Regulator seeks input on handling powerful utilities

(CNS Business): The newly formed Utility Regulation and Competition Office (OfReg) has launched a public consultation to seek input on how it will manage and deal with monopolies in the utility sector. Officials said they want people to comment on what criteria and items of evidence should be used in defining relevant markets and assessing significant market power or dominance of the sector it regulates. During the last two meetings of the Legislative Assembly, the government passed a catalogue of laws paving the way for the new regulator to keep an eye on the critical utilities and ensure fair play.

The most specific piece of legislation was the Utility Regulation and Competition Law, which says OfReg can, at any time, determine that a provider in the fuels, electricity, telecommunications, water or wastewater sector is too dominant and then take action to level the playing field. The legislation was primarily designed to address widespread public concerns over the fuel sector and how prices are set, with allegations that the bulk providers may be colluding or manipulating prices.

But the telecommunications sector has also faced public criticism for not providing all customers with the level of service that they have been promised when they take up phone and internet contracts. Complaints have been made that internet service is rarely provided at the speed people pay for and that mobile service can be patchy and unreliable in certain areas. But the consumer has few options open to them, despite the liberalisation of the sector.

As the new authority begins to take shape, it is looking for public comment on how best to deal with potential monopolies and ensure fair competition in all of the utility sectors under its remit. The law requires the office to establish and publish criteria relating to the definition of relevant markets in the respective sectors, and against which market power may be assessed, for the purposes of making a determination that one or more entities has too much power which is undermining competition and consumer confidence.

“This consultation is very important and relevant for all sectoral providers operating within the fuels, telecommunications, electricity, water and wastewater sectors for which OfReg has responsibility,” officials from the regulator said in a release inviting public input.

The proposed Guidelines on the Criteria for the Definition of Relevant Markets and the Assessment of Significant Market Power is meant to assist sectoral providers and other interested parties in understanding how OfReg will apply certain provisions of the URC Law.  The guidelines set out the approach OfReg expects to take in defining relevant markets, and the criteria used in assessing significant market power.  

Following this analysis, OfReg must determine the action it should take to create a fairer market. This could include the imposition, maintenance, amendment or withdrawal, as appropriate, of specific regulatory obligations on the players in the sector that have been defined as too dominant.

The consultation on the proposed Guidelines on the Criteria for the Definition of Relevant Markets and the Assessment of Significant Market Power’ document is now on the OfReg website and responses must be made in writing to OfReg via email on consultations@ofreg.ky or by mail at P.O. Box 2502, Grand Cayman KY1- 1104.  The office will post any comments received on its website on 1 June 2017. 

For more information visit the site www.ofreg.ky or call 946-4282.

Tags: Featured, OfReg, Utility Regulation and Competition Office

Category: Local Business, Utilities