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Report rejects overseas `call back' services

A Government Minister will review the contents of a 17-page Telecommunications report he received yesterday before he makes any decision about its recommendations for the future of the Island's phone services.

Telecommunications Minister the Hon. Grant Gibbons said yesterday: "I only got the report this morning. And at this time I'd like to read it thoroughly, think about it and see what the community feeling is.'' The Commission -- chaired by former UBP MP the Hon. John Stubbs, who died last Tuesday after a long struggle with cancer -- made sweeping recommendations for the future of telecommunications on the Island.

The Commission considered nine applications from various people who were seeking to provide telephone and cellular services.

Saying competition among those providing telephone, cellular and radio services was healthy for Bermuda, the Commission warned unlimited competition could be dangerous.

Unlimited competition "could discourage continued investment in infrastructure and result in a group of weak and diluted service providers'', it said.

It said that at the moment the Bermuda Telephone Company has a monopoly on the domestic telephone market, while Cable & Wireless has a monopoly on international calls.

Bermuda's international phone service, which currently costs between 25-30 cents a minute, is more expensive than international calls made in North America.

Domestic calls are cheaper. They cost 15 cents for an unlimited telephone conversation.

The Commission said Bermuda would benefit from "controlled and limited competition in the provision of both domestic and international telecommunications services''.

Accordingly, the Commission recommended that Government should licence Telco to compete with C&W in international calls, while C&W should be allowed to compete with Telco in the local market.

But it proposed that approval for Telco be delayed until C&W made a formal application to enter the local market.

It also said the two companies should offer the services through each other's facilities.

Of the remaining eight applications, the Commission proposed that five be rejected.

These services would allow Bermudians to call a switch system in another country like the United States. The switch system would record their number and phone the caller back who could then dial any person in the US for cheaper US prices than those Telco currently charges.

The Commission said these services should be prohibited within Bermuda because they were "cream skimming'' or using other companies' technology to offer lower rates.

The five companies were: Global Access Bermuda, Island Bell, Bermuda International Telecommunications, Bermuda Global Access Ltd. and TeleBermuda International.

TeleBermuda proposed to offer a rival international service to C&W by building a spur from a fibre-optic cable to the US and Canada, but first planned to offer a callback system.

Three other applications -- all using forms of celular or wireless technology -- were recommended for approval.

They are: North Atlantic Telecommunications, Bermuda Digital Communications Ltd. and Telecommunications (Bermuda & West Indies) Ltd.

BDC Ltd. director Mr. Kevin Stevenson said his company welcomed the recommendations, adding that if they were accepted, they would give Bermudians access to state of the art technology while enjoying lower prices.

NAT also proposes to build a fibreoptic telephone network in Hamilton to support voice and data services.