Cap for Jersey business connectivity costs proposed

Thursday 19 March 2015

The price of phone and internet services to businesses should be capped, according to the competition regulator.

A review of the prices to businesses has found no evidence of excessive pricing, but the regulator says that prices from JT – the main operator here – should be capped and they should have to publish profits from their wholesale business.

Those proposals, which would also cover Sure in Guernsey, are now formally out for consultation for four weeks.

The head of the Channel Islands Competition Regulatory Authority, Michael Byrne, said that the subject was an important one for the economy.

He said: “Business connectivity services are vital in supporting our island economies to continue to grow and remain competitive. A healthy balance between investment incentives and lower prices is key.

“The stricter regulatory control at a wholesale level is balanced by greater freedom given to retail leased line providers who can be more flexible and competitive in their pricing.

“This sets out a strong, sustainable framework for regulation in the future. We can’t, however, expect local operators to compete with places where governments subsidise connectivity which is the case for many of the comparators cited and assessed as part of this review.”

The report has been warmly received by JT, who say that they welcome the recommendations and that the report has brought balance to a challenging debate.

JT's Corporate Affairs Director, Daragh McDermott, said: “We welcome these recommendations and note in particular the finding that the price charged to businesses for what are known as 'private circuits' is not excessive. There have been a lot of inaccurate allegations in this area so we hope that this report from the regulator will add some much needed balance to what at times has been a challenging debate, which didn’t compare like with like. For example, local prices have often been unfavourably compared to jurisdictions where connectivity pricing is actually subsidised by the government.

"Ensuring local businesses can connect quickly and reliably to their colleagues and customers across the world is clearly vital for the ongoing success of our economy, and JT looks forward to continuing to provide those services in a fair and transparent way."