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News Article

August 31, 2013
Second home rentals should pay tax

Dear Editor,
With the recent letter sent out to second homeowners on Eleuthera, an old debate has been given new life.
There are those who don't want to "offend" the second homeowners who are seen to bring money to the islands in the form of tourism, but this hotel guest tax is passed on to the guest, which is then passed on to our community.
The amount of rooms now available for rent via the second homeowner market far exceeds the number of actual hotel rooms on the island and as such, those rooms should be seen as a "hotel" in itself.
For far too long, second homeowners have not been licensed and not paid hotel guest tax as required by law. Some of them have been told by website owners that they don't have to pay it "because they will never get caught"or the "Bahamian government will never get it together enough to enforce the law."
As we are staring down the face of VAT, it is time to take control and enforce the laws that we already have. We are leaving so much money on the table right now, and it is time to wake up. It is important for the community and it is the law.
Back to the topic of second home rentals, a few non-Bahamians set up websites and convinced homeowners to list their properties on Eleuthera. Although this is illegal, according to Bahamian law, these extremely successful operations have flourished because no local person has had the wherewithal to create a competitor and our government, whether by inattentiveness or by design, looked the other way.
According to several sources, one site is generating in excess of $300,000 [a] month in rental income, netting its operator $30,000 in commission per month. The fine alone for the properties listed on one website amounts to $7.9 million for just the year 2013. There needs to be accountability both on the part of the government, the homeowners and the locals. The time for blaming others has to end. This is no one's fault and everyone's fault.
The law since 2009 states that any property that rents out one bedroom or more must be licensed and must pay hotel guest tax. This tax is 10 percent and is passed onto the guest and then forwarded to the government at the end of the month.
The form is extremely simple to fill out and many people pay their hotel taxes in cash at the administrator's office. The more difficult part is getting licensed. In order to be licensed, the home will need to be inspected, and many second homes that are in the rental pool will not pass that inspection.
Sure, the homes that rent out for $15,000 [a] week will probably pass inspection but those that rent for less might have deferred maintenance, which will preclude passing the inspection. Does every room have a smoke detector? Do you have fire extinguishers (inspected and tagged) by each stove? Do you have a pest control contract? Do you have reliable power and clean water? Do your air conditioners work? Do you have doors that lock? Do you have either phone or Internet that is on? Those are just some of the things that homeowners will need to comply with to get licensed and I venture to guess that many will not pass.
Having homes inspected will ensure that many of the guest complaints will cease because most of them have to do with cleanliness, lack of water, AC, power and lack of security. We have all heard about the filthy homes, robberies, lack of clean water and lack of guest services at rental homes. This is not just a problem of the homeowners and their renters, this problem affects all of us.
The money collected from hotel guest taxes is shared between the local government and Nassau, 50/50. The estimated amount of guest tax not collected from rentals since the beginning of 2013 is over $100,000. Sure, it is probably a lot more, but do you think that our settlement could use $50,000?
The claim that the online rental service providers have increased tourism to our island is false, according to United Airlines, American Airlines, Ministry of Tourism and Expedia. The guests are simply being diverted from local hotels and inns to rental homes.
Again, it is illegal for non-Bahamians to transact any real estate business, whether they are in the United States or any other country. The homeowners who list their properties for rent with anyone who is not Bahamian are breaking the law. Some of the website owners try to subvert the law by using a Bahamian shill and some don't even do that, going so far as to boast that the Bahamian government will do nothing to stop them.
This is a problem for all of us. If you own a home and receive rental income, you need to be licensed and registered and you need to pay hotel guest tax. Period.If you have a child who is being educated in one of our schools, you are affected by the lack of money going back into our community. If you are a non-Bahamian website owner, you are in violation of Bahamian law and you have misrepresented yourself to your clients.
I have heard from many homeowners that they were told not to register and not to pay hotel guest tax because the government wouldn't do anything about it. Whoever has said that should be ashamed and should be held accountable.
The hotel guest tax is just another piece of the puzzle. Are we going to protect and care for our country or are we going to rape her and destroy her for today's gains?
If you are buying crawfish out of season, if you are doing shoddy work, if you are not caring for an animal, if you are charging someone too much, if you are being rude to tourists and if you are looking the other way while your neighbor takes a "payment", you are part of the problem.
Are we a nation of talkers or doers? All of these things take care and action on our part. The problem is not only the homeowners, the problem is all of us for being too lazy to enforce the law and for allowing there to be a hole in the market that needs to be filled.
Any Bahamian could do the same thing that the website owners are doing, but will we do the work or will we sit back and blame others for our lack of prosperity? -- Concerned Citizens

