COMMUNICATIONS MINISTER NOT KEEN ON INDEPENDENT

C O N F I D E N T I A L SECTION 01 OF 02 BAGHDAD 003633

SIPDIS

FOR NEA/I ECON ASSIST PASS TO TF-BSO

E.O. 12958: DECL: 11/16/2028
TAGS: EAID ECON ECPS KINT IZ PGOV PREL
SUBJECT: COMMUNICATIONS MINISTER NOT KEEN ON INDEPENDENT
TELECOMS REGULATOR

REF: STATE 113842

Classified By: ECOUNS Michael Dodman for reasons 1.4 (b, c).


1. (C) Summary: Iraq Minister of Communications Farouk Abdel
Qadir told ECOUNS on November 5 that "Iraqi people suffer
from poor quality of service," so the Ministry of
Communications (MoC) must provide not only infrastructure and
clear laws, but also strict monitoring of service quality.
Admitting Iraq's difficulty in making the transition from
central planning to a liberal market system, Abdel Qadir at
once contradicted himself, espousing strong central MoC
control of the telecoms sector. The MoC is working closely
with the Multi-National Force Communication and Information
Systems Directorate (MNF-I CJ6) to develop a near-term
strategy to build on Iraq's present infrastructure. Abdel
Qadir cited the Egyptian telecommunications model as a
suitable model for Iraq, with licensing and operations
handled by one entity, "bringing balance to the system."
Echoing the Minister's point, Deputy Minister Amer Bayati
said the Communications Media Commission (CMC) should only
control frequency assignments, allowing the MoC to control
all other regulatory, monitoring, licensing, and
infrastructure responsibilities. These statements do not
bode well for Iraq's three telecommunications laws which are
to be voted on soon in the Council of Representatives (CoR).
Accordingly, we will encourage the GOI to allow the World
Bank to review these laws as soon as possible. End summary.


2. (U) Participant list:

Iraq:
- Farouk Abdel Qadir Abdel Rahman (Tawafuq/IIP) -- Minister
of Communications
- Amer Bayati -- Deputy Minister of Communications
- Kassim Hassani -- Director General for Internet Services

United States Embassy:
- Michael Dodman -- ECOUNS
- Roy Therrien -- ESTH Officer (notetaker)


3. (SBU) Iraq Minister of Communications Farouk Abdel Qadir
told ECOUNS on November 5 that the ministry's main goal is to
attract foreign investment and private companies to work with
the ministry to improve Iraq's telecommunications service.
"Iraqi people suffer from poor quality of service," said
Abdel Rahman, so the ministry must provide not only
infrastructure and clear laws, but also strict monitoring of
service quality. Otherwise, "Iraqi companies will not
operate like western companies." Abdel Qadir alternated his
stance, at once espousing strong central MoC control of the
telecoms sector while equally lamenting Iraq's difficulty in
making the transition from central planning to a liberal
market system. Agreeing with ECOUNS' views on the importance
of market competition to drive improved service and the
introduction of advanced technologies, Abdel Qadir concluded
that that was why the ministry needed expert planning
assistance to formulate the ministry's long-term
telecommunications strategy.


4. (SBU) Deputy Minister Bayati said the MoC has a "clear
vision" for the country's telecommunications system:
"Eventually, all services will be provided by the private
sector," he said, with the MoC's role limited to ownership of
the major infrastructure, licensing, and regulation. Noting
the ministry is working closely with the Multi-National Force
Communication and Information Systems Directorate (MNF-I CJ6)
to develop a near-term strategy "to build on our present
infrastructure," Abdel Qadir said what the ministry needs
most is "expert consultancy" to help them build a long-term
strategy. He claimed the Task Force for Business Stability
Operations (TF-BSO) has offered this kind of planning
assistance to the MoC. (Note: MNF-I CJ6 conducted their
first joint planning session with the MoC on November 10,
focused on outlining near-term infrastructure improvements to
quickly build service capacity as well as the importance of
including private sector competition for building and
operating infrastructure. TF-BSO has provided two
consultants and two engineers under contract supporting MoC
strategic planning efforts. End note.)


5. (SBU) Claiming Coalition Provisional Authority (CPA) Rule
65, which established the Communications Media Commission
(CMC),"was not done very well," and "weakened the MoC,"
Abdel Qadir cited the Egyptian telecommunications model as a
more suitable model for Iraq. "The Egyptian MoC handles both
licensing and operations, bringing balance to the system," he
said. Unable to collect licensing fees, the Iraq MoC depends
on the Ministry of Finance (MoF) for its budget. "Under the
previous regime, we provided IQD 47 billion to the MoF," he

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said. "Now we need money from MoF just to pay our salaries."
Overlooking ECOUNS' explanation of the importance of having
balanced regulatory and operational functions to provide
improved telecommunications service, Deputy Minister Amer
Bayati said the CMC should only control frequency
assignments, allowing the MoC to control all other
regulatory, monitoring, licensing, and infrastructure
responsibilities. "We are building not only physical
infrastructure, but also legal infrastructure," he said. "We
are giving more control to private companies day by day, but
growth must be gradual."


6. (C) Comment: The irony of these statements by the MoC's
most senior leadership does not bode well for Iraq's three
telecommunications laws which are to be voted on soon in the
Council of Representatives: the MoC Law, CMC Law, and the
Chief Information Officer Council Law. Accordingly, we will
encourage the GOI to accept the World Bank's offer (reftel)
to review these laws before the CoR vote to ensure they
include provisions for an independent regulator.
CROCKER