Despite warnings from the United States' Federal Communications Commission to stop providing call-back service in countries where it is illegal, GlobalTel is still offering its services to Bermuda customers.

The letter, sent by the FCC in July, said GlobalTel - a Florida-based company infamous in the local telecommunications sector for its aggressive courting of Bermuda customers - should stop operating in Bermuda.

The Bermuda Government did not learn about the letter until Wednesday, during a conference call between senior Bermudian and American telecommunications officials.

But an e-mail from a GlobalTel customer service representative said the service is still available for customers in Bermuda and the company's website quotes rates for calls originating in Bermuda.

According to a statement issued by Telecommunications and E-Commerce Minister Renee Webb (pictured), the FCC's letter told GlobalTel that "US providers of call-back service must operate in a manner that is consistent with the countries in which they operate".

The letter referred to Bermuda's telecommunications legislation, which outlawed call-back services in 2000 and includes provisions for a $50,000 fine or two years in prison, or both.

"If your company is in fact offering a form of call-back service, you could be liable to the statutory penalties described in the Bermuda legislation," the FCC wrote.

"The ruling is a major milestone for the Ministry in its efforts against operators of illegal call-back services," Ms Webb said.

Ms Webb's statement said Bermuda is one of a few international jurisdictions which have introduced anti-call-back legislation which " (allowed) intervention by (the FCC) if necessary".

But the statement did not indicate what specific action the US regulatory body would take if GlobalTel continued to operate.

And in August - before Ms Webb knew about the letter - she was pessimistic about the forthcoming decision because "the FCC is an American body which will act to protect American interests".

During a telephone interview this week, however, Ms Webb did not seem concerned about the FCC's lack of precision, even though GlobalTel is continuing to offer its service.

"Usually they are warned when they are outside of the law," she said. "The point is they've been warned."

Since it began servicing Bermuda in 1996, GlobalTel has overcome several obstacles to provide its service.

Cable & Wireless, which was the only long-distance provider at the time, quickly blocked the access numbers which customers dialled to trigger a call-back.

To circumvent the problem, GlobalTel instructed customers to trigger callbacks by sending numeric messages to one of more than fifty pager numbers.

The owners of the pagers, according to Telecommunications Director Greg Swan, received nuisance pages, while GlobalTel intercepted the messages with scanning equipment in a Sandys apartment and triggered the callbacks via satellite.

That set-up worked until August, when police raided the apartment and seized the equipment.

The representative would not say how GlobalTel provided its service to Bermudian customers, although the company does allow customers to trigger callbacks through its website.

Although Government officials insist they are concerned about any illegal activity, the battle may not be worth the effort.

Unlike in 1996, when GlobalTel began its selling its services here, call-back is no longer the cheapest option.

Although the company promised to drop rates 15 percent a month back in December 2000 - and never raise them once they fell - GlobalTel's per-minute charge for calls to the US has risen since then from 19 cents to 30.5 cents.

Licensed long distance providers charge rates as low as 23 cents per minute, depending on the time of day (see chart), although Ms Webb said the declines had more to do with allowing Internet providers North Rock and Logic to enter the market rather than competition from call-back companies.

"Quite frankly, I don't know why anyone would use the service," Ms. Webb said.

In conversations several months ago, call-back companies told her they were no longer interested in Bermuda because the cost of calls had come down so much.

The operators told the Minister that the use of their services in Bermuda had dropped substantially and they were more interested in lucrative Caribbean markets, where the relatively high cost of conventional long-distance creates high demand for their services and more room to undercut licensed providers.

According to the Ms Webb, Cable & Wireless and TeleBermuda also confirmed that the number of incoming calls from call-back operators had declined drastically.

TeleBermuda spokesman Jim Ivey added that the frequency and length of calls made by the company's customers has increased since the company introduced its 23-cent-a-minute rate over a year ago.

But the Minister said that if Government discovers that GlobalTel is still operating (in the past, Ministry officials have set up test accounts to check), it will ask the FCC to take further action.

It will also look for ways of shutting down the service within its own jurisdiction.

"Whomever the Bermudian is, we'll arrest the Bermudian," Ms Webb said.

She said many of the call-back companies - there have been as many as four operating in Bermuda - often relied on a local connection, or sent a representative here to run the operation.

But local enforcement in the past has yet to produce results.

In April, hotelier Larry Lamb became the first person charged in court with telecommunications offences associated with operating call-back services, but he will not go to trial until later this month.

In August, charges against a second man, Michael Edinholm, were dismissed after the Department of Public Prosecutions failed to file the charges in court within the legal time period.

Ms Webb also recalled one instance of a call-back company operating from a hotel room.

Authorities tried to catch the visitor at the airport when he left, but failed.

As a last resort, Government could make it illegal to use call back services, not just to operate them.