By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Cable Bahamas is warning it may “be forced to exit the market and/or file for bankruptcy” if regulators fail to ensure it can compete on equal terms with Elon Musk’s Starlink and other satellite providers.

The BISX-listed communications provider, in feedback to the Utilities Regulation and Competition Authority’s (URCA) consultation on creating a regulatory regime for satellite-based communications services in The Bahamas, argued that the likes of Starlink enjoy “a significant business advantage” because they do not have to invest in building and maintaining on-ground network infrastructure.

And, with such operators already possessing a network “built in space” above this nation, Cable Bahamas asserted that this “robs the country of revenues” because none of the required investment and maintenance costs will be spent in The Bahamas.

It sounded the alarm that, should URCA implement a flawed regulatory regime for satellite communications, it may be forced to halt network expansion and improvements and dragged “into an unsustainable pricing war” with the likes of Starlink that could undermine “Cable Bahamas’ ability to stay in the market”.

While some observers will likely view its feedback as alarmist and self-serving, and designed to encourage the imposition of restrictions on the competitive threat posed by satellite technology, Cable Bahamas did gain backing from its Bahamas Telecommunications Company (BTC) rival over concerns about the spectrum fee URCA plans to charge for such services.

The BISX-listed provider argued that the annual 70 cents per megahertz (MHz) spectrum fee that URCA proposes to levy on satellite providers is a “whopping” 13,000 times less than what it pays for mobile services. And BTC, too, said it “strongly opposes” this fee structure on the basis that it is anti-competitive and discriminates against incumbent legacy carriers such as itself and Cable Bahamas. 

Cable Bahamas, in feedback which emerged on the eve of the CANTO regional communications conference, argued that the “horse has fled the stable” because URCA licensed Starlink to provide retail broadband services throughout The Bahamas in 2023 and is only now attempting to establish a proper regulatory regime after-the-fact.

“Cable Bahamas is operating in a soon-circulating market for electronic communications services, with individuals using the Internet at 94 percent as a percentage of the population, and with mobile cellular subscriptions (per 100 people) at 99,” the BUSX-listed communications provider added.

“Moreover, the category of operating licence issued to Starlink allows them to offer fixed broadband services anywhere in The Bahamas. In many respects, the licence issued to Starlink gives them as much leverage, if not more, than Cable Bahamas, but without the corresponding obligations. Whereas Cable Bahamas’ licence is 15 years, the licence for Starlink is perpetual.

“The scope of both licences allows the holder to provide any ‘carriage services’, and to establish, maintain and operate one or more networks,within, into, from and through The Bahamas,” Cable Bahamas continued.

“Giving the right to LEO (low earth orbit) satellite operators to provide any carriage service to end-users in The Bahamas, including fixed broadband Internet without any investment in network infrastructure on the ground in The Bahamas, puts them at a significant business advantage but robs the country of revenues (import taxes, equipment type approvals etc) and jobs that would be generated though the supply value chain when implementing network roll-out.”

Cable Bahamas then asserted that the restrictions imposed on the holders of such licences “are inconsequential in the case of Starlink, which already have their network built in the space above The Bahamas since the NGSO satellite-based broadband Internet network, by its nature, does not depend on the traditional local network interconnection envisaged in the licence.

“If the proposed [regulatory] framework is implemented in haste and Starlink encroaches on Cable Bahamas’ existing customers, Cable Bahamas may be forced to stop investing in network capacity expansion and quality improvement, and may be forced into an unsustainable pricing war which would reduce Cable Bahamas’ ability to stay in the market,” the BISX-listed provider disclosed.

“This would have far reaching consequences on the local industry, and this may lead to loss of jobs. Cable Bahamas’ contribution to the Treasury through taxes and licence fees will be reduced. Cable Bahamas may eventually be forced to exit the market and/or file for bankruptcy.”

Proponents of Starlink and satellite broadband Internet, especially Bahamas-based consumers who already use the former’s services, will likely dismiss Cable Bahamas’ comments as ‘sour grapes’. Besides remote Family Island locations not reached by BTC or Cable Bahamas’ networks, Starlink is also making inroads in more populated areas among persons dissatisfied with the incumbents’ service quality.

However, BTC joined Cable Bahamas in opposition to the spectrum fee structure that URCA proposes to impose for satellite communications providers. Using the example of a 100 MHz bandwidth in the 2,200-6,700 MHz band, BTC said the proposed 70 cents per MHz tariff for satellite was far less than what itself and Cable Bahamas would have to pay for the same spectrum.

“Based on BTC’s understanding of the proposed change and the example provided, while BTC would be assessed fees of $42,000, $8,500 and $4,250 for 100 MHz of standard spectrum in New Providence, Grand Bahama and other islands respectively, satellite operators would be assessed a fee of only $70 for the same bandwidth in the same standard spectrum across all locations in The Bahamas,” BTC added.

Noting that it already supports “remote island communities, where the business case for subsea and terrestrial fibre build-outs are cost-prohibitive”, with wireless solutions, BTC urged URCA to go back to the drawing board over the proposed fee structure for satellite operators.

“For these reasons, BTC strongly opposes the proposed fee structure put forward by URCA and requests clarification on the proposed fee changes, as it appears that URCA is not adhering to its own principle on a non-discriminatory fee structure and does not comport with the principle of fair competition,” the carrier, which is 49 percent owned by the Bahamian government, added.

“BTC encourages URCA to re-examine its policy with a view to creating a level playing field for all providers in the sector.” Cable Bahamas said URCA had confirmed the 70 cents per MHz fee for satellite operators in response to its own inquiries.

“Based on the illustration you gave in your letter dated January 15, in response to ours of January 14, we wish to observe that the fee of $0.7 per MHz which you propose for satellite across the board would be unjustifiably low in comparison to access spectrum for cellular mobile, which is charged a whopping $13,000 per MHz - which makes access spectrum for cellular mobile 13,000 time more expensive than satellite spectrum,” Cable Bahamas argued.

The BISX-listed communications provider, describing the licensing of satellite communication services to Bahamian retail customers as premature, added: “The group bemoans the fact that the ‘horse has fled the stable’, and that URCA is after the fact attempting to establish a regulatory framework after licensing Starlink in February 2023 for retail broadband services throughout the Bahamian archipelago - - and not limited to underserved areas - with a series of missteps which saw said licensing shrouded in mystery and a lack of transparency.

“And moreover, the language of URCA’s public consultation document implies that URCA is holding this [consultation] because it wishes to licence more low-earth orbit satellite service operators who have been agitating for licences as soon as possible.” Cable Bahamas may be right there, as the consultation drew responses from Starlink and six other satellite providers.

“The Cable Bahamas group submits that URCA has a fundamental duty to ensure a fair and competitive market environment that provides a safeguard to local operators, particularly in the face of increasing competition from satellite-based electronic communication services,” Cable Bahamas added.

“While satellites offer valuable solutions for global connectivity, they can also pose challenges to local operators who are bound by national regulations, service obligations (including universal service obligations) and infrastructure investments.

“The regulator must balance the promotion of technological innovation and broader service availability with the need to safeguard the interest of local providers, ensuring that they are not unfairly disadvantaged by the potential disruptive impact of satellite services that do not face the same regulatory or cost burdens,” the company argued.

“This balance is crucial for meeting the objectives of the Communications Act, maintaining a level playing field, encouraging investment in local infrastructure and promoting long-term sustainability within the domestic telecom sector.”