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News Article

September 17, 2012
Deepening our democracy and their pockets

"Cable Bahamas has earned profits of over $203 million in fourteen years."
Last week in this column, we asked our readers to consider whether the Utilities Competition and Regulatory Authority (URCA) should approve Cable Bahamas' request for an increase of the basic cable fees by as much as 27 percent. We foreshadowed a town meeting that was organized by URCA on Tuesday, September 11 to allow them to hear the public's views on the requested increase. We went to that town meeting which was well-attended, lively and, at times, even passionate.
Therefore, this week we would like to Consider This... was the URCA town meeting productive? What, if anything, did it teach us about Cable Bahamas?

Meeting overview
The URCA-hosted town meeting was represented by some of its senior executives. Several Cable Bahamas executives were also present as well as one identifiable director of that Company. The meeting was chaired and the ground rules were clearly explained by URCA's general counsel and, except for several reminders to allow individuals to be heard, the meeting was lively and occasionally boisterous.
There were approximately 200 persons at the meeting and at least 50 of them spoke to the issue.

Not one single person who publically expressed their view felt that the increase was justified or should be approved. There was unanimous objection to the proposed price increase. We did not get a sense that anyone in attendance felt intimidated about supporting the price increase. Admittedly, URCA did not adequately explain the reason for the proposed increase, except to state that Cable Bahamas felt that the cost of programming had increased, without any statistics to support Cable's claims, as well as the fact that the cost of living had increased since 1995 by 37 percent.

Expressed sentiments
Some of the sentiments expressed by participants at the town meeting included the following:
o Cable Bahamas should be ashamed of itself for asking for an increase;
o In light of the channels that subscribers are receiving and Cable's poor level of service, Cable is not entitled to an increase;
o Cable should consider keeping the current price level while decreasing the number of channels offered because many subscribers could do without some of the channel offerings;
o It is patently unfair for Cable to charge a reconnection fee of $55 or $56, particularly given the frequent outages experienced by some subscribers;
o Given its monopoly, subscribers are held technologically hostage because there is no choice of service providers;
o There are many students who rely on the Internet for study purposes and "without Cable Bahamas, we are technologically blind";
o Too many of the channel offerings are in Spanish which, in an English speaking country, is unacceptable;
o This town meeting was only cosmetic and a farce and it was felt that a decision had already been made by URCA to grant the increase;
o URCA was asked to quantify how much of The Bahamas has cable, pursuant to Cable Bahamas' mandate to "provide cable to the entire Bahamas." URCA never answered the question;
o It is grossly unfair for Cable Bahamas to charge households $30 and $50 to businesses for its monthly service. This disparity is unacceptable and unjustifiable;
o Cable Bahamas is demonstrating that it is the worst kind of corporate citizen by asking poor people for an increase while many Bahamians are still suffering the effects of the economic downturn; and
o The proposed increase of $8 for household consumers is unconscionable because with that amount "we can buy at least eight tins of tuna fish or at least three tins of corned beef".
Perhaps the biggest bomb shell was dropped when activist Rodney Moncur asked URCA to confirm that its Chairman Randol Dorsett is the lead attorney for Cable Bahamas, which Moncur maintained resulted in a gross conflict of interest. Moncur added that "it is professionally immoral for the chairman of URCA to be Cable Bahamas' lead counsel (in the Supreme Court) and therefore has no confidence in URCA's ability to be independent in this matter". The question went unanswered.

