The Telecommunications Commission has rejected a Cable & Wireless Plc plan to lower its international telephone rates.

Cable & Wireless, which is in competition with TeleBermuda International Ltd., had submitted a proposal to the commission to give its customers a six percent rebate for international calls made in June, July and August.

The company also wanted to expand its regular discount periods for calls to the US, the UK and Canada. The proposed rate changes were submitted to the commission on April 29, a few months before TeleBermuda began operations.

TeleBermuda has marketed its service by claiming its prices would be 15 percent less then Cable & Wireless' existing rates.

Cable & Wireless deputy general manager John Fuge said the company was still reviewing the commission's decision and would give a full response next week.

"We are disappointed that the savings we are making on the wholesale market can't be passed on to customers at this time,'' he said.

In reaching its decision the Telecommunications Commission stated that the proposal by Cable & Wireless to offer a three month rebate period, as a temporary reduction, failed to satisfy Government's telecommunications policy as outlined in a position paper of May 10, 1996. The position paper outlined the manner in which Government was going to open up competition in the local and international telephone market. Cable & Wireless had the monopoly on the long distance market, while the Bermuda Telephone Co. Ltd. had the monopoly on local calls. "Moreover, the limited duration of the proposed reductions is likely to create confusion in the marketplace as rates are first lowered and then changed again within a three month period,'' the commission said in a July 16 statement. The commission stated it was rejecting both of Cable & Wireless' proposals for the temporary rate reduction and the changes in the discount calling periods until the company submitted a "comprehensive'' rate package. The commission would then establish a top and bottom range within which Cable & Wireless would be able to set its rates.

"Once the price ceilings and floor prices are established, C&W will have the ability to set its rates within the allowed ranges, provided that in general it spreads its rate reductions across all routes and complies with the statutory requirement for non-discriminator treatment of customers,'' the commission stated. "This approach is designed to ensure that all Bermudians participate in the benefits of competition in the international telecommunications sector, while at the same time preventing anti-competitive pricing action by the incumbent carrier, C&W.'' Government, in its position paper, warned that it would not allow "predatory pricing'' by the already established carriers -- Cable & Wireless and the Bermuda Telephone Co. Ltd.

Cable & Wireless plan rejected The term "predatory pricing'' generally refers to attempts by one competitor to undercut a rival's prices at below market rates so as to drive it out of business.

TeleBermuda objected to Cable & Wireless' proposals on the grounds that the company had not given enough notice about its intentions.

The commission closed its statement by calling on Cable & Wireless to submit its "comprehensive'' proposals as soon as possible.

Mr. Fuge would not comment on when the package would be submitted to the commission.