18 September 2020

Can Legal Blunder Stop Cheap Broadband on St Helena?

originally published in the The St Helena Independent Volume XV, Issue 41, Friday 18th September 2020, p. 3

It appears that our own legislation could potentially create a problem for the future. Many are arguing for competition, or at least substantial change to how telecommunications works on the Island. There is strong opposition to extend Sure’s monopoly beyond the current licence period which ends in 2022. It is felt that if Sure’s monopoly continues the introduction of fast broadband via the submarine cable will be of little help to lower the cost of communication for the people and businesses on St Helena.

It is true that we have one of the highest charges for telecoms in the world and this price is for a very slow service.

It is well known that if Sure SA does not get an extension to their monopoly licence beyond 2022 St Helena Government has to pay compensation to Sure for their investments on the Island. This is likely to be a multi-million payment.

What is not clear is what SHG is paying for. The compensation clause in the Telecommunication Ordinance (2006) says “Whenever a Utility licence comes to an end and it is not renewed for a period commencing with the expiry of that licence, the Government must pay to the former licensee compensation in accordance with this section.”

Further down in the same section it is stipulated what assets should be compensated for and how the value of the assets should be depreciated. It is all in great detail.

There is only one big problem with the legislation. It does not stipulate what happens to the assets after millions are spent on compensating Sure. There is nothing in the Ordinance stating that the assets are transferred into SHG ownership after the compensation has been paid. As the law is written it looks like we are paying Sure compensation for not being able to use their assets for telecommunication but not to take ownership of the assets.

What can happen is that we have to pay Sure twice, once according to the legislation, and once more to take ownership of Sure’s assets. Sure can charge SHG whatever they want for the assets and obviously the Island cannot afford to build a completely new telecommunication network, bury new cables and erecting new towers, and everything else that goes with it.

This legal hiccup makes it almost impossible for anybody to compete with Sure or actually buy them out.

Somebody suggested that we should change the Telecommunication Ordinance but this is not feasible either as the current licence agreement with Sure is based on the current legislation and any new legislation would be retrospective and thereby invalid.

Just to clarify this important issue further we can compare the Telecommunications Ordinance with the Utilities Ordinance (2013). This is the law which regulates Connect St Helena. As it stands now, this law is regulating a state owned company (Connect is state owned) but the legislation is written in a way that it could also be applicable if Connect would be privatised.

The Utilities Ordinance is clear on the point of compensation and what happens to the assets if Connect’s Utilities licence should expire, is says: “Whenever a licence of a Utilities Provider comes to an end and it is not renewed for a period commencing with the expiry of that licence, the public utility service assets thereupon vest, without any deed or other instrument of transfer, in Her Majesty in right of Her Government of St Helena, and that Government must pay to the Utilities Provider compensation in accordance with this section.”

This is a legal way of saying that ‘when SHG pays the compensation they take over the assets’. This is how it should be but it was overlooked in 2006 when they wrote the Telecommunications Ordinance and it was also overlooked in 2012/2013 when the new contract was signed with Sure. This can be a very costly mistake by St Helena Government but hopefully arbitrators and legal experts can sort out the problem in St Helena’s favour.

High-speed broadband would be huge for education. Not only could we make better use of online materials, but with affordable broadband teachers could develop their practice from home.
I'm an IT engineer and I would love to return to my island to start an IT business, but because of the slow, expensive and unreliable internet connection this is simply impossible.
I had to leave St Helena to study. Being 5000 miles away from my family and friends is hard. Not being able to skype with them due to the slow and expensive internet on St Helena is even harder.
Socioeconomic status is now heavily reliant on broadband penetration. With the ever-growing importance of the internet, St Helena with its limited access is in danger of being left behind.