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Posted by Hallam Hope from the Barbados Consumer Watch under Submissions

Gaining access to basic consumer information seems to have more hurdles than one would expect. A few months ago I approached the Fair Trading Commission (FTC) and asked them for a copy of the Terms of Reference (TOR) of the consultants assessing the Price Cap. I also asked for the dates for their work. I wasn’t asking for what they were paying the consultants from taxpayer revenue to tell us some things we could determine for ourselves.

I felt that as a taxpayer I was entitled to know what they were supposed to be doing so I could enhance any submission on the Price Cap, which affects the pockets of the most vulnerable in our society. It seemed quite reasonable. The response was that both items of information requested were “internal” and not available to the public.

Well, in August I inquired about the number of people who have been waiting for basic telephone service and the date of the last report. Surprise! This is also not public information. Well, what is surprising is that we live in a world where all administrations, including the new Government, talk about transparency and good governance. But without access to basic information consumers cannot advocate on matters that affect their interests.

So to deny consumers elementary information is tantamount to failing to perform a fundamental public responsibility, that of transparency in public office.


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20 responses to “The Fair Trading Commission (FTC) And Access To Information”


  1. ITAL! Where is it?


  2. @Hallam

    Having made the request what is the recourse?
    Can the Public Counsel help out here?
    Also does the law support your request?

    We have highlighted your post because we feel that freedom of information is critical to the sustainability of any democracy.

    Maybe Chris can provide an assist here since this is right up his ally.

  3. Bsanned Again From BFP Avatar
    Bsanned Again From BFP

    Why should academics expose or be involved with a process that will ultimately exposes how other academics really make a living in this third world neo-conservative state? I agree with them. Close ranks…!


  4. @David and Hallam… This issue with the FTC is systemic…

    I really don’t know what recourse might exist, short of continuing to publicly embarrass the FTC and lobby for a review of its functionality and the conflicts of interest which exist.

    As an example, during the PCM Review it became clear that the FTC would not be providing information to the public, even though within their own request for comments it was stated that submitted comments would be made available to the public.

    Because of this, I created a mailing list which several of the commenters joined, including Hallam and Roosevelt. This proved to be invaluable to our mutual efforts, as it allowed us to debate the points at hand and exchange information between ourselves.

    Interested individuals may wish to see the following Blog entry, and download the BANGO submission linked from same: http://www.ideas4lease.com/blog/2007/10/29/bango-ftc-written-submission-on-price-cap-mechanism-review/

    It is a somewhat lengthy document — read the final “Summary” section on page 17 if nothing else.

    Something must be done — I just don’t know what its going to take for the government to take on this issue with an appropriate level of seriousness.

    Perhaps a massive public letter-writing campaign to the Minister Responsible, George Hutson?


  5. @Chris

    We had a read of your blog and we expected to find a link to the PCM, is this the link?

    Please clarify, we have heard the experts on telecoms all agree that the PCM operates at optimum in a competitive telcoms environment. We assume that the FTC would be privy to the expert analysis and have access to their own. The foolish question we have is why do we still have the PCM in position, what are we missing? Why has the FTC based its review on the expectation that future growth will take place in the various sectors. Who are the players that are expected to bring the competition.

    Please guide the BU family through this complex matter. Simple language is appreciate.


  6. David… The link you provided was the response by the FTC to the submitted comments, but not the individual comments themselves. They redacted a great deal of information from what was submitted.

    The BANGO paper is at: http://www.ideas4lease.com/reports/bango_ftc_pcm_response_20071025.pdf

    The Ideas 4 Lease response is at: http://www.ideas4lease.com/reports/chalsall_pricecap_response.pdf

    Please also see:
    http://www.ideas4lease.com/blog/2008/02/11/new-price-cap-period-could-bring-rate-reductions-%e2%80%a6if-proper-adjustments-are-made/
    http://www.ideas4lease.com/blog/2008/02/11/effective-competition-needed-in-telecommunications/
    http://www.ideas4lease.com/blog/2007/10/15/is-cost-really-outstripping-revenue/
    http://www.ideas4lease.com/blog/2007/10/15/release-information/

    While this may seem like a complicated subject, it is really quite simple. It is only complicated when people try to make it seem that way…


  7. @David… I have to be away from keyboard for a while, but will respond directly to your above shortly as to why the PCM still exists.

