Could Failed BTL–Smart Deal Leave Government Open to Legal Challenge?

Turning now to the aftermath of the failed BTL–Smart acquisition, concerns are surfacing over whether the collapse of the proposed deal could eventually expose the Government to a legal challenge.  Reports reaching Love News suggest that the Public Utilities Commission’s determination that BTL is a dominant provider could become relevant if Speednet, or any of its shareholders, seeks to challenge the conditions under which Smart has been competing.  That concern has gained further attention following an internal message sent to BTL employees today by Chairman Markhelm Lizarraga.  Lizarraga confirmed that the PUC’s determination has changed the environment in which BTL operates. He told employees that the designation brings additional regulatory obligations, greater oversight and constraints that will require BTL to be more disciplined in how it competes, invests and serves customers.  The chairman’s message did not refer to any legal action, but he did note that the dominant-provider designation as BTL’s immediate challenge, saying the company should not underestimate the regulatory headwinds ahead.  Meanwhile, some attorneys familiar with the telecommunications sector are reportedly concerned that the PUC’s findings could be used in a future claim questioning whether Smart has been competing on a level playing field in a market dominated by BTL.  PUP Chairman Henry Charles Usher was asked this morning whether the failed eighty-million-dollar transaction could leave the Government legally exposed.

Henry Charles Usher, Minister of Public Service: “That gentleman does not get into any business transaction for charity. He gets into business transactions to make a profit and he does whatever is in his power in his groups to maximize that profit. So I would not describe any business deal or any transaction that he has ever proposed as charitable. Certainly I think that there were many other external issues having to do with lawsuits etc that are coming. What we need to do as a government and I will certainly be the first advocate of it , we have to explain to people what these issues might be. That is most important, we have to be able to communicate, we have to be able to explain to them and to hear back the feedback when it comes to any of these issues. So as they come we have to be able to let the people know what’s going on.” 

In his employee bulletin, Lizarraga said BTL respects Cabinet’s decision not to support the acquisition and now considers that chapter closed. He acknowledged the time and effort employees invested in evaluating the transaction but said the company must now focus on growing through other avenues.