The Bermuda Telephone Co. Ltd. (BTC) has put up another hurdle against Government's attempt to introduce full competition in the local telecommunications market.

BTC yesterday launched a Supreme Court appeal against an order by the Telecommunications Minister that it must connect competitor, Quantum Communications Ltd., to its network by September 3.

The suit is one in a series of problems Government has encountered in trying to introduce competition in Bermuda's telecommunications market. Last week Government made a settlement with Cable & Wireless, which had launched a suit over the ending of its monopoly on long-distance services.

Now fresh problems are breaking out in introducing competition for local service. Quantum needs the connection with BTC so it can offer voice services to its Hamilton-based customers, putting it in competition with the company.

BTC, in an advertisement appearing in today's Royal Gazette argues it won't make the connection because Quantum's telecommunications license is invalid.

BTC claims that Quantum is a reseller because it leases its fibre-optic network from majority owner Belco Holdings Ltd., while its license requires the company to establish and own its own facilities.

But in response to BTC's arguments, Quantum president and CEO, Jim Sullivan, said yesterday the company has since purchased the source of the dispute -- the fibre-optic cable -- from Belco.

"Our license was valid when it was granted, and it is valid now,'' he said.

"Now all doubt is removed.'' However BTC president Lorraine Lyle said such a purchase -- for which she said Quantum has provided no evidence -- still did not answer the company's appeal to the Supreme Court.

"To do something after an illegal act has been committed does not make it legal,'' she said.

She said that sooner or later BTC will connect Quantum but not under the terms of the company's current license, which she said exposes BTC to legal risk.

BTC wants the terms of the license changed and a regulatory framework established so the company can compete under the same rules as Quantum, she said.

"Regulation by whim is not effective,'' Ms. Lyle said in an interview yesterday. "Some of the issues are that Quantum's license needs to be adjusted to reflect the fact that they are a reseller. The license is invalid or they are in breach of it. We believe that to proceed with interconnection would expose us to legal risk and we believe that we have not been treated fairly.'' According to the advertisement, BTC believes it would be committing an illegal act if it were to connect Quantum.

Ms Lyle also criticised the Telecommunications Commission for being slow in dealing with matters. She said the regulatory process was flawed and needed to be made clearer and applied fairly.

"Our argument are based on points in law,'' she said. "We strongly believe in them and we believe that they should be heard in a judicial arena. So far they have been heard in a political one.'' BTC has also applied for a stay against Telecommunications Minister Senator E.T. (Bob) Richards order to interconnect Quantum. If the stay is granted by the courts, BTC won't have to connect Quantum until its appeal is concluded.