    But, in very short form, the PCM is known to be the most effective form of regulation which has ever been devised. However, it only works if the control *inputs* are set correctly.


  8. Time for an information disclosure policy and legislation as well. Without this Government is not compelled to disclose information except as enshrined in the particular legislation.

    For example, Town Planning is required to make their register and related information always available for public viewing by law; and that is only specfic to information in that Department. Also the same for Corporate Affairs.

    There is also some legislation which states that you can demand to see a file from a Government Department if that file concerns you. Think there must be locus standi.

    As far as I see, Public Counsel is not authorised to get into the business of Government. Maybe the Ombudsman, but only if the Department is compelled but refusing… This really requires legislation.


  9. Some fairly heady stuff contained in those documents and absolutely nobody in the BU household qualified to analyze the content. It begs the question if the people offering objections and submissions to the FTC on telecoms issues are competently addressing the issues.

    No disrespect intended but what expertize being tapped into to offer the best feedback to the FTC?

  10. Banned Again From BFP Avatar
    Banned Again From BFP

    I’ll read all of this stuff. But it is relevant to note the FTC is a business to business thingy and not a consumer to business mechanism, at least this is what Owen A suggested. Maybe if applied for information as a business enterprise with a valid complaint or something….


  11. @David: “No disrespect intended but what expertize being tapped into to offer the best feedback to the FTC?”

    No disrespect taken.

    For the record, I personally have no formal training in Telecoms Policy. (For that matter, I actually have no formal training in anything… The only letters I can claim after my name are Mensa.)

    *BUT*, this stuff is really nothing but simple mathematics, and common sense. It is not rocket science.

    Further, for the record, I leveraged on my contacts in the industry, and retained the services of two telecoms policy experts from Canada to review all of my work on the PCM review and the TARC. The work was sound.


  12. @Banned Again From BFP: “But it is relevant to note the FTC is a business to business thingy and not a consumer to business mechanism, at least this is what Owen A suggested.”

    You may wish to examine the Barbados “Fair Trading Commission Act” and the Barbados “Fair Competition Act”, and then reconsider your interpretation of what the FTC’s mandate supposedly is…


  13. @David,
    I would not say that there is no expertise. It is a question of capacity. We do not have the resources to keep going to court. The problem we have in Barbados is that law mostly go unchallenged because it is too expensive to go to court.

    You know, we keep saying that as a given. It would be good to check and see what it really cost for a layman to lodge a case. We may have to go that route if it is not expensive. Usually the expense is the lawyer.

    There are provisions for motions to the FTC itself but to my mind that is a waste of time. Asking the FTC to adjudicate against itself although there is no cost. The alternative for most issues is to secure a hearing before a judge in chambers.

    So basically the problem is that we arrive at deadends. It really is not rocket science is right, once you start to follow it, like anything else you gain the expertise and the skill. Probably time to explore the court route.


  14. @David (et al): “Please clarify, we have heard the experts on telecoms all agree that the PCM operates at optimum in a competitive telcoms environment.”

    This is *not* true. The magic of the PCM is it allows the introduction into a marketplace *without* competition the same market dynamics which would exist if competition *did* (but doesn’t) exist.

    @David: “We assume that the FTC would be privy to the expert analysis and have access to their own. The foolish question we have is why do we still have the PCM in position, what are we missing?”

    Please let me copy-and-paste a bit of language I sent to the aforementioned mailing list I set up for the independent responders to the FTC PCM Review (sent to the list 2007.10.27)…

    *-*-*-*

    The PCM has been found to be superior to all other forms of regulation because it is a light-handed form of regulation, and allows the company to conduct its business without having to interact with the regulator every time it wants to make a price change. Further, because the company knows the maximum amount of retail price (normally) decreases it must face each year (as defined by the X-factor), it can plan for this and implement efficiencies in order to at least match this.

