Senate may oppose multi-sector regulator bill

24 Mar 2014

Puerto Rico’s lower chamber of parliament, the House of Representatives, has approved a bill to create a new multi-sector regulator for the telecoms and energy markets, the Public Utilities Regulatory Commission, but the bill is likely to face opposition from upper house Senators, local news site NotiCel reports. As well as reforming the regulation of the Electric Power Authority (PREPA), the bill establishes the commission to replace the existing Telecommunications Regulatory Board (Junta Reglamentadora de Telecomunicaciones de Puerto Rico [JRT]) as the regulator of telephony, cable TV and ISP markets, and also imposes new charges on internet services, while local telcos argue that the legislation, in conjunction with other related regulatory measures, also gives PREPA’s internet and telephony subsidiary PREPA Net certain advantages over other telcos/ISPs (including claims that the measures are designed to make PREPA Net the ‘exclusive telecommunications provider of government’).

Local telcos and cablecos are lobbying against aspects of the new bill, which they argue is a backward step for the telecoms sector. Naji Khoury, CEO of multi-service cable operator Liberty Puerto Rico, was quoted as saying: ‘The [bill] aims to go back in time to a regulation in which the government established rates and each administrative process governing the provision of services by telecommunications companies. The Telecommunications Act of 1996 [which created the JRT] broke with that structure and created a regulatory model in which competition is the axis of the regulatory process and market restructuring. This [legislation] aims to change this paradigm and regulate the rates of all telecommunications services. It also seeks to regulate the internet, but is contrary to federal law, and establish new taxes for internet services. These changes will clearly have a negative impact on the ability of the industry to provide innovative technology and provide better service.’

Under the bill, the new regulatory commission would collect additional fees to cover operating costs and establish a reserve of 25% of its annual budget income. These new charges, which will not exceed 0.25% of gross income, would take the form of a tax on all utilities including telephony, pay-TV, internet and electricity.

Puerto Rico, Liberty Puerto Rico, Telecommunications Regulatory Board of Puerto Rico (TRB)