September 20, 2002

Dear Sir,

What Bermuda needs is competition for CableVision and then we should not need to be held to ransom!

September 19, 2002

Dear Sir,

I am a semi-retired international businessman and a permanent resident on the Island with my Bermudian wife. Like the majority of Bermudans, I have more questions than answers on the incredible situation we all find ourselves in with CableVision service. However, I am sure that if you made the pages of your daily the locus of a frank debate, you and could make a great contribution to finding a solution.

Here are several key questions to be tabled in the debate:

n Is it true that – as reported in the press – CableVision is illegally tapping the TV signals that they distribute at a (high) cost to the subscribers? That they are therefore "stealing" the intellectual property of others? That Cablevision would have set an "escrow account" (where and under what terms?) where they made contributions for many years in view of eventually compensating the TV signal owners? Why was this "commercial dispute" not settled? Would granting CableVision any licence amount to Bermuda endorsing an illegal arrangement?

n It seems CableVision's "legal" grounds in its dispute with the Government rests on a written promise made by the Government 15 years ago that any renewal of license would be made for not less than ten years? Is it possible for any government to legally bind its successors to any terms of a finite commercial contract?

n As a businessman I am certainly sympathetic to the need of a business to recoup the investment made during the life of any business contract. This is the 'moral' ground on which CableVision bases its position. The cable industry is indeed known for its heavy fixed investments in plant and equipment; actually, none of the US cable giant companies make consistent profits yet due to the large depreciation charges arising from such investment (although they usually show large cash throw-off allowing them to keep investing). The size of the investment is dependent on many factors like the kind of technology embedded, the size of the geographical area of service and others. We live on a mere 21 square miles and, until recently the technology used by CableVision was certainly among the cheapest available. Given that subscription fees are higher than in US, one wonders how many times has CableVision recouped its existing investment? Are CableVision audited financial statements over the past 15 years available? Can the public examine them given that CableVision is a public utility? Certainly the Telecommunications Ministry is entitled to have them and should make them public.

n The burning issue for the public, in addition to the high fees is, of course, the quality of the service. There is no printing space available to publish the many examples of poor service, from bad TV pictures to long periods of non-service to being unresponsive and/or misleading to customer complaints. Years ago I worked in Eastern Europe and I can state with certainty that CableVision's level of service has been significantly inferior to the ones in a region not known for being an model of good service. We have noticed an improvement in CableVision service in the last few months, no doubt prompted by the licence renewal deadline. It is clear that the Ministry was trying to place a 'short leash' on the company by granting it only a one-year license renewal.

How could one get ironclad assurances for the future? The century-old water utility model applied in France may be an alternative. The utility is granted a long-term licence with clearly spelled-out financial terms and service obligations plus the undertaking to maintain and invest to improve the system to latest technology economically applicable. When the licence expires, the government owns the system and solicits new bids from interested businesses.

What is to be done now? There should be a number of alternatives, but I think the Government must seriously consider the worst; in that case, Bermuda should confiscate the cablevision assets with proper compensation and operate it until it selects the most advantageous contract from new bidders. The cost of compensation, if any, to CableVision can be easily financed by issuing bonds backed by the system assets and future cash flow. Then perhaps a relationship like the one described above or another optimum arrangement can be concluded without the Government being the operator and/or the owner of the system.

I hope this letter makes a contribution to solving a problem which denigrates Bermuda's otherwise well deserved reputation.

September 19, 2002

Dear Sir,

While I'm trying to convince myself that the Minister of Telecommunications intentions are good and just, I keep asking myself why target CableVision?

It appears as though it is almost personal. I'd be the first to admit that service from CableVision could and should be improved. However, I also think that because of the upgrades that they are currently making, the training their staff members are undergoing, as well as the millions of dollars they are investing in education, digital upgrades and broadband, I believe they are heading in the right direction.

Why is it so difficult for the minister to believe that it is not unreasonable for CableVision to request the security of more than just a one-year license and therefore the opportunity to get a return on their investment? Aside from financial security, has the minister not considered the implications that this may have on the company regarding staff continuity?

If I were a staff member of CableVision with bills, a mortgage to pay and mouths to feed, I would be contemplating seeking employment elsewhere right now because of the possibility that the company could be forced to shut its doors in just one year. As a labour government, I thought you would be trying to protect the workers and their future, not harm them. By the way, where is the input and support from their union representative? I wonder if the minister will ensure that the two new companies that are applying to the Ministry of Telecommunications for a licence will be given a one-year licence until they can prove that they are a viable company and can provide a good signal and fast service response times.

I think it is safe to say that both companies, if successful with their applications, will be given much more time than a one year license. I'm sure the investors of these two new companies would not even entertain the idea of investing millions of dollars in equipment and staff training without more security than a one-year renewable license would provide.

It would seem to me that it would be much more beneficial to the residents and businesses of Bermuda if the Ministry of Telecommunications focused on making sure that companies like BTC improved service response times.

It seems absurd that the minister has gone this far over cable TV. However, it is still considered acceptable by that same ministry to allow BTC to take weeks or even months to repair a phone.

I assume that they must consider it acceptable because they haven't done anything about it. They did allow them to raise their rates a few years ago. The ironic thing is that I seem to remember that the ministry approved their rate hike request because they promised to improve service. I think most would agree that there has not been much of an improvement, if any.

Why aren't they on their backs? We've just learned to accept the fact that they will get to us when they want. Have we become that dependant on television that this has become the ministry's number one priority?

The way I see it is that if I have to call 911 for emergency service and my phone is out of order, I can't pick up my newly repaired cable box and call from it. If my cable goes out, so what, I'll stick my antennae it and watch the local broadcasts.

September 20, 2002

Dear Sir

I am a CableVision subscriber and I was one of the many that was not happy about the change in service and increase in prices bought on by the new cable boxes. I now pay $71.50 per month for my service and by and large it is acceptable.

I suppose I am fortunate to live in an area of the Island that also does not suffer too many disturbances in power, so my cable is quite consistent. I also realise that there are many subscribers on the Island, who, having chosen cable service over a satellite feed, for whatever reason, feel that they are the "victims" in this current dispute. I, like many on the Island, especially our seniors, do not like being without my "window on the world". However, and this appears to be to be the crux of the matter, how can our Government expect a company like CableVision, to spend $4 million on part of their planned upgrade, with a promise to spend another $4 million for just the certainty on one further year's contract? CableVision, in my mind, whilst not perfect, have at least been honest about their past shortcomings, and also their plans to provide the Island with an improved and more consistent service once this upgrade is complete. Has anyone really thought about how long it must take to 'recable' the Island? A huge and daunting task by any standards. At least they have shown their commitment to the Island, by embarking on such a task in the first place.

I really fail to see, in business terms, how Minister Webb can expect such a large monetary commitment by CableVision without the promise of a longer contract. Would you, in your right mind, give Bermuda a further $4 million with the possibility that you then "walk away" in a year's time, if the Government decides not to renew your contract further? It is corporate suicide.