CLARO vs Digicel - Cross-Network Flat Rate Calling and MNP Cometh

The recent quiet in the Newspapers, Broadcasters and from the Telecoms Providers themselves with regards to any news related to their activities has been glaring. No new stories on TechJamaica, the widely accepted aggregator of all things related to computers, technology and Telecommunications and Broadcasting in Jamaica.

This unusual quiet, from my personal experience working first as a Network Maintenance Technician at C&W (2001 to 2004) and then later as a RF Technician (2008AD - 2009AD) at CLARO Jamaica Ltd.

This is a combined experience of approximately five (5) years, is that this level of quiet is usually before the launch of some major new service, as was the case back in 2002 when the then CWJ at which I was working at the time was relauching their Network as a GSM Network rebranded as bMobile.

The launch of Digicel’s WiMaX 4G Mobile (IEEE 802.16d) slated to launch at the end of the Second Quarter of 2010AD as stated in the article “Digicel to offer mini laptops with 4G service next year”, published Friday September 4^th 2009AD by Lavern Clarke, The Jamaica Gleaner.

ZTE Corp of China as their build out partner of their new WiMaX 4G Mobile (IEEE 802.16d) Network as stated in the article “Digicel signs ZTE as 4G MobileWiMax Internet Partner”, published Sunday, September 27, 2009AD, The Jamaica Observer is hovering in the air.

So too is the possibility of Telecom Provider Digicel launching its foray into Broadcasting in the form of DigiTV in Jamaica, already successfully launched in Vanatu, Tonga and other Polynesian islands also possibly to be launched a little before the launch of their WiMaX 4G Mobile (IEEE 802.16d) Network, possibly at the start of Rising Stars, as strongly hinted in the article “DigiTV launch for 2009AD - Mobile provider branches into TV”, published Friday November 14^th 2009AD by Ross Sheil, Online Co-ordinator, The Jamaica Observer.

If all these events are really going to happen in the latter part of the second quarter of 2010AD, which is effectively in the summer, then one can expect big things from Digicel. But, the learned and work-weary experienced John Public suspects something deeper is at work.

This as the level of unusual quiet without any pre-announcement of any sort surrounding these impending launches is a little more than usual. Can it be that there is something else on the horizon, some bona fide reason that explains this abnormal quiet?

It seems there is. In 2002AD the then Telecom Provider C&W filed a lawsuit against Telecom Provider Digicel alleging that Telecom Provider Digicel’s stance on setting cross Network Rates (off-Network Rates) Mobile was unlawful and was in breach of the Telecommunications Act of 2000.

Then Telecom Provider LIME contended that the high Cross Network Rates between Telecom Provider Digicel and itself, which is currently is about JA$17.70, as opposed to JA$12.00 for LIME as stated in the article “What’s behind the two-Phone syndrome?”, published March 7^th Sunday 2010AD by the Sunday Herald was unfair.

Obviously, the learned John Public can see that this would make it prohibitively difficult to make cross Network calls from Telecom Provider Digicel, thus resulting in charges of “ring-fencing” by Telecom Provider LIME. Since leaving Telecom Provider C&W in 2004AD I have been tracking this key test case which originated back in 2002 as it relates to the interpretation of the Telecommunications Act of 2000. Telecom Provider C&W eventually won the case in 2007AD.

Telecom Provider Digicel was then ordered to pay over the US$340 million it had owed C&W ushering what was then thought was the coming of flat rate calling regulated by the OUR (Office of Utilities Regulation) despite reservation about regulation by Government by then COO (Chief Operating Officer) Colin Webster as stated in the article “Local Phone Rates may be lowered”, published Thursday January 25, 2007AD by, Ross Sheil, Staff Reporter, The Daily Gleaner, The Jamaica Gleaner.

However, Telecom Provider Digicel, the sore loser, quickly appealed and the case dragged on until 2009AD when Telecom Provider LIME took the case all the way to the Privy Council in the United Kingdom.

Then came the good news. Telecom Provider Digicel not only lost the appeal, but also passed a ruling in effect upholding Telecom Provider LIME’s position on the case.

This is that the OUR has oversight over the regulation of Cross-Network Rates as the OUR regulates utilities and under the Utilities Act, Telecoms Providers, NWC, JPS Co. and Sewage despite the fact that the Telecommunications Act of 2000 does not explicitly state that the OUR is responsible for setting Rates.

