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C&W chief warns: $60m investment `in jeopardy'

Cable & Wireless has filed writs against the Ministry of Telecommunications less than a month after it was announced that Internet service providers (ISPs) would be able to provide long-distance service and international carriers were given the go-ahead to enter the business Internet market.

And C&W general manager Eddie Saints said a planned $60 million investment by the company was "in big jeopardy'' following the decisions.

"If it is not made, and in all likelihood it won't, Bermuda will have missed a golden opportunity to become an e-commerce centre.

Mr. Saints said the two writs filed yesterday were purely matters of process, the first a request to extend the company's leave to appeal and the second asking to reveal the process behind Telecommunications Minister Renee Webb's decision.

He said Ms Webb had written to C&W, TeleBermuda, Logic and North Rock to tell them that she would provide reasons for her decision by this Friday. However, she admitted that the June 30 date was outside the companies' appeal window and that an extension would be granted.

"We want to make some kind of sense of this situation,'' said Mr. Saints.

"Right now there are some gaps.'' He said C&W may appeal the decisions themselves once the process behind them was revealed.

Cable & Wireless is unhappy about the Ministry's decision to prevent them from serving residential Internet customers and the permission granted to ISPs to offer cut-rate long distance services.

C&W investment `in jeopardy' "We have concerns about the industry at large,'' he said.

"The service Logic is providing has nothing to do with the Internet. It is just a way to bypass the international telecommunications infrastructure. I don't even think the regulators understand it.

"Logic does not have the investment in infrastructure -- nothing's backed up.'' And he said the manner in which Logic was working their initiative was "If our system breaks down, you've always got Cable and Wireless to back you up.'' "We're not in the business of `oh, if it fails, we'll back you up','' said Mr. Saints.

"If you want cheap, we'll give you cheap. But I don't think the market wants that.'' And he said he saw the relationship between the Bermuda Telephone Company and Logic as "too incestuous'' and unlikely to bring down prices. Both companies are owned by the holding company KeyTech.

"BTC is a big monopoly that only seeks to increase prices without increasing productivity and efficiency,'' said Mr. Saints.

"I have severe concerns about telecommunications in this country, their administration and future at this point. People who take these decisions, such as the Ministry, must understand the long term implications.'' TeleBermuda International's general manager James Fitzgerald said the company would be in contact with C&W to discuss their plans, expressing concern about future investments in Bermuda.

"We're obviously watching this very closely,'' he said.

"We invested $55 million for the cable between the US and Bermuda and we understood (from Logic's agreement) that there would be no resale.'' Logic's Internet connection is provided by TBI, while North Rock uses both international carriers. He said his company understood that if another competitor entered the market, they would have to lay down their own cable.

On the subject of the Ministry's decision to restrict the two carriers to the commercial market, Mr. Fitzgerald said TBI's original licence allowed them to provide Internet services to any local customer, and that one part of that licence had been taken away.

"(Originally) we didn't want to get into the Internet. There are only 15,000 Internet users on the Island.

"We were willing to let Logic and North Rock do their business, but if we want to compete effectively, we have to be on a level playing field. It might make sense for us to bring in a bundled service for customers with Internet and long distance together.''