The Eastern Caribbean Court of Appeal has ruled in favour of telecommunications operators, Caribbean Cellular Telephone, BVI Cable TV Limited, Digicel (BVI) Limited and Cable & Wireless (BVI) Limited, in a longstanding dispute over the calculations and use of the telecommunications levy.
In a unanimous decision, the court upheld the decision handed down by the High Court which sided with the operators against the Telecommunications Regulatory Commission (TRC), and ordered that reasonable legal costs be paid to the respondents within 30 days. A written judgement is expected shortly.
The case centred on the interpretation of provisions in the Virgin Island Telecommunications Act 2006 governing how the TRC can collect an annual levy from licensed telecommunications companies. The Court determined that the levy is not intended to serve as a general revenue mechanism for the TRC, but rather as a limited tool to address funding shortfalls tied to the TRC’s operational needs.
Under the ruling, the TRC may impose the levy only if its audited financial statements show a deficit after accounting for other sources of revenue such as royalty payments, licence fees, spectrum fees and other regulatory charges. This interpretation reinforces the principle that the sole intention for the levy is to recover the reasonable operating costs of the regulator, rather than generate a surplus.
The judgement also addressed how the regulator may use any funds collected from the levy.
According to the Court, levy funds collected from telecommunications operators must be used strictly for lawful purposes of the regulator, and money raised for regulatory purposes cannot be diverted to unrelated government projects.
It has been ordered that funds previously transferred by the TRC to the Government of the Virgin Islands, to support infrastructure initiatives including $2 Million for the East End – Long Look Sewerage Project, be returned to the commission.
Chief Executive Officer of Caribbean Cellular Telephone and BVI Cable TV, Averad Penn welcomed the ruling in an invited comment to 284Media, “We are thankful for the clarity provided by the Court of Appeal. Regulatory certainty and the rule of law are essential for industries like telecommunications that required long-term investment.”
Penn said that as a locally owned company, CCT has investment in communications infrastructure for the territory for nearly four decades and remains committed to working with the government and the TRC to develop digital infrastructure in the Virgin Islands.
The judgement is expected to shape how the TRC calculates the industry levy and manages in financial structure going forward.