Under strenuous objections from the Opposition United Bermuda Party, the law governing the telecommunications industry was overhauled yesterday by the House of Assembly after a five-hour debate.

But while the law strengthens the ability of the minister and the Telecommunications Commission to regulate the industry, the Opposition United Bermuda Party says that it is draconian and some of its provisions could well be challenged on constitutional grounds.

Unlicensed telecommunications operators now face a 25-fold increase in fines as a result of the new laws. And licensed carriers have new duties under pain of criminal sanction.

Telecommunications Minister Renee Webb, introducing the bill, said that its purpose was to "continue to encourage competition in the marketplace, while ensuring that anti-competitive behaviour is minimised".

The bill increases the penalty for people operating a telecommunications business without a licence to a maximum of $50,000 on a summary judgement, and $100,000 on conviction on indictment, and adds a $5,000 daily fine if the offence continues.

Unlicensed operators were previously subjected to maximum fines of $2,000 and $4,000 respectively. Left unchanged is the fact that they can also be imprisoned for up to two or five years.

The bill also makes it unlawful for a carrier to discriminate against another, sets international standards for telecommunications equipment and makes it illegal for the courts to award costs to a carrier in the event of a legal battle.

Ms Webb told her House colleagues that the bill will help ensure that Bermuda's telecommunications industry stays on the cutting edge and end frivolous lawsuits which are paid for by the taxpayer.

"After the numerous court cases and time spent by lawyers and judges interpreting and challenging the Telecom Act, it is timely that we have these additional changes to the Act before us today". She added : "We need to have legislation that deters carriers from initiating frivolous lawsuits solely as a delaying tactic or other reasons that are counter productive in terms of new applications for this industry".

Carriers now have new duties under the law - to provide interconnection and other telecommunication services, within 30 days after the request is made and "upon reasonable terms and conditions", to other carriers and they are forbidden to disclose confidential information provided by a customer or another carrier. Failure to live up to these duties will attract a fine of $50,000.

Ms Webb said that carriers had often frustrated her Ministry and the Telecommunications Commission by not providing required information to justify rates. The bill gives the minister power to authorise an on premises search of a company that is holding out on information. Resistance will also result in criminal sanction.

Shadow Legislative Affairs Minister John Barritt, led the Opposition's charge against the bill saying it was punitive, burdensome and unfair to carriers that acted in good faith and ended up on the wrong side of the law.

"If there is a carrier with a problem, don't treat everybody in a broad brush way," he said.

And far from maintaining competition in the telecommunications industry, said Opposition Leader Pamela Gordon, the bill would act as a disincentive to new players and foster a return to a duopolistic or monopolistic industry.

"What's the plan?" Ms Gordon asked. "Ultimately where does the Minister see telecommunications going that will benefit Bermuda and create opportunities for people who would feel this is the place to invest ?"

Ms Webb pointed out that long distance rates had gone down 60 percent since she became Minister and the carriers were actually making more money.

The Opposition ranks also took the Minister to task for provisions that they said removed the rights to effectively appeal a decision by the Telecommunications Commission or the Minister's directives.

The bill removes the court's power to order a stay of the Minister's decision in the event of an appeal.

Mr. Barritt pointed out that the legal system already had mechanisms for weeding out frivolous lawsuits.

"What we're doing is really taking the courts out of the equation," he said. "The inevitable conclusion is that the Minister can be trusted with the power to grant a stay, but not the courts of this land".

On behalf of the Opposition, Mr. Barritt argued that carriers that win a case are penalised anyway as a result of lost business and market share.

"Just because some people choose to abuse the system, you don't make everybody suffer," said Mr. Barritt. Besides, he said, the bill "increases the penalties for everybody, except ... the Minister".

Ms Webb countered that the Government had been in litigation seven times since she took office - and each time the Government won. The effect of the litigation had been to stymie competition. She said it would be "total anarchy" if carriers acted outside their licence until they go to court.

"Unfortunately we have to keep the carrier's honest ..." said Ms Webb. "It would be great if they were self regulating. But they cheat".

All 11 Opposition members present voted against the bill. But the Government side won the day with 16 votes for its passage.