FCC can't stop us: GlobalTel

Defiant callback service claims U.S. regulator allows it to operate in Bermuda

By Ayo Johnson
(News from 2001-01-19 Edition)

THE U.S. FEDERAL Communications Commission will not help Bermuda enforce its ban against "callback" operator GlobalTel’s activities in the Bermuda telecommunications market, GlobalTel CEO Steve Williams said.
Williams is promising that his company will be offering island residents long-distance service at 10 cents a minute to the U.K., Canada and the U.S. next month.
Meanwhile, another callback operator emerged yesterday in the Bermuda market with E-Call offering calls at 80 per cent discount with 12 per cent commission for anyone who signs up as an agent.

"The FCC will not prohibit us from operating in Bermuda. Our attorneys have met with their staff last month and have assured us that we are completely clear to do business in Bermuda," said Williams in an E-mail to the Bermuda Sun.
This contradicts assurances by Telecommunications Minister Renee Webb that the U.S. authority will help Bermuda rid itself of GlobalTel.
Ms. Webb was unavailable for comment yesterday.

Since the ban became law in mid-December, GlobalTel has been persistent in its efforts to lure Bermuda customers. Local authorities in turn have stepped up their efforts to shut them down. Island residents caught helping GlobalTel’s
business face substantial fines and a two-year prison sentence.
The Government’s position is that the service is making profits without ever having invested on the island — and that is unfair to the existing carriers who have invested heavily.
GlobalTel has said that its bid to be a licensed carrier with a physical presence in Bermuda has already been rejected by the Telecommunications Minister.

Government is now preparing a case file for presentation to the FCC which regulates U.S. telecommunications companies. The FCC has included Bermuda among a list of countries which have banned callback operators.
According to Gregg Skall, a senior attorney at Washington D.C.-based firm Pepper and Corazzini, which specializes in communications law, Bermuda’s case is dead in the water.
Skall was referred to the Bermuda Sun by Williams.
"What I have advised him is that there are certain conditions where the FCC does consider the actions of so-called callback services to be illegal," Skall said. "But Bermuda does not fulfil the requirements the FCC recognises."
The FCC would not take action "under current conditions."
Skall said that the services being offered by his client GlobalTel did not fall under FCC’s definition of callback services because calls are being placed through an Internet connection.

Meanwhile, Williams is keen to portray himself as a champion of competitive forces in Bermuda’s telecommunications industry.
"We have saved the residents and businesses in Bermuda millions of dollars," he said.
"Why are we now the bad guy? Because we save money? TeleBermuda and Cable & Wireless are huge international companies. Are we not responsible for them lowering their rates? Yes we are, and so we have been good for Bermuda. Let them compete!"
He added: "Next month we will unveil our new pricing structure which includes calls to the U.S., Canada and U.K. for 10 cents all day on Fridays. We are committed to Bermuda. We are here to provide a better, quality service for all of Bermuda residents and businesses."

Skall declared himself baffled as to why Bermuda authorities would not give GlobalTel a carrier’s license. "Bermuda is restricting the benefits of competition for their citizens."
He accused the authorities of wanting to extract "monopoly rents" from the long distance carriers.
Long-distance rates have plummeted since the market was opened up to competition.

Meanwhile, GlobalTel is not the only company trying to make inroads into the Bermuda market. One of the latest to emerge is E-Call, which is offering calls at 80 per cent discount from Bermuda with 12 per cent commission for anyone who signs up as an agent.
Officials from the FCC were not available for comment.