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Bermuda's Internet Access and Costs

How they compare in speed, price and competitiveness to those in USA, Canada and UK

By Keith Archibald Forbes (see About Us) exclusively for Bermuda Online

To refer by e-mail to this file use "bermuda-online.org/internet" as your Subject

Introduction

Bermuda is substantially behind most of the other developed countries in Internet speed and value. As merely one example, compare the 101 Mbps (megabits per second), $99 a month service being offered to American residents by CableVision-USA with the 1 Mbps service being offered by Bermuda companies for the same price. In Canada, the UK and Europe high-speed Broadband is the norm, not the exception. Even in the UK's more remote areas, such as the far north of Scotland, 8 Mbps unlimited service with BT is routinely available for £19.50 a month. In Jamaica, 15 Mbps is the norm and in the Bahamas 9 Mbps is standard. Bermuda presently offers one of the lowest speeds in the developed world and at a far higher price than elsewhere, with a maximum speed today of 4.5 Mbps to homes.

Logic Communications Ltd and others now offer the following, in upload speeds: The 4.5 Mbps service shown below by Logic and Transact is currently the fastest Internet domestic connection available in Bermuda.

Internet Service Providers (ISPs), residential and business

Compare the above to prices in USA, Canada, United Kingdom, Europe, Japan, for substantially higher Broadband or DSL upload speeds.

In its 21 square miles, Bermuda has the following at home Internet Service Providers providing both DSL and much slower dial-up 56 Kbps services.

BTC has DSL without telephone service as a 2 Mbps connection and 4 Mbps connection
Bermuda CableVision offers 'Cable Modem' service and 4 Mbps connection, as an add-on to cable TV costs.
Cable & Wireless. A Class A carrier, one with its own international long-distance circuits. Registered businesses only, which can provide a valid tax account number. Registered businesses only, which can provide a valid tax account number.
Logic Communications Ltd. The original ISP. For individuals and businesses. Residential and business packages, separate and bundled, for both Internet and International Long Distance phone calls. Owned by Keytech of Bermuda which also owns the Bermuda Telephone Company Limited (BTC).
North Rock Communications. Washington Lane. Telephone (441) 296-2700. Fax (441) 296-2701. Wireless services for businesses and homes. Competitive with DSL and Cable. Introduced the first 3 Mbps residential broadband service to the Island in October 2008.
TeleBermuda International. A Class A carrier, one with its own international long-distance circuits. Registered businesses only, which can provide a valid tax account number.
Transact Ltd. 20 Dundonald Street, Hamilton. Phone 298-1279 or fax 292-4310. Residential and registered businesses.

Other factors in Bermuda as an electronic commerce center

Unlike in the USA, Canada, UK, etc. where it is possible, via the Internet, for people from or in other parts of the world to access published private Bermuda Telephone Company Limited (BTC) landline and other telephone numbers, in Bermuda it is not. There is no Bermuda equivalent of the Internet's 411 service.
In Bermuda, all international companies must by law by 100 percent dependent on local companies - such as the Bermuda Telephone Company Limited (BTC) - for their local telephone and other local telecommunications needs. Local Internet Service Providers (ISPs) must be Bermudian companies (in other words, at least 60% beneficially Bermudian owned, directed and managed). Presently - and this is not likely to change - local laws do not allow any foreign corporations - such as AOL, which routinely offers services in the UK, Europe, USA and Canada - to offer Internet service from Bermuda, or to own more than 40 percent of a local business (one trading in the local market place). Overseas based organizations with huge bulk purchasing power elsewhere and no controls (like Bermuda has) are not permitted to own local outlets. .
Global companies with world headquarters or offices in Bermuda - like insurance and investment companies and telecommunications companies - may operate in worldwide markets but are not allowed to operate freely in the local Bermuda market place.
Unlike in other countries abroad where governments routinely have their web sites in their home jurisdictions, the Bermuda Government has its official Tourism web site in the USA. Most other "local" websites are USA or Canada or UK based. Only a few are truly local. Cost and 24-hour support overseas are some of the reasons why.
The Bermuda Government has import duties (averaging 27.5 percent and up) levied by the Government on computers, modems, peripherals, routers and all other relevant electronics. They are the highest in the Western Hemisphere. In addition to Customs Duties are Air freight, wharfage and Air Terminal fees. Thus the retail cost in Bermuda of a new 3.4 GHz computer with 4 G DDR RAM and a 17" LCD Flat Panel Display is hugely more than in the USA and double that of the UK. Plus, USA and UK prices price often come with lots of extras including a printer, scanner, choice of software options and 1 year free high-speed Broadband Internet access, but Bermuda prices do not.
The license fees paid to the Bermuda Government by ISPs and others directly or indirectly are the highest fees and taxes per square mile of territory imposed by any country anywhere for telecommunications.
The very high Cost of Living, see www.bermuda-online.org/costoflivingguide.htm.

Other Services include

a number of privately owned Internet Cafes
A Bermuda Government operated community portal program aimed at senior citizens, in community centres.
A Bermuda Government operated recycled PC program, for seniors in government owned Parish Rest (care) homes.
An Internet Access in Public Places initiative, such as in Post Offices, libraries and other public buildings, following the UK methodology.

Reforms suggested to current system

Current system

The four categories of telecommunications companies are:

Class A providers. International service providers (TBI and Cable & Wireless. Also Brasil Telecom, which cannot sell to retail customers).
Class B providers. Fixed and wireless domestic service providers, including BTC, Quantum, the cellular providers and the Cable TV providers; and
Class C providers . Internet service providers, including Logic, North Rock, Fort Knox and Transact.
Cable TV providers - Bermuda-based Cable TV companies authorized to provide limited telecommunication services. They include Bermuda CableVision and World on Wireless.
Companies would get one licence to cover all sectors under the Government's new proposal. (See at end of Other Factors, etc. below)

Proposed reforms

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

Current telecommunications licensing system with three classes of licences will eventually - not before 2010 - be abolished in favour of a new general Communications Licence, to better foster competition among a variety of service providers. 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. With the new general Communications Licence, competition will be enhanced and industry innovation encouraged. Removing the licence barriers will allow head-to-head competition between small and large providers and hopefully balance out any market dominance larger providers may have at the moment.

The government will introduce a single Communications Licence that will allow all providers to compete with each other across the full service spectrum.

Bermuda moved a step closer to this more competitive market place for internet and international telecommunications after Government offered a consortium of domestic companies a licence to install a new undersea cable connecting Bermuda and North America. Initially, North Rock Communications, Transact and KeyTech - parent company of the Bermuda Telephone Company, joined together under the name Cable Company to apply for the new licence in September, 2007, to own and operate their own undersea telecoms cable as a way of by-passing the need to buy capacity from carriers Cable and Wireless and TeleBermuda International on existing cable networks. Once awarded, the licence enabled enabled the consortium to construct and operate a new submarine cable, connecting Bermuda to North America. A new undersea internet and telecommunications cable to end the current duopoly of Cable & Wireless and TeleBermuda International was completed and in April 2009 was ready to begin operations, but with North Rock and Transact no longer as two of the partners, instead now as customers. The new cable is 100 percent Bermudian owned. It has the ability to carry telecommunications traffic 10 times the capacity of that currently used.

Will it mean cheaper and faster internet prices? It is hoped so.