Kassie Smith QC wins judicial review of BVI telecoms regulator’s decision on margin squeeze for Cable & Wireless
The High Court of the British Virgin Islands (“BVI”) has just handed down judgment in a claim brought by Cable & Wireless (BVI) Ltd (“LIME BVI”) for judicial review of the decision of the BVI Telecommunications Regulatory Commission (“TRC”) finding that LIME BVI had engaged in an anti-competitive margin squeeze in breach of the requirements of the BVI Telecommunications Act 2006. The TRC had received a complaint from CCT, a competitor of LIME BVI, to the effect that LIME BVI (by certain “All Talk Calling Plans”) was charging average retail prices to its mobile customers for calls to LIME affiliates in other Caribbean jurisdictions which were below the wholesale charges available to CCT from those LIME mobile network operators. The TRC investigated the complaint and issued a decision on 1 June 2012 to the effect that LIME BVI had engaged in an anti-competitive margin squeeze during the period January 2009 to August 2010 which, had it continued, would likely have had anti-competitive effects contrary to the public interest and would have been detrimental to consumers in the BVI in the long term. The TRC ordered LIME BVI not to engage in such conduct and fined it USD$493,665.
The Court held that the TRC’s decision was ultra vires the 2006 Act and that it should be set aside. The Court held that the relevant section of the Act under which the TRC proceeded against LIME BVI applied only to present and future conduct, and not to past conduct. The Court agreed with the submission of LIME BVI that the TRC’s decision could only have been limited to offending conduct which ceased before the decision was issued. It agreed with LIME BVI’s argument that “the tenor of the Act lends itself to ex ante regulation of operators” only. The Court therefore found that the TRC had acted ultra vires the Act and that this warranted the decision being set aside. The Court also agreed with LIME BVI’s argument that the TRC acted ultra vires the 2006 Act by applying it to LIME affiliates outside the jurisdiction of BVI law (i.e. those LIME affiliates responsible for the setting of prices in the wholesale or upstream markets). However, the court held that this illegality alone would not have been sufficient to set aside the TRC’s decision.
Kassie Smith QC acted for LIME BVI in the proceedings before the High Court of the BVI.
To read the judgment, please click here.