Cable providers, TRB face off in court this week over Claro franchise license

Written by  //  January 23, 2012  //  Telecommunications/Technology  //  No comments

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OneLink and Choice are turning to the court for relief in its fight with the TRB. (Credit: © Mauricio Pascual)

OneLink Communications and Choice Cable TV will face off against the Telecommunications Regulatory Board in federal court this week over the agency’s decision to grant Puerto Rico Telephone (Claro) a cable television franchise license to offer Internet Protocol television services, which the cable providers claim is illegal.

The outcome of the court’s intervention this Thursday could possibly lead to the annulment of PRT/Claro’s controversial cable franchise license, thus delaying the availability of IPTV once again, News is my Business learned.

In a complaint filed Nov. 19, immediately after the TRB gave PRT/Claro the go-ahead to launch its service, the cable companies took exception with the fact that the agency chose to override a prior order it had issued requiring PRT/Claro to abide by a number of conditions with a new one that lacked “any meaningful conditions or restrictions, in blatant violation of federal and Commonwealth substantive and procedural law and in astonishing contradiction of the Board’s own substantial administrative record.”

PRT/Claro requested a cable franchise license in Feb. 2008, unleashing a battle that has involved the TRB, as well as local and federal courts.

Along the way, OneLink has opposed the petition — joined at times by the other cable providers — claiming PRT has violated laws applicable to all cable carriers on the island, including building out its network prior to having the permission to do so. The plaintiffs have also objected to PRT’s ability to cross-subsidize to finance its services, which would give it an unfair advantage when it came to pricing.

Heated public hearings
The controversy peaked during the latter half of 2011, when the board held several days of public hearings underscored by heated arguments between the agency’s associate members, as well as competing companies. Consumers also got their say, mostly clamoring for the start of IPTV.

OneLink Attorney Jorge Bauermeister presents arguments during last summer's IPTV hearings at the TRB. (Credit: © Mauricio Pascual)

The outcome of those hearings held in August was an order that placed a number of strict conditions on PRT/Claro to be able to offer islandwide paid IPTV services. However, less than a week later, the board — whose three members were involved in heavy infighting — revoked and replaced it with a new one.

“The Nov. 16 order drastically changes the granting of the cable franchise to PRTC, permitting it virtually immediate rights to begin operating as a cable operator without any protections for consumers and competitors from the effects of PRTC’s continued unlawful conduct, despite the voluminous findings that such operation is contrary to federal and Commonwealth requirements and contrary to the protection of fair competition and the interests of the public…,” the complaint states.

In the complaint, OneLink and Choice alluded that two of the board’s decision-makers — President Sandra Torres and Associate Member Gloria Escudero — are biased in favor of their former employer, PRT. Furthermore, OneLink claimed it has filed several petitions at the agency after the license was granted, which have gone unattended.

‘Irreparable damage’
In the complaint, the San Juan metropolitan area’s cable television provider acknowledged that granting Claro’s license without any restrictions could ultimately cause “irreparable harm” to each of their businesses. Choice’s footprint blankets 31 towns along the island’s western and southern flanks.

“Without court intervention, the Board’s action will cause irreparable harm to plaintiffs and their cable franchises by permitting a cable operator that does not meet the requirements and has not followed the rules to unfairly provide cable services in Puerto Rico in blatant violation of federal and Commonwealth law,” the complaint states. “In light of the Board’s actions, and the irreparable harm they will cause, plaintiffs [have] no meaningful state or administrative remedy of any kind.”

“This allows PRTC to begin its cable operations with a number of advantages, less burden, and faster than plaintiffs, as well as the ability to unlawfully manipulate its pricing,” the parties claimed.

U.S. District Judge Daniel Domínguez will hold a status conference on the complaint this Thursday.

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