Bermuda plans sweeping telecoms reforms

17 Jan 2007

The government of Bermuda has announced plans to implement a sweeping reform of the country’s telecoms industry in a bid to foster competition and reduce prices for end users. Among a series of proposals on the table, the authorities have mooted the idea of removing the current restrictions on foreign direct ownership in telecoms firms – the so-called 60-40 rule. In addition, plans are under way to replace the existing system of licensing with a single unified licence that would allow operators to provide an unlimited range of telecoms services and products. Under the current system, as laid down in the Public Telecommunications Service (License) Regulations 1998, there are four categories of licence:

Class A (international facilities-based)

Clas B (domestic facilities-based)

Class C (leased lines) and,

Cable TV providers (such as Bermuda CableVision and World on Wireless).

The plans have been published in a Ministry of Environment, Telecommunications and E-Commerce (METEC) consultation document, the outline of which has been seen by local newspaper the Royal Gazette. The government hopes that the removal of the 60-40 rule will encourage inward investment in cutting-edge technologies and create a level playing field which will improve competition. The existing rules mean that international service providers can be 100% foreign-owned, but local carriers and ISPs are subject to the ownership cap. METEC’s consultation document ‘Telecommunications Regulatory Reform in Bermuda’ proposes that all current licensees should be offered a new Unified Domestic Licence (UDL) which would eradicate the restrictions and allow providers to offer ‘a full service portfolio’. However, it is recommending a three-year moratorium on awarding new domestic licences ‘to enable current providers to adjust to the new market conditions before further competitors are allowed into the market’.