actions using local lines were fraudulent.

Owner of GAB Mr. Michael Leverock is angry with comments made by General Manager of the Bermuda Telephone Company, Mr. Ernest Pacheco.

Mr. Pacheco claimed that GAB were using Telco/Cable & Wireless lines for its "callback system.'' And it fuels the row over whether the Bermuda telephone monopoly should be broken by giving companies like Global Access licences to operate international calls.

Mr. Leverock claims to have had 1,000 customers when it started at the beginning of April, but it then had to stop in June on the instructions of Puisne Judge the Hon. Mr. Justice Ground.

Government intervened and the row came to a head at last week's Telecommunications Commission hearing into the telephone monopoly.

At the hearing Mr. Pacheco launched a furious attack on GAB's operation last year, stating it would lead to rising costs of private calls if international business calls were lost.

He said: "Allowing competitors to come cream-skimming the most profitable parts of our universal services will cause an imbalance between our obligations and our rights. It must be accepted that some services must subsidise others.

"Telco contends that allowing GAB to use our established lines is an unreasonable practice and a fraudulent use of the telecommunications system.'' The callback system is able to bypass the local phone system to provide a discounted international service. The customer makes a call to a US number but only allows it to ring once before hanging up. The operator is able to determine the Bermudian number and calls back offering a line at American rates, cheaper than Bermudian.

GAB was offering the lines to Bermudian companies at a minimal cost with discounts up to 25 percent.

But Mr. Pacheco said the original call must use the Telco/Cable & Wireless line and is therefore fraudulent.

But in a statement to The Royal Gazette Mr. Leverock said: "Global Access Bermuda would like to make it perfectly clear that its callback service is not fraudulent, as claimed by Mr. Pacheco during the recent hearings. GAB has paid all charges required for the provision of its service.

"Callback services are used throughout the world and are not in violation of any laws or conventions which regulate telecommunications.

"The callback service provided by GAB is currently in operation in 109 countries.'' Mr. Leverock said calls made with callback are treated by the local network as inward bound. This means both Cable & Wireless and Telco are compensated by the foreign carriers in accordance with agreed arrangements for handling this type of traffic.

He said: "We would like for Mr. Pacheco to prove that our service is fraudulent, as this is a serious statement.

"If he cannot do so then we expect him to retract his statement and offer us a public apology.'' The Telecommunications Commission is expected to make its decision at the end of February.