CABLE & Wireless yesterday signaled its intention to hand over $164 million to its rival, Digicel, even though a Supreme Court ruling, which said the money was owed, may be challenged by the Office of Utilities Regulation (OUR).

C&W has been holding the money in escrow, pending the outcome of the court case in which the OUR had argued that Digicel, spurning its directive, was overcharging C&W for terminating calls into its network.

But C&W said yesterday that it had been holding the disputed funds "in an appropriate account and will pay over the amounts now due in accordance with the ruling by the court".

Essentially, the Supreme Court ruled that Digicel was not obligated to charge C&W the termination fee that had been set by the OUR, that it was a market economy and Digicel was free to charge any price it wanted.

Digicel said yesterday that it was always confident in its position.

"We have always included it in our revenues, because we were confident that the ruling would be in our favour," declared David Hall, the company's chief operations officer. "(C&W) said they would have it (the money) on Wednesday... it is only a matter of writing a cheque."

Digicel had been charging C&W an interconnectivity fee of $12 per minute each time C&W customers called into Digicel's network. The OUR had established a ceiling of $8 per minute for the industry, and instructed Digicel to price its service accordingly.

C&W, whose fee was within the ceiling set by the OUR, had, during the period of the court case, paid over $8 per minute to Digicel, and placed the difference in an escrow account.

Interestingly, the court case was actually argued between the OUR and the Ministry of Industry and Technology, after the minister, Phillip Paulwell, in response to a complaint from Digicel, instructed the OUR to refrain from interfering with the pricing policies of Digicel.

The OUR responded to this directive by filing a motion in the Supreme Court for a declaration that the ministerial directive was unlawful and should be voided because, among other factors, it exceeded the discretion conferred on the minister under Section Six of the Telecommunications Act of 2000.
Yesterday, Justice Dukharan ruled in Paulwell's and ultimately Digicel's favour.

But the director-general of the OUR, J Paul Morgan, said he would consider appealing the ruling because of the fundamental issues involving the role of the agency and that of the ministry under whose portfolio responsibility it fell.

"It sets the tone of how the OUR will operate in the future, so we have to make sure we get it right," Morgan told the Observer.

Importantly, a few months ago Digicel dropped its interconnectivity rate to $7 per minute, a move that at one stage threatened to make redundant the court case.

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