Digicel (Barbados) Ltd

• Jurisdiction: Barbados
• Court: Fair Trading Commission (Barbados)
• Judge: Sir Neville Nicholls,Professor Andrew Downes,Ms. Herma Griffith-Ifill,Mr. Errol Humphrey,Ms. Monique Taitt
• Judgment Date: 06 July 2015
• Docket Number: FTC/URD/MTNLRIC 2015-01

In the Matter of the Utilities Regulation Act, CAP. 282 and the Fair Trading Commission Act, CAP. 326B and the Telecommunications Act, CAP. 282B of the Laws of Barbados;

And in the Matter of the Utilities Regulation (Procedural) Rules, 2003, S.I 2003 No. 104 and the Utilities Regulation (Procedural) (Amendment) Rules, 2009, S.I 2009 No. 82 of the Laws of Barbados;

And in the Matter of a Decision of the Fair Trading Commission dated the 27 ^th day of March 2015 on the Long Run Incremental Cost Interconnection Rates;

And in the Matter of Digicel (Barbados) Limited's Application for a Review and Variation of the Decision dated the 27 ^th day of March 2015;

Digicel (Barbados) Limited

Applicant

Before:

Sir Neville Nicholls—Chairman

Professor Andrew Downes—Deputy Chairman

Ms. Herma Griffith-Ifill—Commissioner

Mr. Errol Humphrey—Commissioner

Ms. Monique Taitt—Commissioner

FTC/URD/MTNLRIC 2015-01

FAIR TRADING COMMISSION

DECISION

PART ONE — BACKGROUND

1 The Fair Trading Commission (“Commission”), in its Decision on the Long Run Incremental Cost (“LRIC”) Interconnection Rates (“LRIC Decision”) of March 27, 2015, determined interconnection rates based on fixed and mobile LRIC models. These models derived the costs that an efficient operator would incur in providing interconnection services in a competitive market. The resulting costs for fixed and mobile termination and transit services were used to inform the rates that would be applied for interconnection purposes.

2 In its LRIC Decision, the Commission determined that the interconnection rates for Fixed Transit, Fixed Termination, Mobile Transit and Mobile Termination Interconnection Services in $BDS/min would be reduced and would be as follows:

Fixed Transit — $0.010;

Fixed Termination — $0.011;

Mobile Transit — $0.011;

Mobile Termination — $0.055

3 The rate structure for interconnection services is based on a single, per minute tariff and will replace relevant rates in the Consolidated Reference Interconnection Offer 2010 (“RIO 2010”).

4 The said rates are to be adopted using a glide path, whereby 60% of the decrease will be effective from May 1, 2015 and the remaining 40% from April 1, 2016.

Filing of the Motion for Review and Variation

5 Following the issuance of the LRIC Decision, Digicel (Barbados) Limited (“the Applicant”) filed a Notice of Motion for Review and Variation (“Motion for Review”) with the Commission on April 23, 2015. The Motion for Review was supported by the Affidavit of Ms. Nadia Alleyne, the Legal & Regulatory Manager of the Applicant.

6 The Applicant also sought an order staying the LRIC Decision until final determination of the Motion for Review. A Stay of the LRIC Decision was granted by the Commission on June 3, 2015.

7 In its Motion for Review, the Applicant proposed that the Commission vary the LRIC Decision by extending the period of the glide path for the implementation of the new LRIC interconnection rates from twelve (12) months to three (3) years.

8 In the Motion for Review and its submissions of June 1, 2015, the Applicant relied on the following grounds in support of its application:

• A. The Commission failed to conduct the LRIC process in a transparent manner in that the costing exercise engaged in by the Commission, in tandem with Cable & Wireless (Barbados) Limited, was prejudicial to the Applicant.

• B. The Commission failed to act in accordance with the rules of natural justice, since it did not provide the Applicant with a reasonable time frame within which to adjust to the new rates which subjected the Applicant to hardship and prejudice.

• C. There were procedural deficits in the setting of the rates for the Applicant.

• D. There were procedural flaws and an overall absence of transparency.

• E. The Commission failed to meet the mandatory requirements of the Utilities Regulation Act.

• F. There were procedural deficits in the setting of the glide path.

• G. There were substantive deficits in the analysis regarding the setting of the glide path.

• H. There was a material difference between the preliminary position and final position of the Commission in respect of the glide path.

• I. There was a material change in circumstances and new facts.

9 The Commission's analysis of the grounds raised by the Applicant is provided in Part Two and Part Three of this Decision.

