July 12, 2010

By Bill Jaynes
The Kaselehlie Press

Palikir, Pohnpei-On June 18, FSM President Manny Mori vetoed Congress Bill 16-34. Among other things, the Congress Bill would have made it the responsibility of the President to nominate Board Members to the FSM Telecommunications Board of Directors with advice and consent of the FSM Congress.

His transmittal letter to Congress Speaker Isaac V. Figir asked the Speaker to recall that at the FSM leadership conference it was decided that the composition of the board of directors of the FSM Telecommunications Corporation should be maintained at the status quo until the five governmental entities have had an opportunity to deliberate further on their respective ownership rights in the corporation.

At issue during that meeting were state claims to proprietary interests in the Corporation since FSMTC runs its lines on electric poles erected on State-owned easement rights acquired by each State government. Except in the State of Chuuk, most FSMTC lines are run under ground. Even still, states claimed at the meeting that easement rights were obtained by the individual states and that FSMTC has been using the State easements without providing each State with just compensation.

The President said that "the National Government currently lacks sufficient information to confirm the truth of these claims, however, because the States are claiming ownership interests in the Corporation as consideration for the use of their State property, the National Government has a duty to take these claims into serious con-sideration."

President Mori mentioned in his letter a resolution passed by the Pohnpei State Legislature the day before his veto letter was transmitted to Congress. The Pohnpei State Resolution was strongly worded and was titled, "A proposal for a resolution urgently requesting the President of the FSM to embrace his responsibilities as the leader of our entire nation inclusive of the four states, in vetoing C.B. No. 16-26, CD1, through which the FSM Congress is attempting to deprive the four states of the FSM of their rightful ownership and participation in the nation-wide telecommunications corporation of the Federated States of Micronesia."

Kosrae, at the end of May passed a similar resolution though the President didn't mention it in his veto letter. The Kosrae resolution was not as strongly worded as the Pohnpei resolution but the cover letter written to the President by Speaker Lyndon H. Jackson concluded by saying, "The Kosrae State Legislature sees this bill as little more than a naked 'power grab' by the Congress and urges you to exercise your Presidential authority to act to protect the rights of the states and veto this bill."

The Governors of Yap, Kosrae, Chuuk, and Pohnpei also each urged the President to veto the bill. The President also didn't mention those communications in his veto cover letter to Speaker Figir.

The President concluded by saying, "I hope that you will understand that there are simply too many outstanding unresolved issues to all Congressional Act No. 16-34 to pass."

Since Senator Mori was elected from amongst his Congress colleagues as the President of the FSM, Congress anecdotally has had a long and storied history of overturning Presidential vetoes of their bills. At press time the Congress Public In-formation Officer had not responded to our queries for exact figures on the number of vetoes that Congress has overturned since Mori was selected as the President.

Much of the recent National Government activity regulatory activity that focuses on FSMTC seems to be centered on the fact that the first FSM Congress set up the national corporation to function as the sole provider of telecommunications services- a monopoly.

"Pacific countries with similar population size to the FSM, such as Tonga and Samoa, through competition in their telecommunication market, enjoyed greatly reduced phone and internet charges by sometimes more than 50%, as well as far better coverage," said Francis Itimai, Secretary of the FSM's Department of Transportation, Communication, and Infrastructure (TC&I).

The quote appeared in a TC&I press release that said that Itimai was one of the keynote speakers at a conference on a "Framework for Action in ICT (Information Communication Technology) for Development in the Pacific," at a conference that took place in Tonga on June 16, and 17.

Itimai led the FSM delegation which included Assistant Secretary for TC&I Jolden Johnnyboy, a former board member of FSMTC, and TC&I consultant, Dr. Norman Okamura from the University of Hawaii.

In fact, FSMTC's service rates for telecommunications services are still less than either of Tonga or Samoa according to several studies conducted in the Pacific region (www.strategies.nzl.com/wpapers/2009010.htm). Additionally, neither Tonga nor Samoa has the widespread geography that FSMTC is charged to cover, though the population bases are, as Itimai said in his press release, similar.

FSMTC seems to be an anomaly as far as Pacific telecommunication price structures are concerned. The company continues to develop its technology and maintains some of the lowest prices for their services in the Pacific despite the fact that it is currently a legally mandated monopoly.

Editor's note: Mathematically and economically inclined readers with internet access might be interested in reading the scholarly work by Cambridge scholars Pavlos C Symeou and Michael G Pollitt entitled, "Telecommunications in small economies: the i-pact of liberalization and alternative technologies on universal service," which can be found at the website address: www.city.ac.uk/economics/dps/CCRP%20Confer-ence% 20Papers/Pavlos%20Symeou.