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FSM president proposes fiber optic cable legislation

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PALIKIR, Pohnpei (FSM Information Services) — On Aug. 12, 2020, David W. Panuelo, president of the Federated States of Micronesia, submitted for the 21st FSM Congress’ review a bill for an act which, if passed by Congress, would transfer ownership of the HANTRU-1 fiber optic cable’s Pohnpei spur, and other rights, and liabilities to the FSM Telecommunications Cable Corporation.

The purpose of the legislation is to advance the development of an open telecommunications market by better reflecting the different roles of FSMT Cable, as a non-profit wholesaler providing access to fiber optic infrastructure, and FSM Telecommunications Corporation, as a for-profit retailer of telecom services.

The FSM Telecom Act 2014 Amendment allowed for the establishment of FSMT Cable, which is responsible for installing and maintaining the fiber optic network connecting the FSM to the world. Additionally, the Act allowed for the establishment of the Telecommunications Regulation Authority, which serves as the sector’s regulator. While FSMT Cable presently has ownership of the fiber optic cable spur connecting Yap and Guam, and the cable from Chuuk to Pohnpei, the organization does not yet have ownership of the HANTRU-1 cable spur connecting Pohnpei to Guam. A “spur” is an extension from land to an international cable.

The lack of direct ownership of the HANTRU-1 Pohnpei spur on behalf of FSMT Cable has direct implications on the implementation of the $35 million Digital FSM project with the World Bank, which intends to connect fiber optic access to homes, hospitals, schools etc. in all FSM states, as well as the development of the East Micronesia Cable which is intended to connect the Republic of Kiribati to Pohnpei with a spur to the State of Kosrae and a spur to the Republic of Nauru, thus connecting all of the FSM states and its neighbors to the world at large.

Through a January 2019 binding agreement called an Indefeasible Rights of Use deed, the FSM national government, FSMT Cable, and FSMTC agreed that FSMTC would retain ownership of the HANTRU-1 Pohnpei spur but FSMT Cable would retain usage rights. As this agreement is increasingly challenged by various stakeholders internally, and increasingly recognized by the World Bank, the primary donor behind the Digital FSM project, as a potential setback, the Panuelo-George administration has taken the view that transferring legal ownership of the HANTRU-1 Pohnpei spur to FSMT Cable is required for the State of Kosrae to eventually receive improved internet infrastructure via the East Micronesia Cable.

Transferring ownership, and other rights, and liabilities of the Pohnpei spur to FSMT Cable would benefit FSMTC by removing significant amounts of its current debt and responsibilities. By emancipating FSMTC from these financial duties, the corporation would be freer to scale up retail services for citizens. It is not the intent of the FSM national government to cause harm to FSMTC, but rather to allow the corporation to adjust to the new norm of a liberalized marketplace in a more expeditious manner.

“The refusal to act in accordance with the terms of the [Indefeasible Rights of Use] deed undermines the telecommunications sector, and puts at risk the East Micronesia Cable project which will provide a cable connection to Kosrae,” Panuelo wrote in a letter to Wesley W. Simina, speaker of the 21st FSM Congress, about the legislation. “It also undermines the development of a free and open competitive and customer-oriented telecommunications market, and ongoing World Bank grants for the Fiber to the Home project.”

“These proposals [to transfer spur ownership, and other rights, and liabilities],” President Panuelo continued, “are consistent with the original intention that [FSMT Cable] will hold the submarine cable interests of the FSM, and be responsible for the development of a modern fiber network. These proposals [will also] provide confidence to progress the [East Micronesia Cable] project as [FSMT Cable] will be able to effectively represent the FSM’s interest in providing a submarine cable link to Kosrae.”

“We trust that Congress will look favorably on this bill,” President Panuelo said.

Citizens interested in reviewing the president’s letter and proposed legislation may find it here:

http://gov.fm/files/August_12_2020_Bill_Transmittal_re_-_HANTRU_Cable.pdf

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