Government of the Federated States of Micronesia

President Mori Transmits Bill to the Congress of the FSM to Establish Oversight over FSM Telecommunications Corporation

Palikir, Pohnpei (FSM Information Services): April 2, 2009 - President Emanuel "Manny" Mori transmitted an Executive Bill to the Special Session of the Congress of the FSM on March 23, 2009. In the transmittal of the Bill to Speaker Figir, President Mori stated that "The impetus of the proposed bill is to ensure that telecommunication services provided by the FSM Telecommunications Corporation (FSMTC) are provided in an effective, efficient, transparent, and financially accountable manner."

President Mori noted in the transmittal letter that the Bill creates a new Chapter 3 to Title 21 which establishes the authority of the FSM Government. Through the Department of Transportation, Communication, and Infrastructure (DTC&I), the Bill would enable the National government to "review and approve the service plans, rates, business relations, response to customer trouble calls, and establish standards for the reporting of telecommunications income, expenses, assets, and service levels; provide for a means by which customer complaints regarding pricing and quality of services may be reviewed; empowers the DTC&I to adopt rules and regulations based on these mandates; and directs the DTC&I to prepare and submit an annual report on the state of telecommunication services and ICT in FSM."

Additionally, President Mori's letter stated that the bill amends "Section 203 of Title 21 to be consistent with proposed new Chapter 3; and requires the FSMTC to operate on the principles of transparency in its business operations, procurement, and reporting; establish an open, competitive procurement process for the procurement of goods and services to ensure that customers pay the best price for goods and services; submit copies of the request for proposals, bidder responses, and other information to the DTC&I; and provide information in response to requests by the DTC&I."

President Mori said that the "Bill is a critically important step toward lessening the telecommunications problems in the FSM and to ensure that telecommunications is a vibrant infrastructure for the social and economic development of the FSM." President Mori noted that the Bill is consistent with the "recommendations by several international and regional organizations" and that he hoped that "Congress perceives this bill as an important step toward improving telecommunication services in the FSM and give favorable consideration and action for passage."

Mr. Francis Itimai, Secretary of the Department of Transportation, Communications and Infrastructure (DTC&I) underscored that "Under the Bill, the FSMTC would continue to operate as they do under the law. However, the FSMTC would operate in a more open and transparent manner as a public corporation. The FSMTC would also have to provide information regarding plans, customer complaints, procurements, operating income and expenses, and the like to the National Government and the Congress, who have a broader concern with the impact on telecommunications on the economic and social development of the FSM." (A full copy of the bill can be obtained by requesting a copy from Mr. Jolden Johnnyboy, the Assistant Secretary of Communications of the DTC&I. Mr. Johnnyboy's email address is transcom@mail.fm.)

During a public hearing on March 26, 2009, the Congressional Committee on Transportation and Communication discussed the proposed bill with representatives of the Department of Transportation, Communication and Infrastructure. Although a copy of the Bill was provided to the FSMTC General Manager and members of the FSMTC Board, no comments were received during the second hearing as none of the FSMTC management staff was present. Secretary Francis Itimai testified to the Committee that the Executive Bill would establish a mechanism to systematically address the concerns raised by Congress members, and that the Bill would ensure a more effective, efficient, and transparent telecommunications corporation.

Because of concerns raised by Senator Urusemal that, in his view, this Bill may take away current responsibilities of the FSMTC Board, Secretary Itimai responded that "it is important for the Government and people of the FSM to clearly understand the state of telecommunications in the FSM" because of its importance to the FSM and added that "the FSMTC, including its Board and Management, would continue to operate in the way that it has been operating, except that it would need to submit information on its plans, rates, log coverage, services, and customer complaints - information that both the Government and citizens of the FSM should be aware of. This Bill will allow the FSM Government, through DTC&I, to have the oversight and policy responsibility over telecommunications once it is passed by the FSM Congress and signed into public law by the President."

Some members of the Committee wondered whether this Bill would indeed compliment the efforts spearheaded by the FSM and the Asian Development Bank on privatizing the public corporations and the response from the DTC&I representatives was that indeed this undertaking to strengthen the regulatory regime of government was strongly recommended in the report for that project. Witnesses called upon by the Committee to also comment on the Bill transmitted by the President also was a gateway for good governance, transparency and good ethics and recommend passage of the Bill as both because Government should be looking at the operations of the public utility and FSMTC should operate on principles of transparency.

Comments were also made that similarly many Pacific Island Nations have passed similar laws to help their countries move forward in the area of liberalizing and regulating telecommunications. Pacific Island Countries that have introduced competition and regulatory authorities include Fiji, Samoa, Tonga, and Vanuatu. In Micronesia, the Commonwealth of the Northern Marianas Islands and Guam have extensive competition since 1996. Palau has also competition for internet and mobile communications and the Republic of the Marshall Islands recently introduced similar legislation to begin liberalization and regulation.

The Bill was introduced in the Session of Congress preceding the public hearing by Senator Moses Nelson, who is the Chairman of the Congressional Committee on T&C but was deferred indefinitely due to concerns raised by some members, who were not in full support of the Bill; meaning the Bill would die with the 15th FSM Congress. It has yet to be determined if the Bill will be resubmitted during the 16th FSM Congress.