New $30 CableVision fee rejected

Bermuda CableVision will be allowed to charge new data customers higher rates after its bid to levy a $30 fee to all customers was rejected. 

CableVision wanted to charge customers $30 as a fee for all the services it provides. The resulting fee would have seen existing cable customers pay the same price by data customers would have had an increase. 

In a letter to the Regulatory Authority, CableVision, general Manager Terry Roberson wrote: “Our (relatively few) data-only customers are paying for their data services, but are not paying for the basic network used to provide those services. On the other hand, our video customers are paying more than they should. While this might be appropriate on a purely ‘incremental cost’ basis in a regulatory environment without either wholesale customers or direct competition for video or data services, looking ahead, we are concerned this could be construed as discriminatory and unfair.”

CableVision said a fairer and more transparent approach is for all customers to pay a network access fee and then pay separately for each additional service.”

On Friday, the RegulatoryAuthority released its ruling against this fee. It did agree that the current rates being charged by CableVision for its standalone broadband service to not allow it to recover the costs for providing it.

The Regulatory Authority wrote: “BCV is effectively selling its standalone broadband service at a price below cost. this would run afoul of BCV’s duties as an ICOL holder and cannot be permitted by the Authority.”

Anti-competitive

The Authority went on to say it was “anti-competitive and does not promote a competitive market for Bermuda and Bermudians.”

The Authority disagreed with the amount of increase BCV has sought in order to recover its costs on a standalone basis. 

It also wrote: “BCV’s proposal would have created a circumstance which incentivized current Standalone Broadband Service customers to leave their current Video Services provider in favour of BCV in order to have an overall reduction in the cost of Broadband Services. “

The Authority approved a price increase for data services for new customers: 4 Meg will go from $35 to $48, 6 meg from $45 to $56, 8meg from $55 to $65, 15 meg from $90 to $95 while 25 meg will stay at $140. 

Philip Micallef, the CEO of the Regulatory Authority, told the Bermuda Sun: The Regulatory Authority has requested Cablevision to lessen the impact on the 562 customers who are affected. It has been decided that:

• Existing customers will not experience any increase in price for the next two years.

•  During the next two years, only new customers, who wish broadband-only service, will be charged at the new rates.

• Existing Cablevision broadband-only customers are able to switch to a less-expensive service that is currently available.  

“In addition, if existing broadband customers want to add TV access to their preferred service, Cablevision will lower its TV price to offset the cost of broadband access and bring it to the level enjoyed by its current bundled-service customers.

“And the RA is going to keep monitoring these access charges and review them when appropriate to ensure the costings used are still current , and Cablevision has not begun to make an unduly high level of profit.”

Thrilled

Mr Roberson told the Bermuda Sun: “As the result of a recent decision by the Regulatory Authority, we are excited to announce that we are free to offer products and services direct to consumers. Until now, Bermuda CableVision has been extremely restricted in terms of what services it could provide and who it could provide them to. 

“We’re thrilled about what this change means for Bermuda and for our customers. We look forward to introducing many new products and services for residential customers and introducing services to commercial customers in the coming weeks and months, both in data and voice, and in particular to driving down prices.

“We are also pleased that the Regulatory Authority has agreed that we can adjust our pricing structure for new standalone data services customers. As Bermuda CableVision offers both data and video services across the same network, we have long felt that our video subscribers have been bearing more than their fair share of the network costs. New data only customers will pay a little more, while new video only customers will pay a little less. We think this will be fairer to customers and will be announcing the new pricing structure shortly.” n