Cable Bahamas director's views
While no one from Cable Bahamas spoke at the town meeting, in an interview with one of the daily newspapers, Dionisio D'Aguilar, one of the Company's Directors, agreed that if Dorsett is still Cable Bahamas' lawyer and URCA's chairman, "that does seem to be a bit of a conflict". He was also quoted as describing the meeting as "stupid" and a "complete waste of time". He continued that for Cable Bahamas, "it made no sense for them to respond to those people". He is also quoted as saying that "those town meetings are the stupidest things that God ever created. They are always out of control; they are just a way for people to vent".

Cable Bahamas' financial results
When asked about the level of profits that Cable Bahamas has earned over the years, one of URCA's executives replied that Cable Bahamas is a public company whose profits can be viewed online. So we went online and noted a startlingly revealing history of profitability by that company. For the period 1998 to 2011, the published annual audited net profits earned by Cable Bahamas are as follows:
It is revealing that Cable Bahamas earned a net profit of $7.2 million in 1998 (its lowest) and a record high net profit of $28.5 million in 2009, or an average annual net profit of $15 million for the 14 years reported. Could it be that the company applied for a rate increase in 2011 because it realized that its annual net profits were declining from 2009 and wanted a higher return for its shareholders that approached that banner year results? Is that sufficient justification for a rate increase?
Or perhaps Cable Bahamas has noticed that, because of the economy, its subscribers have migrated from the more expensive packages to the basic package, thereby accounting for some of the decline in its profits. So, instead of applauding the allegiance of its subscribers who, in such a desperate economy, have found a way to stick with cable, albeit in a smaller way, in an example of capitalism at its worst, cable decides to raise the price of that basic package, perhaps taking it out of the reach of the very customer who has been forced to drop the more expensive package to scrap together that $30 each month. To even the casual observer, it appears to be a classic case of corporate and individual greed.

Conclusion
Whatever one might think about URCA's town meeting, one thing is certain. These types of public fora are indicative of a maturing and deepening democracy which enables citizens to express their views on issues of national importance. They should be encouraged and we commend URCA for hosting such meetings, even if they are uncomfortable for some of the stakeholders. To date, given the enormous profits that Cable Bahamas has earned over the years, especially in light of its cable monopoly, a persuasive argument has not been made that would support the proposition that URCA should grant the requested increase at this time, having regard for the already high cost of living that many Bahamians are experiencing.
This exercise has clearly demonstrated that such public meetings will contribute to the deepening of our democracy even while a monopolistic company is simultaneously seeking to deepen its coffers and the pockets of its shareholders.
Next week, we will consider how, from its inception, URCA seems to be plagued with charges of conflicts of interest and what can be done to overcome such perceptions and allow them to do their important work, free of the shadow of scandal.

o Philip C. Galanis is the managing partner of HLB Galanis & Co., Chartered Accountants, Forensic & Litigation Support Services. He served 15 years in Parliament. Please send your comments to pgalanis@gmail.com.

