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| Sunday, 27 February 2005 |
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Features |  |
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Once more on telecom regulation Part II
This article refers to the two articles published in the Sunday Observer under the above caption: The first article on 12th December 2004 - a presentation made by the Deputy Speaker in Parliament and the other on 2nd January 2005 a response to the first article by R. Samarajeeva published on 2nd January 2005. These two articles referred to data cited in the presentation I made on the 24th of November 2004 to the Sri Lanka Branch of the Institution of Electrical Engineers (IEE) London UK solely in response to their request to address them on the chaotic state of Interconnection in the Telecom Sector of Sri Lanka the most critical shortcomings highly eroding market competitiveness and affordability of telecom services. The presentation was meant solely for the discourse of the IEE members competent on the subject. by K.K. Gunawardana Samarajeeva does not divulge the dismal failure of the Public Interest Program Unit (PIPU) - the organization created on the advice of himself to the previous regime to overcome shortcomings of the liberalized sector. As the head of the PIPU instead of truly and dedicatedly helping the Regulator to overcome the critical shortcomings of the liberalized telecom sector he functioned as the pseudo regulator availing of his authority to weaken the TRCSL and erode market competitiveness. Super regulator The intentions of Mr S to weaken the TRCSL is further endorsed in a report published in the Sunday Observer of 24th Nov 2002 soon after PIPU was setup - where he states, attributing various plausible reasons to support his intention to closedown the TRCSL to bring it under a super regulator-needless to mention its intended incumbent . This he did stealthily accomplish through expertise engaged at exorbitant remunerations but without any accountability of their missions - producing null output - some instances of which are quoted below. For e.g. he defied the warning conveyed to him of the imminent failure of the expert mission on interconnection of EGO and hastily engaged the expert at a cost - yet a top secret - but reported to be over US $ 400,000 The outcome of this mission is that nearly 30 of the 35 licensees have not yet been able to interconnect and charges for international calls are more than five-fold those of other cost-effective markets. Monopoly This mission under his direction also recommended to differ unbundling of the local loop to grant SLT the monopoly rights to provide ADSL service, most vital for the development of ICT applications, in particular telecommuting services to ease road congestion and improve national productivity. The outcome of the stealthy actions of Mr S is: ADSL services of high cost; unsatisfactory quality and; slow pace of its growth. Subsequent to the dismal failure of the above mission on EGO interconnection, the Director General of Telecommunications (DGT) of the TRCSL, reportedly under the direction of PIPU dispatched an official to the Regional office of the International Telecommunication Union (ITU), the UN specialized - agency in telecom - to seek their advice on the problem. This official was apprised of the forewarning issued to the DGT on the imminent failure of the mission, the solutions proposed to the DGT and the offer of services free of charge to resolve the problem. Expert On return of this official to Sri Lanka it is understood however another expert was engaged but once again with null outcome. Mr S also engaged an expert on asymmetric regulation, ironically to quell asymmetries of the type mentioned aforesaid created by himself and his expertise to perpetuate his vested interests . In another instance he crafted a fund - the VGK as named by Mr S, to mobilize funds to develop the rural sector, ignoring the commensurate authority provided in the Telecom Act to levy a cess. This cess as stipulated in the Act is calculated on the turnover of the operator. The cess if applied will generate funds far greater than the VGK. It could be used by the Regulator for purposes prescribed. This provision gives commensurate authority to the Regulator to deploy the cess for any prescribed purpose - including provision of affordable access to remote areas where telecom investments in the startup phase may not be economical and not conducive for new entrants to invest. This fact he did ignore solely to justify engaging an expert to draft the strategy for the VGK. It is ironical to note that while Mr S claims that he is a supra expert in telecom he always needed assistance of consultants to carry out even simple tasks such as those mentioned above. This cast much doubts of his competence. Several others say the reason for the above is that the PIPU was the cover up agency for providing employment for consultants. Hence while Mr S was being paid by the Govt an opulent salary of US$ 298,000/- per annum (i.e. nearly SL Rs 2,500,000 per month) he was also well rewarded by these experts. This salary until published by the CDN was a top secret. The above are a few of the numerous instances that shows how Mr S allowed the Regulator to Regulate. In fact his guru is reported to have said that telecom laws and interconnections in USA have been dubbed as the haven of employment of lawyers. It appears that weakening of employment opportunities of these experts - with maturity of USA markets to understand the real intentions of these expert services - necessitated to create employment opportunities for himself and the experts in overseas markets. Misuse It is said that such actions by persons of the like of Mr. S that lead to the downfall of the previous regime and it is perhaps the reason that this Govt. closed down the PIPU . 