Recent weeks have seen a row break out in Bermuda over the government granting Cable & Wireless, the telecommunications provider, access into the Bermuda market, which would be to the detriment of local Internet providers. Indeed, one of Bermuda’s two Internet providers, North Rock, has now said that it may challenge the government in court over the issue and has warned the government that the island will be hit by higher Internet prices as a result of its changes to telecommunications rules.
North Rock is complaining that it has been put into direct competition with telecommunications giants Cable & Wireless and TeleBermuda (TBI), and says that small local providers will have immense difficulty in competing against companies with that kind of capital. North Rock has urged the government to sort out what its policy is with the 60/40 ownership laws in respect to local and international companies and not bow to threats from Cable & Wireless.
North Rock spoke out after Cable & Wireless filed a writ against the Ministry of Telecommunications and said that it could pull out of a $110 million proposed investment in facilities in Bermuda.
Director of North Rock, Erich Hetzel, said ‘What we feel, and probably most Bermudians feel, is that Cable & Wireless can compete best in the court room. So our concern is that these threats will be taken seriously and they end up getting what they want. That would be the wrong reason to make a decision.’ He added that the problem was not simply about telecommunications but about the broader 60/40 ownership issue: ‘You have to ask the question do you want foreign corporations in Bermuda. You cannot look at it industry by industry and cherry pick. You have to look at the whole picture. If the people of Bermuda want big corporations running things, then we will go along with that, we have to. But we feel it is very dangerous for telecommunications and pivotal for Bermuda.’
The row began at the beginning of June when Telecommunications Minister Renee Webb stated that the Bermuda administration 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 local Internet market by allowing them to provide services to businesses. Ms Webb said she had given something to everyone and taken away something from everyone, but most parties have complained ferociously about the deal.
Mr Hetzel said that he feared the big international carriers such as Cable and Wireless would force the hand of the government to get their own way, and that this would close down competition and leave a monopoly that could dictate market prices. He said ‘This is exactly the opposite of what the Minister of Telecommunications wanted when she made the changes. She wanted more competition to push prices down. But it is not a level playing field. Small local companies have to compete with international giants.’
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