Tue | Sep 25, 2018

OUR telecoms contract review awaits tax information from consultant

Published:Wednesday | February 15, 2017 | 12:00 AMMcPherse Thompson
Ansord Hewitt, Director General of the Office of Utilities Regulation.

The Office of Utilities Regulation (OUR) is trying to ascertain whether the consultant it engaged to assess contracts issued by telecoms operators is tax compliant.

The review by the consultant is meant to determine whether the terms of the contracts are fair to consumers.

The delay has also held back the determination of terms and conditions considered reasonable for inclusion in customer contracts, the regulator told Gleaner Business.

The OUR, in its 2015/16 annual report released recently, said the Telecommunications Act empowers it to modify terms in contracts that are deemed to be unfair.

Up to now, the regulator has generally refrained from intervening in contractual matters for telecommunication services in retail markets.

"There are concerns, however, that some of the contract terms for retail telecommunications services, such as long contract durations, coupled with excessive early termination charges, create barriers that unfairly prevent consumers from terminating services and switching operators," said the OUR, adding that it is "timely to review current industry practices to ensure that they remain reasonable and fair to both operators and consumers."

The intention is to provide general guideline upfront in a bid to reduce uncertainties and the need for post-contract interventions.

The regulator had noted that it planned to engage a consultant in the 2016/17 fiscal year to undertake the assessments. That period comes to an end in a matter of weeks.

Asked what was holding up that process, the regulator said via email that "in accordance with the procurement rules" it was "awaiting the submission of the tax compliance letter by the consultant in order to proceed with the execution of the contract."

The request for proposal for the consultancy related to unfair contract terms and the development of pecuniary penalty regime for offences against the Telecommunication Act and regulations was published in August 2016.

The OUR said the guidelines will seek to limit the ability of telecom licensees to take advantage of the weaker bargaining power of their customers.

"In general, the OUR expects contracts to be fairly balanced so that licensees are not provided with greater rights or benefits than customers in equivalent circumstances," said the proposal.

It also noted that a pecuniary penalty regime has not yet been established for licensees who commit an offence against the Telecommunications Act or regulations made under the law.

The power to impose pecuniary penalties was included in the Telecommunications Act when it was amended in 2012.