BRIDGETOWN, Barbados-Caribbean governments appear more serious recently about breaking the monopoly stranglehold Cable & Wireless plc has on more than a dozen countries in the region.
Ministers responsible for tele-communications recently agreed in Jamaica to adopt a regional approach to negotiating with the British telecom giant, whose monopoly has been a deterrent to foreign investment.
Their communique, issued 7 October, said a working group will be established under the direction of the Caribbean Telecommunications Union (CTU), a regional government agency headquartered in Trinidad and Tobago, “charged with responsibility for elaborating a coordinated approach to the interaction with Cable & Wireless.”
The ministers said that in an increasingly liberal and global environment, it is essential telecommunications be available on the basis of competition.
They unanimously agreed that “there shall be coordinated action among CARICOM States and other associated states in the approach to the implementation of their telecommunications policies within a structured framework and on the basis of competition, as well as attendant policies that would result in affordable prices for a broader base of populations in the region.” CARICOM is a 15-member trade and economic group in the region.
Not surprisingly, the decision has not been greeted with unbridled excitement.
“With a yawn, a stretch and maybe a mumbled `better late than never’, many observers in the region noted the main decision out of the recent meeting of CARICOM ministers responsible for telecommunications,” wrote Dr. Hopeton Dunn, senior university lecturer at the University of the West Indies in Jamaica.
Noting that a similar stance taken almost 10 years ago came to nought, Dunn argued in an article in the Observer newspaper in Jamaica that the commendable but belated new drive by the ministers is at least in part the result of overwhelming international pressure for an end to monopolies and for competition in the local and global markets.
“These demands for liberalization also include pressures for new regulatory and pricing reform,” he remarked.
Unlike in U.S. unincorporated territory U.S. Virgin Islands and the U.S. commonwealth Puerto Rico, where Washington has a policy of competition in domestic telephone service and long distance, the former British colonies of the Caribbean have been tied firmly to the former colonial power, Great Britain.
But the need to diversify their economies and capture foreign investment in information services, thereby easing unemployment rates as high as 20 percent, contribute to the urgency for a change in policy.
The new enthusiasm was fueled during last year’s summit in Barbados involving President Clinton and CARICOM leaders, who agreed to push for more open markets. Washington promised assistance, which was not defined at the time.
Since then, high-level sources in Port of Spain, Trinidad and Tobago, have told Global Wireless that competition in telecommunications has been a prominent agenda item for U.S. Secretary of State Madeleine Albright, who has met with regional leaders in Washington and the Caribbean.
The market for basic telephone service and much of the long-distance business remains bound to license agreements that extend well into the next millennium, despite agreement by many countries to open their markets in keeping with the World Trade Organization (WTO) accord. Industry watchers say full liberalization will occur only when these licenses run their course or are re-negotiated.
Specifically, Washington wants to see the region strengthen its regulatory capacity in areas such as interconnection policy, and set up mechanisms to guarantee more competition, particularly in the lucrative long-distance market.
Wireless communications and the Internet, which governments contend are not covered by the monopoly licenses, offer bright opportunities to pry open the industry.
Barbados’ Minister responsible for telecommunications, Phillip Goddard, has reaffirmed a commitment given in May that the cellular market will be opened for competition in the country early in 1999.
Trinidad and Tobago has adopted a policy of liberalizing the industry, and government minister Rupert Griffith told a regional edition of WORLDNET’s video conference program Dialogue that the establishment of a telecom authority to regulate the industry was being pursued “expeditiously.”
The political will to bring competition to bear is no less evident than in Jamaica, where the minister responsible for trade and technology, Phillip Paulwell, is leading the charge to open his country’s market.
Jamaican Prime Minister Percival Patterson told reporters in early August that a new policy recently announced by the government would allow for greater competition in wireless and value-added services. It would ensure “fair and non-discriminatory interconnection with Cable & Wireless,” he remarked.
Speaking on the same WORLDNET program, Diane Cornell, chief of the Telecommunications Division at the United States Federal Communications Commission, urged speedy work to set up independent regulators.
She added: “I think starting with the approach of introducing wireless competition or satellite-based competition, or Internet-enhanced service competition-areas where the Cable and Wireless monopoly does not necessarily cover those services-is a very useful way to proceed, and has been done in many other countries. And I think that’s a very useful way to start off the process.”
But Cable & Wireless, through its reaction to initiatives in Bermuda, Dominica, Barbados and Jamaica, has demonstrated it will defend every inch of its turf.
The company took the Bermuda government to court after it allowed a second company to offer long-distance service, and it pulled the plug on a company in Barbados, Ideal Agencies, which indicated it would return leased central office equipment and replace it with equipment from an American-run local company.
In Dominica, the 300 Internet customers of Marpin Telecom and Broadcasting Co. were pulled off the Internet after Cable and Wireless (Dominica) Ltd. insisted the company’s use of satellite communications to deliver Internet service contravened the Cable & Wireless monopoly license on telecommunications services. The government’s response was non-intervention-let the two work things out.
The new agreement by regional ministers is an attempt to fight the Cable & Wireless monopoly from a regional position of strength. Even seemingly domestic issues such as rate rebalancing could be negotiated at a regional level.
Most governments acknowledge the British multi-national has played a considerable role in developing the regional telecom infrastructure, in some cases way beyond that of even some developed countries.
But they recognize, too, that in a highly-competitive global marketplace urgent changes are required.
