RA ‘not sufficiently fit for purpose’ – former commissioner
An overhaul is needed urgently for Bermuda’s telecommunications and energy regulator, according to a former commissioner of the Regulatory Authority of Bermuda.
Philip Perinchief, a lawyer who served four years as a consultant in the telecommunications ministry, said that the board of commissioners had submitted roughly 100 suggested amendments to the Ministry of Home Affairs “well over a year ago” without seeing any movement.
He said that the RA, created in 2011, had become inefficient and “not sufficiently fit for purpose” as a modern authority. He called for “a truly independent body” to oversee its selection of commissioners.
“Relevant, timely and appropriate legislative and regulatory reform allows the RA to breathe and grow naturally,” Mr Perinchief said.
“Without this support, it’s likely to suffocate and wither on the vine.”
The Ministry of Home Affairs defended the RA’s independence and stated that its technical officers were more than sufficient to keep commissioners up to date.
Mr Perinchief spoke after the RA’s selection committee reviewed applicants in June to fill two vacancies on its five-strong board of commissioners.
His place on the board was among them, with the three-year tenure as a commissioner ending on May 31.
Mr Perinchief said that the board had discussed the creation of “a truly independent body of technically and technologically competent, non-partisan or non-political” members of the selection committee.
He said that the committee, headed in accordance with the 2011 Act by the Attorney-General, Kathy Lynn Simmons, had a “desultory recruitment attitude”, with no reply to his application for an extension of tenure.
He added that two new commissioners had been appointed, with no notice in the Official Gazette.
The ministry has said that while the RA’s board signed off on a “package of recommendations“, the suggestion that recommendations on 100 amendments and reforms had gone to the ministry was ”incorrect“.
“The only recommendation made by the then chief executive officer and the general counsel and board independently of the Government is to increase the RA's audit function.”
A spokesman said the proposals also involved the Director of Energy and the Permanent Secretary at the Ministry of Home Affairs, who spent “many hours reviewing the Regulatory Authority Act 2011, the Electricity Act 2016 and the Electronic Communications Act 2011”.
“During the same period, the amendment to the Electricity Act to create the Innovative Licence, otherwise known as the Regulatory Sandbox, was also drafted.
“After that, work began on the fuels legislation. Both Acts were significant pieces of legislation, and the same group of officers worked on all. With the fuels legislation, then chairman of the RA Mark Fields also worked with the team on the legislation.”
The legislation was drafted by one staff member at the Attorney-General's Chambers.
The ministry said the rest of the commissioners did not review “any” of the legislation involving the RA.
“Because those amendments taken together would be challenging to tackle and draft in one colossal bite, they have been prioritised into three phases so that the most critical are amended first.
“The first phase, subject to Cabinet approval, will be tabled later this year.”
Former commissioner Phil Perinchief criticised the political make-up of the RA’s selection board.
Mr Perinchief also questioned the RA’s independence.
The spokesman responded: “The minister may give directions on the policies of the sector and industry. However, he cannot give directions on specific applications or licence holders. The RA is accountable to the Minister of Finance and Minister of Home Affairs as to how it utilises its funds.”
The RA Commission was said to be the highest-paid of all government boards.
“Regarding suggesting political interference, the ministry advises against baseless inferences, as there are no instances where the Minister of Home Affairs interfered with a specific application.”
The ministry also defended the expertise and tenures of RA commissioners.
“The RA is composed of technical officers that are skilled and knowledgeable at their jobs.
“As long as the RA retains those highly competent technical officers, then any onboarding can be done by the chief executive and his officers rather than the commissioners.
“However, our experience has been that the term limits of commissioners are constantly rotating, so there are always commissioners left to onboard working alongside new commissioners.
“When the last two finished, three commissioners remained.
“As such, the suggestion or need to raise commissioners’ terms to five years is unwarranted and unnecessary.”
The ministry told The Royal Gazette on June 28 that successful candidates would be agreed upon and gazetted “by next week”. As of yesterday, they had not been published.
Mr Perinchief said: “Such practices, which happen every year and will happen again in 2024 if there is no change, puts the operation of the RA under great risk, turmoil and strain.”
Walter Roban, the home affairs minister, has adamantly maintained the legislated independence of the RA.
Mr Perinchief said that the selection committee’s structure, staffed wholly by political figures, could raise the appearance of political control.
He insisted that the RA board “should, at a minimum, enjoy the independence of the Bermuda Monetary Authority model, but with its own unique structuring and mandate”.
“Its pride of place in Bermuda as an immensely important board is easily comparable to that of the BMA, and growing.”
Just two of the five commissioners are required for the board to reach a quorum, which Mr Perinchief called “risky” and “not in keeping with good governance” for a body tasked with far-reaching decisions.
He added that recommendations had been put forward to change the tenure structure to smooth the transition between commissioners leaving and new commissioners coming on board.
“The incoming commissioners would have the benefit of receiving the experience and expertise of the outgoing commissioners if structured correctly.
“Bermuda is a relatively small place and there are not a lot of the right credentials around to choose from a suitable pool of candidates.
“If there is a dearth of talent in this area, the vacancies are all too often filled with political hacks, friends and relatives, to the overall detriment of the organisation.”
He added: “Every year or so, the RA loses a wealth of experience and begins anew with quite often very green incoming commissioners who spend the first two years of their three-year tenure trying to learn industry jargon, terminology and what a rate tariff or Integrated Resource Plan is.
“Accordingly, commissioners and staff have called for a quorum to consist of at least three or five depending on whether the complement of board commissioners is raised to seven or nine commissioners, which is the proper number when you consider the huge amount of work the RA has currently, and has coming its way quite soon.”
Mr Perinchief said his advanced master’s degree in law included satellite communications law and regulations.
He studied at the United States Telecommunications Training Institute
He added that the 2011 Regulatory Authority Act was drawn up with his help during his time at the ministry responsible for telecommunications.
Mr Perinchief said he was “surprised” that the final Act included US material with legislation gleaned from Britain, Canada and Commonwealth jurisdictions because American legislation “differed markedly in some respects from the UK approach to regulatory matters”.
“In any event, the RAA 2011, and the subsequent primary legislation the Electronic Communications Act 2011, the Electricity Act 2016 and the Submarine Communications Cables Act 2020, are all in need of keeping pace with the rapid change in the markets they shape and manage.”
Mr Perinchief said he hoped that the authority’s board would take action on recommendations handed in, to bring “this fine and very dynamic organisation” to full capacity for the modernisation of Bermuda’s communications and energy sector.
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