Fri, 18 Jul 2003

Telecom body launched, phone rate hike imminent

Evi Mariani, The Jakarta Post, Jakarta

Minister of Transportation Agum Gumelar inaugurated on Thursday the long-awaited telecommunications regulatory body, paving the way for the government to increase telephone rates in the near future.

"I acknowledge that the body is not yet perfected. However, it is the beginning of an ideal regulatory body for the telecommunications sector," he said.

The House of Representatives, the World Bank and telecommunications experts have long urged the government to establish an independent regulatory body for the industry to ensure fair competition among players and to protect consumers. The establishment of such an agency is also stipulated in Telecommunications Law No. 36/1999.

Early this year, the House annulled the government's decision to raise the telephone rates by up to 35 percent, citing the government's failure to meet its promise of establishing the agency prior to the hike.

Now that a regulatory body has been established, based on a ministerial decree issued last week, the government will have its way free to increase the rates.

"We will raise the telephone rates soon," Djamhari Sirat, director general for post and telecommunications at the ministry, told reporters, but did not mention the time frame nor the percentage of the expected increase.

The decree states that the newly established Indonesian Telecommunications Regulatory Body (BRTI) will regulate, oversee and control the country's telecommunications industry, with the authority to issue licenses, settle disputes and set the benchmark for service quality standards.

The BRTI will comprise the directorate general for post and telecommunications and an executive board, the Telecommunications Regulatory Committee.

The Committee is to have five members, including the director general for post and telecommunications, who will automatically head the committee. The remaining four members will be chosen from select members of the public who meet a set of criteria.

One of the requirements is that they must have expertise in telecommunications, information technology, economy, law or other social sciences.

They must also not possess shares in any telecommunications network or service companies, and must not work for such companies as directors, commissioners or employees.

Djamhari must thus resign as a commissioner of PT Telekomunikasi Indonesia (Telkom) in order to head the BRTI.

"I will resign right before the minister issues the decree on my appointment to BRTI," he said.

The ministry promised to complete the appointment of all committee members in three months, when another ministerial decree will be issued to induct the committee members.

As for the body's finances, Djamhari said the it would be entirely funded from the state budget, but he did not mention the amount.

Given the membership of the directorate general in the BRTI, reporters questioned the independence of the body. However, Djamhari promised the government would not intervene in the BRTI in any decision-making processes. The directorate general will only function to endorse the body's decisions so that they become public policies.

He said the ministry had studied several models of such bodies in other countries and had found that none of them completely resembled the BRTI.

"Any criticisms or suggestions on how to improve BRTI are welcome. The current formulation on the BRTI can still be changed if the public so desires," Djamhari said.

Key points on the BRTI

-- BRTI consists of the directorate general for post and telecommunications and the Telecommunication Regulatory Committee, which consist of five members appointed directly by the Minister of Transportation. -- Every decision taken by the Committee is made through consensus or voting, and will be issued as directorate general's decrees. -- BRTI is tasked with regulating, overseeing and controlling the telecommunications network and services. -- BRTI reports progress to the minister every three months if necessary.

Source: Ministerial Decree No. 31/2003