The Fair Trading Commission (FTC) is warning that Jamaica’s mobile telecommunications market is susceptible to coordinated conduct by the dominant mobile players.
The FTC made this revelation following its assessment of the country’s mobile telecommunications market, which it deemed to be competitive. Jamaica’s competition regulator undertook a study on the local mobile telecoms market, which was completed in September 2020.
The study was initiated pursuant to a request made by the Spectrum Management Authority (SMA), which is the national regulator for the radio frequency under Jamaica’s Telecommunications Act of 2000. The SMA is also charged with the responsibility of issuing licences for radio frequencies used for mobile telecoms operations.
The request was made by the SMA, which was in the process of reviewing its Spectrum Cap Policy, a tool it uses to drive and safeguard competition in the telecommunications industry. The review by the FTC was to assist the SMA to determine whether the cap was still needed to safeguard competition.
The FTC contributed to the review by assessing the level of competition within the sector and by making recommendations on the Spectrum Cap Policy. The main finding of the study is that “the market is competitive”.
CONCERNS ABOUT POSSIBILITY OF COORDINATED CONDUCT
However, in the absence of easy conditions of entry, competition in the market is susceptible to coordinated conduct. The study found that “the anticipated increased demand for mobile telecommunication services stemming from the novel coronavirus pandemic could make it increasingly difficult for future entry to occur, if the mobile spectrum is not properly managed”.
Accordingly, the SMA is tasked with striking the appropriate balance between preserving future entry, and allowing incumbents to meet the increased demand for mobile telecommunication services. To strike this balance, the FTC is of the view that the spectrum cap should be replaced with a spectrum screen.
“Specifically, spectrum should be assigned to each operator in the customary manner up to the assignment of 33 per cent of the assignable spectrum,” the FTC recommended. The regulatory body has further recommended that, “requests for assignment between 33 per cent and 37 per cent should be approved by the SMA on a case-by-case basis”.
The current cap is 30 per cent. The FTC is recommending that minister with responsibility for telecommunications, Daryl Vaz, considers implementing the recommended revisions to the pricing of spectrum in Jamaica. On November 6, 2020 the SMA issued a Proposed Spectrum Holding Policy document, which incorporated the findings and recommendations of the FTC.
Stakeholders have since provided feedback which has been addressed by the SMA and the FTC. According to the FTC, the consultation is ongoing.
ANOTHER TELECOMS MARKET
The FTC is currently carrying out a study, initiated in November 2020, into the Internet service providers (ISP) and subscriber television (cable TV) operators. The open market study sought to determine the competitive effects of wholesale agreements between ISP and cable TV operators, who provide Internet services to final consumers.
The FTC says it is reviewing, among other things, the terms and conditions under which enterprise broadband ISPs offer services to cable TV operators, and assessing the extent to which these agreements adversely affect cable TV operators’ service to consumers. The study is slated to conclude in March 2021.