The Utilities Regulation and Competition Authority (URCA) is pushing towards the creation of a universal service fund (USF) from and into which the Bahamas Telecommunications Company (BTC) and Cable Bahamas will contribute and draw in order to complete the roll out of their television, internet and phone services to far flung communities.
The regulator recently took the next step towards the creation of the fund, which will be used to finance the provision of what the regulator considers basic services to as yet "disconnected" islands throughout the Bahamian archipelago.
URCA is now seeking feedback over the next five weeks on its draft regulations for the establishment, management and administration of the universal service fund, which were published last week.
"It's part of a series of documents that set out how URCA will treat universal services, which are a group of services set out in the Communications Act as intended be provided to all people in all populated areas in many cases at affordable rates," said Stephen Bereaux, URCA's director of policy and regulation.
BTC has been designated by URCA as the universal service provider (USP) for fixed line telephone services, mobile phone services, and dial up internet, while Cable Bahamas is considered the USP for basic cable television and non-dial up internet.
To date, Bereaux said that these services are available to virtually all of the Bahamian population, given the concentration of people in certain islands such as New Providence, Grand Bahama and Abaco, but this still leaves certain islands with small populations without critical services.
"We give them (service providers) national licenses, but as a flipside there's a national need for services and none of them are going to meet it if left on a purely commercial basis, but at the same time it's not fair to put the burden on any one of them (alone).
"It is understood that by providing certain services to 10 families in a far flung island the cost is likely to significantly exceed the money that you can charge for that service. URCA has committed to setting up a fund which is a way to get money from the sector to assist the USP in providing the service in areas in which it may not be cost effective to do it."
However, unlike with USFs in many other countries, said Bereaux, no funds will be raised to fund the Bahamian USF until a need is specified by the sector itself.
"Before anyone pays someone has to show there's a need for funds. We don't want to collect money if there's not a proven need. So you would have to show the cost to provide the service that you would not have incurred had you not had to go and do this thing, and at that stage URCA levies money from the sector - from everyone earning over a certain amount per year to meet that commitment."
The basis upon which a USP could claim money from the fund for providing service expansion will be on the premise of "net avoidable cost", which equates to the difference between what it would cost to provide the service and the return the company will gain from providing it.
"So if Cable Bahamas has to provide a basic TV package in Mayaguana to a community of 15 people, and it would cost them X million, and they can get $300 a month from those families, the net avoidable cost is the difference between those two figures," said Bereaux.
Contributions to the fund will be paid by USPs in a manner proportionate to their market shares. URCA is also seeking to set into motion an implementation timeline for USPs to provide key services to disconnected communities.
USFs are common in the developing world, but also in places such as Canada, which has far flung populations. Feedback can be offered on the latest draft regulations until October 25.
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