The Office of Utilities Regulation (OUR), which regulates the island’s telecommunications sector, is being taken to court by a newly-formed lobby group, the Jamaica Competitive Telecommunications Association (JCTA), over allowing large carrier, Cable & Wireless (C&W) to “almost double” the rates it charges other telecoms providers to transfer calls to C&W’s land lines.

“The increase is not cost-based and by the OUR allowing this, it has almost had the effect of ruining the industry,” said Steve Twomey, president of Reliant Enterprise Ltd and member of the 10-member JCTA board.

“It is the view of the JCTA that the OUR’s lack of proper oversight of the telecoms sector is contrary to the interest of their members, the Jamaican consumer, and government policy. As a result, the JCTA has launched a joint legal action against the OUR,” said the JCTA in a written statement.

The matter will be addressed in an independent judicial tribunal.

JCTA said that the price increase was uncompetitive and was threatening the profitability of the industry.

The OUR announced that beginning January 24 this year, C&W was allowed to charge other Jamaican carriers no more than five US cents per minute, to transfer calls onto C&W’s land lines. Before, C&W charged on average 2.6 cents per minute.

At the same time, the OUR had established a flooring on the rates that local telephone firms could charge international carriers to deliver calls into Jamaica – 8.1 US cents per minute (approximately J$49.00).

It means that these firms would have been able to charge US carriers 8.1 cents to accept their calls into Jamaica, and then pay C&W no more than five US cents to deliver the calls to its land-based customers, allowing them to make a spread on the transaction. The move was meant to provide stability to the industry, which saw the US carrier reducing the amounts paid to Jamaican carriers due to competition.

But Twomey said that the OUR did not know the costs of the industry players.

“They did not know if we were making more than that before they put in the new prices,” he added “The spread is not big enough, they cannot tell the market to just change the rates. The market was doing fine without them interfering.”

The OUR said it was currently investigating whether C&W was charging above cost for the service, but also said that C&W was allowed to increase the rates in the interim.

“…We are investigating if the charge is cost-based,” said Courtney Jackson, deputy director-general at the OUR. “They are allowed to increase the prices before we complete our investigations.”

But while the investigation is ongoing, the JCTA said that it was being hurt in the process.

The JCTA also asserted that the OUR had failed in their mission and had not done enough to foster competition.

The 10 companies involved in the joint action against the OUR are: the Jamaica Network Access Point (JNAP); TPE Communications; Reliant Enterprise; Telecommunications Alliance; Caribtel; Knutsford Telecom; Callworks; People’s Telecom; Touchpoint; and NewGen Technologies.

“While the general public is enthralled with the competitive battle between Cable & Wireless and Digicel in the mobile sector, other sectors of the telecoms industry are not experiencing the same level of thriving competition,” the JCTA said.