Telecoms reform to allow firms to compete across all services

By Tania Theriault

Telecommunications Minster Terry Lister

After a three-year process of study and consultation, regulation of telecommunications in Bermuda is set to undergo significant reform.

Minister of Telecommunications and E-Commerce Terry Lister told the House of Assembly on Friday that the current telecommunications licensing system — with three classes of licences — will eventually be abolished in favour of a new general Communications Licence, to better foster competition among a variety of service providers. A new Regulatory Authority will also be created to oversee the industry.

Mr. Lister made public the official Telecommunications Reform Paper for Bermuda 2008 and said that two draft bills will be prepared to implement its recommended changes — the Regulation Bill and the Communications Bill.

At the moment, there are three different licences for telecommunications providers which restrict providers from offering services outside their licence stipulations, although the provider may have the capacity to provide other services.

International providers have Class A licences, while domestic telephone providers have Class B licences and Class C licences are issued for Internet Service Providers (ISPs), paging providers and other providers of miscellaneous services.

Mr. Lister said this licensing system had served Bermuda well, although ISPs in particular have complained in the past about being restricted from providing some services.

With the new general Communications Licence, competition will be enhanced and industry innovation encouraged, Mr. Lister said.

“The reform will encourage investments in leading edge technologies and services and will enable customers a variety of choices in the purchase of services from a supplier of their choice,” the Minister said.

Removing the licence barriers will allow head-to-head competition between small and large providers, he said, and hopefully balance out any market dominance larger providers may have at the moment.

“Technology changes and consumer desire to purchase sophisticated bundles of services from a single supplier, mean that, going forward, the structure is no longer appropriate,” Mr. Lister said. “That is why we will introduce a single Communications Licence that will allow all providers to compete with each other across the full service spectrum. This will encourage providers to invest in new IP-based technologies that currently drive innovation and cost reduction in the telecommunications industry across the world, keeping Bermuda at the leading edge where we belong.”

Meanwhile the creation of a new Regulatory Authority will mean that “the execution and implementation of regulatory policies will be separated from the policy-making itself”, the Minister added. “This structure is in line with international best practice as well as World Bank and ITU recommendations for good regulatory governance.”

The Regulatory Authority will consist of a Commission of three voting members, who will initially work three days a week. The Commission will be supported by a professional and administrative staff led by a Head of Staff, who will also serve as a non-voting member of the Commission. The Minister noted that commissioners may move to full time service should the scope of their activities mandate in the future.

There is still much work to be done to reform the industry, Mr. Lister added: “Building the framework and continued consultation Mr. Speaker, to implement the legislation the regulatory authority will need detailed regulatory rules to ensure its decisions are fair, transparent and consistent. My team at the Department of Telecommunications is currently working with our international advisers and with the carriers to develop these rules so that the new regulator can become effective as quickly as possible.

“This involves a series of written consultation processes, each of which is supported by a workshop at which the carriers are invited to discuss and challenge the analysis and proposals put forward. This extensive consultative process will result in regulatory rules that are known and understood by all parties, reducing regulatory uncertainty and thus improving the terms of doing business in Bermuda.”

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