path in their bid to take substantial stakes in two new telecommunications companies.

And when asked if Government would oppose Cable & Wireless' proposed acquisition of a reported 27 percent stake in Bermuda Digital Communications Ltd. and 30 to 35 percent in Quantum Communications, Telecommunications Minister, John Barritt, would only concede that his Ministry had given no such approval to date.

It also remained uncertain if such approval would be required, although Government clearly alluded to the issue of cross-ownership in its recent position paper on telecommunications.

The questions were raised yesterday by The Royal Gazette as the Minister hit back at the Bermuda Telephone Co. and its CEO, Lorraine Lyle, who slammed Government in a Hamilton Lions Club speech. Stung by her allegations that telecommunications regulations were "ill-conceived and ineffectual'' and a suggestion that regulators were not taking their obligations seriously, Mr.

Barritt counter-punched with his regrets that she saw fit to level "personal attacks on (Telecommunications Director Ted) Pitman, the Commissioners and myself.'' He said, "It is something else again for Ms Lyle and Telco to say that they disagree with what we are doing and on that score I, as Minister, and I think the Department as well, welcome constructive criticism.'' But he denied Telco's suggestion that Government had failed to address the issue of cross ownership, saying the subject was tackled in the Telecommunications position paper. Ms Lyle had commented on the Cable & Wireless move to buy about a third of Quantum and a 27 percent stake in cellular company Bermuda Digital.

Mr. Barritt said, "We recognised this (the possibility of cross-ownership) as a natural development based on the experience of other jurisdictions where competition has been admitted.'' He pointed to the position paper, which states: "In order to ensure that any cross-ownership concerns remain subject to regulatory oversight, the Government intends to include as a condition of licence that any change in control of a carrier, or change in ownership of blocks of shares of 30 percent or more of voting shares of a carrier would require prior Ministerial approval.'' Although both companies have been offered telecommunications licences, neither Bermuda Digital nor Quantum have actually received them. And Mr. Barritt would not be drawn on how the status of those licences would be affected by Cable & Wireless' stated ownership intentions.

But the Minister was less than happy with Ms Lyle's suggestion that there had been no "public process'' involved in telecommunications reform, saying that nothing could be further from the truth. "The track record of Government here both during my tenure and prior to that has been one of consultation,'' he said. "That's a fact and you can look it up. There were consultations on amendments to the Act and that was preceded by round table discussions with those in the industry that led to both a discussion paper and the Position paper, both of which were made available to the public and which were debated in Parliament.'' He said there was no reason to believe that consultation would not continue.

And it was not a surprise, but rather to be expected, that there would be some disagreement over Government's approach.

Mr. Barritt said Government was trying to remain flexible so it could adapt to the continuing change in circumstances.

He said, "We have tried not to introduce layer upon layer of rules and regulations (and a bureaucracy in support) which while appropriate today, may be inappropriate and obsolete tomorrow.

"We have instead allowed those in the industry who know the business best first crack at sorting out practical issues and we have always said that where they cannot we will then intervene and make decisions for them. "One final comment: we are trying to work toward a free market where the players can compete under the same rules. It is not going to be easy trying to get there and I think all of Bermuda understands why.'' GOVERNMENT GVT