Digicel’s long distance service offered through sister company Transact is not lawful and Transact does not have a licence to do business in Bermuda, the Government has declared.The declaration is contained in a package of affidavits filed by the Attorney General’s ahead of next week’s Supreme Court trial over the Transact/Digicel long distance service.The affidavits also reveal that a central part of Digicel’s case may be an October 20 letter in which it seeks to confirm from Telecoms that it can “offer all three services of ISP/Mobile and ILD (utilising VOIP) to customers who request this under the Digicel brand”.Government insisted in the affidavits that its response to Digicel on that query did not greenlight the offering of long distance service through Transact.Government has joined with long distance provider TBI and CellOne in objecting to the service. Digicel is battling CellOne for not providing interconnection.ISP North Rock is also protesting and in a letter to the AG has called on Government to declare Transact in breach of its licence, which would effectively stop it from carrying on business.North Rock general manager Vicki Coelho, said of the letter: “We have received confirmation of receipt of the letter and that the Ministry of Environment, Planning and Infrastructure Strategy is seeking advice and will respond more fully.”The Ministry in charge of Telecoms declined to comment when asked whether it would be acting against Digicel/Transact given its position. A spokesperson said: “As the matter is before the courts, the Ministry will not comment.”The legal battles if you include the CableVision disputes could amount to at least a quarter of a million dollars in legal fees.“This will cost the telecommunications sector hundreds of thousands of dollars in collective legal fees as a result of the current litigation with Digicel/Transact,” a telecoms insider said.The affidavits and grounds of objection were supported by the Ministry of Environment, Planning and Infrastucture and Permanent Secretary Derrick Binns, and also the Ministry of Business Development and Tourism, and the Telecommunications Commission.In past hearings Digicel has insisted that it’s acting legally and with Government’s blessing. Digicel was ordered by the court to halt the long distance service while action was pending.Nevertheless, TBI president and chief operating officer Gregory Swan was heartened by Government’s response.“The position taken by the Government is clear and reiterates their previously stated position that there has been no change to the policy of not issuing any new telecommunications licences or changing the conditions of licences until telecommunications reform has been implemented,” Mr Swan said yesterday.“The current separate licence classes, restricting the offering of services, remains in place until such time that the imputation tests of Regulatory Reform provide the opportunity for Universal Licences. If in fact Transact has been carrying on business in breach of the conditions placed on its 114 B Licence and Transact cannot lawfully provide long distance telephone service, this will have to be addressed accordingly.”The Government affidavits filed by consultant Crown counsel Maurice Cottle said: “Transact cannot lawfully provide a long distance telephone service, or any service at all, to customers in Bermuda or any customers at all ... None of (Digicel) or Transact is entitled to market ‘Transact’s long distance telephone service’ either to customers in Bermuda or elsewhere at all; or to any customers of other carriers at all; or using the “Digicel” brand name ...”On interconnection, the affidavit said: “Transact has no right at all, whether under section 22 of the Telecommunications Act 1986 or otherwise, to require other carriers to provide them with any interconnection at all ...”On the matter of Digicel acquiring Transact, Government’s affidavit stated: “The Registrar of Companies by the section 114B licence made it a condition that all services offered by (Digicel) and Transact shall continue to be available separately to all customers and that (Digicel) was not to bundle services offered by (Digicel) and (Transact). Nothing could be more unambiguous than that.”The affidavit added: “The approach of the applicants (Digicel/Transact) to these matters, in effect if not by design appears explicable only in terms of stealing a march of industry players in advance of the implementation of regulatory reform: and that is precisely one of the arguments that has been advanced against the applicants by two industry players ...”A central piece of Digicel’s case appears to be a letter of October 20 from Digicel CEO Wayne Caines appearing to seek to confirm if it was acceptable “to offer all three services of ISP/Mobile and ILD (utilising VOIP) to customers who request this under the Digicel brand using our Mobile Licence and Transact Licence”.The Government affidavit said: “Implicit in the positive answer to that question was that it certainly was subject to observance of the requirements of the section 114B Licence and the legal incidents relating to the telecommunications licence; the freeze, pending regulatory reform which both (Digicel) and Transact had agreed to; maintenance of the separate management and operation of (Digicel) and Transact; that there were to be no changes to licences pending regulatory reform; and that if there were to be any such change only the Minister of Environment and the Minister of Business Development could make such changes.”The Government affidavit stressed: “The Department of Telecommunications wishes to make it expressly clear that however its letter of 20 October 2011 might be read, it in no way intended to give permission to or to allow the applicants to do what was not permitted in the current regulatory environment, nor by their respective licences ...“When the Department of Telecommunications, in its letter response to (Digicel), dated 20 October 2011 ... said this in response to that above-referred statement query: if you provide an Interconnection Agreement between yourself and Transact, outlining the terms and condition of such billing arrangements. Please be reminded that under Transact Class C Licence it can offer ILD over VOIP only ... The Department of Telecommunications was not able to, did not purport to and was not authorising any breach of the Transact section 114B or telecommunications ‘C’ licences; or licence, or actions or omissions in breach of Government’s press releases and Minister’s statements, to which I have already referred.”