and open competition…” is a key objective of this Act.
The relationship between the sector-specific regulator and the competition authority is defined (with some overlaps) in terms of:
- Ex ante powers exercised by the Office of Utilities Regulation (OUR),
- Ex post powers exercised by the Fair Trading Commission (FTC), and
- References and consultation between the two agencies.
Ex Ante Versus Ex Post Powers
The OUR is the lead agency in regulating telecommunications sector. Under the Telecommunications Act the OUR has the following sector-specific or ex ante regulatory functions and powers:
- Oversight of license requirements and authorization,
- Assessment of the incumbent’s (or any dominant operator’s) Reference Interconnection Offer, and resolution of interconnection and wholesale disputes,
- Management of numbering resources on a non-discriminatory basis,
- Regulation of retail prices and service quality,
- The power to prescribe rules to safeguard competition, and their application to operators with market power. Example include rules addressing separation of accounts, keeping of records, and preventing mis-use of commercially sensitive information supplied to the incumbent to facilitate interconnection, and
- The power to mandate number portability, indirect access (such as carrier pre-selection), and unbundling of the local loop.
The FTC operates under the Fair Competition Act (FCA). The FCA seeks to promote competition throughout the economy and protect consumers from business practices that have or are likely to have the effect of substantially lessening competition in a market.
The FCA is a ‘conduct-based’ instrument. Thus the FTC’s powers in telecommunications are largely ex-post — they apply after an abuse of dominance has taken place. The FTC may, on its own initiative authorize an entity to continue a practice that would otherwise be deemed anti-competitive under the FCA. In addition, Government may exempt a sector or person from the provisions of the FCA.
Before March 2000 the FTC took a keen interest in the conduct of Cable & Wireless Jamaica (CWJ), Jamaica’s dominant telecommunications operator. The FTC tested the scope of CWJ’s exclusivity and succeeded in opening up the markets for single line Customer Premises Equipment (e.g. handsets, answering machines) and internet services to competition. It also barred the company from offering ‘free’ voicemail advertising in competition with message service providers.
Reference and Consultation
Under the Telecommunications Act the OUR has a duty to refer matters of competitive significance to, and consult with, the FTC before:
- Making declarations of dominance in the voice telephony market, and
- Prescribing competitive safeguard rules and their application to a dominant operator.
Wider Cooperation and Coordination between the FTC and OUR
While the Telecommunications Act envisaged close collaboration between the OUR and FTC, it provides no clear guidelines/protocol as to how this should be done. In reality a practice has developed where the OUR routinely consults the FTC even in instances where it is not obliged by statute to do so. For example the OUR has consulted the FTC on its assessment of CWJ’s Reference Interconnection Offer, development of price caps, and setting reduced mobile termination rates.
Consultation takes the form of:
- Written submissions by the FTC to the OUR’s consultative documents,
- Formal meetings between the two organizations (at the level of staff, and sometimes management), and
- Joint working groups. For example, in assessing dominance in the fixed line markets for retail and interconnection services a joint working group was established comprising officers of both the OUR and FTC.
This consultation ensures that the OUR’s methodology concurs with the Commission’s. As a result the scope for market participants play off one agency against the other is reduced.
In 2001 the local appellate court ruled that the FCA, in allowing the FTC to act as both investigator and adjudicator, is acting contrary to the principles of natural justice. This ruling has hampered the FTC in exercising its investigative and enforcement powers with respect to matters referred to it by the OUR.
Conclusion
The Jamaican experience has been that in a liberalized environment, regulatory issues are also ‘competition’ issues. However, overlapping jurisdictional responsibilities require diligence and cooperation to avoid ‘turf wars’ between agencies, or worse, matters being overlooked as each agency expects the other to deal with a particular problem.