2.2. Misuse of PIPU's Colossal Funds - Cost of Opportunities deprived to the People of Sri Lanka Mr S seems to be indifferent to the immense cost of opportunities deprived to the people of Sri Lanka as a result of misuse of the Social Capital allocated to the PIPU for strengthening the public goods essential to sustain market competitiveness. National debt He is also indifferent to the consequent increasing burden on the national debt payment that will have to be paid with scarce foreign exchange earned by the toil and sweat of the Sri Lankan people. His salary of US$ 298,000 per annum alone could have easily provided even at the current inflated per line investment cost of the market well over 250 lines per annum - and at typical costs prevailing in competitive markets well over 1500 lines per annum. These provisions could have served expeditiously the increasing numbers yearning for access to service in rural areas - at the current pace of investment by the private sector these rural people are unlikely to be served within their lifespan. The total social capital mismanaged by the PIPU - yet a top secret - but reported to exceed US$ 30 million could have easily provided well over 300,000 additional lines to the nation at current prices of competitive markets. 2.3. Malpractice Tactic of Confidence Tricking Privatization As much as he inveigled the previous regime to set up the PIPU with himself as its head he misrepresents info to show that the article of 12th Dec 2004 is blaming the Secretary to the Treasury for signing the joint venture agreement for privatization of the SLT, authorizing tariff increase demanded by the joint venture partner of the SLT. Another attempt to distract attention from the root cause weakening market competitiveness and win his trust - to seize opportunity to once again recommence the cycle of confidence tricking. Furthermore, with the same intention he condemns the Deputy Speaker for publishing the article with the hope that he could win the sympathy and confidence of the Head of State. 2.4. Monitoring Impact of Policy/Regulations on Network performance - an Act of Heresy Recommendations It is evident from the article of Mr. S, that none of the claims made by him are supported with results from monitoring the impact of the recommendations of PIPU's expert missions on the performance of the network. He, often openly stated that monitoring the network is the role of the engineers but they have no role in the sector reform. Any person challenging the impact of his decisions on network performance he viewed it much like the medieval feudal lords as an act of heresy that he sternly dealt with. In fact to inflict fear he did once dismiss a junior engineer who was bold enough to challenge him but to his dismay he was reinstated by a court order. His inability to master engineering disciplines, he conceals by unleashing a "vendetta" against the engineering profession. Sacrifice His remarks unsubstantiated by data endorses the fact that Mr S acts on his instinctive drive to further his vested interests at the complete sacrifice of the interest of the Nation and above all the interests of the helpless user of telecom service. 3. Collective Participation of the Public in the Sector Reform to Benefit from Globalization These activities of the PIPU and its head are classic illustrations of the ruthless exploitations/malpractices reported in the Publication "Globalization and its Discontents" - by Dr Josef Stiglitz - at one time the Chief Economist of the World Bank and also Nobel Prize winner for Economics in 2001 - that will impede for ever the developing nations improving economically. Beyond doubt The lack of transparency/accountability of the activities of the PIPU of which Mr S. was the head, his endeavors to convince users to make calls of short duration, block the opening of up of ADSL service show beyond doubt that he is the key driver of the colluding interest eroding competitiveness of the market and timely access to affordable service nation wide. The only hope to protect the interests of the nation to benefit from the immense gains of globalization is by collective and active participation of the public in the sector reform process. This is vital to ensure that the Public goods essential to sustain market competitiveness are managed by neutral entities fully accountable for the measurability/productivity of its outputs and not abused by imposturous entities inveigling the nation's leading decision makers. |
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