long-distance phone service, reports Adam Cooper . Logic accuses Government of holding back progress.

ERROR RG P4 31.8.1999 An article in the August 19 issue of The Royal Gazette incorrectly stated that Logic Communications pays $12 million for the bandwidth it leases from TeleBermuda International.

Logic Communications has announced that it will take its LogicPhone dispute with the Telecommunications Ministry to the Supreme Court.

Logic president Peter Durhager said yesterday the Supreme Court was the company's only option to resolve the issue.

"It's obvious that we would prefer not to go to court, but we must have a definitive resolution to the subject,'' said Mr. Durhager. "We believe that we have a strong case and look forward to receiving the Court's determination on the effect of our licence in order to finally bring this matter to a positive conclusion,'' he said.

Logic launched its slashed-rate long-distance service on July 23. It was suspended on August 2 after threat of criminal prosecution by Government.

And the service was an overwhelming success, with more than 600 customers signing up in the first 60 hours. Mr. Durhager said Government was resisting advancement by barring LogicPhone. Telecommunications Minister Renee Webb maintains that Logic is only allowed to provide data, but not voice services.

But Logic's licence also allows the company's equipment to provide a service for the purposes of sending and receiving electronic messages and data.

"LogicPhone uses exactly the same technology as sending an e-mail or downloading a picture,'' said Mr. Durhager.

"The technology has outpaced the legislation.'' He also said there was no real difference between LogicPhone and computer-based telephone software sold by local retailers which allows consumers to make calls through the Internet.

"We are concerned that the situation as it currently stands is not moving towards any meaningful resolution despite our very best efforts to work constructively and in a spirit of genuine intent and cooperation,'' said Mr.

Durhager. "We have been dealing with this matter for almost two years. The marketplace has repeatedly called on the industry and Government over the past several years to present choice and lower cost communications services and to date, we have collectively failed to deliver.

"Bermuda is ready for this,'' he said. LogicPhone's rates started at 44 cents per minute for calls to the UK, US and Canada. The lowest rate currently offered by the other two carriers is TBI's late-night rate of 63 cents per minute to the US.

"Since announcing the forced discontinuation of LogicPhone, we have received a tremendous response from a wide variety of people who live and work in Bermuda, offering their support for LogicPhone,'' a Logic Press release said.

Logic currently leases its connection from TBI for $12 million annually. But TBI has said it would not have provided the service knowing that Logic planned to undercut its market.

But Mr. Durhager rejected claims that Logic was "riding on TBI's coattails'', saying the company had already invested more than $10 million in extra bandwidth and end systems to bring LogicPhone to market.

And he did not dismiss suggestions that Logic may lay its own fibre-optic cable, although the company is not currently licensed to do so. Logic will be represented by Ronnie Myers of Diel & Myers and international telecoms lawyer Andrew Lipman of Swidler Berlin Shereff Friedman, LLP of Washington, DC.

Peter Durhager