Confusion in FSM Over Impact Of New Telecommunications Bill

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Recent delay in implementation doesn’t reverse liberalization law

By Bill Jaynes

POHNPEI, Federated States of Micronesia (Kaselehlie Press, June 11, 2014) – During it fourth regular session the FSM Congress passed a bill to delay the effective date of Chapter Three of the Telecommunications Act of 2014 until May 12, 2015.

No committee report was adopted to support the delaying act.

At press time President Mori had not yet signed the act into law but had also not acted to veto the Congressional Act.

There is some misunderstanding amongst FSM citizens about the Congressional Act including at least one FSM State lawmaker who seems to think that it reversed the entire liberalization law.

Yap’s Senator Jesse Raglmar-Subolmar wrote in a Facebook posting and on a blog site that the FSM Congress did not pass the telecommunications liberalization bill in time to access funding offered by the World Bank that would eventually land a fiber optic cable in the FSM State. He further wrote that World Bank’s consideration of funding for a Yap fiber optic cable was "now again being bamboozled by" the bill to delay implementation of the telecommunications liberalization law.

In fact, the FSM Congress passed the telecommunications liberalization act, and President Mori signed it into law just in time to meet its own part of the World Bank’s multi-national IDA-16 funding scheme that also involved Palau. Without the full participation of each of the countries involved in the multi-lateral funding scheme, the IDA-16 could not go through.

At least one of the countries did not meet the requirements for the IDA-16 and it wasn’t the FSM. Officials from the Republic of Palau have not yet determined how they will fund their portion of the deal.

The bill affects ONLY chapter three of the telecommunications liberalization law which has to do with the establishment of an Open Access Entity which the FSM won’t have the money to develop until funding is available. The telecommunications industry in the FSM is STILL liberalized and FSM Telecommunications Corporation is no longer a government mandated monopoly.

Senator Raglmar-Subolmar surmised in his posting, "That will delay further the project which the World Bank has agreed to consider under IDA17, since the project couldn't meet the deadlines for IDA16 of the World Bank and one of the delays was the late approval by Congress of PL no. 18-52 and now the Congress has seen fit to delay the implementation of the project under IDA17 also."

There has been no indication that delaying the implementation of the bill will push back World Bank’s consideration of a multi-lateral ID-17 grant that would help to pay for the landing of a fiber optic cable in Yap and in Palau at some point in the future.

A World Bank spokesperson who visited the KPress office several months ago said that the World Bank could not provide funding for a telecommunications provider that was legally mandated to be a monopoly as was the case at that time in the FSM. The FSM would not be able to access World Bank’s proffered funding until there was a legal environment that allowed for competitive telecommunications operators in the FSM.

The World Bank spokesperson said that the bank could not be viewed as funding a specific monopoly operator.

She said that the World Bank does not lobby for reform in any country and that previous news and opinion items that we have published regarding a World Bank agenda for telecom reform have not been correct. She said that the World Bank responded to specific requests by the FSM government for improvement of telecommunications services in its geographically separated country.

The World Bank did not initiate the bill to liberalize the telecommunications industry in the FSM. The FSM did.

FSM Senators said that they felt they had been blindsided by the announcement of an alternative plan for World Bank funding.

The World Bank Communications Officer who visited KPress several months ago told us then that if for any reason the multilateral plan for the landing of a fiber optic cable in Yap and in Palau should fail there was a bilateral plan for funding of electrical power that it was also working on at the request of the FSM government.

The official at the FSM Department of Resources and Development who worked with the World Bank on that alternative funding arrangement did not return our phone calls and we have no details on what specifically that multi-million dollar arrangement will fund.

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