Letter of the day: Conditions should accompany LIME/Flow deal
Published:Sunday | August 23, 2015 | 12:00 AM
THE EDITOR, Sir:
Are we fools or what? On January 15, the Government of Jamaica approved the merger of telecommunications giants LIME and Flow. For many of us, this approval, without any conditions or imposition, was not in the interest of the Jamaican people.
Last month, the Federal Communications Commission (FCC) approved AT&T's $48.5-billion acquisition of DirecTV. However, this deal was not approved without due consideration given on the impact it would have on consumers and other market players, and as such, conditions were imposed on the company to ensure that it would not bring any harm to the market.
The AT&T/DirecTV deal is very similar to the LIME/Flow deal as AT&T is primarily a telephone and Internet company (just as LIME), while DirecTV is a satellite TV service provider, similar to Flow in that Flow provides cable TV and is a small player in the broadband market.
With that said, there were several impositions on AT&T, including, but not limited to:
1. Increasing the availability of high-speed fiber lines.
2. Providing faster Internet service to schools and lower-cost broadband service to poor customers.
These conditions, among many more, were imposed to ensure that consumers of the telecommunications services would not be affected in a harmful way. The conditions were also imposed to ensure that the market remains competitive and that there is not a significant disadvantage to other players.
EXPRESSLY AUTHORISE
One will notice that in his press release approving the deal, Minister Phillip Paulwell stated that the Telecommunications Act does not 'expressly authorise' him to impose conditions on the transactions.
We agree Minister. However, Minister, it does 'expressly authorise' you to look out for the consumers of telecommunications to ensure that their interests are best served.
It does 'expressly authorise' you to look out for the other players in the market to ensure that the playing field is level and competition is maintained. Minister, it 'expressly authorise' you to protect the Jamaican people.
This deal is bad. It posits lack of competition. The effects have been harmful thus far for the Jamaican people and we can only hope and pray that it doesn't bring our telecommunications industry back to where it was a few decades ago.
Dr James Nolan
Management Consultant
Kingston 6