IN THIS column yesterday we discussed the PUCﾴs change of ground rules after granting a private company a licence to offer telecommunications services to the public in competition with BTC. This change has made the approved licence virtually useless.
Presumably, acting in good faith the company, which announced that its fixed-line services would be available to the public by January 1 next year, has spent a large sum of money preparing its services. And, of course, one cannot forget the loss of anticipated business caused by the change of the rules. It would appear on the face of it that this is a potential case for the courts.
At the time that the licence to SRGﾴs subsidiary, DigiTel, was granted ﾗunder PUC rules and the Bahamas Telecommunications Companyﾴs (BTC) licence ﾗ BTC was obliged to accommodate all companies licensed by the PUC with leased circuits so that they too could operate. BTC having the monopoly over these circuits was obliged to lease them to others. In this case a competitor was licensed by the PUC with the PUCﾴs full knowledge that the licensee would offer competition to BTC.
Earlier when DigiTelﾴs licence was questioned by a change in the ground rules, the PUC was quick to point out that the change could not affect DigiTelﾴs licence because the licence had been issued before the rules were changed.
Two months later the PUC had a change of heart. By modifying BTCﾴs licence so that it no longer has to provide leased circuits to a competitor during the two-year exclusivity period, it has pulled the plug on DigTel.
In his column yesterday we said that we have drawn two conclusions from this sequence of events.
The first is that we no longer believe that PUCﾴs decisions are independent of government. We believe that a heavy hand from some government closet came down with a heavy clout on PUC.
Our second conclusion comes from a comment made by a businessman that by this action government has set a precedent, and no one in future can feel safe in their contracts, because the rules can be changed at governmentﾴs whim. The opinion was that the three consortiums vying to be governmentﾴs strategic partner at BTC should take to the hills, because it would seem that even a signed contract with government is no longer sacred.
In fact this action by the PUC has not set a precedent. It has just repeated a precedent set in 1970 by the first PLP government. This has led us to conclude that there is nothing ﾓnewﾔ about this PLP. As someone said of them last week: ﾓThese are the same PLP that we had before. They have just put a veneer on themselves, but deep down we are dealing with the same people.ﾔ
We now believe that this is true.
In 1970, Freeport licensees were up in arms that the PLP government ﾗ having pledged that it would honour all the previous governmentﾴs agreements ﾗ was about to break the immigration clauses of the Hawksbill Creek agreement.
Under the agreement the licensees needed no work permits to bring in key workers. All they had to do was to notify government of their need and give the necessary details of the persons arriving.
The situation got pretty heated in Freeport, with one public speaker telling government that ﾓpoliticians should keep their cotton-picking hands off private enterprise.ﾔ
Eventually the licensees sought the opinion of an eminent British constitutional lawyer, Major Tasker Watkins, VC, QC.
Major Watkinsﾴ opinion was that if government, thwarted by legalities, attempted by legislation to repeal or amend the essential parts of the Hawksbill Agreement so that the Immigration Act, 1967, would apply, without reservations, to key workers required in Freeport it would be a ﾓa rare abuse of the legislative powers which the government undoubtedly possesses. It would be a breach of faith. It would be a breach of contract.ﾔ
Needless to say, the PLP government did the unthinkable. It abused its powers and changed the agreement by legislation.
Sir Lynden Pindlingﾴs ﾓbend or breakﾔ speech shook Freeport, this breach of faith brought it tumbling down. Investors abandoned the island in droves.
It was not until the advent of the FNM that new life was breathed into Freeport.
Bahamians might not understand the significance of what has been done to SRG-DigiTelﾴs licence, but foreign investors do. We hope that the fall-out can be contained.
However, when people lose faith in agreements made by a countryﾴs government, it is almost impossible to regain their confidence for further investment.
Editorial, The Tribune
September 4th, 2003
