Preliminary Comments
Digicel notes that Flow’s response deals with matters which were not the subject of the Consultation Document. Specifically, Flow raises a number of concerns including assertions that the draft Infrastructure Sharing Rules anticipate an ex-post approach to costing and characterising the OUR’s activity in developing a cost model as an ex-ante intervention.
Digicel believes that this fundamentally mis-states the situation. While the draft Infrastructure Sharing Rules may provide that the OUR would only intervene to set a price after a dispute has arisen, this does not preclude the OUR having developed a methodology for setting a price in advance of such a dispute arising.
Given the time required to develop cost models it is prudent that the OUR develops such models in advance of the actual need as they are remedies for a market failure and delays in deploying them once the need arises ultimately results in consumer welfare deficits.
This approach reduces the scope for disputes arising as market players have certainty and clarity as to the approach that will be adopted by the OUR in determining price and provides incentives to Licensees to arrive at commercially agreed terms within the likely range that the OUR would determine. If no disputes arise after the development of a model, this is likely to be a direct consequence of the existence of the model.
Flow queries why a mobile model should not also be developed. Digicel notes that the market for mobile infrastructure sharing is fundamentally different to that for fixed. There is a wholesale only provider of mobile infrastructure active in the market in Jamaica. Further there is a history of mutual sharing between mobile operators on commercially agreed terms. Digicel believes that it is within the margin of discretion of the OUR as an expert regulator to identify that there is a greater need for the development of a model for the sharing of fixed infrastructure and to proceed on that basis.
