FSM FIBER OPTIC PROJECT

It appears that the Palau fiber optic project funded by the World Bank is on schedule as indicated by the news article in the link provided below. The public corporation set up to implement the project has been keeping the general public informed of the developments taking place.

For the FSM, not much news is coming out from the FSM Government. Much news and rumors have been pointing to infighting among leaders. Is this an isolated incident restricted to this endeavor, or is this business as usual in Palikir?

If this type of attitude continues, one wonders where the state of the FSM be come the year 2023.


https://belaucable.com/news/2017/11/03/bsccnet-is-connected

https://belaucable.com/



Comments

  • edited November 9
    what do they know about telecommunications? walakandidi
  • TruthIsThat, thank you for posting this topic. It supports what I have been saying all along. FSMTC's previous lobbying against OAE as well as the World Bank's conditions has caused a significant delay to the implementation of the fiber for Chuuk and Yap.

    From what I have been informed, Chuuk and Yap have similar roll-out plans as Palau but as you posted, it seems Palau is way out in the lead and have already begun not only testing of their fiber but also the roll-out of Belau Submarine Cable Corporation (BSCC) which will be in charge of the fiber connectivity allowing for transparency and for a competitive telecom market for all Palau.

    As for the FSM, our OAE, which is equivalent to BSCC in Palau has stalled for months because of FSMTC's continued reluctance to meet the World Bank Conditions.

    A silver lining now is that it seems the CEO for FSMTC has finally caved in to moving forward however he has created conflict and confusion within our leadership.

    Only time will tell how this will play out for the FSM.
  • I heard one the World Bank grant condition is that the FSM will liberate the telecommunications services to allow for competition which will result in reduced cost to consumers with a marked increase in value to the same people.

    FSMTC and FSM Congress might be opposed to this idea, wanting to keep telecommunications and telephone services under the current monopoly situation where FSMTC is the sole provider of all these services. This is an the expense of consumers in residences, private offices as well as government and NGOs. As long as this continues, FSMTC will not have an incentive to reduce prices to consumers. In fact, the entity will try to keep prices at a premium because the management knows that people do not have a choice but to subscribe to their services because there is no one else providing them. I hope I am wrong and this is not what motivates FSMTC and FSM Congress. Because if this is so, then they are in effect cheating their own people.

    While some may fear that allowing competitors into the telecommunications arena in the FSM will spell the demise of FSMTC, the FSM's only child in this playground, taking this mentality may be considered childish and selfish and self-destructive. The only people who will suffer are the citizens and the governments of the FSM. They will continue to pay the premium price for sub-par service.

    There are other arrangements which can ensure the continuation and prosperity of FSMTC while at the same time welcome competition for retailing telecommunications services. The FSM economy will grow, and with this growth will come increased demand for telecommunications.

    At present, FSMTC is ill-equipped to face competition. Its management, technicians, financial expertise are babies in the field of telecommunications services and hardware know-how. Perhaps this is the fear some people have-that the competition will snuff out this baby. To avoid this, it is time for the thinkers to think BIG and look into the future. They need to look for experts to advise them and they need to be courageous to take risks.

    I hope something good is going to happen soon. I hope I have not offended anybody.
  • TruthIsThat, you are right when you stated FSMTC is ill equipped to face competition. I was informed by a credible source that FSMTC was offered a way out of competing in the telecom market.

    The World Bank did not want to see our local telco be thrown under the bus so the actual plan was to have FSMTC provide the telecom hardware infrastructure and services for all interested companies willing to enter FSM and compete in the market.

    This meant FSMTC would only lease their hardware and services to these interested companies. This guarantees a steady revenue for FSMTC and allows the corporation to operate without risk of competition.

    The interested companies would then sell their services directly to their potential customers and therefore FSMTC would not risk any chance of failure as it will no longer have direct access to its previous customers. Its only customers would be isolated to the interested companies that choose to come in and compete in the market.

    A good example of this would be Pohnpei Utilities Corporation deciding to forgo all customer interaction by allowing a separate entity to enter into an agreement to market, sell, and bill its existing customers while PUC would only maintain the power generation, the power lines, and the installation of services. PUC would then be able to sit back and collect revenue without the need of direct interaction with customers.

