Company's decision to raise its local calling rates.

It is understandable that the company wants to recoup the $10 million it will lose in revenue as a result of the forced reductions in its charges for overseas calls. But care must be taken that the increase in local calls does not make Bermuda uncompetitive.

While it is true that everyone in Bermuda makes some overseas calls and will benefit from the cuts in overseas rates, there will be wide variations in costs and benefits. A local company or individual with a local clientele could see costs rise, while an international company or a person who makes a higher proportion of overseas calls should see costs fall.

Changes are taking place in the telecommunications world very quickly and it is difficult to see where they will end. Deregulation and the end of telecommunications monopolies should benefit the consumer in the long run, but there is a risk that if the changes are not managed well, service will deteriorate -- or that companies will simply raise other fees to make up for the shortfall instead of finding ways to become more efficient.

The bigger problems, which has bedevilled the issue since the start is the system of regulation, which seems to be battling with the transition from being a regulator of two monopolies to the regulation of a free market.

BTC chief executive officer Lorraine Lyle said in this newspaper on Tuesday: "There is no process for these things to go through, which is part of the issue we are dealing with. In the whole realm of telecommunications, there is no clearly outlined process for how these changes come about.

"Even in the process by which we file for rate changes, it is not clear exactly the process it goes through or the timing. There are no set guidelines and the process by which we respond to world pressures is unclear.'' Clearly it will be difficult, if not impossible, to manage the process of telecommunications service well if no-one knows how they are going to go about the changing rates and meeting competition.

This process must be agreed to by the Government and by the players involved so that all are on an even playing field. If not, service providers will be put in the position of having to make rate changes quickly, without any clear sense of what effect they will have on the consumer.

Ms Lyle added: "Removing more than $10 million is a huge hit. You can't just take that away. Something has to happen.'' BTC has responded by proposing to raise its local rates. As the Island's major telephone provider, it needs to be profitable in order to continue to invest in new equipment and changes. But these decisions on rates need to be taken carefully to ensure that the Island -- whose success depends on a sophisticated infrastructure -- can remain competitive and that the consumer is not hurt.