Sat | Jun 15, 2019

Letter of the Day | OUR does not set retail rates for telecoms companies

Published:Monday | June 10, 2019 | 12:05 AM

THE EDITOR, Sir:

Patria-Kaye Aarons’ weekly column in The Gleaner on June 4, 2019, titled ‘Hol’ down and ‘tek’, lamented what she said was a second increase in prices this year for internet packages offered by Digicel.

Ms Aarons seemed to suggest that it is the Office of Utilities Regulation (OUR) which sets these rates when she wrote, “I’d like the Real Estate Board rules to govern decisions made at the Office of Utilities Regulation. Rent Board says landlords can’t increase what they charge more than once per year, and never more than 7.5 per cent. Similar rules should apply to other service providers.”

The OUR, through this medium, would like to clarify its role in setting rates for the telecommunications (telecoms) sector. There are two types of rates for services in the telecoms sector: wholesale rates and retail rates. Wholesale rates refer to the prices that telecoms operators charge each other for services and facilities. One example is the termination rate, which is the price that operators are allowed to charge each other for sending calls between networks. Retail rates refer to the prices that the operators charge their end users. While the OUR has regulatory oversight for the telecommunications sector, it does not currently set retail rates for the sector, which comprises market segments in which robust competition between service providers is expected to drive prices and efficiency.

This is not necessarily the expectation in wholesale market segments and so the OUR has intervened in the past, with significant effect. Our intervention in 2013, for example, resulted in a drastic reduction in retail mobile phone rates.

QAULITY OF SERVICE

It is no secret that the issue of the quality of service in the telecoms sector has been a source of disappointment to the OUR. This is evident in the number and nature of consumer complaints received by the OUR and on which we provide reports to the public. This suggests that heightened competition in this sector has not resulted in the enhanced service quality we had expected. It is for this reason that the OUR has consulted on and drafted quality-of-service standards for the telecommunications sector. These draft standards, reflecting significant inputs from stakeholders, are now going through the legislative process. Once promulgated, they will add to the options available to the OUR when seeking to hold telecoms providers more accountable in respect of their service standards.

In the meantime, while we do not regulate retail rates, the OUR has been vigilant in requiring service providers to give notice of rate increases and changes in the composition of packages. Recall that in 2017, the OUR intervened following a decision by Digicel to introduce a prepaid maintenance fee. The OUR had questioned the notice period given to customers, among other issues. This resulted in Digicel indefinitely halting the charge, and offering rebates to customers who were already charged. We recently issued a public notice in the media inviting comments on a consultation document titled ‘Improving Information Transparency in Telecommunication Markets’, which deals with measures to improve transparency in the prices for various service offerings and packages. That document is available on our website: www.our.org.jm. We look forward to receiving comments as we move to further strengthen this sector.

ELIZABETH BENNETT MARSH

Public Education Specialist, OUR