Govt. gets tough on call back services

By Ayo Johnson
(Business from 2000-09-29 Edition)

GOVERNMENT NOW has the full support of the U.S. authorities in fighting back at call back services operating on the island, Telecommunications Minister Renee Webb announced yesterday.
And new laws expressly making call back services illegal are in the offing.
But Globatel International CEO Steve Williams says that any such law would be anti-competitive and violate the World Trade Organization agreement and he doubts that the Federal Communications Commission (FCC) would help Bermuda enforce it.
His company wants the Bermuda government to give it a licence.
A Washington D.C. meeting last week with officials of the FCC and the Telecommunciations and E-commerce ministry, established that the FCC will help enforce Bermuda’s ban against call back services.
But Webb ruled out prosecuting locals who subscribe to the service. “Call back services in Bermuda are illegal and the FCC now has Bermuda on its list of countries that prohibit the use of call back services,” Webb said.
“To facilitate U.S. carrier compliance, the FCC has openly stated ‘that it would be prepared to receive documentation from any Government which seeks to put U.S. carriers on notice that call back services using uncompleted call signaling has been declared expressly illegal in its territory.”
Most of the call back service providers are U.S. based and therefore under the jurisdiction of the FCC, the country’s telecommunications regulatory and licensing authority.
Globatel International and Fibretel, another call back operator, have been slicing up the market by offering long distance calling at considerably reduced rates.
Williams told the Bermuda Sun that Cable and Wireless is “behind any political movement” to keep out competition.
“Why would Parliament vote against something that so many people want to have?” asked Williams from his New York office. “It doesn’t make sense.”
But Webb, while leading the charge for lower rates, is firmly supportive of local carriers TeleBermuda and Cable and Wireless who have spent considerable sums in developing the country’s telecommunications infrastructure. Bermudian jobs and future infrastructural development, she said, are at stake.
“Although we want to continue to stimulate competition, resulting in additional savings to the consumer, we have to be ever mindful of the balance that must be maintained in order to encourage the ongoing development of our infrastructure, an infrastructure that must continue meet the demands of business and the community in general,” she said.
“It is for these reasons that the Ministry of Telecommunications and E-commerce cannot support or condone the use of call back services in Bermuda.
“This decision... is the only way of insuring that those companies that are providing jobs for Bermudians have some means of protection from call back service providers that are only interested in skimming revenue from our economy and not contributing to it.” An estimated 3,000 local residents have been subscribers to the services — until LogicPhone a voice over Internet service, launched by Logic Communications last month put a dent in their growth.
Webb acknowledged that in the long run, technology and competitive forces are the best defence against call back operators.
But the FCC agreement and pending local legislation strengthens Bermuda’s hand in the battle against call back operators.
“As a consequence of having legislation on our books, we will prosecute those who are offering callback services in Bermuda,” Webb said.
Twenty-two countries are on the FCC’s list of countries that have banned callback services. Not having legislation expressly making them illegal. Bermuda’s ban was a policy decision by the previous government.
The local long distance carriers have been cooperating in the bid to block the illegal calls. Efforts have not been too successful as the call back operators employ increasingly sophisticated technology.
Williams told the Bermuda Sun that his company does business in countries that have banned call back, with direct dial and a “different form of call back” not subject to FCC jurisdiction.
“There’s new technology being developed everyday... we will offer any service we can if we so desire — if we are able to do it in such a way that it’s legal. We are committed to the business. We think that the Government of Bermuda should give us a license,” Globatel’s CEO said.
He added that Globatel is “in the process” of applying for a telecommunications licence.
“It’s a shot in the dark,” Williams said. “But if we are a major player in Bermuda, we’re not going away. So why not give us a license?”
He argued that Bermuda only had a “little” competition in the telecommunications industry and that lower prices actually stimulate, not threaten the economy.
“You need a lot of competition before you can see any benefits,” continued Williams. Globatel offers a range of services besides call back, offered Williams. “Give us a licence and we will invest millions of dollars in Bermuda.”
If the Government was concerned about infrastructural investment “it doesn’t happen by restricting trade,” he said.
Asked whether Globatel will file a civil action against the FCC if they order the company to stop its callback business in Bermuda, Williams said: “I don’t think they will enforce any action against a company such as ours that is operating in accord with the world trade agreement. But if it’s against FCC law, we don’t have a choice.”