    Unfortunately, FSMTC was against this for some reason and unfortunately may, in the long run, lose any chance of success in the future if it decides to actually compete in the liberalized telecom market.

    Here is the link to the Congress Bill that addresses this: cfsm.fm/ifile/20%20congress/BILLS/CB_20-90.pdf





  • I see, Snowden. Now, what would be the profitability of that? Suppose only two companies are interested in leasing FSMTC's equipment/facilities? What and how much profit would FSMTC make; rate of sustainability?
  • Sinbad, what needs to be understood is that competition promotes business and therefore increases the likelihood of a larger customer base.

    With the liberalization of the telecom market, it forces the competition to focus on the customer needs and therefore the need for expansion of services as well as the implementation of new services to address shortfalls of the competitor.

    This all boils down to a significant increase in the total customer base for all of the FSM. What FSMTC should have done was accept the condition to provide the infrastructure and services and then negotiate a flat rate or percentage of all the revenue from the potential companies that will be marketing the service. This actually guarantees increased revenue for FSMTC.

    The added benefit is it forces FSMTC to actually provide quality service on demand in order to meet the expectations of the new telecom providers. As a monopoly, they have chosen to ignore current issues that are afflicting their customer base. As an infrastructure provider, they have no choice but to provide a quality of service that is expected from the potential companies will be in place to market their services.

    Lastly, I was informed that the consultants for the World Bank even went as far as proposing for the addition of new Board members for FSMTC if this plan was accepted. This new members would consist of individuals from the interested companies since they would have to be part of the decision making process on how FSMTC would expand its infrastructure in order to accommodate the likely increase in customer base once everything starts rolling out.

    This was supposed to be a win, win situation for FSMTC as well as for its customers. But for now, I'm informed that everything seems to be in limbo while the leadership tries to sort out the confusion that FSMTC created.
  • Thank you Snowden. The reason I am asking these questions is because I do not have any knowledge in business and marketing. I am simply wondering if it would be practical and profitable, in the business sense, to have competition over certain kind of business and/or service with a limited customer base. Like right now the target customers in FSM would be residents.

    It is true though that with competition, comes fair rates or competitive rates, cheaper cost for the services, improved quality of service. This will also mean that the operational cost would increase in order to satisfy the customers. That quality of service must always be competent amongst the competitors resulting in eventual increase in the cost, logically.

    Now, my fear is when one or more of the competitors fail to keep up with the consumers demands or expectations and eventually loses business, leaving fewer service provider or even leaving only a single provider. Wouldn't the remaining one then reverse the process as in monopolizing the service?

    Again, thank you Snowden. Please continue to educate and inform us on this important issue.
  • Sinbad, you bring up a good argument and I digress that I do not have significant information to respond regarding competition as the delay in the implementation of the fiber and of OAE has caused this project to lose traction and therefore any realization of how competition would move forward.

    On the other hand, the liberalization of the telecom market has had a 100 percent success rate in the South Pacific, proving that even with competition, the local telco surprisingly made a profit. This was due to the need for aggressive marketing and finally stepping up and meeting the needs of their customers.

    Since there seems to be no public information coming out of FSMTC or the National Goverment regarding specifics on the liberalization of the telecom market, one can only ponder on how things will actually roll out come activation of the Fiber in Yap, Chuuk, and Kosrae.

    My own opinion as a paying customer, I would be more than happy to have multiple service providers marketing their own mix of unique services. I would then be able to jump ship if my present provider is not meeting my expectations or does not have the exact service I need.

    Monopoly has caused the management of FSMTC to misbehave, to abuse their positions, and to ignore their customers. It's time competition moves in to force the issue of addressing whether this management can actually operate in a professional environment. Whether it be as an wholesale infrastructure provider or actually competing in the market, come next year, we shall all be able to see the outcome.
  • edited November 15
    Great and inviting information on similar scenarios existing in locations comparable to ours. We must not forget, as well, that these places have higher population count than ours, and their cash flow within their respective communities can support such type of services. This may seem as an assumption on my part. Well, partly true that I base some on assumption, but most apply.