In addition, historically it has been known that the Privy Council always rules in favour of Commonwealth Governments on issues relating to regulation of Utilities in all former British Colonies, thus the outcome was basically assured once Telecom Provider LIME brought the case to the Privy Council.

This loss by Telecom Provider Digicel to Telecom Provider LIME is one of a string of lawsuits that Telecom Provider Digicel has lost, inclusive of the case which was finally resolved in the Supreme Courts in which Telecom Provider Digicel blocked calls on Telecom Provider LIME’s international circuits in December 2008AD and January 2009AD.

There is also a case of contempt brought against Country Manager, Geoff Houston and Lawrence McNaughton as mentioned in the article “LIME wins another legal round against Digicel”, published Sunday February 14^th 2010AD by The Sunday Herald.

But the real battle royal is just about to begin.

Telecom Provider CLARO, apparently awakened from their docile slumber, without waiting for the ink to dry on the ruling from the Privy Council, the prima facie of their lawsuit against Telecom Provider Digicel in the Privy Councils equivalent of the legal gazette as it relates to the OUR and oversight with regard to Cross-Network calling, has already filed legal proceedings against Telecom Provider Digicel and a complaint with the FTC (Fair Trading Commission).

Telecom Provider CLARO is alleging that the Cross-Network calling rate contract into with Telecom Provider Digicel, albeit legally binding, in light of the Privy Council ruling is now null and void, and can be claimed also to be an example of anti-competitive action on the part of Telecom Provider Digicel, thus explaining the filing with the FTC as well as the lawsuit being brought against Telecom Provider Digicel.

If this were a chess game, this would be a very good move and a quite fortuitous pre-emptive strike against the “Old’Cel”, as to wait on the OUR to finally make a determination of the applicability of the Privy Council ruling and begin to set Cross-Network Rates would take at least another two (2) years at the least or up to eight (8) years at worst.

This as Telecom Provider Digicel may seek to refresh and have the case retried against Telecom Provider LIME, citing that it be interpreted in terms of a specific legal issue between themselves and Telecom Provider LIME.

Even better, the fact that Telecom Provider Digicel did not immediately seek to cancel all Cross-Network contracts (the habeus corpus for Telecom Provider CLARO case) with ALL other Telecoms Providers with which it had set Rates for Cross-Network Rates via contract would mean that ALL of these Telecom Providers can also join Telecom Provider CLARO.

This would be the biggest Class Action suit and Class Action complaint to the FTC involving Telecoms Providers and their complaints with regards to the anti-competitive behavior of Telecom Provider Digicel in setting Cross-Network Rates in a manner that is akin to “ring fencing” (to quote Telecom Provider LIME Executives) in a bid to hasten the OUR playing its hand.

Thus, as additional action, it is being recommended by the learned John Public that all Telecoms Provider who have Cross-Network rate contracts with Telecom Provider Digicel that they STILL have not annulled should join forces with Telecom Provider CLARO. Then not only could they bring the matter of the anti-competitive behavior to the attention of the FTC but also file a lawsuit against Telecom Provider Digicel in a bid to prevent them from appealing the specific application of the Privy Council’s ruling as it relates to the oversight of the OUR with regards to setting Cross-Network Rates.

This would force the OUR into action to make all contracts null and void and make setting Cross-Networks Rates priority and thus begin to actively regulate and set cross Network Rates between the various Telecoms Providers with Telecom Provider Digicel.

Once and for all there would be a level playing field, and as it is easier with the already beleaguered and overburdened OUR, usher in something that the OUR finds easier to regulate and maintain and something that John Public would appreciate: Cross-Network Flat Rate Calling between all Telecoms Providers.

Not only would Cross-Network Flat Rate Calling usher in a more competitive Telecoms Sector, as for the first time all Rates would be the same, it would result in most members of John Public being able to have only one (1) Mobile Phone based solely on offerings in terms of services and Rates on that particular Network

Thus making Telecom Provider Digicel’s advertising antics a waste of time, as in this new OUR regulated paradigm, the same common rate cross Network would mean you would have to hold on to Customer on the basis of good Customer service alone.

Even better, it would be the perfect setup for the introduction of MNP (Mobile Number Portability). While researching MNP (Mobile Number Portability) while writing my Proposal for the Telecoms Providers, the main focus for the Telecoms Providers next year, it became apparent that contrary to what was said in the article “Mobile Firms divided on Mobile number portability” published Friday, 15 May 2009AD, The Jamaica Gleaner.

