The Utilities Regulation and Competition Authority (URCA) has rejected calls by Cable Bahamas to bear only 18 to 20 percent of an estimated $10,000 in monthly common costs associated with the implementation of fixed number portability (FNP), calling claims by the company that there would be adverse impacts if it shares costs equally with Bahamas Telecommunications Company (BTC) "grossly overstated" and "unsubstantiated".
Yesterday, Cable Bahamas hit back at the determination, with Head of Marketing David Burrows saying that they view URCA's position as placing a "disproportionate" financial burden on Cable Bahamas, given BTC's 400 percent larger fixed line customer base.
"It's URCA's decision, and there is nothing we can do about it but we are certainly not happy about it," said Burrows, adding that the $10,000 common cost per month, which relate to the cost of the equipment/system for the number portability administration service, comprised of a centralized database solution for porting numbers between operators and ancillary services, is "not inconsequential".
In its final determination on costs associated with fixed number portability, URCA favored BTC's position on how common industry costs should be shared, while supporting Cable Bahamas' position on how internal set-up costs should be covered, acknowledging that the two companies "remain divided" over the cost apportionment question.
Ultimately, URCA has ruled that each licensee should cover its own internal set-up costs that will be incurred in preparation for number portability, with "no option to recover these costs from consumers or other operators", while common industry costs associated with the system should be "equally apportioned" between both BTC and Cable Bahamas.
This came despite Cable Bahamas' efforts to argue against an "equal division" of the common industry costs of FNP.
The BISX-listed telecoms provider had suggested that to have it - or any other operator entering the market - pay the same amount as BTC would create an "unfair and disproportionate burden on small operators, having regard to their non-SMP (significant market power) status in the voice market for fixed and mobile services".
Furthermore, Cable Bahamas had suggested that if URCA was to call for equal apportionment of these costs, it would "ignore and compound the historical advantages held by BTC" as a result of its traditional dominance in the market.
BTC meanwhile had been "strongly in favor" of an equal division of common industry costs.
In its determination, URCA hit back that Cable Bahamas is "hardly a new player" in the fixed telephony market, which was liberalized in 2009. And it added that Cable Bahamas also enjoys "incumbent" status in its own right, along with significant market power, in other important sub-markets.
URCA charged that it has restrained any abuse of BTC's historical position in the market and its current position in the voice market in light of "ex-ante and preventative" measures put in place.
"URCA was unable to establish any link between equal division of common industry costs and the negative impacts identified by Cable Bahamas," said the regulator.
With respect to internal set-up costs, BTC expressed the view in its submissions to URCA that other operators should absorb some of its internal set-up costs, which would be "huge".
"BTC's competitors will benefit from the introduction of number porting. In BTC's view, other operators should bear part of BTC's internal set-up costs," the telecoms provider argued in its submission.
However, URCA did not agree, and moved in favor of Cable Bahamas' proposal that each operator should bear their own internal set-up costs with respect to fixed number portability, arguing that if other operators absorbed BTC's costs in this regard it would undermine "the cost minimization principle" with BTC having "little or no incentive to deploy the most cost efficient FNP solution".
URCA proposed that neither "donor operators", those from whom customers are requesting to move; or "recipient operators", those receiving the customers, can charge customers for the move. However, donor operators can charge recipient operators $4 per successful porting of a customer to their network.
Number portability is considered to be a cornerstone of a truly liberalized telecommunications market. In its determination, URCA noted that there is clear evidence that customers are reluctant to change their network operator if it means changing their phone numbers.
"Number portability is a key issue in the introduction of network competition. The absence of number portability therefore gives incumbent network operators a significant competitive edge."
Competition is promoted by number portability given that customers can change their operator without changing their numbers and incurring all of the related inconvenience.
By facilitating movement among operators through such portability, URCA expects to help to drive down prices.
Number portability is now expected to occur on December 2, after being delayed by three months due to "lack of operator readiness".
URCA is investigating BTC over its failure to be adequately prepared for the previous September 3 deadline.

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