Government has backed down on its previously stated intention to push telecommunications industry reform through the House of Assembly before the summer recess.

A spokesman for the Ministry of Energy, Telecommunications and E-Commerce (METEC) told telecoms companies the news yesterday in an e-mail.

METEC Minister Michael Scott had previously told the industry that he would table the Regulatory Authority Act and the Electronic Communications Act bills either today or next Friday, to be voted on before the summer recess.

The e-mail, seen by The Royal Gazette, states: "Please note that having regards to comments regarding the timing of the proposed draft Bills, the Minister has agreed to extend the current timetable for the tabling of the Bills.

"The tabling will therefore not take place in this session of Parliament as originally proposed. The Minister will update industry on its new time table as early as possible."

The news will be welcomed by many in the industry who had called on Government to delay the legislation to allow discussion.

One of those was KeyTech Ltd. boss Sheila Lines who said she said more time was needed for clarification of exactly what the reform was meant to achieve.

Ms Lines said that the industry has not had the consultation it had been promised from the Ministry of Energy, Telecommunications and E-Commerce (METEC) during the five years since the reform was first mooted.

She said that while an updating of the 1986 framework under which the industry operates was necessary, more dialogue was needed to create a regulatory structure fit for the next 20 years.

Jamie Thain, managing director of internet service provider Transact, welcomed yesterday's news. "We think it's the appropriate thing for the Minister to do to delay the legislation," he said.

Mr. Thain added that the question of fees to fund the new Regulatory Authority (RA) proposed for the industry — totalling around $9 million a year — and how the new authority would work in practice were two of the major issues warranting discussion.

The outline of the legislation was published last month and telecoms companies were given until June 18 to comment.

The reform will bring down the current licensing rules, which restrict the services that telecoms companies can offer. Government has said it believes the new "universal licence" regime will improve choice and pricing for consumers.

Ms Lines' company KeyTech owns the Bermuda Telephone Company, cellular provider M3 Wireless and Internet service provider Logic Communications, and counts Bermuda CableVision as an affiliate.

"We welcome the opportunity to continue discussion on the shape of reform that will be cost effective and targeted to specific benefits for Bermuda as a whole," Ms Lines said in response to yesterday's legislation delay.

She said a national policy document was needed to clarify the aims of reform. A dialogue with the industry could provide private-sector solutions that would be simpler and cheaper and than the creation of a new and expensive layer of regulation, she added.

"It's very hard to say whether this regulatory authority will be effective because its policy goals have not been set," Ms Lines said. "How can you measure whether it's been successful without setting goals?

"I think our industry does want to evolve and is ready to accept a challenge. But Government is not telling us the expected outcomes. If we knew that, it would help companies to adopt new models.

"If the Government came out and said, 'These are our five-year objectives', then that is something that the industry could plan for."

Government has said the legislation is based on "best practice" elsewhere, but Ms Lines questioned whether it would be appropriate for the tiny Bermuda market and suggested the aim should be the adoption of "best results" legislation.

Ms Lines also questioned the need for the costly new RA. The burden of funding the RA will be borne by the industry in the shape of extra fees, some of which are likely to be passed onto customers. That is something that Ms Lines said would be likely to cost jobs and reduce investment in the industry.

"How is it going to bring down prices for consumers if the regulator will cost $9 million?" she said.

Extra fees from the RA would put an upward pressure on prices, not help to bring them down. The two major areas in which telecoms companies could bring down their costs to provide lower pricing for their customers were salaries and infrastructure, she said. So was the Government seeking job cuts and a reduction of investment on new technology?

"Government has said they think there will be amalgamation in the industry," Ms Lines said. "This can only come about through companies going to the wall, or agreements between a willing buyer and seller." Mergers often led to job cuts as combined entities sought savings, she added.

"The big missing piece is: What is this going to do for Bermuda?"

METEC's public statements on reform have expressed the hope that reform will lead to greater competition, better services for consumers and higher investment in new technology, but Ms Lines said clear goals rather than hoped-for outcomes needed to be stated.

Government should set out clearly in a national policy document measurable targets for the new legislation, she said, whether it be higher Internet speeds or pricing according a benchmark, for example.

"There will be an opportunity for a private-enterprise solution before reaching for this regulatory solution, which is complex and costly," she said.

The telecoms sector had proved capable of realising Government's clearly stated aims for the industry in the past, she said. In 1986, the aim was competition and competition has flourished.

When Government sought a new undersea cable link between the Island and the US to provide extra capacity and competition in the telecoms sector, KeyTech, North Rock Communications and Transact teamed up to build the Challenger cable, which became operational two years ago.

There were great opportunities for companies to leverage common infrastructure rather than duplicating infrastructure, which would lead to higher costs, she said.

In its proposed form, the legislation would give sweeping powers to the new RA. Doubts over how the RA will use its powers and what policies it will pursue have created uncertainty through the telecoms sector, deterring investment for the future. "I believe that too much discretionary power is being given to the RA," Ms Lines said. "They will have a huge ability to make policy, but if they have no goals set, then they are not going to be accountable for what achievements they make."

One of the RA's roles will be to regulate competition and take action against those deemed to be abusing market dominance, a principle Ms Lines agreed with. But she did not believe a regulator was necessary to achieve it.

"If, for example, they want to facilitate competition in local loops for Hamilton, then come to BTC and have a dialogue," she said. "Ask if we're willing to help and if we say 'no' and we are deemed to be uncompetitive, then treat us as such.

"Why can't we have that discussion now?"