anticipated decision, Government announced yesterday that Internet providers can offer long distance services. Mairi Mallon reports on the outcome of this and how customers will benefit.

Telecommunications giant Cable & Wireless could pull a planned $110 million worth of investment in the Island's infrastructure as a result of the Government announcing yesterday that the Internet can be used for long distance calls.

Eddie Saints, the general manager of Cable & Wireless said that while yesterday's announcement came as no surprise to him or his company, the long-term plans for the company would have to be reviewed in light of the news.

He said: "In world companies like ourselves, who have put a tremendous investment in Bermuda. The question is can we afford to maintain this or (should we) review this? "We have $80 million earmarked for the next two years, and a total of $110 million capital investment in the next five. We will have to look at can our business plan sustain it and ask can my investments be recouped?'' Telecommunications Minister Renee Webb yesterday announced that the law would be relaxed to allow telephone calls to be placed over the Internet, allowing for the first time Logic and North Rock to muscle in on the lucrative long distance phone call business.

And she also said that both Cable & Wireless and TeleBermuda would for the first time be able to offer Internet services -- but only to businesses and not to homes. Ms Webb said: "It is Government's hope that these changes will be viewed as a positive step for enhancing telecommunications competition which will be not only of benefit to the people of Bermuda, but to the entire economy of Bermuda.'' Mr. Saints, speaking after a meeting with the Minister, was keen to state that the change in the telecommunications laws would not mean that Cable & Wireless would up and leave the Island.

But he added: "This decision continues to fragment the industry.'' Mr. Saints said on the issue of now being recognised as having a licence to carry out Internet services although only with commercial customers: "Our position has been from the start that our licence allowed us to do Internet service originally. And the ruling to just allow us commercial access is very unfair.'' The concern voiced by Mr. Saints was echoed by James Fitzgerald, general manager of TeleBermuda, who said that while he welcomed competition, it had to be on a level playing field. He said that the decision by the Government did not offer fair competition.

"Competition brings out the best in all businesses. However, competition has to be on an equal footing. Cable & Wireless and TBI are on equal footing. We have both laid a lot of cable and put in the investment.

"But on the other hand we have Logic, the sister company of BTC and owned by KeyTech. It allows BTC to get into long distance calling, when a licence they applied for before was turned down.

"It certainly turns all the tables and the fact that we and Cable & Wireless have had to put cable between Bermuda and the US does not leave a level playing field.'' However Logic's president and chief financial officer Neil Speight said he was delighted at the outcome.

"We really support the decision. Logic has taken a lot of time and effort over the last two years to get this to happen. It will bring value and innovation to the market place.'' He said he was unable to say so far whether the outlawed LogicPhone scheme which was closed down last August would be revived, or a new scheme put in its place.

"We are all working very hard at this at the moment. We are not sure what we will be calling the system, whether we will use LogicPhone or another name.

There is not a single proposition at the moment.'' North Rock will be issuing a statement on the matter later today. Ms Webb unveiled the plans yesterday first to representatives from the four companies involved -- Logic, North Rock, TeleBermuda and Cable & Wireless, before hosting a press conference.

She said: "Many multinational companies want to use international telecommunications carriers who provide fully integrated services around the world.

"We would expect that the larger carriers should be able to offer lower business rates for Internet services. This is one more step along the way to ensure that Bermuda becomes an E-commerce centre. Presently Internet rates in Bermuda are among the highest in the world.'' Mr. Saints added: "Cable & Wireless is greatly concerned that whereas the Internet Service Providers appear to have been given all they asked for, we have been severely restricted in the services we wish to offer our customers.'' He said that there were many issues which had to be clarified, such as whether the two companies would have to pay fees to BTC in the same way that Cable and Wireless do. Currently they and TeleBermuda have to pay 10 cents for every call coming in or going out of the country to BTC.

He added: "It is premature to say what the outcome might be, but it is true to say that Cable & Wireless is not in the position of having to re-assess the implications of these developments on our business plan and on proposed investment plans currently under consideration.'' The actual change in the law affects a band under the telecommunications laws known as "Class C'' carriers which leaves the door open for other companies to get in on the long distance call market.