Far-reaching telecommunications reform proposals went before the House of Assembly as Environment, Planning and Infrastructure Minister Marc Bean introduced two “inextricably linked” bills aimed at replacing decades-old legislation.Between them, the Regulatory Authority Act 2011 and the Electronic Communications Act 2011 cover a raft of reforms approved by Cabinet in 2008.Mr Bean told the House that the Regulatory Authority Bill will allow a more independent regulator to regulate multiple sectors of the industry, while the Electronic Communications Bill is aimed specifically at the telecommunications sector.However, Shadow Government Estates Minister Cole Simmons charged that the reforms could end up squeezing Bermudian companies out of a fast-changing business.Mr Bean began by addressing both bills together.“This Telecommunications Regulatory Reform proposal seeks to create a regulatory framework that meets Bermuda's current and future needs, the Government's telecommunications regulatory objectives, and consistency with international best practices,” he said.“The proposed reform has two major components: the separation of policy-making from implementation and enforcement, and the removal of a segmented licensing structure.The first would create an Independent Regulatory Authority, comprising a Commission of three with a team of support staff, with the Minister continuing to represent the Island in international telecommunications matters.Eliminating separate classes for licensing would create a single standard license, he said, to be called an Integrated Communications Operating Licence (ICOL) or unified license allowing holders to offer any telecommunications service.Mr Bean promised “transitional measures” to protect smaller companies from aggressive competitors, and said the new regulations would give Bermudians better choice of services and make the Island more competitive internationally.And he warned that existing legislation, which restricts licensees from offering “multiple services on a single service platform”, could cause the Island to get left behind as the industry develops.Currently, businesses must operate different service licenses under separate companies.Under the reforms, Mr Bean said, a single license could cover an unrestricted range of services under one company.Pledging that fairness would be preserved, the Minister added that Government was not proposing “a model of open entry for new carriers”.Bermuda's market is too small for such competition, he said, and Government would abide by a transition period in which no new licenses would be issued.The Minister also warned that failure to reform would end up failing consumers.Acknowledging the Opposition's support for reforms, the Shadow Estates Minister said: “We need to ensure there's a balance between what the service providers want, what the investors want and what the consumer wants.”The OBA's Cole Simons suggested that the Commission be composed of a lawyer, a businessman and a representative of the Government.And he said it was important that the Authority be autonomous. Mr Simons said he was pleased that the Authority's finances would be audited by the Auditor General. But he advised that the sectoral review envisaged in the bill be an annual exercise instead of every three years.While he agreed that the industry will adjust to the new market, he would have preferred lighter regulation, he said.Addressing the issue of foreign ownership, Mr Simons said that since most of the industry players had already gained exemption from the 60-40 ownership law, it should be done away with altogether for the industry.And, estimating that the fees could come to a collective $400,000 annually, he asked how the government intended to arrive at a cap for the fees paid to the regulator by the industry players.The MP then pointed to provisions in the legislation dealing with industry dominance and said that in his view they were not necessary because of the small number of players in such a small jurisdiction.“We can call these players in and rap them on the knuckles and say we see what you're doing, let's stop it,” he said.Mr Simons also questioned why he did not see much in the bill about satellite and orbital slots.His colleague Shadow Finance Minister Bob Richards then took to the floor to disagree with the Minister's perspective on how competition started in the industry.Mr Richards noted that Michael Leverock got the ball rolling by starting a callback service, was taken to court by Cable and Wireless and lost.“His efforts started the changes that enabled the new carriers to form,” he said. “This industry and the competition in this industry was started by Bermudian private enterprise.”The former Telecommunications Minister said that following Mr Leverock's “audacity” Government implemented the “alphabet soup system” to manage the industry.“I was one of the people that tried to wrestle Cable and Wireless to the ground and for my efforts got sued for $100 million.”But Mr Richards said that by the time his tenure as Minister ended, the regulatory regime he had put in place had become obsolete because of technological convergence.And he criticised the government for only now coming up with a new regime to replace it with.“It was obvious to the Minister of the day in 1998 that the alphabet system was obsolete and here we are in 2011 just getting down to it,” he said.“It's been a long time coming.”Mr Richards expressed concern that the industry will be saddled with unacceptable costs as a result of the legislation.