Killing the Free Market

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Monday, 23 July 2012 02:30

By caribarena news

Antigua St. John's - New information reaching Caribarena indicates that the Cabinet of Antigua and Barbuda forced APUA into the newly established telecommunications Memorandum of Understanding (MOU) prior to the document being vetted by the Attorney General's office.

The purpose of the MOU is to govern on a contractual and mandatory basis the relationships between the international telecommunications operators in the Telecommunications sector after the end of the Cable and Wireless exclusive monopoly.

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According to our information, the Board of Commissioners of APUA, during its meeting on the 14th of June, outlined the achieved objectives and outstanding issues within the MOU. The Board resolved to hold off the signing of the MOU, pending the approval of the Attorney General.

However, on the 18th of June 2012, the Secretary to the Cabinet sent a letter to the Office of the Prime Minister, to the Prime Minister himself, to Chairman of the Board of APUA Clarvis Joseph, and to the Minister of Telecommunications Dr. Edmond Mansoor, stating that, "Cabinet at its meeting held on 18 June 2012 agreed to issue a policy directive to the Antigua Public Utilities Authority (APUA) Board of Commissioners to sign the Memorandum of Understanding…"

It was only two days later, on the 20th of June, that the Attorney General's office replied, noting that it took issue with several aspects of the MOU.

The response said, "You will note that the Attorney General's Office was not part of the negotiation team as stated in paragraph 56 of the MOU. We have looked at the MOU for the first time and are not comfortable with some of the language used. We also have reservations to certain statements which are considered to be inconsistent with the Telecommunications Act, Cap. 423."

Why did the Cabinet issue this policy directive before the Attorney General's Office vetted and approved the MOU? What interest was being served by signing the document without the Attorney General's approval? And why has the Attorney General remained silent on this matter?

Furthermore, why is the Government establishing a Memorandum of Understanding, or an agreement of any sort, between the telecommunications companies on the Island?

This Memorandum of Understanding is establishing a Cartel, or a formal agreement between what would otherwise be competing firms. With the end of the C&W Exclusive monopoly, Antigua and Barbuda could look forward to a liberalized telecommunications sector.

However, the efforts of the Ministry of Telecommunications to establish this MOU, and to create an agreement between all the Telecommunications companies on the Island, is leveraging the existing oligopoly to create a Cartel, which will ultimately reduce the levels of competition as all members would be locked in an agreement by which they would have to abide.

This is further compounded by the establishment of fixed network transit rates between the companies and fixed international incoming rates for domestic termination.

The Government should be looking to establish what every other free country in the world has done, and that is to establish a level playing field, with the Government acting as regulator, and setting the boundaries for what the companies can and cannot do.



This would allow competition to dictate the direction of the Telecommunications market, and allow the various companies to take initiative, drop prices, and establish their own agreements if need be, instead of a Government arranged Cartel.

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