Nearly two years from now, the proposed merger between telecommunications providers BTL and Speednet has been called off entirely, but the fallout from the failed acquisition could still leave BTL facing significant market challenges, according to former Public Utilities Commission (PUC) chairman John Avery.
Avery, who opposed the planned acquisition from its inception, calling it legally invalid, argues that a lingering regulatory measure imposed amid the merger review has put the incumbent telecommunications provider in a precarious competitive position. The regulatory order, known as a statutory instrument (SI), freezes all of BTL’s existing rates for a three-year period, leaving the company unable to adjust its pricing even as competitors move to capture market share.
PUC has long classified BTL as a dominant market provider, a designation that remains in place even after the collapse of the Speednet deal. Under that status, the company already faces heightened regulatory scrutiny of all pricing decisions, but the three-year rate freeze adds an extra layer of constraint that runs counter to existing telecommunications law, Avery says.
“The law is clear that dominant providers retain the ability to adjust their rates to match changing market conditions, but this SI overrides that provision by locking prices in place for three years,” Avery explained in an interview transcript from an evening television news broadcast. “If rival licensed providers choose to cut their prices to attract new customers, BTL cannot respond in kind. That leaves the company completely unable to defend its existing customer base if competitors decide to exploit this vulnerability.”
Beyond the inability to match competitor pricing, the rate freeze also slows BTL’s ability to respond to broader market shifts. Any new service package, pricing plan or updated offering the company wants to roll out must first go through a full PUC approval process, delaying the company’s ability to adapt to changing consumer demand and industry trends.
Avery says the regulatory measure was never justified, even when the acquisition was still under consideration. The designation of BTL as a dominant provider and subsequent rate freeze was only implemented to ease public fears that the merged company would act as a monopoly and engage in predatory price gouging, he argues. Now that the merger has been canceled, the unnecessary rate restriction violates existing telecommunications legislation and should be withdrawn immediately.
Avery is calling on BTL to lobby PUC leadership to repeal the SI, replacing the rigid three-year freeze with a standard, formula-based rate review framework that aligns with existing law and supports healthy market competition. “Regulators should not be setting static prices in this market,” he noted. “The law makes clear that market forces should drive pricing, with appropriate oversight for dominant providers – not arbitrary freezes that distort competition.”