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FTC unable to establish Digicel 4G breach

Published:Wednesday | April 13, 2011 | 12:00 AM
Digicel Jamaica executives test the 4G WiMAX service at its launch in Kingston in this August 2010 photo. - File

Mark Titus, Business Reporter

The Fair Trading Commission (FTC) says it has not been able to establish a breach against mobile telephone operator Digicel Jamaica regarding the promotion of its WiMAX residential offering as a 4G technology.

According to FTCNewsLine, the competition watchdog's quarterly online publication, the commission "has concluded that it is unable to establish a breach under Section 37 of the FCA (Fair Competittion Act) in relation to Digicel's claims made in August and September 2010 regarding its 4G WiMAX broadband services.

"The conclusion is guided by information issued by the International Telecommunications Union (ITU), the body which is charged with the regulation, establishment and definition of technological standards for global use within the telecommunications industry," states the newsletter, sent via email by the commission's executive director, David Miller, in response to queries by Wednesday Business.

In December 2010, the ITU included 4G WiMAX and LTE (Long Term Evolution) in the technologies designated as 4G.

The 4G designation was made two months after LIME, which offers 3G broadband, lodged a complaint with the FTC, citing comments attributed to Sanjay Acharya, chief media relations and public information officer at the ITU, that "no IMT-Advanced (4G technology) is being implemented as yet". Early 2011 was given as a likely timeline for its implementation.

position changed

LIME, on that basis, declared that WiMAX was not 4G and that Digicel, which began marketing its broadband service in September after pouring at least $2 billion of capital into its build out, "does not currently offer a 4G service" and was, therefore, engaged in false and misleading advertising.

But the ITU's position changed in the midst of the FTC's probe, just after the international body's annual World Radiocommunication seminar held in Geneva, where it was determined that 'LTE-Advanced' and 'WirelessMAX-Advanced' should be accorded the official designation of IMT-Advanced.

Notwithstanding its authentication by the global communications watchdog, the FTC decided to keep the matter open, indicating that the three-month gap between the endorsement of WiMAX as 4G and the launch of Digicel's broadband promotions could be a determining factor in the investigations. However, it added that it was not the only issue that was considered.

Richard Fraser, head of legal and regulatory affairs for Digicel Jamaica, said the company was "pleased with the decision of the FTC and happy that this matter can now be closed".

He added that "In the meantime, we continue to enjoy turning people on to the island's fastest wireless broadband service while our customers are benefiting from the ease and convenience of Digicel 4G broadband."

LIME did not respond to Wednesday Business queries.

According to data provided by the FTC, which is now investigating the proposed deal for the acquisition of Claro Jamaica by the Dennis O'Brien-owned Digicel Group, for the period April 1, 2010 to March 31, 2011 a total of 428 cases were investigated, with matters relating to the telecommunications sector accounting for 39 per cent of those cases.

The FTC data show that 308 of the cases were classified as matters concerning "misleading advertising", 53 as offences against competition, four as requests for opinion, and two as sale above advertised price.

Of the 428 cases, 61 complaints were considered as being outside the purview of the FTC and were therefore transferred to relevant agencies, where appropriate.