The Editor, Sir:
The Broadcasting Com-mission has noted the comments made in your editorial of Friday, February 22, regarding our response to changes in the subscriber television (STV) sector. In particular, we note your comments on our action in obtaining an interim court order restraining Columbus Communications Limited (Flow) and Entertainment Systems Limited (ESL) in their recent transaction. Without prejudice to the matters before the court, we wish to respond to your comments.
With respect to the intent of the commission in taking this action, we reaffirm that as a regulatory body governed by a specific law, the commission is duty-bound to ensure that all licensees, regardless of size or geographical location, operate with due regard to the law and the regulations. Approval for any transfer in ownership or change of person in control of any licensed broadcasting or subscriber television business is required within this framework. One purpose of this provision is to enable an evaluation of the merits of the transaction in terms of its potential impact on subscribers and on the wider public interest.
The necessary action by the Broadcasting Commission should not be construed as any attempt to restrict the operation of business or investment, which we have explicitly encouraged and facilitated at all levels.
Competitive environment
The recent legal action must also not be mistaken to be the totality of the Broadcasting Commission's response to the situation. It is a matter of public record that over a sustained period, the commission has been taking action to preserve a competitive environment. It was the commission's recommendations that created the opportunity in the first place for over 50 local competing STV businesses to rise from a chaotic landscape that existed before. The grant of the first islandwide STV licence recommended by the commission in 2002 was to a home-grown company, N5 Systems Limited. This company was intended to operate a wireless service competitively with the network of zoned providers throughout the country. The non-performance of N5 Systems Limited resulted in the then portfolio minister revoking its licence on the recommendation of the commission. It is this framework of competing islandwide and local STV operators that we are seeking to uphold and expand, while recognising that change is inevitable.
Within this context, the com-mission has recommended for some time now that at least two islandwide competing STV providers should be in place, alongside the long-established zoned providers, as the competitive framework for the sector. This proposal, which seems to have escaped the attention of the editorial writer, forms an integral part of our planning for the sector.
Mergers and acquisitions
The competitive environment envisaged includes early introduction of a new islandwide wireless provider, competing with Flow, as well as with the existing zoned cable operators. While the commission does not seek to dictate the terms of corporate transactions, it must proactively regulate the entire landscape, taking account of the changes in the competitive environment including the overall public impact of these transactions and the performance and service quality of all its licensees.
Against this background, we have taken, and will continue to take, deliberate measures designed to encourage a competitive, accountable and responsive STV and broad-casting environment.
In making recommendations to the minister on the terms and conditions of Flow's licence, the commission took special care to ensure the inclusion of provisions related to the Fair Competition Act, 1993. In the process, it also became clear that the absence in Jamaica's legal framework of adequate legislation relating to mergers and acquisitions is an important matter for review. The Broadcasting Commission encourages public discussion of this issue. In the meantime, however, and unless the competition law is amended, the existing provisions must be upheld.
I am, etc.,
HOPETON S. DUNN, Ph.D.
Chairman
Broadcasting Commission