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News Article

October 05, 2014
BTC IPTV by March 2015

The Bahamas Telecommunications Company (BTC) intends to launch Internet Protocol television (IPTV) by March 2015.
BTC Chief Executive Officer Leon Williams confirmed the information at a business meet and greet event while he was talking about the updates to the telecommunications network. The company has previously only said it would begin trials by Christmas with a 2015 rollout.
"We are in the process of spending some $65 million this fiscal year - ending in March 2015 - to improve our cellular network as well as to deliver services like iMPLS (interprovider multiprotocol label switching) and MPLS (multiprotocol label switching) that gives the high-speed bandwidth that businesses need," he said.
"In addition to that, sometime between now and March, we hope to get into the business of television. We are launching our own IPTV network. Stay tuned. Coming soon."
IPTV takes advantage of the same "language" used by the Internet to allow information to be sent and received over any broadband or network connection. AT&T, one of the leading IPTV providers, says the technology is "a different, improved technology than 'traditional' cable or satellite TV, and it allows for more flexibility within the network."
IPTV enables two-way interactivity...The two-way IPTV network means viewers have more options to interact, personalize and control their viewing experience.
Multiprotocol label switching is a protocol for speeding up and shaping network traffic flow. It was created in the late 1990s to avoid having routers waste time by having to stop and look up routing tables.
Interprovider MPLS is an enhanced provider interconnect service that allows MPLS-based service providers to seamlessly extend IP virtual private network (IP VPN) service reach beyond their region. Based on leading industry standards and technology, iMPLS dramatically enhances a provider's time-to-market capability for serving out-of-region customers while minimizing the capital expense needed to build out an extended network and service infrastructure. Interprovider MPLS also grants service providers immediate access to Global Crossing's converged IP applications.
The Ingraham administration privatized BTC in 2011, selling 51 percent of the company to Cable and Wireless Communications over the vociferous objections of a significant number of people. It was a campaign pledge by the Christie PLP that, on assuming office, they would renegotiate in order to return majority ownership of BTC to "the Bahamian people".
At the gathering, an event sponsored by the Bahamas Chamber of Commerce and Employers Confederation to salute Carnival Corp. CEO Arnold Donald, Williams noted that in September, negotiations concluded and CWC transferred two percent of the company into a foundation designed to benefit the Bahamian people. The new arrangement means that CWC owns 49 percent of BTC, with the government of The Bahamas owning 49 percent and the foundation - which government officials refer to as "the people of The Bahamas" - owning two percent.
"I make the distinction between the Bahamas government, and the people of The Bahamas. The people of The Bahamas own 51 percent of the economic value of BTC," Williams said. "[That's a fact] we should be proud of."
Williams talked about the challenges of connectivity in The Bahamas, which he noted covered the same area as the entire Eastern Caribbean. He said there are five submarine cables - possibly more - connecting The Bahamas to the U.S. and the rest of the world.
"There are no other countries in the Caribbean as connected as The Bahamas," Williams said. "We've got both cellular networks, CDMA and GSM. So whether the tourist comes from the U.S. as a Verizon customer or as an AT&T customer, it makes no difference - their phone works while they are here."

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News Article

May 16, 2012
BTC seals multi-year deal with Syniverse

In an effort to further enhance mobile performance, the Bahamas Telecommunications Company (BTC) has agreed to a multi-year contract with a Florida-based company specializing in roaming, messaging and networking solutions.
BTC will utilize the services of Syniverse in the hopes of improving mobile call quality for local subscribers on its network and for roaming callers that frequent the country annually.
The CEO of BTC Geoff Houston said the new partnership will be a great resource for the network.

"At BTC, we are constantly exploring new ways to enhance the mobile experience for our end users rather than managing the endless complexities that arise from having a multitude of vendor relationships," Houston said. "Syniverse brings the best of both worlds - providing the in-region expertise and solutions to optimize the experience of our subscribers and inbound roamers, while also serving as a preferred provider for so many of our mobile support needs, allowing us to remain focused on our top priority, our customers."
Syniverse provides mobile solutions for over 900 mobile operators, cable and Internet providers in over 160 countries. Its array of resources that it will offer to BTC go beyond messaging and roaming. BTC will now have the ability to proactively recognize and resolve problems such as network outages before the user is impacted.
The company should also be able to offer real-time alerting and rating capabilities that alert subscribers as they use data services at home and while roaming, and minimize the size of the uncollectable data roaming bill for BTC.
Senior Vice President of Syniverse for the Caribbean and Latin America Pablo Milkota, said BTC's commitment to improve mobile service quality is a great decision and it certainly will pay off in the long term.
"BTC is taking full advantage of Syniverse's breadth of solutions to meet and anticipate customer demands today and well into the future, while also realizing the efficiencies of a single source for advanced mobile solutions," Milkota said.
"We are pleased to expand our relationship with this forward-looking operator, building upon our long history of serving operators in the Caribbean and throughout Latin America. As a result, we now make mobile work for 95 percent of mobile subscribers in the region."

