Government's plans for E business received positive feedback from the business community on Friday.

The Chamber of Commerce in Hamilton was packed out for a Public Forum on the Green Paper on E Business.

Nearly 50 business people (plus two civil servants and one consultant) attended the three hour meeting and in what proved to be a lively "forum" for discussion.

Several proposals sparked criticism, however. In particular, the Class C Internet service providers had something to say about the Green Paper's recommendation of further deregulation of the Internet Service Provision (ISP) market and permission for the international carriers to provide Internet service to residents. The Class C group currently includes North Rock, Logic, Fort Knox, iTech and Transact Limited.

The Green Paper asserts that the cost of Internet connection in Bermuda is currently too high and could be reduced by further competition in the market.

At the moment Cable & Wireless and TeleBermuda are licensed to provide Internet access to businesses but not to the consumer market,

But smaller local Internet companies expressed alarm that if the residential market was opened up to the large international telecommunications companies, the larger providers would undercut them.

Some stakeholders concurred with the Green Paper that part of the reason for the high prices of Internet service is the costs to ISPs of bandwidth, (an industry term for Internet capacity.)

According to the Green Paper, Class C ISPs have to pay international carriers high prices for bandwidth.

In the US a 100 percent leased T1 costs in the region of $1,200 a month, in Bermuda it can cost around $18,000. "By any standards this is a significant amount and goes some way in explaining the price structure for internet services."

Tom Coelho, general manager of North Rock, suggested that if further competition was needed, it was not in the residential sector ISP sector. "The Ministry of Telecommunications has effectively attracted competition in the ISP, Cellular, Local Telephone Service, and Long Distance markets. The least competitive segment is in the area of international service. North Rock's position has always been in support of establishing a level playing field."

Mr. Coelho suggested that the most effective measure to reduce prices would be to eliminate the Class A Licence designation and allow carriers to either purchase capacity from Brazil Telecom, which owns an existing fibre optic cable network running between Bermuda, Cuba, North America and South America, or build their own off island capacity.

"Until such time as local carriers are permitted to purchase international capacity directly, or build their own, the international carriers should not be allowed into the residential market," said Mr. Coelho. This drew a response from TeleBermuda International director of marketing, James Ivey who said that his company had spent over $50 million in establishing the long distance cable network.

TeleBermuda's original investment had been agreed on the basis of a certain "managed competition" principles. If such principles were to be relaxed, he said there would have to be something to offset the effect on TeleBermuda.

Mr. Ivey said it should be recognised that Class A carriers had major capital expenditure commitments.

In order to get new cable in here in 10-15 years the company needed to protect its ability to raise capital.

Jeff Hamill, chief executive officer of Logic Communications, said that the costs for operating an ISP in Bermuda were more than just the price of bandwidth.

Just in relation to real estate rents here for their hosting facilities and secure facility his company had spent over a million dollars last year.

He said he was happy with the current "managed competition" of the sector by the Ministry. "I understand what they are trying to do, we don't always agree with every decision, but trying to manage all the different interests is a difficult job."

The president and chief executive officer of Fort Knox Bermuda Ltd. was not present at the forum but, contacted for comment on Saturday, he said he was against further competition being introduced into the residential market at this time.

He said his company was currently looking at options to access cheaper bandwidth from overseas and hopefully that would lead to a reduction in prices for the consumer.