Vodafone criticises MCA over broadband agreement

Vodafone Malta has hit out at the Malta Communications Authority accusing it of failing to intervene despite knowing that Datastream had forged ahead in an "anti-competitive" bandwidth agreement with eight internet service providers.

"The fact that the MCA knew all along about the agreement is undoubtedly an aggravating factor to the whole matter. Not only did the MCA not use its powers to ensure that competition is implemented in the market but rather it gave its full support to such an anti-competitive initiative to be accomplished by Datastream," a spokesman for Vodafone argued.

The MCA last night contested the claim, saying it saw the agreement for the first time only after Vodafone had lodged its complaint with the Office for Fair Competition (OFC) and that it could not directly intervene while another public authority was investigating matters.

The Commissioner for Fair Trading recently deemed a bandwidth agreement between Datastream, an offshoot of Maltacom, and the ISPs to be in breach of competition rules and declared it null and void, pending a final decision by the OFC.

The decision elicited an adverse reaction from Datastream, which argued that it served solely to expose the ambiguity of competition rules in Malta.

But, on the other side of the coin, Vodafone yesterday said that the Datastream case has served to elucidate certain areas of overlap in competition matters in Malta, which were previously unclear.

For instance, it was established that the MCA had no exclusive jurisdiction on competition issues in electronic communications cases and that the OFC, once presented with a case involving points on competition, is in duty bound at law to investigate and give a decision, Vodafone said.

While the electronic communications market has a regulator, one should bear in mind that it was purely incidental that the agreement involved operators in the electronic communications sector.

Vodafone said the kind of agreement entered into by Datastream raises concerns of a competition nature - namely the foreclosing effect of a deal between a dominant player and other market players over the purchase of bandwidth. All this took place on the eve of the entry of a new supplier on the market.

The Datastream agreement was signed shortly before Vodafone acquired a licence to sell international bandwidth.

Vodafone asked whether, had it submitted its claim of abuse before the MCA instead of the OFC, and in the light of MCA's "no objection" to the agreement, it would have had a realistic chance for a fair and impartial hearing and decision on the matter.

Unlike what Datastream was trying to imply - that the agreement with the eight ISPs brought about stability in the market - Vodafone said that one should rather say that the actions of a monopolist abusing its dominant position served to quash competition and reduce benefits to consumers in the long run.

"The Commission for Fair Trading's decision to grant Vodafone's interim measures coupled with the null and void declaration of the agreement entered into are an indication that the commission remained unimpressed by Datastream's views about the perceived positive effects of the agreement on the market."

Datastream chief executive officer Godfrey Vella had insisted that his company played by the rules, since the MCA was fully aware of the agreement in question.

The MCA yesterday denied giving support to the allegedly anti-competitive behaviour. Once Vodafone lodged their complaint with the OFC, it could not directly intervene, other than to assist the OFC in its investigations, it said.

"One must appreciate that it would have unnecessarily complicated matters if the MCA had intervened of its own accord whilst another public authority was investigating matters. Indeed at present, the MCA and OFC are discussing how they should proceed in cases which potentially may be of concern to both entities in order, among other things, to avoid any overlap and duplication of work."

At no stage did Vodafone raise a dispute or a complaint with the MCA on this matter, it added.

And on Vodafone's doubts over whether it would have received a fair hearing from the MCA, the authority said it decided any disputes only after appropriate investigation and after giving all the interested parties a chance to make their submissions.