Special Telecom Section
Palau
Public And Private Sectors Collide
Business executive Alan Seid says his company, Palau BroadBand, could bring cutting-edge telecommunications technology to Palau, practically overnight. Schools could afford high-speed Internet access for students. The hospital could tap other health care systems with videoconferencing. With cheaper long-distance and Internet rates, businesses could truly open up to the world marketplace.
And tourists visiting Palau could snap a photo with their cell phone and fire it home on Palau BroadBand’s microwave network. Seid, the chairman of Palau BroadBand’s parent company MidCorp, says word-of-mouth is a powerful marketing tool in tourism. Palau could add “word-of-broadband,” he says.
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That’s a vision of the fledgling private enterprise you would think this young island nation could get behind considering its high long-distance phone rates and mostly slow, expensive Internet access. But in the toss and tumble world of developing nations, it is a vision that Palau National Communications Corporation, the public agency that runs telecommunications here, is dead-set against.
PNCC general manager Ed Carter says the pubic agency charges higher prices for international calls and Internet service to provide subsidies for developing its domestic system. In other words, to keep the local phone service fees low as the system is built out, PNCC charges more for its overseas service. Carter says if Palau BroadBand starts offering lower rates for Internet service and long-distance calls, PNCC will of course be forced to lower its prices and lose that domestic subsidy.
“That is why we are trying to hold on to the public monopoly,” Carter explains.
At least until Palau can find another subsidy for its domestic system, he says. Palau is vigorously pursuing inclusion in a U.S. telecommunications domestic program that offers subsidies to rural areas. If that came about, he says, Palau could then benefit from competition.
But according to James Stevenson, managing director of Palau BroadBand, the law does not provide PNCC with that monopoly. And Palau BroadBand has invested $250,000 in the fact that Palau law permits a company to provide the services they aim to provide. Stevenson believes the side effects of Palau BroadBand would be more consumer-friendly policies and practices at PNCC.
“Anyone who doesn’t have competition for more than 20 years is going to have practices that do not benefit the customer, but benefit the company,” says Stevenson.
Arvin Raymond, chief of the division of Transportation and Communication, which grants such licenses, says his division has held off on its decision as regulations are promulgated to govern the new technology the company wants to introduce. He adds that in ruling on its license, is within their purview to weigh how Palau Broadband would affect overall communications in Palau.
Palau BroadBand has responded to the drawn-out process with a lawsuit aimed at bringing the issue to a head. The lawsuit, filed Sept. 5, asks the court to issue a license, which they argue they are entitled to under the law.
Seid sums up his quandary: “The government is collaborating with PNCC to prevent Palau BroadBand from being licensed.”
