Developing Telecoms | Pacific broadband funding must reach underdeveloped areas instead of jeopardising competition

4 February 2012

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Pacific broadband funding must reach underdeveloped areas instead of jeopardising competition

Tuesday, 27 July 2010 10:32 | James Barton

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A new Federal Communications Commission report on broadband deployment has called attention to the need for federal regulators to funnel broadband stimulus funding to areas of greatest need, rather than building duplicate networks in market areas which are already competitive.

Communications service provider GTA TeleGuam has responded to these findings by calling for broadband stimulus funding destined for US Pacific territories to be directed at areas that need it such as the Commonwealth of Northern Mariana Islands, noting that the report found there to be no areas in Guam unserved by broadband.

“Privatization and competition have given Guam affordable choices and a world-class communications infrastructure,” said Daniel J. Tydingco, executive vice president of external and legal affairs for GTA TeleGuam. “Broadband stimulus funding sought for Guam should go to needy areas such as the Commonwealth of Northern Mariana Islands”.

Three areas in the CMNI – Saipan, Tinian and Rota – have no broadband infrastructure. The FCC estimates that 1,024 out of 3,230 U.S. counties and territories are unserved by broadband. The minimum speed threshold for broadband is 4Mbps downstream and 1Mbps upstream.

“Broadband is lacking where there is limited or no competition and where incumbent providers have little incentive to make adequate investments so they can maintain profit margins,” Tydingco said. “Unfortunately, in these poor areas broadband access is limited or not affordable, stifling economic growth and expansion.”

According to Tydingco, DSL costs in CNMI are two to three times higher than in Guam, with a basic T-1 connection from Guam to Saipan costing around $6000 a month – the same as a STM-1 connection (equivalent to 100 T-1’s) from Guam to Los Angeles.

One reason for these high prices is the lack of competition in the CNMI. Guam has two aggressive wireline-based broadband providers and four wireless carriers that blanket the island with their broadband coverage. There are also 12 submarine cables with landing points on Guam.

“Communications providers on Guam have made demonstrable progress in infrastructure deployment and investment on the island,” Tydingco said, noting that GTA TeleGuam alone has invested more than $75 million since the Government of Guam privatized the company in January 2005. Another $10 million is planned for 2010.

GTA TeleGuam contends that nearly $100 million in stimulus funding sought for Guam will tilt the competitive playing field in favour of one company and return the island to pre-privatisation days of high rates, slow innovation and poor service. The money, Tydingco argues, would be better spent on developing infrastructure in underserved areas of the Mariana Islands.

“A taxpayer-funded public overbuild of communications infrastructure on Guam will jeopardize competition, risk current and new investments on the island, and it will cost Guam a net-loss of good-paying telecom jobs,” Tydingco said.

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