Three year broadband dispute resolved

Since 2019, telecoms service providers Flow and C3 have been involved in a dispute over infrastructure sharing, but those issues have now been resolved after arbitration proceedings took place, mediated by ICT regulator, OfReg. The findings were for and against both parties with regard to a long line of issues.

The problems initially were brought to light when C3 submitted an initial Dispute Determination Request to OfReg in June 2019 regarding several issues it was experiencing obtaining infrastructure sharing services with Flow. As the operator of the Maya-1 subsea cable, Flow is legally obliged within the terms of its licence to provide shared infrastructure access services to other licenced broadband services providers in the Cayman Islands. 

OfReg then conducted an extensive investigation and consultation process with both companies to establish the facts of the dispute. The alleged issues ranged from slow or uncompleted work, appropriate pricing for access, to technical issues on sub-duct sizes and access to install equipment at the MAYA-1 cable landing station.

List of issues

OfReg has since made a number of determinations on the various issues, creating the opportunity for both companies to resolve their issues. The issues were broken down as follows:

Issue 1: Whether Flow responded in a timely manner, applied appropriate prices and acted reasonably in responding to C3’s request to share certain underground duct infrastructure along Shamrock Road between Spotts Dock to High Rock Road.

OfReg determined, despite delays by both parties, Flow responded to the requests for quotes within a reasonable timeframe, however they did not provide the duct clearance and make-ready in a reasonable time (the duct clearance is still not completed). They also found that the mark-up on base prices Flow charged for make-ready works should be corrected to a lower amount determined by OfReg and C3 reimbursed for the difference, and also found that Flow, having stopped works in late 2019, was not justified in doing so and should complete the works as contracted.

Issue 2: Whether Flow had approved C3’s use of a certain size sub-duct as installed in Flow’s infrastructure and whether that installation should be considered a material contract breach by C3. They also had to investigate whether Flow’s prices for duct access were appropriate and whether Flow should compensate C3 for any unused sub-duct and associated fibre cable C3 installed.

OfReg determined C3 did not have Flow’s permission to use the 1.5” sub-duct and was in breach of the contract, although this breach was not a material breach (which would lead to a complete termination of the contract). They also found the rates proposed by Flow for 1” and 2” sub-duct were not reasonable and Flow should amend its pricing to the new lower pricing as determined by OfReg. C3 should either remove the 1.5” sub-duct or agree to pay Flow for that subduct at the 2” rates as determined by OfReg. In addition, C3 did not have Flow’s permission to use the 1.5” sub-duct, so Flow did not have to compensate C3 for any unused 1.5” sub-duct and associated cable.

Issue 3: Whether Flow had acted reasonably by denying C3 permission to access and co-locate inside the Maya-1 submarine cable landing station. OfReg determined that Flow was not justified in its reasons for saying there was insufficient space within the CLS and must provide C3 with space within the CLS to mount the C3 equipment specified.

Issue 4: Whether Flow had legal basis to refuse C3 access to part of duct from Maya-1 to Health City where access was not feasible due to lack of capacity. OfReg determined Flow was justified in its rejection of C3’s alternative solution.

Issue 5: Whether Flow should revise the various duct survey estimates to ensure that they meet the cost orientation and transparency requirements of the Interconnection and Infrastructure Sharing Regulations.

OfReg determined that the base prices charged by Flow were acceptable, but the loading factor applied was not in compliance with the regulations, therefore Flow should correct the loading factors to a lower amount determined by OfReg and reimburse C3 for the difference.

Executive Director for Information Communication and Technology at OfReg, Sonji Myles, said: “Two of OfReg’s principal functions in the ICT sector are to promote and maintain an efficient, economic and harmonised utilisation of our ICT infrastructure, and to resolve disputes on the sharing of ICT infrastructure between service or network providers.

In doing so, we ensure a level playing field for licensees, protect the interests of the public and promote competition and choice for consumers. In this case, intervention was required to resolve a number of issues that we are satisfied now means both licensees are compliant with the terms of their licenses and can equally provide consumers with more choice and better services in the future.”