IRAQI TELECOMMUNICATIONS: AT THE FRONTLINE OF THE

UNCLAS BAGHDAD 002677 SIPDIS E.O. 12958: N/A TAGS: ECON PGOV EINV ECPS EINT KGIT KWIR TINT TSPL SUBJECT: IRAQI TELECOMMUNICATIONS: AT THE FRONTLINE OF THE BATTLE FOR IRAQ'S ECONOMIC IDEOLOGY REF: A. 09 BAGHDAD 01565 ¶B. 09 BAGHDAD 02097 ¶C. 07 BAGHDAD 02820 ¶D. 09 BAGHDAD 0156 ¶1. (SBU) Summary: Recent developments in the Iraqi Telecommunications sector reveal fault lines in Iraq's attitudes toward independent regulation. The Ministry of Communication (MOC) continues to actively oppose a private sector-led, competitive telecommunications market and an independent regulatory authority. The GOI's Communications and Media Commission (CMC),however, is pressing for greater authority and believes that the MOC role should be limited. Newly re-staffed by PM Maliki, the CMC continues to voice strong opposition to the MoC's direct participation in the marketplace, specifically, plans for a state-owned company for mobile services. Through the Strategic Framework Agreement's (SFA) Information and Communications Working Group, post has advocated a strong role for the CMC as an independent regulator and opposed the MOC role as a market competitor. End Summary. The Inequities of the Planned 4th Mobile License -------------- --- ¶2. (U) Often discussed since the issuance of the original three telecommunications licenses in 2007 (Ref C),the MoC has again proposed a fourth mobile license that would be controlled by a new state-owned company. The MoC would partner with an international telecommunications provider for the technical and marketing expertise and position itself as a competitor with Iraq,s three existing, private mobile providers. While the existing licenses were issued for the use of global system for mobile communications (GSM) technology, the MoC's new license and company would access higher frequency bandwidth capable of greater data speed and volume, commonly known as 3rd Generation or 3G. The MoC has provided no indication that existing market participants would be allowed to operate on the same 3G spectrum. (Note: The GOI included $1.3 Billion from expected proceeds from the future sale of the mobile license in its proposed budget supplemental in August (Ref B). End Note) PM Maliki Appoints New CMC Lead and Commissioners -------------- --- ¶3. (SBU) Provisionally established by CPA Law 65 to manage Iraq's frequency spectrum and to license and regulate the telecommunications sector, the CMC exists now in a legal and political grey zone (Ref D). Though not fully empowered or funded by Iraqi law, it retains the authority of a still valid CPA directive. In a welcome and somewhat surprising move, PM Maliki recently appointed Dr. Burhan Shawi as the CMC CEO, along with four additional CMC commissioners. Maliki's decision to breathe life into the CMC implies that the concept of an independent regulatory body has some level of support in the PM's office. That said, it remains to be seen to what extent the executive branch will empower and support the CMC in its political turf war with the MoC. The CMC still faces a number of challenges: lack of full legal authority, a staff largely working under contract, and a budget derived directly from the parliament and not channeled through the MoC. ¶4. (SBU) Comment: Few issues cast in sharper relief the differences in economic ideologies in Iraq than those in the telecommunications sector. The Iraqi post-colonial, command-economy legacy and mindset is widespread, multi-generational, and spans all sects and minority groups. Iraqis who understand and believe in a private sector-led, market-oriented, free-trade future for Iraq are largely Qmarket-oriented, free-trade future for Iraq are largely outnumbered. Post will continue to support the CMC and voice concerns about MoC plans for a fourth wireless license. End Comment. HILL