The Isle of Man is ?the offshore centre to beat? for its e-commerce attractions and benefits according to a report commissioned by that jurisdiction which also deems Bermuda ?no longer a viable contender in the e-commerce market?.

UK consultancy Charteris Plc filed the report ?e-business Strategy ? Five Years On? on commission from the Chief Minister?s office of the Isle of Man.

The consultants found that the Isle of Man?s policy and positioning had stood the test of time and commended its e-commerce marketing position as well as its business continuity legislation which allows foreign businesses to temporarily re-locate to the Island in the event of a disaster.

However they found that other jurisdictions that had positioned themselves as e-commerce centres including Bermuda had ?fallen by the wayside?.

Nancy Volesky, Director of E-Commerce with Bermuda?s Ministry of Telecommunications and E-Commerce, responded to the report that since Bermuda does not allow online gaming or gambling businesses, which has been the Isle of Man?s chief focus in e-commerce, ?we are not competing or are behind in that marketplace?.

She adds that Bermuda?s industry with respect to data storage, hosting, back up and business continuity is already mature.

?The local IT industry has the expertise to support the billion dollar insurance and financial services industries located here. This means the provision of customised (not just off the shelf) development, solutions and services and network management of global businesses,? she said.

The Isle of Man report follows an initial study in March, 2000 as well as a follow-up study in 2003 to establish the most appropriate means of developing e-commerce in Isle of Man. In both of those reports the consultants considered Bermuda a competitor and noted that in their 1999/2000 report there were ?some grounds for believing it represented a serious threat?.

?Similarly successful in the financial service sector, it made early headway is establishing legislation and appointing a world-class individual to head up its e-commerce initiative, James Martin ? an IT industry guru and Bermuda resident. They were also fast to set up good e-payments infrastructure in the shape of First Atlantic and Promisant and attempt to tackle the secure identification of individuals, through Quo Vadis,? the consultants said in the five-year-old report.

Three years later however they reported that Bermuda had fallen behind the pace on virtually every measure, although people continued to regard the island as a competitor.

The third and latest report states that Bermuda is not a significant threat for numerous grounds. The personal experience of consultant and report co-author John Miller, who spent eight months in Bermuda in 2004-2005, implementing an IT system for one of the banks, plays into the report?s findings. The authors also point to the Island?s own green paper published in 2003 which identifies issues including space restriction, cost of accommodation and travel, service deliveries and IT skills in the workforce. The web server on which the green paper is located is ?unreliable, so downloads may take several attempts,? the consultants note adding ?this, in itself, speaks volumes?.

Their reasons for not viewing Bermuda as a significant threat include its status as the fourth most expensive place on earth to live and its small land mass which in itself will limit actual business expansion.

The report also takes aim at Bermuda?s ?highly restrictive immigration policy? which makes hiring a non-Bermudian a lengthy process that can take up to six months. As for the Bermuda work pool, the consultants deem the state education system ?poor and constantly short of resource? and note that the IT sector is plagued by a chronic shortage of staff with all major companies operating between 25-50 percent of key roles vacant.

?There is a very small group of talented indigenous IT mangers,? the report said adding that IT professionalism is not comparable with Western Europe and work-ethic issues also exist with it common practice for Bermudians to hold multiple part-time jobs.

The IT sector is mostly staffed by expatriates on temporary work permits which ?leads to an unstable workforce with short term attitudes,? the consultants said.

As for telecoms, the costs are prohibitive and they still exhibit monopoly-like characteristics. The report notes that ADSL slow-speed connections of 128kb cost four times the price of 2 Mb link in the UK with the service subject to ?frequent failures? often for days at a time.?

?Off-island latency is unacceptably bad ? it is easy to observe this by trying to load a major site like www.theroyalgazette.com.?

They also notes that accommodation for non-Bermudians and business visitors are in short supply and extremely expensive although they err in their report by stating that non-Bermudians are not allowed to own a car.

High cost airfares, the danger of driving scooters and high custom duties also come under attack in the report which also note ?a degree of political instability and continuing racial tensions? as well as ?serious social issues including extensive illegal drug usage with recent estimates of per capita spending of $3200 on illegal substances?.

The consultants state that since Bermuda is in the high-risk Atlantic hurricane zone ?it is not a suitable location for disaster recovery or hosting.?

In fact, Cayman businesses chose to operate out of Bermuda business continuity centres after Hurricane Ivan.

Ms Volesky said her department is working with the Bermuda Monetary Authority, the Ministry of Finance and members of the industry to facilitate opportunities for Bermuda companies in business continuity and will also hold consultations with the business technology community this spring in an exercise to shape Bermuda?s future direction in e-business. The results will be used to draft a Green Paper which will ultimately serve as guidelines for the telecommunications sector for the next years to come.

Updates to the Electronic Transaction Act along with forthcoming data protection and child protection legislation are progressing, and expected to improve the regulatory and legislative environment and promote business technology development.

Ms. Volesky added that her department is also undertaking a comprehensive study to identify technology workforce requirements, challenges and opportunities. The government portal now hosts 12 Ministries and 60 departments and receives an average of 1,209 visitors per day while government ministers are successfully using digital certificates on all electronic communications and a government certificate authority is in the works.

Bermuda is not the only jurisdiction to receive negative reviews in the report. Both Jersey and Guernsey have ?lost the plot on e-commerce? according to the consultants.

They note however that Jersey has been hugely successful in building a fulfilment business and there are some signs of regrouping on the e-commerce while Guernsey has seen some success in developing a substantial on-line gaming business.