passed an Act breaking up the Island's telecommunication's duopoly.

On Wednesday the House of Assembly debated the Telecommunications Amendment Act 1997 -- for the second time.

It clears the way for new local and international telephone carriers, including TeleBermuda, to enter the Island's markets and compete against established operators Telco and Cable and Wireless.

The Act was originally passed last year, but then sent back to the House by the Senate who recommended an amendment.

The Act passed on Wednesday included the Senate's amendment as well as several suggested by the telephone industry and Government.

Telecommunications Minister John Barritt told the House the Act was designed to open up the telecommunications business to competition.

However he said: "It is the beginning and not the end of amendments as we move from a monopolistic to a competitive environment in a dynamic and evolving industry.

"We need legislation that can accommodate change as well as move the industry forward at the same time.'' Walter Lister , Shadow Telecommunications Minister, said the Minister had taken Progressive Labour Party advice in making the amendments.

He added: "If Bermuda is to move into the next Century we must allow competition to enter the industry now.'' Mr. Lister added however that with more than nine million international calls made from Bermuda last year it was vital that new telephone operators were "first class''.

PLP backbencher Walter Roberts asked if the consumer would benefit from competition and see reduced prices or whether prices would become identical in the long run.

He said in the US, where the telephone market has been opened to competition, prices had not decreased.

"I have concerns that the consumer will get the prices that the Minister feels will happen with competition,'' said Mr. Roberts.

Ottiwell Simmons , a backbench PLP MP, also asked what was in the Act to prevent the new companies merging and to protect competition.

In reply Mr. Barritt said the legislation called for companies to justify price or service changes and added: "Maybe we will have to look at what position we will take if there are any mergers.'' Legislation to reduce the "unduly onerous'' effect of payroll tax on cultural organisations breezed through the House of Assembly Wednesday night.

Finance Minister Grant Gibbons presented the Payroll Tax Rates Amendment Act 1997 which he said was "quite a simple amendment''.

It only changed payroll tax by placing non-profit cultural organisations in the lowest tax category, where the rate is four and a half percent.

Previously the organisations were subject to a rate of seven percent.

While tax is applicable on the organisation, the full amount of the liability may be recovered from its employees.

This ensures that the organisation is not obligated to raise charitable funds in order to pay taxes.

To be placed in the tax bracket, organisations must be approved by the Finance Ministry who will consult with the department of Cultural Affairs.

Shadow Finance Minister Eugene Cox said the new incentive demonstrated the importance of cultural organisations and boded well for Bermuda as its cultural heritage was being developed more than it used to.

Initiatives to strengthen the Island's foreign sales corporation business were approved in the House of Assembly Wednesday night.

House passes legislation The draft order entitled the Companies Act 1981 (Fifth Schedule) Amendment Order 1997 was presented by Finance Minister Grant Gibbons.

He said the order would reduce annual fees for small and regular sized foreign sales corporations which did not lease aircraft.

These were non-US corporations designed to boost sales of US exports for use outside the US and they received tax incentives to encourage export activity.

Dr. Gibbons said Bermuda was the jurisdiction of choice for aircraft leasing companies but tax laws governing leases had changed in the US and no new companies had been seen here recently which was why their fees were not being changed.

However fees for other companies were being reduced so Bermuda could compete with the US Virgin Islands -- who were number one in the world with 3,200 foreign sales companies -- and Barbados who had 1,700 registered.

Dr. Gibbons said Barbados had grown rapidly over the last few years because it had changed its fee structure. Bermuda would now copy that fee set up in order to compete.

Small companies would be charged $500 while the regular sized businesses would be charged $1,000. He added that this area was not a "high priority'' to Government but the customers' needs had to be met.

Shadow Finance Minister Eugene Cox said international business was one of the Island's twin economical pillars and whatever was done to attract more of it was to the Island's advantage.

He warned Government not to do things in "a piecemeal fashion'' and said it should ensure it had the infrastructure in place to attract the businesses and keep them here.

Draft legislation designed to change insurance industry fees to better reflect the degree of regulations each class of company face were approved in the House of Assembly Wednesday night.

The Government Fees Amendment Regulations 1997 were presented by Minister of Finance Grant Gibbons who said the current regulatory system had proven very effective but there were a number of challenges ahead.

In particular there would be increasing competition from other jurisdictions and the demands of the Island's clients would have to be met.

He said the fee changes had been discussed with an Insurance Advisory Committee and were agreed to.

While fees were set to increase in classes three and four, continued Dr.

Gibbons, they would be lowered in classes one and two. Previously all four classes had enjoyed the same fee structure with registration fees at $2,315 and annual fees at $1,155.

But the regulations will see registration fees for class one and two insurance companies drop to $1,500 while their annual fees go down to $800.

These would make Bermuda more desirable as a domicile to these companies, he said.

Meanwhile class three registration fees would go up to $2,500 and their annual fees would climb to $2,500.

Class four will be hit more substantially with climbs to $15,000 but Dr.

Gibbons assured that in the terms of the size of these companies these raises were not tremendously significant.

Shadow Finance Minister Eugene Cox welcomed the changes but added that he hoped the same "sensitivity and accommodation'' shown to overseas firms would also be applied to local companies.