A sweeping reform of the telecommunications industry aimed at generating more competition and lower prices for consumers is in the pipeline.

Amid a raft of proposals contained in consultation document, Government has suggested that restrictions on foreign ownership — known as the 60-40 rule — should be entirely dropped for telecommunications companies.

And the industry’s licensing system is also in line for a complete overhaul, which would allow companies to deliver an unrestricted range of services with one all-embracing licence.

For example, this would mean that an internet service provider (ISP) like Logic could compete with a cellular phone company like CellularOne, or an international service provider like TeleBermuda International.

The moves are mooted in a consultation document on regulatory reforms drawn up by the Ministry of Environment, Telecommunications and E-Commerce (METEC).

It is hoped that the abandonment of foreign ownership restrictions will encourage investment in the latest technology and lead to “a level playing field”. Currently, international service providers can be 100 percent foreign-owned, while all ISPs, for example, are subject to the 60-40 rule.

METEC announced yesterday that the public would be encouraged to have its say on the proposals and consultation would include a public meeting to be advertised in the print media.

A statement from METEC yesterday said that the restrictions imposed by the licensing system were causing problems for companies now seeking to expand into new markets.

There are four groups of providers under the current system and companies are prohibited from providing services outside its licensed area.

The consultation document, entitled “Telecommunications Regulatory Reform in Bermuda” proposes that all current licensees should be offered a Unified Domestic Licence (UDL) which would eradicate the restrictions and allow providers to offer “a full service portfolio”.

“Tangible benefits to consumers from the proposed reform include one-stop-shopping — being able to purchase all telecommunications services from a single provider — and increased competition which frequently results in improved quality of service and reductions in prices for services,” a statement from METEC said yesterday.

“Additionally, from a consumer perspective, it is currently necessary for users of telecommunications services to contract with several providers (e.g. for the services provided by the Class A, B and C providers) and this means a more complex and less user-friendly telecommunications environment than is seen in many other countries around the world.”

The Ministry also proposes issuing no new domestic licences for between one and three years “to enable current providers to adjust to the new market conditions before further competitors are allowed into the market”.

The regulatory changes would bring Bermuda “in line with international best practice and to ensure the continued investment in innovative services for telecommunications users in Bermuda”, METEC added.

METEC Minister Neletha Butterfield said: “Technology is changing rapidly and the structure of Bermuda’s telecommunications industry does not lend itself easily to the new converged technology and service platforms emerging across the world.” METEC this month invited applications from telecom companies to build and operate a new submarine telecom cable. The consultation document explains why the Island needs it.

It says that Cable & Wireless operates and owns two submarine cables. “Both of these cables have been in use for a number of years and their capacity limits are inadequate for the future needs of the economy,” the document states.

Brasil Telecom also operates a cable to Bermuda but the company is restricted from doing business with retail customers and can only sell capacity to the other international providers, Cable & Wireless and TeleBermuda International.

[bul] Anyone interested can download the documents via the Government portal (www.gov.bm) or pick them up in person from the Department of Telecommunications on the second floor of the F.B. Perry Building, 40 Church Street, Hamilton.