The cost of Internet in Bermuda could be cut dramatically with a new project in the pipeline, according to Telecommunications Director Greg Swan.

And the project, which is still under wraps, could be unveiled as soon as next month, according to Mr. Swan who was speaking on Monday night at a forum on the E-commerce Green Paper.

While saying he could not reveal details of the project, but that it was being worked on, he said that the broadband cable being laid by CableVision could be one way of providing cheaper Internet access.

“On the cost of Internet, I can tell you that the commission and the Ministry are working on the matter,” he said.

The Island's residential Internet Service Providers have been criticised for the high cost of access to their services. They say in their defence that it is unfair to compare cheap unlimited access in the United States advertised on television to the cost of running a business in Bermuda with its economies of scale which are then passed on to the customer. Mr. Swan said that at the Ministry and Commission, they clearly understood the infrastructure problems faced on an Island the size of Bermuda.

He added: “The cable being laid by CableVision will be under-utilised. How do we potentially use this without putting the Internet Service Providers at risk? That is the question we are asking.

“We will have some proposal in the next month and we will then be able to disclose what it is. I know I am being vague, but I apologise,” he added. At the moment unlimited access to Internet is offered by the ISPs on the Island and costs just under $100 a month plus unlimited telephone access which is another $100.

There have been calls for the Ministry of Telecommunications and E-commerce to intervene to help customers get cheaper access - in the U.S. unlimited access can be bought for under $10 a month. The Green Paper states: “It can and has been argued that Internet access for around $40 to $50 a month is not a significant amount when one considers all the other costs associated with living in Bermuda (the basket of costs concept). And while there may be some truth in this, the real concern lies in the “perception” that Internet costs of $50 a month give, especially when in most countries basic Internet connection (without telephone charges) is almost free.

“In Bermuda the costs for Internet have not, in the main, fallen with increased competition, to the same degree as they have done in the voice market.

“A simple and rough comparison is a 500 percent decrease compared to a 20 percent reduction over four years.”

It goes on to say that there have been relatively large price falls for business chiefly from the international carriers but the price of residential has remained relatively high.”

It added: “Unless basic Internet connection costs are reduced it may be difficult for Bermuda to compete in the offshore e-business game.”

In December 2002 CableVision announced it was upgrading its fibre optic cable to broadband which would allow them to offer digital TV with more channels and better audio and picture quality.

TV games will also be available and the company hopes to add video-on-demand at a later stage while the new cable system could also be used to offer high speed Internet access to home computers, according to CableVision general manager Jeremy Elmas.

He said at the time: “Digital technology brings a number of benefits to customers including improved picture quality and reliability, the capacity to add hundreds of new channels as well as interactive services such as video-on-demand, digital-quality music services and interactive television.” At the time he said that the project was more than 60 percent complete and would be fully transformed by the end of 2003. The new digital technology allows up to 1,200 channels though CableVision said it was very unlikely this many channels would ever be added.