MNP (Mobile Number Portability) and many of its ilk, once implemented in a coordinated structured manner, MNP (Mobile Number Portability) would not only benefit Customers, in terms of removing the need for discounts on handsets and result in real competition based solely on pricing, the introduction of Free Postpaid or Plans.

It would save Telecoms Providers millions of dollars each year on Phone Numbers, Phone Instruments (Mobile, fixed line Mobile, landline or wired /wireless modems) IMEI and SIM Cards (Mobile, fixed line Mobile, landline or wired /wireless modems) as well as overall Mobile cell site maintenance.

This once Telecoms Providers do something they have not since Senator Phillip Paulwell, the then Minister of Telecommunications, liberated the Telecoms Sector and enacted the Telecommunications Act of 2000, primal Legislation by which the Telecoms Providers are guided – share their Telecom Infrastructure Resources.

Thus I and many young people who have since left the Telecoms Sector are left to wonder if the reason for not introducing MNP (Mobile Number Portability) is politically motivated as MNP (Mobile Number Portability) would not only result in increased co-operation and cost savings, it would also result in a more unified control of the Mobile Industry by having third-party scrutiny i.e. Government of Jamaica as well as increased security protocols.

Employees, for example, would have to be implanted with RFID (Radio Frequency Identification) to identify persons entering and leaving cell sites which would be co-located, as all Telecoms Providers, under a properly set up (Mobile Number Portability) environment, would have unfettered access to all sites in order to do work seamlessly.

The increased level of security both from without and within, would make it difficult for Employees seeking to gain additional revenue from the unauthorized usage of the Telecoms Providers Network and hence may be the real source of opposition to  MNP (Mobile Number Portability)

In addition, the cost savings due to the streamlining of the Telecoms Providers as specified in my Proposal would also result in a general increase of salaries, as the Telecom Providers would have no excuse to not be able to pass on the cost-efficiency results of just simply sharing which would result under MNP (Mobile Number Portability).

To wit, Telecom Provider LIME Employees would clamor for equal pay with their Telecom Provider Digicel counterparts and Telecom Provider CLARO Employees would clamor for a pay increase and promotions that many feel are due since the changeover from MiPhone to Telecom Provider CLARO and Telecom Provider Digicel Employees would ask for a pay increase since redundancies were done, as stated in the article “Digicel ofers voluntary redundancies”, published Tuesday, January 13, 2009AD, The Jamaica Gleaner.

Salaries as high as JA$160,000.00 per month per employee, right cross the board could be possible if Telecoms Providers were to share their resources on every level, from Engineering, Finance, Human Resources, etc.

Thus it is in the best interest of not only the Telecoms Providers but the Telecoms Providers Employees to go MNP (Mobile Number Portability), for as it will result in increased scrutiny from the Government of Jamaica and possibly more Taxation, the unprecedented level of sharing that is required in my Proposal

If implemented, should leave a smile on the Telecom Provider’s Employees faces each month when they check their salaries, as the level of efficiency that would be achieved would be so great that the Telecoms Provider would have no choice but to pass on the surplus to its Employees.

This would be both in increased salaries as well as Telecoms Providers giving back more to society, both in the form of Direct Financial Support as well as via employment of suitable pre-trained and qualified personnel from our local universities who were given training under programs hosted at the Universities provided jointly by all the Telecoms Providers.

Therefore a more efficiently, streamlined Network would eventually result in increased Government of Jamaica scrutiny but also in increased revenues for Telecoms Providers and Telecoms Providers Employees, even in a Recession, and MNP (Mobile Number Portability) and the high level of sharing which would result from companies putting aside their differences.

If ignored, MNP’s non-implementation would be to the long term disadvantage of Telecoms Providers, especially as most Financial Analysts have forecast the after effects of the Recession in fragile Third World Economies to continue on for another seven (7) years, even if the Recession in the United States of America were to be over by the year 2010AD.  

As the high cost of Mobile Phone instruments and Cross-Network calling is now again in the spotlight, and may now finally start getting some media attention.

The Jamaica Herald is striking the first chime on the gong with the start of this article of what may possibly be some real coming competition by virtue of championing the above in the start of their series articles entitled “What’s behind the two-Phone syndrome?”, published March 7^th Sunday 2010AD by the Sunday Herald on the Telecommunications Sector and the reason why we as John Public are forced to have more than one Phone.

