Looks
like I did not have to wait very long for this ball to drop, faithful followers
of my blog, who had read my prediction of the FTC (Fair Trading Commission)
case dogging Telecom Provider Digicel
all the way to the London 2012AD Olympics as per the ending of my
blog article entitled “Digicel
to shut down CLARO's Voice Network in HSDPA+ Push - The Louisiana Purchase of
Spectrum”.
This
as the Supreme Court Justice Ann Marie Hayneson Wednesday May 15th
2012AD has now given the FTC
(Fair Trading Commission) the
green light to challenge the legality of the Digicel/America Movil swap as
stated in the article “FTC
can now challenge Digicel/Claro merger”, published May 18,
2012 - 7:50 pm, The
RJR News Online and “Court
dismisses Digicel claims against FTC”, published Tuesday
May 15, 2012 12:59 pm, The
Jamaica Gleaner.
When
the FTC
had originally made its challenge last year as stated in the article “Digicel,
LIME stake out positions on FTC challenge”,
published Sunday January 8, 2012, The
Jamaica Gleaner, Telecom
Provider Digicel’s
CEO Mark Linehan’s response was atypical aggressive and pointedly making it
clear that the FTC
had no jurisdiction and thus no case, quote: “Firstly, Digicel has yet to be
served with this claim by the FTC.
Secondly, the FTC
is seriously misguided in its thinking that our acquisition will be detrimental
to consumer welfare, and we have no doubt that its claim does not stand a
chance given the fact that the deal has already been completed and took effect
from 30 November, 2011. The positives to come out of the deal are manyfold and
the FTC,
in any event, lacks jurisdiction to regulate mergers and acquisitions”.
Rather
long winded but Oh how the tables have turned against Telecom
Provider Digicel
in the space of four (4) months, gentle people reading my blog!!
The
FTC’s
Case was argued by Attorneys Wendy Duncan and Sashawah Newby with Dr Delroy
Beckford for the FTC
along for the ride with the defendants Telecom
Provider Digicel
being represented by Michael Hylton, QC, and Georgia Gibson Henlin.
Supreme
Court Justice Ann Marie Haynes’ ruling as reported in the article “Way
cleared for FTC to challenge Digicel/Claro merger”,
published Wednesday, May 16, 2012 by PAUL HENRY Crime/Court
desk co-ordinator, The Jamaica Observer effectively
states the following:
1.
Fair Competition Act 1993 does apply to
the agreement between Telecom Provider Digicel
and CLARO Jamaica as CLARO's assets are effectively property of Telecom Provider Digicel,
which means a monopoly is forming, an area of law that the FTC
is appointed guardian based on a DIRECT interpretation of the Fair Competition
Act 1993.
2.
The FTC
has jurisdiction in relation to the transactions based on her interpretation of
the Fair Competition Act 1993 and the Telecommunications Act of 2000 as albeit
a deal involving companies, customers are involved and as such FTC
can intervene
For
those keeping score, this is technically the first time that the FTC
has won a case based solely on merit as opposed to direct word of Law, as NEITHER
of these arguments are enshrined DIRECTLY in either law. In fact the words of
Beckford from the FTC
are historic and should be framed, quote: “This is the first time the FTC
has prevailed on a jurisdiction point whereby its jurisdiction is challenged
with respect to alleged anti-competitive conduct”.
Good
to note that back in January 2012AD as stated in the article “Digicel,
LIME stake out positions on FTC challenge”,
published Sunday January 8, 2012, The
Jamaica Gleaner, Dr. DelroyBeckford has argued on
behalf of the FTCthat,
quote: “We are seeking a declaration from the Supreme Court that the underlying
agreement between Telecom Provider Digicel
and CLARO Jamaica would have, or is likely to have, the effect of lessening
competition substantially in the telecommunications market, and that the
agreement is, therefore, unenforceable under Section 17 of the Fair Competition
Act, 1993”.
But
the FTC’s
anti-competitive arguments had support a long time ago from – surprise! – Telecom Provider LIMEas stated in the
article “Digicel,
LIME stake out positions on FTC challenge”,
published Sunday January 8, 2012, The
Jamaica Gleaner.Telecom
Provider LIME
Jamaica's Managing Director, Garry Sinclair spoke, saying thus: “We fully
support the FTC
as we have always believed that the merger is detrimental to competition in the
telecoms market and has the potential to reverse much of the gains of
liberalization”.