    OK, so what does OAE represent? And what is the role of the OAE? Would it be fair to say that OAE is just another shadow of, perhaps, portion of FSMTC's nature of business with its independent aim to profit, whereby diminishing FSMTC's potential profitability?
  • edited November 15
    I hope someone from FSMTC Management or Board can enlighten us on this if it will not be in any way conflict with any ongoing investigation.
  • I have heard from very reliable people in government from a person in the information technology business that he will relocate his multi-million dollar business overseas to the FSM if the internet connectivity in the FSM becomes faster and reliable (implementation of fiber optic connectivity) and that other big companies overseas who top managers appreciate the climate, culture and the slower rat race pace of the islands will move at least some areas of their operations to the FSM. If these companies or businesses are even considered small businesses in the USA or in the developed countries their investments in the FSM will be significant and their need for fast internet connectivity will greatly increase the customer base for the telecommunications service providers. Even the employees of these companies will need internet in their homes.

    The internet and the world-wide web are growing and people are traveling at a higher volume and their demand for instant use of the internet is increasing exponentially.

    So I believe there will be enough business to go around.
  • edited November 15
    Thank you Truth. I hope what you are saying comes to reality

    ...what do I know, right?

    So let's wait and see, with fingers crossed
  • Sinbad, what we need to understand is that FSMTC is serving only a fraction of the population of the FSM due to their high service rates as well as their inability to expand into services into rural areas.

    As for the subject of OAE profiting, the Open Access Entity was created to address the fair and equal use of FSM's fiber connectivity in order to ensure that all parties pay the same rate for usage. OAE will be charging any and all service providers to access the fiber bandwidth at wholesale cost. It has similarities to a non-profit organization and will help in the regulation of this fiber.

    Had it been FSMTC handling the fiber connectivity, they would have basically ran up the rates for the other service providers and killed off any competition pushing us back into a monopoly state once again.

    I hope this sheds a little light on OAE.
  • (I could be wrong) but I thought that there is a newly established joint committee, The MicroPal Fiber Optic Joint Committee established by the Governments of the FSM & the Republic of Belau that will oversee planning & implementation of this World Bank $47.5 million dollar project for FSM & Asian Development Bank $25 mill for Belau, under the second phase of Pacific Regional Connectivity Program. The 1st phase was the Tonga-Fiji connectivity project in which the cable to Tonga became operational in August 213.

    Not sure if there are changes after the signing ceremony of this project but the plan was the installation of the cable systems for Belau, Yap & Chuuk will all be on the same vessel scheduled for loading in July of this year.

    And yes, of course, the release of funds for the FSM project will depend on FSM carrying out the next steps to implement the FSM Telecom Act of 2014, which opens up the telecom market to competition.

    Anybody knows if the additional $16.2 million to connect Kosrae with Kiribati & Nauru is already approved by the World Bank Board of Directors?

    Anybody knows who's the head of the newly established FSM Telecom Cable Corporation?

  • AntiColonialist , FSM Congress Resolution 20-53: Approving an accepting a grant from the International Bank of Reconstruction and Development (World Bank) in the amount of Special Drawing Rights (SDR) 12,000,000 as additional funding, to fund the FSM Connectivity Project’s investment in a regional cable system to connect fiber optic cable to the state of Kosrae, including all the terms and conditions of the assistance.

    As for FSM Telecom Cable Corporation or OAE, the head this soon to be established Corporation is Adolfo Montenegro. He was the former CEO for BlueSky Samoa. www.blueskysamoa.ws
  • Congress passed Congressional Act (CA) 20-54 as a supplement to the 2018 national budget to appropriate $333,000 towards the set up and operation costs for an FSM Consulate Office in the state of Oregon on the US West Coast. Included in the same Act is an appropriation towards the Yap-Chuuk Telecommunications Cable Project of an additional $4 million with $1 million specified for civil works. Rounding out the supplemental funding was an amount of $5 million appropriated towards the FSM Trust Fund.

    http://cfsm.fm/index.php/public-info/this-week-in-congress/335-congress-approves-secretary-of-new-department-funds-new-consulate-office
  • Thank you TruthisThat for the info
  • Optic cable v. Satellite .Optic cable is costly. Sattelite Signals can be bounced off buoy across the Pacific for less money.
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