The issue of MNP will begin to resonate with more a more Jamaicans, especially as the just successfully concluded JDX (Jamaica Debt Exchange) thus far achieved as stated in the article “JDX ends at 99 per cent; Minister says thanks”, published Thursday, February 25, 2010AD, The Jamaica Observer.

The Government of Jamaica’s economic recovery plan is as laid out in the article “'No more skylarking' -  PM outlines economic programme and debt exchange”, published Thursday, January 14, 2010AD by Arthur Hall, Senior Staff Reporter, The Jamaica Gleaner.

As far as one can see, the Government of Jamaica aims to:

1.      Increase the Tax Net

2.      Reduce local debt

3.      Sell off non-performing Government of Jamaica infrastructure

4.      Cauterize the continuous slide of the Jamaican dollar via a US dollar denominated loan from the IMF

5.      Implementation of laws necessary to encourage growth such as the Credit Reporting Act and the CyberCrime Act as stated in the article “Move to Tackle CyberCrime - Hacker got Golding”, published Sunday February 14, 2010AD by Philip Hamilton, Gleaner Writer, The Jamaica Gleaner.

Eventually this should reduce inflation by the separation of our economy from the US dollar by liberalizing the Energy Sector. John Public is feeling pain and would like to see what the Telecoms Providers, who appear to be getting fatter and fatter while members of John Public grow thinner and thinner.

As the majority of Jamaicans are experiencing the increases in basic commodities due to the increases in electricity and motor vehicle fuel, John Public is quick to notice that albeit other industries are squealing, the Telecoms Providers seem to be quiet and are neither contributing anything, whether in support or in opposition to the increased level of Taxation being imposed by the Government of Jamaica.

This observation holds true not only for the Telecoms Providers, but also for the Power Utility Companies, Broadcasters and the Newspapers, all in capitals to indicate their prime importance to Jamaica, as they make life on this little island bearable and possible.

As the price of commodities on the World Market increase and the Government of Jamaica increases and introduces new Taxes, one is left to wonder if these increases are in some way benefiting the Telecoms Providers. Telecoms Providers, Power Utility Companies, Broadcasters and the Newspapers may in fact, be dodging Taxes.

This as many of the Telecoms Providers et al may not submitting themselves to thorough audits in every department of their companies and may be in fact not only dodging Taxes payable on PAYE salaries, but also on financial transactions, evidence of which I witnessed when I used to work at Telecoms Providers C&W (now Telecom Provider LIME) and Telecoms Providers CLARO.

In both instances, I had pointed it out to Senior Management at CLARO and to date no attempt by the respective Telecoms Providers have been made to make their companies more transparent to the Government of Jamaica and be more Tax compliant. In one instance, one Telecom Provider has repeatedly refused to make their profit and loss statements public.

After eight (8) years of operation in Jamaica, albeit this Telecoms Provider has begun to make profit, is yet to give any indication to John Public that it intends or has the intention to make an IPO (Initial Public Offering) to allow the local investors to invest in the company. Thus making the company truly Jamaica by allowing all Jamaicans a chance to be shareholders in their company and “revel in their success”

I am thus left to wonder, also, why official inter-map sharing had not already been initiated at the Telecoms Providers, inclusive of the Big Three (3) Telecom Providers and Big Three (3) Broadcasters as going MNP (Mobile Number Portability) and going DSO (Digital Switch Over) respectively would require that this information not only be made widely available to the Government of Jamaica but also John Public.

John Public, the Jamaican people, are most interested in knowing what the Telecoms Providers, Broadcasters and Newspapers, who are all part of Telecommunications are doing in compliance with the Government of Jamaica in order to increase the Taxable Revenues collected from the Industry.

In addition, the streamlining of Telecommunications and Broadcasting would allow for the entry of more Local Investors with the freeing up of spectrum in the Television and Radio Frequency Spectrum, specifically the “White” Spaces Frequencies that exist between the frequency bands in Television Broadcast as described in my blog article entitled “Telecoms and White Spaces - A Man for All Seasons and the Big Bang Theory”.

It is hoped the Spectrum Management Authority will eventually auction off these “White” Spaces Frequencies as Spectrum License free for High Speed Data usage reserved for Small Telecoms Service Providers. Benefits abound for both John Public and the Telecom Providers when Cross-Network Flat Rate Calling and MNP Cometh.