Higher marketing and legal costs negatively impacted operating income and net income of Bermuda Digital Communications, parent company of Cellular One, during the first quarter of 2006, according to the results of its minority shareholder.

Although the publicly traded Atlantic Tele-Network, Inc did not release BDC?s full financials yesterday, it said its equity in the earnings of BDC decreased from $600,000 to $500,000 million for the three months ended March 31, 2005 and 2006, respectively.

ATN said in its earnings release that BDC has incurred significant legal expenses relating to its dispute regarding the scope of its licence as it relates to data services. Last year, Government officials executed a search warrant on the company?s offices and compelled the company to disconnect The Bull on the ground that the wireless broadband data access service breached the company?s licence. A hearing in that matter took place in April 2006 and a decision is expected shortly.

ATN, which also owns Guyana Telephone and Telegraph Company Limited, posted net earnings of $4.1 million, or 33 cents per share, as compared to earnings of $3 million, or 24 cents per share, for the quarter ended March 31, 2005. The increase of $1.1 million or 34 percent reflects the company?s acquisitions of SoVerNet, Inc. and two previously reported acquisitions by Commnet.

Michael T. Prior, Chief Executive Officer of Atlantic Tele-Network, Inc., said: ?We are happy to have a strong start to 2006. This quarter shows the benefits of some of our key decisions of 2005 ? the decisions to acquire Commnet and SoVerNet, the decision to shut down our Atlantic Tele-Center business and the decisions to implement a restructuring and new service launch at Choice.?