By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian regulators yesterday declined to state where they stand on the $1,000 one-time “demand” or congestion charge that Elon Musk’s Starlink satellite Internet and communications provider is levying on many New Providence subscribers.

The Utilities Regulation and Competition Authority (URCA) declined to respond to Tribune Business inquiries after several persons asked whether it will move to safeguard and protect consumer interests given that Starlink is one of its regulated licensees.

One source, who reached out to this newspaper, said on condition of anonymity: “A few people have been trying to get on. I recommended it to one of my friends to get Starlink, and they got it but had to pay a $1,000 surcharge. If you are on New Providence and go online to sign-up for a Starlink account, it is there.

“If you are geolocated on New Providence, you have to pay a $1,000 surcharge. How does that happen as a regulated entity? Are we protected with a charge, a fee like that by the regulator? An interesting point: If you sign up for a stationary package at $60 per month on New Providence, the surcharge applies. If you sign up for a roaming plan, which provides coverage on New Providence for $175 per month, the $1,000 surcharge does not apply.”

Tribune Business was unable to reach Starlink for comment but, by attempting to apply online for an account with the satellite operator, was able to verify what concerned consumers had said. “Demand surcharge in your area. A one-time charge applies to activate Starlink service in your area,” the message read, identifying the $1,000 one-time fee.

This newspaper was told the fee has been in place for several months, and that Starlink shows no sign of dropping it. One consumer, in a letter published on Page 2B in Tribune Business today, acknowledged that Starlink has been a major boost in providing connectivity and competition to remote Family Island communities that cable providers struggle to reach.

However, they argued that the satellite provider’s “demand surcharge” or congestion charge potentially opens the door for the likes of Cable Bahamas and the Bahamas Telecommunications Company (BTC) to follow suit if regulators fail to pay attention.

“Starlink says the surcharge is necessary because the network is congested. Fair enough. But that immediately raises another question. How do we know the network is congested?” they wrote.

“If Starlink decides when congestion exists, decides how much customers must pay because of it, and decides when the surcharge should end, there is very little independent oversight. That should concern consumers. More importantly, what precedent does this set?

“If one licensed telecommunications provider can impose a $1,000 congestion surcharge, what prevents other providers from introducing their own special fees? Could cable companies impose congestion charges in busy neighbourhoods? Could providers charge extra because a customer's home is more expensive to serve or because demand in a particular area is high? Once these types of charges become accepted, where does it end?”

Tribune Business reported last week how Starlink had led efforts that persuaded Bahamian regulators to slash the original 5 percent turnover-based fee they planned to levy on the satellite industry because it was too onerous.

URCA, unveiling the results of its public consultation on the proposed satellite communications regulatory regime it plans to implement for The Bahamas, revealed that it has cut this fee - to be applied to all turnover earned above $500,000 annually - to 3 percent following push back from Mr Musk’s Starlink and others.

URCA, which conceded that the consultation document included a drafting error creating confusion as to whether the planned turnover rate was 3 percent or 5 percent, nevertheless stuck to its goals and rejected the satellite industry’s arguments that the turnover-based fee be eliminated completely on the grounds that it would impose a “materially higher burden” than in other jurisdictions.

“Responses to the proposed hybrid fee structure, comprising a $40,000 flat base authorisation fee and a turnover-linked component of 5 percent of relevant turnover where annual revenues exceed $500,000 were mixed,” the Bahamian communications regulator conceded.

“The majority of satellite operators and industry associations opposed the inclusion of a turnover-linked component. These respondents argued that satellite spectrum is internationally co-ordinated, shared and non-exclusive in nature, and that revenue-based fees are structurally inappropriate for spectrum that carries low scarcity value and minimal opportunity cost.

“Concerns were raised that turnover-linked fees would create barriers to market entry, discourage investment, penalise subscriber growth and ultimately increase costs for end users, particularly in underserved areas. Several respondents also noted the practical challenge of attributing relevant turnover to a single jurisdiction in the context of multi- jurisdictional satellite operations.”

URCA added that the satellite industry’s “preferred alternative.. was a simplified flat fee calibrated to recover” the regulator’s “actual administrative and spectrum management costs”. Mr Musk’s Starlink was seemingly especially vocal about the cost burden this threatened to impose.

“A further concern raised within this group was that the proposed fee, when added to the existing annual URCA fee and the Communications Licence fee, would result in a cumulative revenue-linked regulatory burden materially higher than comparable international benchmarks for satellite markets of similar scale,” URCA said of the feedback it received.

“Starlink submitted a specific calculation indicating that the combined regulatory fee obligation, incorporating the existing URCA fee of 1.448 percent of relevant turnover, the Communications Licence fee of 3 percent, and the proposed turnover-linked spectrum component of 5 percent, would produce a total revenue-linked charge of approximately 9.448 percent where an operator’s relevant turnover equals or exceeds $500,000 in a given licence year.

“Starlink characterised this as unusually high by international standards, and as directly undermining affordability and service expansion objectives, particularly in respect of Family Island connectivity,” the regulator added.

“As an alternative, Starlink proposed that URCA not adopt any additional spectrum usage fee in shared frequency bands, submitting that such an approach would align spectrum charges with the non-scarcity and shared nature of satellite spectrum, avoid duplication of existing regulatory cost recovery mechanisms, support affordable access and service expansion across all islands, and encourage continued investment in satellite broadband infrastructure.

“Starlink acknowledged that the hybrid framework represents a significant structural improvement over the previous per-terminal fee approach, but maintained that a turnover-linked spectrum fee remains economically distortive and inconsistent with the stated policy goals of the electronic communications framework.”