expand by 30 times the capacity currently available to its Internet customers.

The additional capacity will give Logic the ability to provide cheaper data services to corporate customers, expand its electronic commerce facilities, and offer other products like voice over the Internet, Logic president Peter Durhager said yesterday.

"An increase in capacity of this magnitude allows Logic to compete in a much larger communications arena than before,'' he said. "Our advances in operations will no longer be inhibited by bandwidth limiations or logistical barriers. New products and services can be introduced quickly to a larger market sector without having to constantly reconsider our connectivity speeds.'' The deal also puts Logic in competition with Bermuda's long distance telecommunications providers Cable & Wireless Plc and TeleBermuda International Ltd. (TBI). The two long distance providers are also in the business of leasing dedicated high-speed data access lines to companies for data, frame relay, video, and voice.

Mr. Durhager said Logic will now be able to provide a similar capacity at a cheaper cost compared to renting a dedicated line. He estimated Logic can provide such capacity 30 to 50 percent less than that charged by Cable & Wireless and TBI.

Even though Logic will be in competition with TBI, it's leasing the additional capacity from TBI for 25 years at a cost of over $10 million, Mr. Durhager said. The deal allows Logic to double that capacity in a few years if demand warrants.

Mr. Durhager said TBI made the decision to rent capacity to a competitor because executives decided that in the long run it was in the company's best interest to do so.

Logic, a subsidiary of The Bermuda Telephone Co. Ltd., also leases capacity from Cable & Wireless.

The additional capacity will help make Bermuda a "truly competitive jurisdiction'' for electronic commerce, Mr. Durhager said. The company has already processed over $100 million worth of credit card transactions for customers of the Bank of Bermuda and the Bank of N.T. Butterfield and Son Ltd.

Logic has also processed transactions for about 50 overseas companies doing business over the Internet.

Another source of business the company is currently testing is providing telephone long-distance service over the Internet. The testing has led Cable & Wireless to file a letter to complaint to the Telecommunications Commission over what it sees as encroachment on the long distance market by Logic.

Logic is testing newly developed technology to allow customers to talk over the Internet without having to go through a computer. Cable & Wireless claims Logic is not licensed to provide long-distance voice service.

Mr. Durhager yesterday said since the company started business in November 1997 it has introduced fax over the Internet and global networking services.

"We will continue to push the envelope,'' he said.

He said he doesn't believe Cable & Wireless' claim has any merit and the company's won't need a licence to offer its voice over the Internet service.

Other services such as higher speed dial up, dedicated access, and video conferencing will also be introduced.