“Eventually this cost will be passed on to the consumer just as surely as day follows night,” he said.Remarking on the size of the legislation Mr Richards said that the law looked like it was written “by consultants for consultants” and that the taxpayer will end up paying for more consultants as it is implemented.Health Minister Zane DeSilva asked whether Mr Richards had a conflict of interest. “I'm no longer a director of that company so I have no interest to declare,” Mr Richards retorted.Continuing his speech, Mr Richards said that he agreed with the intent of the bill but wanted a lighter regulatory approach.“I agree with the intent. It needs to be a light touch. But I'm a little sceptical that's the reality because from what I see here there's potential for anything but a light touch.“There's potential for an annuity for consultants as far as the eye can see. And the Bermudian is going to pay for that.”Charles Swan, who was elected as a UBP MP, was supportive of the bill and said that telecommunications could be considered another pillar of the Bermudian economy. But he wondered how such a dynamic industry could be regulated.“Yes, I support it but the sooner we get it up and running the better.”Estates Minister Michael Scott said that the reforms could open up a lot of opportunities for entrepreneurs.He disagreed with the argument that it was too much regulation. The industry was litigious and expected a regime that was globally recognised to manage it. “It makes sense for Bermuda to have what the rest of the world has, tropicalised to meet our needs and that has been done.”Minister Scott, a former Telecommunications Minister, said that it was not dissimilar to the BMA regulation. He noted that the ISPs had been given the opportunity to receive a return on their investment by PLP policies. The evolution of the industry to one which was internet based reduced the value of the ISPs, he said, and there was a “clamour” for the industry to be opened up to allow universal licenses.He noted that the regulations anticipated the potential for predatory pricing and anti-competitive behaviour.Minister Scott said it was important to reduce the price of the internet and offer more capacity “to produce the innovation needed that we have all both advocated as policymakers as being our end mission.”But he noted that “it is only industry that can demonstrate this breakthrough of creativity in the way that my friend Michael Leverock did. He demonstrated this whole point about convergence of technology.”Mr Scott continued :”The greatest impact of this regulatory act is going to be on the ISPs of this country.”And he predicted more companies like Keytech which amalgamates a landline company, a mobile company and an ISP.“I don't see this as a development that we should fear. We should embrace it.”And he said there was “vast potential” in exploiting Bermuda's allocated spectrum.The OBA's Grant Gibbons, another former Telecommunications Minister, was up next. He noted that while technology had changed since his time as the Minister, the fundamental issues remained the same.He said Mr Leverock's callback venture relied on Cable and Wireless cable and the fact that he was not providing telecommunications services.“The issue that Mr Leverock raised did not end very quickly. That issue was the cost of telecommunication services.”And he joined his colleagues in questioning whether the aims of the legislation could be met in a cost effective way.Government backbencher Walter Roban countered remarks by the Opposition about a history of litigation in the industry.“Litigation is not symptomatic of any specific problem with the legislative structure.”Backbencher Walter Roban spoke of his discussions with industry leaders while he held the portfolio for telecommunications before resigning as Environment Minister last month.“The industry has been there through every step of the development of the legislation,” Mr Roban told MPs.“This is what the industry has been waiting for, irrespective of the scepticism expressed by the Opposition.”Claiming telecommunication leaders were “overjoyed” at what Government has in store, Mr Roban said a proper regulatory framework is essential to its development and profitability.He said the OBA's suggestion to let the industry loose contradicted the United Bermuda Party Government's decision to add regulations in 1995.Mr Roban said Bermuda already has an excellent telecommunications environment due in part to its mature and sophisticated commercial background.OBA MP Trevor Moniz questioned what would happen if costs from the regulations are passed by the telecommunications companies onto their customers.He pointed to existing problems in the industry, including a tendency to transfer ownership to foreign owners and a decrease in competition.Bermuda's also companies have a tendency to outsource to save costs, added Mr Moniz. However Digicel CEO Wayne Caines, the former PLP Senator, pointed out via a note passed to the MP that his firm only uses Jamaican call centres after hours. Digicel has agents in Bermuda, conceded Mr Moniz.Mr Bean concluded the debate by saying that at first glance he had doubts over the legislation as he thought reform should mean liberalising the industry.But he said after speaking to experts in the field at home and overseas he learned the potential benefits outweigh the potential risks.Such regulations are necessary in jurisdictions across the globe, he said, while some smaller companies may end up merging to make themselves competitive.He acknowledged the process had “taken far too long”, but said that the current administration has made reform a priority.