The Telecommunications Commission abused its power in scuppering a commercial settlement between Bermuda CableVision (BCV) and the Bermuda Broadcasting Corporation during a bitter commercial dispute, a judge has ruled.

CableVision complained in Supreme Court in July that it only agreed to continue carrying Bermuda Broadcasting Corporation (BBC) channels seven and nine if that would not cost the company financially, or its customers.

It said it only entered a commercial settlement on the basis of letters from the Commission, assuring it the terms would be approved by the Commission.

The agreement was that CableVision would still carry the BBC's channels, but on a new tier called the "broadcasting tier" which customers could opt in or out of.

The price of the new tier was to be left to the Commission, and the price of the economy tier, currently $30, would be dropped so the price of the economy tier plus the new tier would remain the same.

That satisfied CableVision's desire that its customers would not have to pay more in order to watch the BBC channels, which include local news programmes and popular soap opera The Young and the Restless.

During the hearing, CableVision's lawyer Narinder Hargun argued it was unfair and an abuse of power for the Commission to later change its mind, refuse approval and instead order CableVision to pay an annual fee of more than $300,000 to the BBC.

The cable company complained that would force it to make its customers pay more for the local channels.

Judge Kawaley ruled the Commission had given in-principal approval for the new pricing structure in March 2009, and the cable company relied upon that approval.

He said Cablevision was entitled to rely upon the letters and the Commission's later action in refusing approval was an abuse of power.

He agreed with CableVision's lawyers that the company did not expect a public authority to "betray CableVision's trust completely once CableVision have elected to carry the channels."

He therefore quashed the Commission's decisions.

A new telecommunications service cannot be introduced — nor rates altered for an existing one — without the approval of the Commission, which must seek public feedback first. It is also empowered to resolve disputes between parties to agree commercial terms.

Government lawyer Mark Diel argued that the Commission's former attorneys, Attride Stirling and Woloniecki, acted without authority in sending letters to CableVision pre-approving the new tariff structure.

The judge heard evidence that members of the Commission failed to open e-mails and were unaware of what their attorneys were agreeing to on their behalf.

However, the judge did not blame the members of the Commission, who are all volunteers, for what happened. He referred to an 'administrative muddle' at the Commission as being to blame for the breakdown of communication between the it and its former attorneys.

He commented: "The Commission became somewhat like a ship sailing on a dark night through strange waters strewn with reefs: without its sole navigator, it understandably went off course."

Now the judge has quashed the decision of the Commission, it is expected to approve the proposed new tier structure, subject to a public consultation exercise.

A further court hearing will be held at a date yet to be fixed to decide the matter of costs over the legal dispute.

Terry Roberson, General Manager of Bermuda CableVision said after the ruling: "Bermuda Cablevision is pleased with today's decision of Mr. Justice Kawaley. We hope this brings an end to the long running litigation and look forward to working with our regulators and our content providers, so we can provide the best possible service, and channel choice, for our customers."