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Second Barbadian ISP Accuses Cable & Wireless Of Unfair Trading

by Amanda Banks, Tax-News.com, London

15 October 2002


Telecommunications provider, Cable & Wireless (Barbados) has been accused of employing unfair business practices in order to drive its competitors out of the running for the second time in a month.

Speaking to the Barbados Daily Nation on September 30, Sunbeach, Barbados' largest ISP, accused C&W of subsidising its own internet subsidiary to an excessive degree. Although the jurisdiction's telecommunications sector is in the process of being liberalised, Cable & Wireless still currently holds a monopoly position, which means that ISPs such as Sunbeach must purchase services and access from the company whilst competing with Caribsurf, its local internet arm.

Chris Alleyne, Sunbeach's CEO explained at the time that: 'Through some strange mechanism, their (C & W's) pricing structure is now so flexible there is virtually no limit to how low they can go with their offers.'

This disaffection was echoed at the weekend by Anthony Gunn, Managing Director of Cariaccess Communications, who went on to reveal that in addition to high levels of cross-subsidisation, C&W is charging its competitors substantially more to purchase its services than it is its retail clients.

'Cariaccess and other ISPs are charged a wholesale rate that is 88 times more expensive than the C&W retail rate for the same service,' he told the Daily Nation. 'This is madness. I never heard of a wholesale rate higher than a retail rate except where it comes to C&W's pricing.'

He continued: 'This is clearly an unfair tactic to drive competitors out of business, but unfortunately, until the Telecommunications Act changes the law and the FTC laws kick in, we are unable to depend on any formal government intervention.'

According to reports, legislation designed to allow the FTC to intervene in cases such as this is in the final stages of drafting, and should go before Parliament by the end of the year.

However, despite fairly widespread condemnation regarding the telecoms provider's actions, Cable & Wireless is resolute in its insistence that it is not doing anything wrong. The company responded to the accusations of unfair trading in a similar vein as it did to Sunbeach's allegations late last month, explaining that:

'Competition allows customers to have a choice at the end of the day. The customer chooses based on a number of factors, of which pricing is only one, and as a consequence customers will change their supplier from time to time.'


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