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News Article

April 26, 2012
Financial elite prepare for OffshoreAlert Conference

Three hundred high-level attendees from 23 countries or jurisdictions will attend next week's OffshoreAlert Conference to discuss everything that's important in the world of offshore finance.

The event - which will be broadcast live over the Internet to those unable to attend - has sessions for buyers, providers and investigators of offshore products and services.

"A unique aspect of The OffshoreAlert Conference is that it brings together a diverse group of influential individuals from onshore and offshore jurisdictions ..."

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News Article

April 10, 2014
Bahamians seek partnership approval in bid for cellular license

A Bahamian-owned company is planning a $40 million investment in telecommunications infrastructure if it obtains government approval to join forces with an international mobile services provider and become the next company selected to gain a mobile license in the newly-liberalized mobile environment.
IP Solutions International Limited (IPSI) currently has an application before the Bahamas Investment Authority (BIA) to approve a share purchase agreement and change in control for the company, which would permit it to bring in Limitless Mobile Holdings as an equity and strategic partner that would assist the local company in continuing to build out its infrastructure and its network.
Limitless Mobile owns and operates a mobile network in the United States, which is currently being upgraded to 4G/LTE. In Europe, Limitless owns and operates a mobile network in the UK, Germany, Denmark, Poland and Sweden.
Those currently involved in IPSI include CEO and major shareholder, Edison Sumner, Sir Orville Turnquest, Virginia Damianos and Larry Carroll. Limitless Mobile Holdings is led by Richard Worley, former chairman of Morgan Stanley Investment Management, and Charles Ryan, co-founder, chairman and CEO of Deutsche UFG, one of Russia's leading investment companies.
BTC's mobile exclusivity period lasted for three years after Cable and Wireless Communications (CWC) bought a 51 percent stake in BTC, as a condition of their purchase.
IPSI, which has been in existence since 2008, has already received the necessary individual spectrum and operating licenses that would enable it to offer fixed line, television and broadband Internet services - known as "triple play".
IPSI claims to have already built and deployed most of the infrastructure necessary to deliver its IPTV, broadband wireless internet and landline (voice over internet protocol) services in new Providence and Abaco and until recently has been servicing the communications needs of the Baker's Bay development on Guana Cay, Abaco for over three years.
In a release sent by Sumner late yesterday afternoon confirming information obtained by Guardian Business, IPSI disclosed that it is waiting for government approval of its partnership with Limitless Mobile before it moves ahead with building out its network and launching its planned rollout of full multi-play media and communications services throughout The Bahamas, which it hopes will include mobile data and voice services.
Sumner told Guardian Business that IPSI is "aptly qualified to get involved in the mobile space" and is prepared to begin the build out of its infrastructure in this regard immediately after they get the approvals from the government on the foreign direct investment component.
"The company intends to spend in excess of $40 million building out its network, the 4G LTE network, and completing the build out of the IP TV infrastructure. The fixed line and broadband infrastructure is already in existence and we just need to begin to migrate our customers onto that. We were already approved in doing it but wanted to wait until we got all of these approvals before moving ahead," said Sumner.
Guardian Business understands that the company has officially made known its hopes of becoming a mobile service provider in The Bahamas, and shortly intends to formally announce its intentions to the public.
Among other companies, Digicel has expressed its continued interest in becoming involved in the mobile space in The Bahamas, telling Guardian Business on Monday that it would hope the government will "imminently" outline how it expects potential participants to go about that. However, Digicel has also elicited a strong negative response from the union that represents BTC staff, the Bahamas Communications and Public Officers Union.
Consequently, IPSI is hoping it may be able to - despite Digicel's stronger financial clout - put itself forward as a more union-friendly company as a means of gaining more union and potentially political favor in the process.
As it stands, the ball is now in the prime minister's court, as the minister responsible of outlining how companies interested in gaining the license to become mobile operators in The Bahamas should proceed in doing that. This would, consequently, open the door to the formal launch of the bid to find a new provider.
There are various types of processes which governments can typically engage in to identify new providers, including auctioning the opportunity or issuing a request for proposal.
In a statement to Guardian Business on the end of BTC's exclusivity period in mobile phone services, the Bahamas Chamber of Commerce and Employers Confederation said that it supports more competition in all sectors of the economy as it "simply creates broader economic and commercial opportunities, while at the same time ensuring that the power is rightly placed in the hand of the consumer."
"We do acknowledge the progress that the new BTC has made with expanded offerings and competitive pricing. We are encouraged by the competition that we see emerging within the marketplace for broadband and land line services.
"For us to see optimal service delivery and best possible packages and prices though, we do need strong robust and fair competition in the sector," said BCCEC Chairman Chester Cooper.

