Canton: P.U.C. will operate according to plan
A day after Opposition Leader Dean Barrow released what he claims is a copy of the agreement signed between Government and Innovative Communication Corporation for the sale of B.T.L., the reviews are still coming in. Most criticism of the deal involves what has been called a government guarantee of a fifteen percent return on I.C.C.’s investment, as well as a clause under which government indemnifies B.T.L. against all outstanding lawsuits. The text of the so-called guarantee is broken into two parts. The first, relating to interconnection, is contained in section 7.8.1: “The Government shall use its best endeavours to ensure interconnectivity between B.T.L. and the licensees in such a manner that charges for interconnection services and facilities shall reflect B.T.L.’s costs based upon a total system costs allocation and will include a return on capital investment after tax of fifteen percent per annum.”
The second section, 7.16.1, involves other regulated rates: “For those rates that must be regulated by the P.U.C., the Government and I.C.C. will submit the agreed return on capital investment of fifteen percent per annum after tax to the P.U.C. for their consideration in the determination of the regulated rates.”
Since both of these clauses represent an attempt by government to influence a nominally independent Public Utilities Commission, we today sought out P.U.C. chairman, Dr. Gilly Canton. According to Canton, who told News 5 he has not seen the document in question, whatever promises government may have made, they must be seen in the light of existing legislation.
Dr. Gilly Canton, Chairman, Public Utilities Commission
“The fifteen percent is again, the decision would have to be whether it is a reasonable rate of return and how it’s applied. Like I said earlier, if it is applied the way we apply it, it’s just a mark up on the cost of providing that service. So if the cost of, to provide the service, is four cents, for a domestic call or whatever, it might work out to be, then you add the fifteen percent onto the four cents, it doesn’t make that much of a difference. Now, if you go to another methodology, where you have a rate of return on an asset base, then you talk about, looking at the total investment that I.C.C. may have made, let’s say it’s a one hundred and five or one hundred million dollars or whatever it is that’s being proposed, then fifteen percent on that rate base would be a large amount of money.”
Janelle Chanona
“If this is a fifteen percent on capital investment, would that also equate to a large amount of money?”
Dr. Gilly Canton
“Yes, because if it is a capital investment, if it is the purchase of the shares then it’s what the shares were sold for, so as I said, we would have to get that clear from governing legislation on what exactly is the methodology of these proposed shares through these arguments or whatever.”
Janelle Chanona
“Dr. Canton, the Belizean people might be feeling that at the end of the day, the P.U.C. has no teeth in implementing its mandate because government promised this, it wants this, so they are going to get it. Is that true?”
Dr. Gilly Canton
“Well, as I said at the beginning of the interview, basically we have the laws that govern us. We are very comfortable that the laws that are being provided for now gives us the opportunity to go in there–which we have been trying to do, and that’s why we had the dispute with B.T.L. about, of doing a fair analysis and then coming up with a fair assessment of what retail prices should be, interconnection charges and stuff like that is. Now if that methodology is going to be changed, then it’s not on us, we can’t implement that unless it is changed in what provides us the tools to work with, which is the governing legislation. So if there is any, like what is being alleged, these things that need to be done, then the only way that we could act on those things is if something comes down from up above us and somebody says, “Okay P.U.C., the government has decided on different policy…it’s not competition environment anymore, it’s more of a managed situation in terms of allowing limited competition”, whatever it might be, that has to be a policy decision. Then if it cannot be implemented through the existing laws then the laws would have to be changed to allow for it to be implemented, then the P.U.C. as regulator could just regulate according to what is provided, the tools that are provided us to regulate.”
In related news, the new B.T.L. appears to have had its first technical glitch today as approximately two hundred Digicell customers were denied use of their phones after an internal error on B.T.L.’s system showed that they had exceeded their credit limit. According to a B.T.L. public relations representative, technicians were working to rectify the problem, but as of news time the glitch had not yet been unravelled.
