GT&T mulls legal action against ‘biased’ regulatory body

Nov 30, 2008 News

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By Gary Eleazar
Director of Rate Making at the Guyana Telephone and Telegraph Company (GT&T) Gene Evelyn yesterday confirmed that the company is gearing toward taking legal action against what it call a biased regulatory body, namely the Public Utilities Commission (PUC).

The PUC recently forced the telecommunication company to suspend its most recent promotional offer of cheap off-peak international calls from wire line phones.

According to Evelyn the company had approached the PUC with the planned promo and explained that the wire line service was currently under pressure in that consumers were opting to use alternative methods of making international calls.

He explained that the proposal to the PUC was to have the promo run for period of three months, after which the data would be analyzed to ascertain its feasibility.

Evelyn noted that the promo was approved and commenced in October and was scheduled to end on December 31.

According to the GT&T Director, some 10 days ago the company received instructions from the PUC to immediately suspend the promo given that Digicel had complained that it was unfair to competitors.

Evelyn opined that this position by the PUC is being viewed as unfair from his company’s standpoint hence the legal action, because this is the second instance where Digicel has complained and GT&T was forced to pull its promotion.

He illustrated his point by stating that on numerous occasions GT&T has lodged formal complaints against promo’s run by Digicel such as the “free after three” which has been running for more than 12 months now, to no avail.

“It is unheard of for a promotion to last for 12 months.” In December last, Evelyn had told this newspaper that the local regulatory bodies were operating as if they wanted to see the death of GT&T with what the company had called unfair treatment.

During an interview with this newspaper last year Evelyn was speaking to the same issue of unfair treatment where he said that that the regulatory role was to referee and not pick the winner in any competition.

“Ever so often it appears to us that one regulatory body or another makes decisions which suggest that they want to decide who wants to win in the market,” said Evelyn.

The local regulatory bodies responsible for the telecommunications in Guyana are the Public Utilities Commission, National Frequency Management Unit (NFMU), the Office of the President (OP) as well as the director of telecommunications.

The instruments used by the regulatory bodies are include the Telecommunications Act, GT&T’s licence, the PUC Act along with the business Agreement with Atlantic Tele Network and the Government.

He added that the company was in support of a competitive environment but was apprehensive when faced with decisions that seem unfair.

According to Evelyn, a perfect example of what the company deemed unfair was the continuous allowance of its competitor Digicel to continue to run its promotion wherein its customers were able to talk for five minutes and after that it was free.

Evelyn said that according to the floor and ceiling rates set out by the PUC for mobile services, Digicel was in violation of the order.

He emphasised that the PUC was notified by the company a long time ago, “Asking for a considered opinion…They wrote us back and said that we (PUC) have passed the complaint on to Digicel and we (PUC) will feed you back when they would have responded.”

According to Evelyn, GT&T then came up with a promotion of its own whereas one of its customers could choose a telephone number and pay a 50 per cent reduction each time they called that number in December.
He continued to say that the promotion was met with opposition in that Digicel complained, calling it unfair.

Evelyn noted that in the beginning PUC complied with the law notifying them of their competitors’ complaint saying that they had a period of ten days to respond, “One day after they wrote again and said to ignore the first letter and withdraw the promotion.”

According to Evelyn, the law prescribes how complaints must be dealt with and this was done in this case, “And we intend to pursue this further.” “We want the regulator to use an even hand.”

He posited also that another example of a situation where the regulators should be monitoring was the phenomenon of Internet Cafés.

Evelyn emphasised that if one were to facilitate international calls then you must be licenced to do so and with respect to the net cafés, licence revenues were not being paid “Apart from breaking the law they are circumventing the revenue and robbing the government…everybody sees and nobody says anything…even the NFMU is being robbed in that most of them use some aspect of their spectrum and they are not being paid.”

He noted that an argument could be made that when GT&T acquired its licence the internet was not in use, hence calls made on the internet did not apply to GT&T.

According to Evelyn that was a spurious argument, in that no licence is technology-specific, technology evolves, further the licence for the service.

He noted that as GT&T expands its services its international calls are depleting and the company is losing, given that international calls subsidise local calls that are priced lower than it costs to supply.

It has since been announced that plans are afoot to close hundreds of Internet cafes that it accuses of bypassing the telephone company system to offer cheap international calls.

The Guyana Revenue Authority has accused the cafes of tax evasion because they do not charge sales tax or other fees for calls made through Internet-based phone services like Skype, Vonage and Packet8.

The tax agency says cafes are multiplying so fast that “their collective impact on the national revenue is too significant to ignore.”

It says callers who use phone companies Digicel and the Guyana Telephone & Telegraph Co. account for 16 percent of the country’s sales tax revenues.

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