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News Article

November 11, 2014
IPTV testing in two weeks

At the opening of a new Bahamas Telecommunications Company (BTC) retail store in Alice Town, Bimini, BTC CEO Leon Williams announced that in two weeks, Bimini would be the first testing ground for IPTV, a new Internet television service available next year.
BTC has been interested in Internet Protocol television (IPTV) for some time. Former Cable & Wireless (C&W) CEO Geoff Houston said in March that a TV offering had been planned for a long time, but had been delayed in favor of higher-priority projects.
New Cable and Wireless CEO Phil Bentley and Williams have been across the country proselytizing for BTC ahead of the liberalization of the mobile phone sector, touting a $65 million investment by C&W into BTC for improvements and the expansion of network and product services, including fixed mobile conversion, the launch of IPTV in 11 markets across the region and B2B commercial customer solutions.
Opening the new store in Bimini, Williams explained that IPTV would be free for Biminites through the test period.
"You'll have an alternative to those other fellows and you'll get a taste of what is to come next year when we launch IPTV with all the channels," he said.
IPTV takes advantage of the same "language" used by the Internet to allow information to be sent and received over any broadband or network connection. AT&T, one of the leading IPTV providers, says the technology is "a different, improved technology in comparison to 'traditional' cable or satellite TV, and it allows for more flexibility within the network".
IPTV enables two-way interactivity... The two-way IPTV network means viewers have more options to interact, personalize and control their viewing experience.

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News Article

September 07, 2011
New website hopes to put itself on the map

While it has been said that absence makes the heart grow fonder, two Berry Islands businessmen were not willing to take that chance when they found their island completely wiped off the map -- literally.
"While doing research," said resident Mark Lothian, "we came across a map of The Bahamas that the Berry Islands was omitted from."
It's a finding that inspired the soon-to-be launched BerryzBuzz.com, which Lothian and partner Norman Bastian hopes will bring a change for the island's economy.
"The global recession has impacted everywhere negatively [and] no where in The Bahamas more than in the Family Islands," said Lothian.  "The Berry's, being a very small, archipelagic, spread-out community, has been especially hard hit.
"Although we have almost complete employment, the economy is still not providing a decent living wage for anyone. All the businesses have been affected and little growth has taking place in the last few years. Most residents need to have several jobs just to make ends meet."
The partners are hoping to take matters into their own hands with the launch of the website, designed around promoting the islands, its attractions and its businesses.
The owners hope to grow the island's visitor base not only in the second-home market, but also from stop-overs wanting to spend time on the island.
It's a goal officials have said won't be realized until a major hotel is built on the more populated islands that can handle the crowd.
However, Lothian and Bastian believe leaving the island in its present state - with several inns and small bed and breakfasts littering the islands -- will actually work to the benefit of the island and distinguish it from the rest of The Bahamas.
"There are people out there just looking for a place like the Berry Islands to visit and to reside: a virtually crime-free, uncrowded, unspoiled, tranquil setting for the week-end visitor and the long-term resident or investor," said Lothian.  "We disagree (that a hotel must be built), there are many rooms available, provided by boutique style bed and breakfast establishments, villa and townhouse apartments and attached and semi-attached rooms in private homes.
"Most of these are owned and operated by individuals that will offer the visitor personalized service to supply all their needs and wants."
Uniqueness is what they hope to showcase with the BerryzBuzz.com website, a virtual forum to promote local merchants and service providers to potential new customers and to promote the Berry Island chain to the world via the Internet.
Given that many of the businesses there are owner operated, there isn't much room for huge advertising or promotion budgets, said Lothian.
He intends to fill that void with more affordable rates that also target corporate and national businesses as advertisers to cover the bulk of the website's operating costs.  The move is expected to defray their expenses and allow them to charge less than other traditional mediums for global coverage.
"What makes BerryzBuzz.com a unique platform for advertising and promoting the Berry Islands and its merchants is the fact that it will not be a static publication," said Lothian.
"We will be actively seeking visitors and investors through the advent of e-mail, blogging, social media and live response venues as well as strategic links to affiliated websites. BerryzBuzz.com will be constantly updated and improved as we grow."
Currently under construction, the website will be launched October 1.
"It is our hope that all the businesses, local and national we approach, will support us in this endeavor," Lothian added.  "We will put the Berryz back on the map."

