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Telecoms providers to offer bundled internet, phone and TV packages

Bundled internet, phone and TV services can finally be offered to consumers after 19 Integrated Communications Operating Licenses, or ICOLs, were issued to Bermuda’s telecoms providers. And Government and Regulatory Authority officials assured that they were confident consumers on the Island will see better deals and lower prices as a result of the increased competition. On the heels of yesterday’s announcement, providers are already launching and planning new services that they were not allowed to offer before getting ICOLS. Advertising for new internet, phone and TV services are expected as early as this week, and bundling of services may follow at any time. Regulatory Authority CEO Philip Micallef said that to ensure fairness between providers, they are introducing a system of handicaps that are called “remedies”, which will be announced next week, and may include tariffs and the power to open up networks. Minister of Economic Development Grant Gibbons said yesterday the issuing iof ICOLS “marks a major step forward in the further deregulation of the Bermuda telecoms industry — a process which began in 1995.” Mr Gibbons continued: “Before the issuance of ICOLS, telecommunications companies in Bermuda operated under a class license system — Classes A, B and C — which enabled companies to offer either landline, cell phone, internet or cable television — but not all of them. As technology continued to advance, it became clear that this system was no longer relevant or workable as companies sought to bundle services and create operational efficiencies and better pricing for consumers. The issuance of ICOLs will facilitate this process.” He said the RA’s issuing of ICOLs is a major step towards enabling an environment of fair and enhanced competition. “And for the Bermudian public, the goal is to have the telecommunications industry provide greater choice, speed and lower prices,” he said. “In Bermuda and other jurisdictions, better regulation has proven to result in economic growth, increased investment, improved quality of service, and more rapid technological innovation in the sector, which can only be good for consumers.” RA chairman Kent Stewart added: “We had expected to issue 21 (ICOLS), but the merger of North Rock and Logic has handed us some unusual issues and so we have delayed the issuance of their ICOLs ...” He added: “As the Minister has remarked, the issuance of the ICOLs is a major milestone in the efforts of the Regulatory Authority to create a new telecommunications environment in Bermuda. The framework we have now created shifts the emphasis so that the needs of the consumer and those of the Carriers will be able to be matched without the burden of Regulatory barriers. “In simple terms, there are generally four types of telecommunications service — the provision of television, internet, mobile telephone and fixed or landline telephone. Traditionally, providers have been licensed to operate only in one or, at most two of those areas. So consumers in Bermuda typically get cellphone service from one company, landline service from another and perhaps internet and television service from a third. “ However, the ICOLS we have just issued now allow any of the providers of telecommunications services in Bermuda to pick and choose what they want to offer to the consumer. We anticipate that some will bundle services in all areas together, so that a consumer, if he or she wants, can get everything from one company, and need pay only one bill every month.” He noted the RA has also released its Market Review and designated certain firms as having Significant Market Power. “These firms are the Dominant players in Bermuda, in certain product or service areas, and so we wish to ensure that they do not abuse their Dominant positions,” he said. “This is a little bit like having a horse race with handicaps! “The Dominant players will be subject to handicapping — we call them “Remedies” and these Remedies will be the next major project that the RA undertakes. We except to release our Consultation on Remedies around the 6th May, only a week away and then, after a consultation, we will release our Decision on Remedies around the 8th July. So, for now, Dominant firms are still in the race but have some restrictions on what they can do right now until we find the right balance of remedies going forward. “So, we soon hope to see a much greater range of choice for the consumer and, we are confident, lower prices as a result of the increased competition we will have created. “I should emphasise that we not advocating that consumers should change what they are purchasing now. If they are comfortable with the services they currently enjoy, then that’s fine. But consumers on the lookout for a better deal should have a much greater range of services to choose from in the months ahead. Mr Stewart said this is not, by any means, the end of the Regulatory Authority’s work. “We have Local Number Portability, Spectrum Management, Universal Access, Consumer Protection and many other items on our list for this year,” he said. On the Logic-North Rock merger, he said: “We have simply decided to have both firms “stay as you were before the amalgamation” for a few more weeks before they embark on their merger plans. “This will allow the Regulatory Authority to examine whether there are any issues that the merger creates that will upset the industry dramatically. “As (North Rock executive) Mrs Coelho stated yesterday, there will be many other firms that can now enter their service offerings and compete with Logic/North Rock so we will observe the market, start a consultation on the issue and also start working on the issues involved in transferring the various telecom licenses that were held by North Rock over to Logic. We certainly expect to see further mergers and consolidations coming. Bermuda is tiny in the telecommunication world and cannot support 20 businesses all doing the same thing. Some firms have speciality products or services and may simply decide to continue as they always have — some will merge with others and some will try and take over the world — that is all OK because market forces are at work and the Regulatory Authority is observing to ensure that play is fair.” The question on many consumers’ minds, however, is will reform bring down costs and improve service, especially internet service. Mr Micallef said this should be achieved because the commission now has wider powers, so they are in a position to directly ask the carriers to do certain things. He said there is a complaint form that is being officially launched on the RA website next week, which will allow the authority to take up issues complained about directly with the carrier, and act accordingly. He predicted that Bermuda will become a world-class service provider as a result of these changes. He added: “One of things we need to work on, is monitoring speeds. It’s a complex process and the contract should state what you should be getting.”

Minister of Economic Development Grant Gibbons speaks at a press conference flanked by Regulatory Authority chairman Kent Stewart, commissioner Carl Musson, and CEO Philip Micallef.(Photo by Mark Tatem)