TRB schedules hearing to weigh public interest of granting Claro TV franchise
A hearing slated to let the public and paid television industry players offer their opinions on whether Claro TV’s request for a cable television franchise is in the public interest may not take place Monday at the Telecommunications Regulatory Board if petitions the company filed to block it are granted.
In what constitutes a most ironic move, Claro Puerto Rico turned to the Puerto Rico Appellate and Supreme Courts, as well as the TRB, this week to stop the agency from going forward with the hearing, claiming that part of the process would put confidential information in the hands of competitors and the public. The company has been pursuing a cable television franchise for more than three years.
However, in its petitions, the carrier referred to a resolution the TRB issued last month convening Monday’s hearing that required Claro to provide information on costs, total investments and the methodology it will use to determine how much it will charge for the Internet-based paid television service it proposes to offer.
“Basically, the board wants Claro to provide information that is has already submitted under confidential terms, for the public and competitors to discuss openly,” said a source who spoke to News is my Business off the record Thursday. “The Board wants competitors to help it come up with the questions it will ask Claro to determine if the license would be in the public interest.”
On Thursday, Claro executives opened the doors of its Hato Rey operations center to members of the media to discuss what it has to offer via its IPTV platform, if it were to get the license.
Among other things, Claro’s Media Affairs Director, Irmarie Cervera, said, “We believe this service responds to the public interest, which is what the agency seeks to get information about during a hearing on Monday.”
Another issue Claro brought up in its petition to the Supreme Court is its prickly relationship with OneLink, the San Juan metropolitan area’s cable television provider, which from the start has opposed the former’s intentions to break into the segment. In its argument, OneLink has said granting Claro the franchise license would pose “serious harm to the Puerto Rican consumer.”
Specifically, OneLink has been claiming — among other things — that Claro will rely on its ability to cross-subsidize services to offer aggressive pricing on its services, potentially harming competition and ultimately, consumers.
Cross-subsidizing is the practice of using the profits from one activity to cover losses from another, something local competitors have claimed Claro could do to move forward with its IPTV offer.
Claro’s reluctance to open up censured
“This is not the first time that [Claro] has tried to hide information about its plans for cable television. During the evaluation of its first application for a cable television franchise, the Board rejected it because, among other reasons, [Claro] had demonstrated a reluctance to provide information requested by the Board and to submit vital information about their operations,” another industry executive familiar with the protracted proceeding said Thursday.
OneLink also took exception with the fact that Claro began building out its IPTV infrastructure before getting the necessary authorization from the TRB, in violation of the Puerto Rico Telecommunications Law. In that instance, the TRB resolved against Claro’s actions.
“[Claro] did not appeal the determination by the Board, but responded with a second application in December 2008. OneLink and others filed comments bringing to the attention of the Board that the request again suffered from serious cross-subsidy problems, that [Claro] had continued ahead with its illegal construction of the system and that PRTC had not submitted all the necessary information for consideration of the application,” the source said.
At that point, OneLink requested to be allowed in the evaluation process of Claro’s franchise request, which sparked a legal battle that ended with the Supreme Court’s decision to turn OneLink down. OneLink can only intervene in the process once the TRB grants Claro the franchise license, the court said.
“Seeing that its half-truths will eventually be exposed, [Claro] has asked three different forums to paralyze a hearing that would obviously only help further their desire for a cable television franchise. It’s almost a requirement to conclude that [Claro] is afraid that the truth will come to light,” the source said.