The Role of the Regulator

Recently there has been a lot of criticism of the Jamaican government in relation to the problems with the Jamaica Public Service (JPS) and the proposed takeover of Claro by Digicel.  It seems to me based on the comments made by the public and the opposition party that persons do not understand the role of the regulator versus that of the Government.

For any business it is important to operate within the laws of the country in which you reside.  The government of that country will set its policies and laws that are to be applied.  These rules tend to be general in nature and as a result certain actions of companies might not be illegal but run counter to the spirit of the law.  Governments will therefore often establish regulators to oversee particular enterprises and to develop more detailed rules governing their operations.  This is done for the primary purpose of protecting members of the public from unscrupulous business practices.

In Jamaica one such regulator is the Office of Utilities Regulation (OUR) which has the job of overseeing water, electricity and telephone services.  The regulatory body is to be independent of both the business sector and the government and is to operate without being influenced by either party.  In regards to problems with the JPS, the OUR is the body that handles all complaints.  All complaints go to that body and the OUR is responsible for settling any dispute.  Similarly, it is the OUR that is to determine whether the deal to acquire Claro is to be permitted.  This independence is critical for the effective operation of the regulator. The only time that Government is to get involved is if the regulator fails to carry out its mandate and acts contrary to the public interest.  This is the case in the United States of America where the Government has had to sue over the proposed merger of AT&T and T-Mobile because in their opinion it would violate antitrust legislation i.e. it would stifle competition.

Too slow

There is however a problem that exists with the OUR especially as regards the length of time that it takes to deal with issues.  It seems to me that they do no not possess sufficient staff to adequately carry out their function.  It is my opinion that handling only one of these utilities is a full time job let alone dealing with all three.  This might be a government matter whereby additional funding is required 0r it may be a case where the fees charged by the regulator need to be increased.
However, one thing remains clear the Jamaican government is not to become involved with the work of the regulator but is to leave the supervision of the industry to the experts that reside at the OUR.

Tags: Claro, Digicel, JPS, OUR