A local Internet service provider has slammed new Government changes in the telecommunications laws, claiming the ruling gives unfair advantage to international companies, The Royal Gazette can reveal.

Tom Coelho, General Manager of North Rock Communications, said: "Government appears more concerned with maintaining `bad old days' of cozy protectionism for foreign corporations in their fear of upsetting them.

"Instead of grasping the opportunity for being the model for telecommunications regulatory framework for the Caribbean, the Government has taken a backward step that may damage the country's competitive edge in the future.'' And Mr. Coelho added that instead of pushing prices down, in effect prices for Internet connection would be pushed up by the move.

Mr. Coelho was speaking out after Telecommunications Minister Renee Webb on Wednesday announced that the Government was changing the law to allow local Internet service providers to provide long distance calling facilities using the World Wide Web, and giants Cable & Wireless and TeleBermuda to enter the Internet market by allowing them to provide services to businesses.

While Ms Webb said she had given something to everyone and taken away something from everyone, the move has proved controversial.

Cable & Wireless stated last week that it could scrap plans for a $110 million investment on the Island because of the new competition in the long distance phone market.

And TeleBermuda complained that it was not a level playing field with Internet service providers having fewer overheads.

The only company which seems happy at the decision is Internet service provider Logic, who have been battling for the right to use the Internet for long distance calls for two years.

But North Rock says it is not interested in voice over Internet protocol, and has only been given unfair competition from the two telecommunications giants.

He said: "I am deeply disappointed that the Minister of Telecommunications has decided to permit Cable & Wireless and TeleBermuda to enter Bermuda's Internet market.

"In effect this allows Cable & Wireless and TBI, foreign owned multinational corporations to compete directly with Bermudian owned Internet service providers for local Internet and E-commerce business. Something that both the last Government and this Government, including the current Minister of Telecommunications, have consistently said would NOT happen.'' And he added that the move would push the cost of Internet services up.

"The interests of Bermuda are not well served by this decision, as it potentially implies less competition and higher prices. We all agree that the way to lower prices is through fair competition. If the international carriers are given free access to the local Internet market, it is unlikely we will see any new Bermudian Internet companies enter the market.'' He added: "What has been created by this decision, is in our view, inequitable and anti-competitive.'' Mr. Coelho said that the ruling posed some questions about the future of Bermuda and the laws governing the ownership of local companies.

`Protectionism' He said: "Another effect of this decision is that the local Internet industry is being unfairly singled out for effective exclusion from the 60/40 legislation.'' The decision means that North Rock, a Bermudian-owned company, bound by the 60/40 restrictions, must now compete head to head with Cable & Wireless, a foreign-owned 114B Licensed company with substantial financial capital behind them.

"This means that TBI and Cable & Wireless enjoy the ability to raise capital on the international market, while not being bound by the 60/40 share holding restrictions when operating in Bermuda.'' He said that all of the Caribbean was trying to free itself from Cable & Wireless' "stranglehold'' and said "yet here we are inviting them in''.

Government's decision to allow Cable & Wireless and TeleBermuda to enter Bermuda's Internet market will create unfair competition and push prices up, says North Rock's Tom Coelho. Mairi Mallon reports.

Tom Coelho