Telecoms bill set to pass next month
JAKARTA (JP): The House of Representatives is upbeat about passing the telecommunications bill by the end of August.
Chairman of House Commission IV for telecommunications, tourism and transportation Burhanuddin Napitupulu said on Monday that legislators and the government were in agreement on most of the important aspects of the bill.
He said the commission would give its formal approval on Thursday after the task force for the bill completed final revisions of its wording on Wednesday.
"The House will hold a a plenary session on August 25 to give final approval on the bill," he told The Jakarta Post.
He said commission members and the government finally reached agreement on the most important issues in the bill, namely exclusive rights in telecommunications currently held by state- owned companies PT Telkom and PT Indosat, rate arrangements and a regulating body.
He said the bill would allow local and foreign companies to freely enter the telecommunications business without having to cooperate with Telkom, which is currently required by Telecommunications Law 3/1989.
"However, the bill will still allow Telkom and Indosat (and Indosat's subsidiary Satelindo) to continue with their exclusive rights until the end of their contracts," he said.
Under the present law, Telkom has exclusive rights to provide local fixed and fixed wireless telecommunications services nationwide until 2010, and domestic long distance telecommunications services until 2005.
Indosat and its joint venture PT Satelit Palapa Indonesia (Satelindo) hold exclusive rights for overseas long-distance services until 2004.
The bill also allows for early termination of exclusive rights subject to a mutual agreement between the government and Telkom, Indosat or Satelindo, he said.
Burhan said the possibility of early termination was designed to give other companies wide opportunities to enter the sectors currently controlled by Telkom, Indosat and Satelindo by offering compensation fees to each of the three companies.
"So we can start liberalizing the telecommunications sector without having to breach the commitment given to investors before the initial public offering of the three firms in early 1990s."
On the rate arrangements, the new bill will allow telecommunications operators to set the amount of rates, including the cellular airtime rate and new connection fee. However, the rates should be based on the structures and formulas made by the government.
Under the current law, operators can only propose rate adjustments to the government based on formula and price cap provided by the government
Burhan said the commission finally agreed to the government's stance not to establish a completely independent regulatory body to act as a watchdog in the telecommunications sector.
He said the new bill would arrange for the establishment of a forum comprising all the concerned parties under the Ministry of Communications to give the government input in the policy-making process.
"The government said the current situation is not yet suitable to accept an independent regulatory body. They're afraid a completely independent body will only add to bureaucratic barriers."
The House initially proposed the establishment of an independent body consisting of telecoms operators, vendors, relevant associations, analysts, consumers and associated government institutions and government representatives to supervise the country's telecommunications sector. (cst)