C. I. Chamber of Commerce releasesstatement on Cable & Wireless' Blocking of Net2 Phone
Cable and Wireless ("C&W")recently placed a total block on access by all Cayman residentsto 10 Internet sites that provide various Internet telephony services.The monopoly on telecommunication services and the prices chargedhave been the subject of public debate.
The following statement clarifies the position of the Chamberof Commerce Council after consultation with its E-business TaskForce ("Task Force") on these issues. The Chamber isstrongly opposed to any action by any individual or organisationthat seeks to restrict public access to the resources of the Internetand the World Wide Web.
Such action, however the individual or organisation may attemptto justify it, runs totally counter to the essential spirit ofthe Internet which embodies freedom of speech, access, and choice.
The Chamber endorses the fundamental principles of the Internetthat state that all individuals and organisations in a positionto control all or part of the Internet should do so in a non-discriminatoryfashion, ensuring that all users - whether academic, commercial,or other - are treated on an equal basis. Concerns about "rights"and "ownership" are inappropriate; what should matteris "responsibility" and "service to the community".
The Chamber notes that a restriction on the Cayman public's rightof access to the Internet can only be effective because a singlesupplier is both the international telecommunications carrierand the sole provider of Internet services.
We believe that such a powerful monopoly, however benevolent,is not in the best interests of the Cayman Islands ("Islands").It is inevitable that at some point the commercial interests ofthis monopoly will come into conflict with the interests of thelocal people.
We firmly believe that unrestricted access to state-of-the-arttelecommunications (of all kinds) at competitive prices is vitalfor the economic and social development of the Islands. We believethat the only way to achieve this is to introduce competitionurgently.
Whenever competition in telecommunications is mentioned, a numberof fears are raised. Whilst we do not underestimate the challengesthat will have to be overcome, we consider many of the fears tobe unjustified. For example:
* Government will lose an unacceptable amount of revenue.
NOT TRUE. Government will be able to negotiate 2 or morelicenses which will generate income similar to that received fromthe current single licensee. The resulting increase in economicactivity also will boost Government revenue.
* No other telecommunications company will be interested in Cayman.
NOT TRUE. The Chamber believes that the volume of telecommunicationbusiness in the Islands is sufficient to attract at least oneother service provider.
C&W does not release to the public its accounts so there isno way to know for certain how profitable it is. However, usingthe contract between Government and C&W that was publishedon the Internet and the publicly available license fees paid toGovernment by C&W it is possible to get some idea of the annualrevenues and profits of C&W.
Based on such information it is possible to determine the following:in 1997 either C&W' annual revenue was CI$115 million or itsannual profits were CI$35 million; in 1998 either its annual revenuewas CI$132 million or its annual profits were CI$40 million; in1999 either its annual revenue was CI$152 million or its annualprofit was CI$46 million.
We believe that such figures show that there is sufficient telecommunicationsbusiness in the Islands to attract another service provider.
* The Government would have to buy the existing telecommunication'sinfrastructure at an impossibly high price.
NOT TRUE. In the most unlikely event that the present supplierdid not wish to remain in a competitive environment, Governmentis required merely to use their "best endeavours" tofind a buyer for the existing infrastructure.
* Local staff would be laid off.
NOT TRUE. There is already a shortage of such skilled staffin Cayman. Any staff dismissed by the present licensee would findnew employment with the competition, (this could be made a requirementof any new contract), elsewhere in the private sector, and withthe new e-business companies we wish to attract.
The Chamber recognises that C&W has made significant contributionsto the development of the Islands and continues to provide a highcalibre of service to its customers. The Chamber believes thatthe telephone and Internet services that C&W provides to theIslands are reliable.
The Chamber also recognises that C&W has made significantcharitable and social contributions recently and over the courseof the period in which it has operated in the Islands, and C&Whas hired many Caymanians over the course of the period in whichit has operated in the Islands and that it has a reputation ofproviding good training and advancement opportunities for Caymanians.
Notwithstanding the positive contributions that C&W has madeto the Islands it is clear that the public has questions aboutwhether the prices that C&W charges for its services are justifiableand whether C&W provides sufficiently modern telecommunicationsservices.
Experience in other jurisdictions has shown repeatedly that theonly effective way of ensuring that the public gets value forits money in telecommunications services is for there to be competitionbetween service providers.
The present arrangement may have been appropriate in 1991 whenthe present contract was negotiated, but Cayman, the world, andtechnology have changed beyond recognition. It is time for thearrangement to change too - and the sooner the better.
C&W once held monopoly positions in several other countriesin the region, including Jamaica, Bermuda and Barbados, but eventuallyagreed to renegotiate its contracts to allow competition.
C&W has publicly acknowledged that renegotiation is inevitablein each of the other territories in which it has a monopoly position,and that it is prepared to enter into discussions with the Governmentsof those territories with a view to introducing competition.
While we realise that Government benefits considerably from therevenue gained from C&W and depends on the contractual agreementto ensure such benefit, we implore Government to take advantageof public commitment and immediately enter into meaningful renegotiationdiscussions with C&W.