ICTA decides against Local Loop Unbundling

| 04/08/2015 | 6 Comments

CNS Business(CNS Business): Cayman’s telecoms regulator, the Information and Communications Technology Authority (ICTA), has denied Digicel’s request for access to LIME’s fibre and copper network. Following a three-year debate, the ICTA has determined that the telecoms group does not have to allow access for infrastructure sharing services that Digicel had requested in 2012.

The ICTA stated in a recent report, “The Authority considers that requiring any Cayman Islands Licensee to provide access to its unbundled fibre local loop is contrary to the public interest at this time.”

The local loop referred to in local loop unbundling (LLU) is the existing copper wire infrastructure that connects homes to landline phones and ADSL Internet services provided by LIME. The company has made the investment in creating the copper wire infrastructure that serves homes and businesses in Cayman. Local loop unbundling would require LIME to open up their infrastructure to competitors so that other providers would be able to offer internet and landline services using the existing infrastructure.

The dispute started in 2011 when Digital requested access to LIME’s fixed wire local loop, where Digital could co-locate its equipment within LIME’s local exchange building at One Technology Square. LIME officials denied such access, stating, “Given the current competitive environment in the Cayman Islands, there is no public policy basis for LIME to be required to expend the time and resources needed to develop this service and the related facilities.”

Digital then filed a complaint through ICTA in February 2012 for determination. After receiving mixed responses from LIME and Digital, ICTA launched a consultation on the local loop unbundling (LLU) in July of 2013 to give interested parties the opportunity submit their comments on the topic.

According to Digicel, “The introduction of local loop unbundling (LLU) is a way of significantly accelerating broadband rollout in the Cayman Islands and enabling far more vigorous broadband competition.” Digicel submitted that the rolling out of island-wide fibre networks would take several years to complete and, in effect, require LIME to provide fixed wire LLU to Digicel and other licensees and would accelerate service competition across all three of the islands.

After a lengthy analysis between both party requests, the reports stated, “The Authority does not consider that mandating access to LIME’s fixed wire at this time would contribute to the long-term benefits of the economy of the Cayman Islands, especially in the current circumstances where there have been significant investments in the deployment of fibre networks by various Licensees.”

The ICTA believes that requiring LIME to provide fixed wire LLU to Digicel at this time is likely to cause greater costs to competition and consumer benefits in the long-term than not doing so. In particular, the authority pointed to the substantial investment in fibre rollout shown by licensees and said that to require fibre LLU would likely “disincentivise” those licensees from further investment in their fibre networks and rollout. This, in turn, is likely to impact adversely their rollout commitments, especially to the less-populated areas of the Cayman Islands.

LIME has welcomed the authority’s much anticipated ruling. Acknowledging that the economic benefits of broadband are considerable, the firm pointed to the commitment and effort required by operators to deliver it. LIME officials stated that in the last two years the firm invested $30 million in its Superfast Broadband rollout.

LIME Cayman CEO Bill McCabe said that if the company had been forced to provide its competitors with access to the networks, it would have stifled future incentives for both infrastructure-based competition and technical innovation.

“We are very pleased with the outcome. It is both pro-consumer and pro-investment, essential ingredients for good regulatory decisions. This ruling sends a strong message to any business thinking about investing in the Cayman Islands that those investments will not be subject to inappropriate regulatory intervention whilst ensuring that consumers will benefit from an attractive environment for solid infrastructure investment,” McCabe stated.

One of the dangers of forcing access to established infrastructure, the CEO explained, is that of “cherry picking”, where new service providers focus only on profitable exchanges, which means highly populated areas with affluent customers would benefit and the less populated outer districts or the Sister Islands would have been left behind or ignored.

“Serious investment in superfast broadband is clearly understood to deliver significant long-term social and economic benefits for the Cayman Islands. This has been wisely recognized by the Authority in its decision. All businesses, services and residents must be able to benefit from high-speed, next generation broadband to ensure the Cayman Islands competitiveness in the global economy, which is why LIME has delivered Superfast Broadband to the entire country,” McCabe concluded.

See ICTA decision document on Local Loop Unbundling

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Category: ICT, Technology

Comments (6)

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  1. Anonymous says:

    Digicel has better customer service than Lime. Mess!

  2. Anonymous says:

    It would be interesting to see a copy of this ICTA report.

    CNS: I’ve now added a link to the ICTA decisions at the bottom of the article.

  3. NoWiFi says:

    With LIME’s rights to monopolise its lines, one would think there should be corresponding obligations. For example, there is a two mile long stretch along the south east coast of Little Cayman that LIME had positively refused to extend its existing line along. People have built homes in this area (including the most expensive estate on the island) and yet cannot get access to the land line that should, but does not, completely encircle this tiny island.

    • Anonymous says:

      They don’t have “rights to monopolize” anything. It is their infrastructure that they invested in, and it doesn’t prevent anyone else from making a similar investment.

      What the Authority has basically concluded is that providers would be less likely to invest (and take the investment risk) in infrastructure in the future if a competitor can simply bolt on to a provider’s infrastructure (once everything has been derisked).

      But its not a monopoly.

  4. Anonymous says:

    Digicel sucks, bottom line.

  5. Anonymous says:

    Just what we need more roads dug up, inevitably higher costs and lower quality services.

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