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News Article

June 08, 2013
U.S. Collects Vast Data Trove

The National Security Agency’s monitoring of Americans includes customer records from the three major phone networks as well as emails and Web searches, and the agency also has cataloged credit-card transactions, said people familiar with the agency’s activities.

The disclosure this week of an order by a secret U.S. court for Verizon Communications Inc.’s phone records set off the latest public discussion of the program. But people familiar with the NSA’s operations said the initiative also encompasses phone-call data from AT&T Inc. and Sprint Nextel Corp., records from Internet-service providers and purchase information from credit-card providers.

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News Article

February 16, 2015
Who's protecting the consumer - pt. 1

"Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer."
- Adam Smith

Many modern societies have established laws and organizations that are designed to protect the rights of consumers, to ensure fair trade and competition in an orderly economic environment and to provide for the dissemination of accurate consumer information in the marketplace. Therefore this week, we would like to Consider This... in The Bahamas, who is protecting the consumer?

Consumers
The consumer normally acquires goods or services for direct use or ownership rather than for resale or use in production and manufacturing. Consumers often stand alone in a complex world that is dominated by big business and big government, where often the former seems to have little or no recourse for consumer complaints or violations by unscrupulous or unethical vendors. It is therefore essential that consumers become more knowledgeable and proactive in protecting themselves against those establishments that take advantage of them.

Protecting the consumer
Consumers are generally protected through two methods: consumer protection laws and the proactive measures taken by consumer advocacy individuals or groups.
Consumer protection laws and organizations are frequently designed to ensure consumers' rights, to foster fair trade competition and the free flow of truthful information in the marketplace.
Governments frequently use consumer protection laws to regulate businesses or to protect the rights of consumers. These laws normally prevent businesses from engaging in fraudulent or unfair practices that would enable vendors to gain an unfair advantage over competitors or to mislead consumers.
For example, the United States has developed sophisticated consumer protection laws and organizations such as the Federal Trade Commission to achieve this objective. In addition, self-regulating business organizations have emerged such as consumer protection agencies, ombudsmen, and Better Business Bureaus to whom consumers can make formal complaints if they believe that they have been aggrieved. One of the most prominent American consumer advocates of the latter 20th Century was Ralph Nader who demanded many businesses, large and small, to properly account to and compensate the consumer for valid grievances. He was an extremely effective consumer advocate.
The United Kingdom has several statutes to protect consumers in specific areas of consumer credit and contract terms. The Australian Competition and Consumer Commission, along with individual State Consumer Affairs agencies, are responsible for consumer protection. Germany has a federal cabinet minister who is responsible for consumer rights and protection. In India, the Consumer Protection Act of 1986 governs consumer protection.
The Bahamas Parliament passed a Consumer Protection Act in 2006 which was intended to provide consumers who are disadvantaged by exorbitant prices, substandard products and the unscrupulous practices of merchants and service providers with a forum to have their complaints addressed on a timely basis by a Consumer Protection Commission. The law requires merchants and service providers to be more responsive to consumer complaints and ensures that in their dealings with consumers, value is exchanged for goods and services provided.

