Telecoms firm Digicel has asked the Utility Regulation and Competition Office, known as OfReg, to refund about $1.6 million in fees after a court earlier ruled the regulator had acted illegally when it demanded broadband firm C3 to settle unpaid licence charges.
Digicel has asked the Grand Court to order OfReg to give back the cash that was paid between May and October this year.
The C3 case heard that legislation passed last year meant that other companies could not follow suit because the new law shielded OfReg from further claims because it validated all fees charged from 2003.
But the writ lodged by Digicel said the ICT (Validation) Act 2024 could not attempt to “validate regulatory fees up until the commencement of the Act”.
It added, “There is no legislation validating regulatory fees subsequent to the commencement of the Act and no legislation validating the royalty fees.”
The writ stated, “The plaintiff further seeks declaratory relief that the defendants had and have no lawful authority to demand, collect or receive the royalty fees; any demand for, or attempt to recover, royalty fees is unlawful and of no effect following the commencement of the … Act, there is no lawful authority to demand, collect or receive the regulatory fees for any period after the commencement of the Act, until lawfully prescribed and, in the absence of such prescription, it shall be deemed unlawful and rendered null and void.”
Damages and interest claimed
Digicel is also seeking interest on the money handed over, as well as its costs for the court case.
But the company this week said it would make no further comment on the case.
A spokesperson at Digicel’s headquarters in Kingston, Jamaica, said, “We will respectfully decline to comment.”
The move came after Infinity Broadband, trading as C3 Pure Fibre, earlier this year won a legal challenge against the Utility Regulation and Competition Office.
Justice Ian Kawaley ruled that the company was not obliged to pay a ‘royalty fee’ – 6% of its quarterly revenue – or a regulatory fee’, the pro rata share of OfReg’s costs for regulation of the ICT sector.
C3 had paid nearly $600,000 in fees since 2015 but stopped paying the royalty fee in 2019 and the regulatory fee in 2022.
OfReg appeals C3 ruling
OfReg has lodged an appeal against Kawaley’s ruling, which involved more than $1.4 million in disputed fees.
Kawaley said that OfReg had no legal powers to raise “coercive revenue” through royalty fees, which were passed on to government, and that there were no regulations to cover the levying of regulatory or royalty fees.
He added that the regulator did have the power to charge initial, annual or renewal licence fees, but there was nothing in the legislation to suggest that the power was intended to include coercive revenue.
But the decision did not mean that other Internet and phone service providers could claim their fees back.
Kawaley said the 2024 Act gave the regulator “protection against an avalanche of further claims”.
The court heard the legislation validated all licence fees collected by OfReg from 5 Aug. 2003 until the 2024 legislation came into force.
A spokesperson for OfReg said “we refrain from making any comment at this time” on the Digicel case because the matter was before the courts.