    A *critical point* is the X-factor is supposed to be set by the regulator based on what is a realistic and reasonable productivity efficiency gains. It is meant to challenge the company to behave as if it faced competition — having to do better every year.

    Another *critical point* is that under the PCM, if the company is able to achieve efficiency gains which are greater than what the X-factor has been set to, then they get to keep these additional profits, or optionally, pass them onto the consumer. It is *the company’s choice*.

    *HOWEVER*, if the actual efficiency achieved is greater than the value of the X-factor, then it means the regulator has *failed* in its role!

    Now, let’s talk about simple Rate of Return, and examine why it is disfavoured as a sole regulatory tool.

    Simple Rate of Return regulation does not encourage the company to perform efficiently. In fact, exactly the opposite — the company benefits by spending as much money as it can to deliver service because it receives returns as a percentage of costs.

    Additionally, there is much more regulatory oversight required under a simple ROR structure. And we all know how expensive and time consuming that can be.

    Now, let me please be absolutely clear.

    I agree the *implementation* of PCM here in Barbados has failed. However, that is because of the FTC setting the values for the X-factor, the I-factor, and the contents of the baskets, incompetently.

    And, perhaps this is where the ROR vs PCM camps can find some middle ground. It is obvious that the *inputs* to the PCM equation are based heavily on an ROR analysis. Additionally, reasonable expected efficiency gains should be factored into the X-factor, bringing it even higher (meaning lower prices to consumers).

    However, again, this time consuming ROR analysis need only be done once every time the PCM value are reset (currently here in BB 3.3 years).

    Fundamentally, the fact the FTC failed in setting the input values to the PCM incorrectly does not mean the PCM itself is incompetent or inappropriate. At the end of the day, the PCM is simply an algorithm. And with all software, garbage in, garbage out. The FTC initially put in garbage. It is our job to ensure the next set of inputs is not garbage.

    Now, to end this particular body of language, let me please put on the table that my formal training is in software development, mathematics and experimental physics. This legal / policy / financial stuff in my mind nothing much more than algorithms and data (some of the latter in a quasi quantum state of uncertainty) expressed in human languages and on paper, rather than in computer languages and in bits. (And buggy as hell!)

    *-*-*-*

    @ROK: Interesting post immediately above… I agree with you, and will be responding further to this within 24 hours.


  15. We don’t want to cast aspersions on the good parties involved but is it possible that the government of Barbados at the time agreed to a ‘deal’ to reward C&W because they went along with an early final phase of the deregulation process?


  16. @Chris,

    I thought we had a fundamental difference over this, but I am now realising that we share the same views but come to different positions.

    My position with the PCM is to scrap it and return to ROR because we will get better results in Barbados from the ROR because of who we are dealing with in the market and the apparent ineffectiveness of policy to deal with the situation to the satisfaction of consumers.

    Under the ROR we enter the arena of a court hearing in order to change prices and intervenors are entitled to be there and to make a case before a legal committee.

    Like you, I have no beef with the mechanism itself but the fact that discretion is not working here and is being used to manipulate the prices in favour of the provider, which could not happen under the old system, is good reason to revert to the old system.

    Not sure which is better, force them to apply realistic values or to scrap it? Seems like both are a challenge. This is where the Court may be a good avenue because, without a hearing to determine whether or not the increases are warranted, the PCM has exceeded regulatory legislation.


  17. @David,

    That is a thought commonly shared by most intervenors. Hard to explain it any other way.


  18. @ROK: I had promised a response to your comment about legal avenues. I have decided taking this non-public (at least for a while) is probably logical. I will be in touch with you on an idea I’ve had…

    @David: It is impossible for an outsider to understand why exactly things are as they are. But *something* smells very fishy…


  19. Just for the record…

    Hallam’s “Letter to the Editor” appeared in today’s Advocate — Page 10.

    Well done Hallam!

    Anyone want to open a book on this having any effect? I’ll place BDS $100 against, at up to 10 to 1 odds…

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