The Island's telecommunications industry must shape up, cut costs and embrace competition if Bermuda is to profit from the e-commerce wave.

Telecommunications and E-commerce Minister Renee Webb issued that warning yesterday as she outlined the Government's serious commitment to deregulating telecommunications to benefit all Bermudians and businesses on the Island.

And in her address to members of the Bermuda International Business Association, she revealed a third local telephone provider had applied to compete with BTC and Quantum, if it survives its current woes.

Ms Webb said Bermuda's telecommunications shortcomings were brought home for her clearly when she changed address by less than a mile in mid-May but found BTC would take until the end of July to connect her telephone lines.

"Clearly that's not acceptable and while BTC has made every effort to assist me in my role as Telecommunications and e-commerce Minister, the issue has not been resolved.

"There is some question with respect to maintaining service level and whether or not that will be achieved and how we within the Ministry will see to it that that happens.

"I am on the platform of saying `Oh Bermuda is a great place, the infrastructure's wonderful' but in reality it takes two and a half months to get a local telephone line, which is unacceptable''.

She said e-commerce would simply fail to take off here unless the Island's telecommunications infrastructure was solid and competitive.

"We have to ensure that the price of doing business in Bermuda, particularly through the telecommunications industry are competitive.

"It is pointless us saying that we are going to be an offshore e-commerce jurisdiction when the cost of operating and doing business is prohibitive.

"One of the results of opening competition is that prices come down, that is a basic economic factor.'' She said as well as the Electronic Transactions Bill which was due to be presented to Cabinet within a fortnight, the Government was moving to have a new Act by the end of the year to deregulate Bermuda's telecommunications.

And it would provide "regulatory protection to ensure that any particular section of the community is not disadvantaged whether that means local consumers or start-up telecommunications companies'', she said.

"The goal of the Government is to move toward deregulation to allow market forces and competition to provide products at competitive prices.'' She said in order for Bermuda to spur growth of e-commerce and keep pace with leaders in the field like the US, Singapore and Ireland, the Island had to remove barriers impeding companies starting up or entering new markets.

"We know the e-commerce industry is developing, as Bill Gates would say, at the speed of thought and Bermuda needs to be a part of this opportunity as we continue to grow our economy.'' She said the Government inherited an outdated Telecommunication Act which did not address recent years' enormous technology changes and so caused problems for faltering local telephone start-up Quantum.

"The deregulation process started over three years ago without the appropriate amendments to the Act.

Shape up, Webb tells telecoms As a consequence there was confusion over the licensing rights of Quantum,'' she said.

The process of dispute resolution and who had the right to take issues to the Telecommunications Commission were also unclear.

"As a result there were challenges before the courts to determine exactly what it is the Act was trying to say in light of what the new-kid-on-the-block Quantum was trying to achieve in relation to incumbent BTC.'' Ms Webb said her Ministry and the Telecommunications Ministry were grappling with some very difficult issues which had to be tackled in the "long term interests of Bermuda''.

"All of the Country has bought into the fact that Bermuda needs to diversify its economy.

"E-commerce is a natural fit because it is not labour intensive and because we can attract this type of business without having a drain on our fragile infrastructure.'' Bermuda International Business Association chairman Glenn Titterton said the Government was staking out a "very pro-initiative and pro-business position'' on telecommunications and e-commerce.

"That is to be welcomed by all of the business community. Competition is the name of the game and it's very, very clear that unless Bermuda has very active competition we will not survive in the world around us,'' he said.

"There are other jurisdictions that are doing very good things in these areas and Bermuda has to run very quickly to catch up.'' Renee Webb: Outdated Act