Abandoning the 60:40 rule for the telecommunications industry would take Bermuda back more than a decade to the time of a monopoly and $1.25 a minute overseas calls.

That is the view of former Telecommunications Minister E.T (Bob) Richards, who believes Government?s proposals for a shake-up of the industry would undo much of the progress inspired by competition in recent years.

The Ministry of the Environment, Telecommunications and E-Commerce (METEC) has produced a consultation paper on the industry?s future which proposes lifting all restrictions on foreign investment.

Mr. Richards, a United Bermuda Party Senator, broke the Cable & Wireless (C&W) monopoly ten years ago, when, as Telecommunications Minister, he allowed TeleBermuda International (TBI) to enter the market with Government protection.

C&W, which lost 25 percent of the market and was not allowed to lower its prices for overseas calls until TBI had had sufficient time to get established, filed a $100 million lawsuit against Sen. Richards.

A settlement was reached before the matter went to court and a new era began in telecommunications with a string of new players like North Rock Communications and CellularOne entering the market.

Sen. Richards recalled: ?I spent quite a lot of time breaking the C&W monopoly and they did not give it up willingly. They even threatened me with a $100 million lawsuit. But we did come to an amicable agreement in the end.

?The result was that it has allowed more carriers into the market and the cost of overseas calls has decreased from $1.25 to about 14 cents a minute.

?My concern is that dropping the 60:40 rule would undo a lot of the progress that we have made in the last ten years.?

Two of the internet service providers (ISPs) with majority local ownership which have sprung up during that time, North Rock and Fort Knox, have expressed similar concerns.

Fort Knox chief executive officer Troy Symonds argued the plan would wipe out all Bermuda ownership in the industry within 12 months of coming into effect.

METEC argued in its paper that more investment in the industry was needed to ensure the Island was served by cutting edge technology.

The Ministry has also proposed dismantling the current licensing system, in which carriers are classed into A, B, C and Cable TV categories, and are restricted to operating in a single sector. Under the new proposal, carriers would receive a unified licence enabling them to offer a wider range of services.

This would allow more carriers to offer convergence technologies, stimulate competition and lead to better services and lower prices for the consumer, METEC believes.

Sen. Richards said the unified licence idea had some merit and that the ?alphabet soup? licensing regime had served its purpose, by allowing several new operators to emerge over the past decade.

?The alphabet approach has outlived its usefulness,? Sen. Richards said. ?However the notion that carriers could be 100 percent owned by foreign investors would not be in the best interests of Bermuda.

?I think it would only be a matter of time before KeyTech Ltd. (owners of domestic carrier BTC) would get an offer it couldn?t refuse and that we?d be back in 1996.

?You would end up with one foreign company controlling the local loop, wireless technology and internet service providing. The smaller outfits would have to merge to respond to that. At best, you would end up with a duopoly.

?Bermuda-owned firms have shown their worth in the market. They?ve done a great job. People who think we should have costs equal to the US are crazy ? we simply don?t have the same economies of scale.?

A new regulatory structure was needed for the industry, but one which would encourage Bermudian entrepreneurs rather than shut them out, he argued.

In a meeting with concerned ISP representatives last week, METEC Minister Neletha Butterfield stressed that the proposals were only at the consultative stage.

The Minister has also encouraged the public to have its say and a public meeting will be held at some time. The full paper is available for downloading from the Government internet portal at www.gov.bm.