Duty of the Commission

10 By virtue of Section 36 of the Fair Trading Commission Act, CAP. 326B of the Laws of Barbados (“FTCA”), the Commission has jurisdiction, on an application from a party or on its own motion, to review, vary or rescind any decision given by it. In instances where the Commission allows a review, it is prescribed by the Utilities Regulation (Procedural) Rules, 2003, S.I 2003 No. 104 of the Laws of Barbados (“the Rules”) and the Utilities Regulation (Procedural) (Amendment) Rules, 2009, S.I 2009 No. 82 of the Laws of Barbados (“the Amendments Rules”).

11 The Commission's discretion to review and vary or rescind a decision or order is exercised with a view to ensure that there is consistency, transparency and predictability in the Commission's decision-making process.

Standard of Proof

12 With regard to the standard of proof, Section 133 of the Evidence Act, CAP. 121 of the Laws of Barbados, stipulates that:

“ In a civil proceeding, the court shall find the case of a party proved if it is satisfied that the case has been proven on a balance of probabilities.”

Evidence before the Commission

13 Rule 54 (1) of the Rules states that the Applicant must comply with Rule 8 of the Rules and file an Affidavit setting out the relevant facts that it relies upon in support of its Motion.

14 The Applicant filed the Affidavit of Ms. Nadia Alleyne, dated April 23, 2015 setting out the facts on which it relies in support of its Motion for Review. The Applicant was invited to file additional written submissions to support its Motion for Review with the Commission on or before June 1, 2015. The Applicant filed these additional submissions on June 1, 2015.

15 Thereafter, CARITEL, Columbus International Inc. (“FLOW”) and Cable & Wireless (Barbados) Limited (“C&W”), the parties to the LRIC Decision, were invited to submit responses to the Applicant's Motion for Review and further submissions. CARITEL filed its written response with the Commission on June 10, 2015. FLOW and C&W filed their joint submissions on June 10, 2015.

16 After receipt of the responses from CARITEL, FLOW and C&W, the Applicant was invited to submit its final written submissions, which it did on June 17, 2015. On June 16, 2015, the Commission requested supporting financial information from the Applicant to substantiate Ground B. The Applicant responded to the Commission's request on June 19, 2015.

17 In determining this matter, the Commission took into consideration all of the written submissions which it received from the Applicant, CARITEL, FLOW and C&W.

Jurisdiction

18 Under the FTCA, the authority of the Commission to allow a review is discretionary. An applicant must first demonstrate, on a prima facie basis, the existence of the permissible grounds of review; this is referred to as “the threshold question”.

19 Rule 54 (1) of the Rules stipulates that every Notice of Motion must contain grounds on which the Commission can review a decision made in a utility regulation proceeding. Rule 54 (1) states inter alia that:-

“ (1) Every Notice of Motion made under Rule 53(2), in addition to the requirements of Rule 8 shall

• (a) Set out the grounds upon which the motion is made sufficient to justify a review or raise a question as to the correctness of the order or decision and the grounds may include

  • (i) error of law or jurisdiction;

  • (ii) error of fact;

  • (iii) a change in circumstances;

  • (iv) new facts that have arisen;

  • (v) facts that were not previously placed in evidence in the proceedings and could not have been discovered by reasonable diligence at the time;

  • (vi) an important matter of principle that has been raised by the order or decision;”

20 Rule 55 (1) of the Rules states that:-

“ (1) The Commission shall determine with a hearing, in respect of a motion brought under Rule 53 the threshold question of whether the matter should be reviewed or whether there is reason to believe the order should be rescinded or varied.”

21 In determining the threshold question, the Commission must consider whether the Applicant established on a prima facie basis that any of the grounds it relies on satisfies the test.

22 According to Black's Law Dictionary, a prima facie case is:-

• (a) the establishment of a legally required rebuttable presumption;

• (b) a party's production of enough evidence to allow the fact-trier to infer the fact at issue and rule in the party's favour.

23 According to the Canadian Radio-Television Telecommunications Commission (CRTC) 78–7 Bell Canada Request to Review Part of the Telecom Decision, the purpose of the threshold question is to determine whether the grounds put forward by the party applying for the Motion raised a question as to the correctness of the decision and whether there was enough substance to the issues raised, such that a review based on those issues could result in the CRTC varying, cancelling or suspending the decision. The CRTC also stated that a review is not a vehicle for applicants to re-argue their submissions made at an earlier proceeding simply because they do not agree with the decision.

24 The CRTC further highlighted that if the Applicant is unable to satisfy the criteria, then there is no purpose in proceeding with the Motion for Review and the Motion can be dismissed at this stage.

25 In accordance with Rule 55(3) of the Rules, the Commission determined that it would consolidate the consideration of the threshold question and a review on the merits in a written hearing. Rule 55 (3) of the Rules...