Battle against callback services picks up steam

By Ayo Johnson
(Business from 2000-09-01 Edition)

CALLBACK SERVICES, offering Bermuda residents huge savings on their long distance bills, are barking up the wrong tree if they think their rates are that much better than bonafide carriers, say officials in the telecommunications industry.
Long distance carriers TeleBermuda International and Cable and Wireless want local and U.S. authorities to crack the whip on callback operators. And the Bermuda Government has been listening.

Telecommunications Minister Renée Webb, who recently pledged to lead efforts in ridding the country of the renegade operators, told the Bermuda Sun this week that an application has been made to the United States Federal Communications Commission for Bermuda to be put on the list of countries that have outlawed the services. "We're not on the list — yet," she said when asked for an update. Inclusion on the FCC's list would make the U.S. agency Bermuda's ally in tracking down the lawbreakers. Callback services are not illegal in the U.S. but the FCC will assist countries in enforcing anti-callback laws if requested.

Logic Communications spokesperson Craig Ferguson told the Bermuda Sun this week that the company isn't threatened by U.S.-based GlobalTel International and Fibretel — two companies that are making some inroads in the local long distance market.
"Obviously it is slicing up the market," said Ferguson. "But price-wise there's really not that much difference and the quality is not that great... GlobalTel is actually more expensive and Fibretel is probably a few cents cheaper" than LogicPhone. He added that the callback services — which are illegal in Bermuda — were more of an inconvenience to the customer.

Using call switching technology, callback services give local subscribers access to a U.S. dial tone, allowing them to make calls as if they were in the U.S.

Cable and Wireless makes the same claim that callback services don't really save the customer that much. Their impact on the industry is, however, "substantial" said head of customer service Paul Furbert, adding that his company works closely with rival TeleBermuda to block the calls.
"It's in the country's best interest to stop it," he explained. "Nobody here working to deliver that call to you is getting their share of the cost." He said "considerable damage" could be done to the telecommunications industry — and the overall economy — if locals continue to subscribe to the services. Local subscribers were sabotaging the country, he added.
"I would say to those people they really want to consider whether or not they want a world-class telecommunications infrastructure or just personal short term gain... If the revenue isn't there locally and internationally, there won't be an investment" in the telecommunications infrastructure. "It's just ripping off the country."

The long distance carriers have been waging a technical battle against callback services — putting a block on numbers as they are discovered.

"It's a constant war," said Furbert.
But efforts are being stepped up on the governmental level as well.
TeleBermuda International spokesperson Jim Ivey said the Telecommunications Commission should take action to prosecute locals involved in selling the service.
"From a telecommunications standpoint I consider it fraud... And fraud is a major issue in the industry."

Telecommunications director Greg Swan told the Bermuda Sun that his department was engaged in an "ongoing" investigation of all callback services operating on the island.
He said it would be premature to say whether locals were involved or if a prosecution was around the corner. But, said Swan, "All callback services we are aware of we will investigate."