In
fact on January 30th 2012, Telecom Provider LIME had also filed
an application similar to that of the FTC,
claiming that the Telecom Provider Digicel/CLARO
merger was indeed anti-competitive. Again Dr. Delroy Beckford weighs in stating
that Telecom Provider LIME’s application
is “an appeal against a decision refusing leave to seek judicial review
regarding the decision of the PM exercising his discretion under Section 17 of
the Telecommunications Act on the question of the transfer of Claro's licence
and of the action of the FTC
in the conduct of its investigations regarding the underlying agreement”.
For
once I agree with Telecom Provider LIME, as this is a
fight by the FTC,
a Government body, against a FDI (Foreign Direct Investor) thinking to bully
its way in a Telecoms Market that is evolving away from Voice and towards Data
as stated in my
blog article entitled “OUR
Records Voice Decline for the Fourth Quarter of 2010 - Postpaid, Data Services
and Fixed Line Mobile and Landline Saturday Night Fever for Telecom Providers”.
One
could even argue that the FTC
is fighting on behalf of the displaced 517,000 CLARO refugees ….er…...I mean
customers left stranded by the shutdown of CLARO Jamaica by Telecom Provider Digicel
as stated in my Geezam article
entitled “CLARO’s
Freeness ends 5th January 2012 – Digicel’s Bigger, Better with Data and Cloud”.
These CLARO customers, albeit small in number, have become targets of both Telecom Provider Digicel
and Telecom Provider LIME
in a JA$1.5 billion promotional credit and SIM Card swap fight as stated in the
article “Fight
for Claro customers”, published Sunday, January 15, 2012, The Jamaica Observer
and “The
value of Claro talkers: J$1.5b” The Jamaica Gleaner
Something
for Students of FD13A at the University of the West Indies can argue ad nauseum!
1.
The Fair Competition Act 1993 does not
apply to the agreement between it and Claro or any results thereof (legal
language folks!!)
2.
Only the Telecommunications Act of 2000
governed the agreement and not the Fair Competition Act of 1993
For
those of us with short memories, my
blog article entitled “Digicel
buys CLARO Jamaica - Jumanji Exchange is no Robbery” indicates when this whole thing started back on Friday March 11th
2011AD and was finalized on December 2nd 2012AD, an event also
faithfully recorded in my
blog article entitled “Digicel
and America Movil complete Telecoms Swap - Telecom Regulators to get their
Pound of Flesh”.
Since then it has become crystal clear that Telecom Provider Digicel was only purchasing CLARO Jamaica in order to get it hands on CLARO
valuable 3G Licenses and 850MHz/1900MHz
Spectrum. This in order to build out their HSDPA+ (High Speeds Downlink
Packet Access) Release 7 Network!
A deal folks that resulted in Telecom Provider Digicel paying mere pennies for this acquired Spectrum and Licenses that
conveniently dropped in other laps without them having to continue building out
CLARO’s Network as per America Movil’s Bilateral Trade Agreement with the
Government of Jamaica with the as noted
in my
blog article entitled “Digicel
to shut down CLARO's Voice Network in HSDPA+ Push - The Louisiana Purchase of
Spectrum” .
So what to come folks? I clear my crystal ball for you yet again:
1. Years of back and forth tit-for-tat appeals to the Court of
Appeals and eventually the CCJ (Caribbean Court of Justice) by Telecom Provider
Digicel until about 2015AD (sigh!)
2. During that time it’s expected that the New Telecom Regulator and
the new Telecommunications Act will come on stream as stated in my
blog article entitled “Phillip
Paulwell broker's Telecom Deal - Telecom Regulator and Mobile Number
Portability Coming”.
3. By then Cross Network Flat Rate Calling and MNP (Mobile Number
Portability) and the resulting Flat Rate Calling Plans will be a part of the
Telecom Landscape as per the article “Call
rates to drop”, published Wednesday May
2, 2012, The Jamaica Gleaner
4. More Competition in Wireless Broadband Data, Specifically
Municipal Wi-Fi and WiMaX, aside from Telecom Provider Digicel, as WiMaX is Open Architecture.
5.
More advance smartphones
will be coming into the market as Jamaicans are increasingly leaning towards
having an Apple iPhone or Android phone as opposed to a Blackberry as stated in
the article “Jamaican
loyalty to BlackBerry wanes”, published Sunday May
20, 2012, The Jamaica
Gleaner.
Stay tuned folks as Telecom Provider Digicel now gets ready to play a Game of Thrones (TV Series 2011) against the FTC, with Telecom Provider LIME in their corner. As for customers, the coming liberalization of the Telecom Sector and the emphasis on Data, Postpaid and Fixed Line services means that we’ll be taken to 50 Cent and Olivia’s Candyshop after having been given a taste of what CLARO 3G’s got!
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