All Bermudian ownership in telecommunications would be wiped out within a year, if Government’s proposals for the industry were to be implemented.

That is the view of one of a group of local internet service providers (ISPs) who met Environment, Telecommunications and E-Commerce (METEC) Minister Neletha Butterfield yesterday.

The ISPs are concerned that the abandonment of restrictions on overseas ownership in the telecommunications industry — suggested in a Government consultation document — could result in large foreign-owned companies seizing the entire market.

If they become policy, the changes will also loosen licensing restrictions to allow companies to offer a full range of services.

METEC’s stated aim is to encourage competition and lower prices, but the local ISPs argue that the result will be the opposite.

North Rock Communications believe that the proposals would bring a return to the “bad old days” of duopoly and high prices.

And Fort Knox chief executive officer Troy Symonds had a dire warning.

“Our view remains that if this proposal is implemented the result would be to eliminate all Bermudian ownership and investment in the local telecommunications industry, and to do it within a twelve-month period,” Mr. Symonds said.

“It would hand over all of the industry to those who can invest the most within the shortest time period. It is clear that Bermudian-owned companies have started and prospered in recent years with support and encouragement from the current Government.

“However they have not yet had the opportunity to amass sufficient capital to compete with legendary foreign industry giants. Implementation of this proposal at this time would eliminate the Bermudian-owned companies.”

Mr. Symonds implied he was disappointed with the result of the consultation process, which involved discussions between Government officials and the industry over the past five months.

“I was originally very optimistic in what the consultation and round table discussions would propose,” Mr. Symonds said.

“I have reviewed the most recent document, which I believe is the final draft of the consultation document which was crafted by a number of highly qualified foreign consultants. Despite extensive consultation and input from industry providers, absolutely no changes were made to the original document.”

Mr. Symonds said that he and other ISPs had their first chance to discuss their concerns with Minister Butterfield yesterday.

“Although the proposal already has tremendous momentum, I do not believe that Minister Butterfield would stomach the annihilation of Bermudian involvement in the industry.

“So I hold hope that the proposal will be either shelved or changed to ensure that the telecommunications industry and its Bermudian ownership is encouraged and not eradicated.”

North Rock added its views in a written statement sent yesterday afternoon.

“It is our view that these proposals will result in the eventual end of telecommunications competition in Bermuda and potentially an end of Bermudian ownership and control of this key industry,” North Rock said.

“We are concerned that this will return the Bermuda telecommunications industry to the bad old days of duopoly control and high prices.

“If the proposals proceed, we can easily see the market consolidation to two or three carriers proceed, eliminating choice and competition. These feelings are not just isolated to the Bermudian firms as the opinion was echoed in a carrier forum last year by foreign-controlled carriers.

“We have continued to call for this Government’s demonstrable commitment to Bermuda ownership and control of the telecommunications industry.

“We remember the days of the $1.25 long distance phone call and North Rock’s opinion is that the consolidation that is anticipated to occur as a result of these proposals will lead to less choice and higher prices in the long term.”

North Rock added that the proposals appeared to contradict the Government’s support for “Bermudianisation”.

“The PLP Government has stated on numerous previous occasions that they seek to create a Bermuda for Bermudians, with a mission statement encouraging ‘the empowerment of the broad majority of the Bermudian people’,” the statement continued.

“This proposed reform however actively promotes the idea of removing control of the telecommunications industry from Bermudians. We believe that our Bermudian owned businesses will be treated unfairly and disadvantaged by the actions of our Government in our home if the proposals proceed.

“We are currently seeing the loss of entry level technology jobs to overseas companies and this proposal will do nothing to stem the tide. We question how long it will be before talented Bermudians are forced to leave the island to seek technology jobs around the world as has happened in the UK and the US.

“We are disappointed that this document has been crafted and released to the public without complete data to support its recommendations, or a detailed analysis of its market impacts.

“In September 2005 local carriers formed a consortium to have an outside economist evaluate the economic impacts of allowing C&W and TBI to remain protected while permitting them access to the local markets. Sadly this process has proceeded and the recommendations were made prior to the receipt of the economist’s study which will arrive this month.”

North Rock added that the Bermuda telecom industry was already serving the Island well. The Economist magazine had ranked it 11th in the world for technology infrastructure and connectivity.

“We should be looking to retain aspects of our system that work and not replacing it wholesale,” the statement said.

North Rock also had concerns that the proposals would only allow international service providers Cable & Wireless (C&W) and TeleBermuda International (TBI) to buy access to the submarine cable owned by Brasil Telecom.

“Our challenge over the years has been the cost of our off-island bandwidth which has been kept artificially high through Government protection of C&W and TBI,” North Rock said.

“For years we have pleaded with Government to permit local carriers to access the Brasil Telecom cable system, so we could reduce the cost to our customers.

“The Government proposal actually continues the protection of C&W and TBI, preventing local carriers from purchasing Brasil Telecom bandwidth directly. This will ensure that prices for services remain artificially high and that the business plans of foreign owned C&W and TBI are protected.”

ISPs tell Minister that proposals would eliminate Bermuda telecom ownership