Scarlet NV’s first appeal
rejected, second on hold
PHILIPSBURG--The Island Council rejected on Wednesday the first appeal of St. Maarten Network Management/Scarlet NV to amend its business licence to provide various telecommunication services.
The second appeal will be dealt with in the Central Committee after a special committee has been established that will hear Scarlet and render advice to government. The Island Council unanimously agreed to declare the first appeal inadmissible and to have government take a decision on the second appeal at a later stage.
National Alliance only agreed after the letter to the Island Council was changed, stating that the decision on the second appeal would be delayed until further investigation had taken place.
Scarlet, then St. Maarten Network Management, in November 2004 requested government’s permission to amend the purpose of its business licence to be able to provide prepaid and post-paid international, inter-insular and intra-insular direct dial services, wire and wireless Internet and data services, private lease circuits and virtual private networks.
St. Maarten Network Management took government to Court in March 2005over its fictitious rejection of the company’s request. The Court ruled in October 2005 that the Executive Council had to take a decision in six weeks. The company filed a second request in October 2005.
The company’s name by then had become Scarlet. The goal of the company was changed to “buy, sell, rent, build, operate as well as maintain and repair telecommunications networks infrastructure, including, but not limited to, wireless and fibre connections.”
The company again took to the courts in December 2005 because government hadn’t responded to the last Court ruling. Scarlet then went to Court in January 2006 to protest the rejection of its request. The Court decided that an appeal had to be filed with the Island Council. The Court considered four months sufficient for the Island Council to take a decision.
In a letter dated July 6, 2006, the Executive Council explained its decision not to grant the request for an amended business licence. Granting the licence would be “unwarranted in a social-economic sense with regard to the population.”
The Executive Council explained that in the policy adopted on October 2002 it had been decided not to grant any more business licences to telecommunications companies if it was the intention of these companies to establish and deploy their own telecommunications services.
The policy aims at protecting the existing telecommunications infrastructure on the island from the negative effects of unrestricted competition in the telecommunications market. Local telecommunications companies in a meeting expressed their concerns about the possibility of competitive companies bypassing their infrastructure by providing international calling services by means of the Internet and/or wireless infrastructure.
In the letter to Scarlet, the Executive Council stated that the way in which the company wanted to provide services would enable it to bypass the fixed local loop facilities.
By leasing bandwidth on the infrastructure of existing telecommunications companies, Scarlet would probably be able to avoid having to pay interconnection settlement fees to the existing service providers. This, stated the Executive Council, would negatively impact the revenues of the existing telecommunications companies. The involved company was informed of the possibility to appeal to the Island Council.
Scarlet filed an administrative appeal with the Island Council against the Executive Council’s decision of July 2006. Scarlet’s lawyer Bert Hofman pointed out that in January Scarlet had appealed the January 2006 decision by government. He suggested that replacing the earlier decision by a new one while an appeal was being handled demonstrated bad governance.
Hofman asked that Scarlet’s request be found admissible and that the Island Council nullify the Executive Council’s decision of July 2006.
Hofman further stated in his letter of July 20, 2006, that government was acting against the federal telecommunication policy and international treaties by going to lengths to protect existing companies. Scarlet argued that companies like ECC and IDL had introduced technological developments like mobile traffic and Internet before more sluggish government-owned companies like TelEm and TelNet.
Commissioner of Economic Affairs Theo Heyliger explained that the Island Council was now only dealing with Scarlet’s first appeal of January this year. He said the second appeal of July would be dealt with in the Central Committee after an advisory committee had been established.
The task of that committee, which would include several top officials of local telecommunications companies, will be to hear Scarlet and give advice. The establishment of this committee is on the agenda of the next Executive Council meeting and the decision will be forwarded to the Island Council afterwards, explained Heyliger.
National Alliance Councilman William Marlin criticised government for not taking decisions. He said the Executive Council had been waiting for the Court to take decisions and that this was not good governance.
“Government looks for a cheap way out: put the request on the slow boat to China and address it to Timbuktu to confuse,” he said. He said it behoved government to explain its policy where it concerns the moratorium on the granting of licences in the telecommunications sector.
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