It may take five or six weeks before Bermudians find out if a proposed 75 percent increase in domestic telephone charges, retroactive to January 1, will be approved by the Telecommunications Commission.

Telecommunications Inspector E.C. "Ted'' Pitman said the Commission met on December 31 to receive the application from the Bermuda Telephone Co. Ltd.

(BTC). The public has 21 days to submit comments on the proposal to the Commission.

But he said the Commission had already asked for data and reports from various sources to begin the process of review.

He was confident members of the Government body were anxious to make a decision as efficiently as possible, given the public importance. Bermudians spent more than 100 million minutes on the line in overseas calls in 1997.

The BTC rate increase is part of a package of proposals that would, by this summer, have those same domestic charges more than twice as expensive as they were before the turn of the new year.

They were occasioned by the Commission's report to the Minister that recommended significantly reducing the interconnection charges paid by international carriers to BTC for use of its local network and services effective January 1 -- together with another cut this summer.

That should make calling overseas 12 cents cheaper per minute immediately, and 17 cents per minute cheaper by July 1.

BTC argues this means the total telecommunications bill to the consumer won't actually rise, as the domestic rate increase is offset by the decline in costs for overseas calls.

CEO Lorraine Lyle said, "Each individual is different. But the average customer has overseas calls on their monthly telephone bill.'' Amazingly, BTC's package of proposals was just made on December 30, together with an ex parte application to have the rates emplaced virtually immediately -- two days later.

Asked about the lack of lead time, BTC CEO Lorraine Lyle said that the report from the Telecommunications Commission was just adopted by the Minister for Telecommunications on December 21.

It was only nine days later that BTC filed for requested changes in their charges.

The Government-required changes, which followed on from directives of the US Federal Communications Commission (FCC), would instantly remove more than $10 million from BTC's total operating revenues of nearly $69 million. The company made $27-million in sales relating to international service.

It would almost wipe out net earnings that were last year placed at about $12 million. The company had to find a way to replace the lost revenue.

Ms Lyle refused to apportion blame to anyone as to why the process took so long, when the FCC directives and its possible effect on Bermuda were known a year ago.

She said, "The FCC lumped Bermuda in with a number of jurisdictions in an income-based study that dealt with what US carriers would pay for terminating traffic. They set bench mark rates.

"We knew the FCC ruling was coming into effect for December 31. And we knew it would impact us, but exactly how, and how Bermuda would prepare, we didn't know. We waited to hear from the Telecommunications Commission.

"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.

"That's why we find ourselves in dilemmas like this. There are just so many things happening in the telecommunications industry for each of the players, and for the Commission and for the Department of Telecommunications, without the things coming down the pike, it has been tough for everybody to be on top of all of the issues at once.

"There are a lot of players involved. We are the ones who get hit with a big chunk of lost revenue as a result of the December 21st local Telecommunications directive to reduce our interconnection charges. We feel there are other ways this could have been worked out.

"We're not sure that this all had to be done as of December 31st. What exactly the FCC would have done had these changes not been implemented at that time is not known. They set benchmark guides.

"We were ordered by the Commission to reduce the interconnection charges.

That's what we are doing. The company does not object to the philosophy and the direction it is going. We know that's where it has to go. We know the interconnection rate we charge is higher than the cost to provide it.

"But that is because our rates are bundled. We have to unbundle them and charge for other services at a more realistic rate so that we will still have the needed revenue to continue to make necessary improvements. If we don't have the revenue, we can't support the capital programmes.

"We knew before December 21 we would have to change the interconnection rate.

Did we know we were going to take this reduction in revenue all in one hit? No.

"Removing more than $10 million is a huge hit. You can't just take that away.

Something has to happen. We are proposing to pick up additional revenue by moving more fully to cost-based pricing.'' BTC proposes increasing standard residential line rates from the current $16 a month to $28 a month as of January 1, and to $34 a month by July 1.

A standard business line would rise from the current $22 to $32 for service beginning on January 1, and to $37 by July 1.

They are part of a list of proposed rate changes for 12 BTC services. The company made an ex parte application to approve the changes effective January 1. If approved, the rates were to be interim until the commission conducted an inquiry.

It comes as a result of the Commission's recommendations for BTC to reduce to 15 cents per minute the interconnection charges paid by international carriers on January 1. BTC had charged 27 cents and 24 cents per minute for outgoing and incoming calls, respectively.

A further reduction as of July 1, would take the rate down to 10 cents per minute.

Lorraine Lyle