The Bahamian experience: commercial banks
Today there are many areas where consumer protection can be greatly enhanced in The Bahamas. In the area of commercial banking, we are all familiar with the practice of some banks overcharging their customers for various
"services" of which consumers are unaware until they are directed to the fine print in the bank mandates - a document that most consumers fail to read or understand when opening bank accounts.
Often, when called out, commercial banks have reversed such charges. Unless the vigilant consumer closely scrutinizes his bank statement, he could end up paying excessive charges that are neither appropriate nor justified.
Then there is the famous "float", that is, consumers' funds that banks hold onto without giving immediate credit to depositors. Despite the introduction of an automatic checks-clearing system, it is commonplace for commercial banks to hastily withdraw funds from customers' accounts, while simultaneously placing a
"hold" on deposited funds for several days. The consequence is that this practice could place the customer's account into an overdrawn position if funds are disbursed by the customer before the "hold" is released. Invariably, this results in consumer bank charges of $25-$35 for having "insufficient funds" on the account because the deposited funds were still "on hold".
Banks even charge a $5 fee for cashing checks for a customer who does not have an account with the bank on which the check was written. This is unethical at best, and should be criminal at worst. This practice should not be allowed to continue. Unfortunately, there is absolutely no one to whom the consumer can turn for relief from this practice, not even The Central Bank of The Bahamas.
One of the most egregious abuses by some of the Canadian banks in The Bahamas is their continued refusal to accept funds from web shop operators and their employees or service providers, although web shops have been legalized. This is an unconscionable travesty which will require government intervention, but we will have much more to say about that in a future column in the weeks ahead. In the meantime there is no agency of the government that is protecting the interest of the consumer from unfair banking practices.

BTC
Since our telephone company, BaTelCo, was virtually
"given away" at a bargain basement price to Cable & Wireless by the FNM government, there continues to be a plethora of complaints about the delivery of substandard service by that public corporation, newly named BTC, which, since it was privatized, some aspects of its service has drastically deteriorated.
It appears that there has been marginal improvement at BTC since Mr. Leon Williams has taken over as its president, but the annoyance of dropped calls remains a daily experience of almost everyone who owns a cell phone.
URCA, which regulates the telecommunications industry, seems more engaged in customer complaints against BTC, but there is still a general perception that there is still little recourse for the customer who has complaints against BTC.

BEC
Where is the consumer agency to which Bahamians can turn when they lose thousands of dollars in appliances that are destroyed by BEC excessive blackouts, brown-outs or power surges? There certainly is no one to turn to when your business itself has been impacted by a lack of power, resulting in loss revenue and production.
Again, it is very difficult to expect any real satisfaction for such disruptions of power from the agency that is supposed to protect consumers from abuses by the cable company. URCA, which does little to compensate consumers from the telephone company abuses, performs an equally unimpressive job in protecting Cable TV and Internet consumers from poor service from that provider, so we cannot even begin to look to them to address the abuse of the consumer by BEC.
Essentially, when it comes to most our major utilities, consumers are voices crying in the wilderness with no one to hear or come to our aid.

Conclusion
In Part II of this series next week, we will look at areas that touch consumers of all ages: what we eat and how we get around.
It is extremely important for Bahamians to be educated and vigilant about our rights as consumers. It is equally important to be able to turn to a Government Protection Agency or a consumer advocacy group where consumer abuses can be seriously redressed and real results can be obtained.
Until we become educated consumers, we will not be good customers. Instead, we will indeterminately wander and wallow in the quagmire of ignorance and abuse. We must no longer put up with things we should not even tolerate for a moment. We must become empowered not only to stop those abuses for ourselves but end them for each and every Bahamian consumer.

o Philip C. Galanis is the managing partner of HLB Galanis and Co., Chartered Accountants, Forensic & Litigation Support Services. He served 15 years in parliament. Please send your comments to pgalanis@gmail.com.

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