Bermuda has the third highest Internet charges in the world, according to figures released this week.

Only Luxembourg at $88.25 for 40 hours a week and Germany at $82.92 come higher, according to a survey by the Organisation for Economic Cooperation and Development.

Bermuda's two Internet companies charge nearly $30 more than the OECD average.

The Royal Gazette worked out that North Rock Communications would charge $82 for a 40-hour monthly package with rivals Logic only 40 cents behind at $81.60.

Telecommunications Minister Renee Webb said: "Internet costs are prohibitive, particularly when people turn on their TV and see Internet prices in the States where you can get unlimited access for as little as $14.99.'' She said North Rock and Logic, as well as cable carriers Cable and Wireless and TeleBermuda had been asked to help with a survey of the industry with the results due tomorrow.

Ms Webb said: "We have no way of knowing at the moment what the costs to the company really are. We need to know what the prices are based on -- to see if they are realistic.

"Their costs could be $1 but they could be charging $10. We're looking at what's happening in the industry.'' But she said Government would not be forcing companies to lower the prices if they were caught ripping off their customers.

She said: "I want business to be able to flourish in a capitalist environment. Our answer to bringing down prices is to allow competition.'' But Ms Webb pointed out that Government had no powers to fix prices charged by Internet service providers and carriers -- unlike with Bermuda Telephone Company which as a scheduled company has to get its price hikes approved by Government.

And she refused to be drawn on whether cable providers should become scheduled companies.

She said: "We have not addressed that issue.'' Ms Webb said it was not impossible that a third company would seek to challenge Cable and Wireless and TeleBermuda by running cables to America.

She said: "Global Crossing applied to do this under the previous Government, but they weren't allowed.

"We want to hold out Bermuda as the centre of an economic hub but companies will ask how much it will cost them to transact through Bermuda. That is very key.'' And she said the information from the survey would help Government make decisions on other issues such as granting licences for phone services via the Internet.

North Rock spokeswoman Vicky Coelho said the company was not to blame for the high prices they charged.

She said: "We find international access is what adds the costs on -- it's the biggest single expense. It's similar to long distance phone calls.'' She said the cost of using the pipes to get off the Island were 250 times more expensive than costs charged by companies for crossing America.

She said: "TeleBermuda only have one route off the Island. When they have the new route to South America opening in October they have indicated that their rates will fall and then we will pass those savings on to the customers.'' However this was denied by TeleBermuda general manager James Fitzgerald. He said: "Our rates aren't considerably out of whack with North America.

Internet costs under fire "We have dropped our prices for international traffic by 58 percent in the last two years but that has not been passed on to the consumer by the Internet companies.'' Mid Ocean News Internet columnist Chris Gibbons also attacked the pricing policy of the Internet companies which charged people the full monthly rate even if they had not used their allotted hours.

He said: "If you don't use it that month, then they have done absolutely nothing to earn the money.

"Bermuda got the Internet before a lot of other countries but it's not caught up.

"Especially given that Logic is owned by BTC you would have thought they would have figured out how to charge for what you have used.'' Ms Coelho argued that the flat rate was to cover overhead costs such as supports services.

But Mr. Gibbons hit back: "If you go over your limit, they can figure out how much extra you've had and they charge you then. It's ridiculous.'' Logic president Peter Durhager said Bermuda was at least five times cheaper than the Caymans and that corporate customers were paying much less for the Internet.

He said: "Bermuda is well ahead of many places in the world.'' Mr. Durhager said companies needed to recoup the massive costs of laying pipes to America if they were going to have funds to keep reinvestment rolling.

Cable and Wireless general manager Eddie Saints said he was confident the current inquiry into Internet rates would find his firm was charging fairly.

He said: "The market isn't as big as elsewhere in the world so the costs aren't going to be the same.'' Opposition Leader and Telecommunications spokeswoman Pam Gordon said: "If Bermuda is to remain competitive, we need to address the prices of the international cable carriers.'' Eddie Saints Peter Durhager