23 August 2015

Liberia's International Call Rates Up With New LTA Order

Monrovia — According to a Commissioner of the Liberia Telecommunications Authority (LTA), Liberians don't often make international calls. This was the reasoning behind a recent LTA order (001-07-31-15) imposing a surcharge on all outbound international calls. According to the LTA Order, international calls will be charged a surcharge of 5 US cents for every minute. So if one calls a relative in the United States for 10 minutes, they will have to pay 50 cents to the LTA for the call, which is in addition to the rate charged by service providers.

The regulatory surcharge, which is not considered a tax, would be paid to the LTA and used as additional funding for the LTA's budget. The LTA, which is known for its exorbitant spending on salaries, foreign travels, expensive vehicles, and high rents, would be directly placing the burden for their extravagant budget on ordinary consumers.

There are over 350,000 Liberians living in the United States alone. Most Liberians at home make regular calls to their relatives abroad soliciting assistance to meet their basic needs in the midst of economic hardships in Liberia. These poor and vulnerable Liberians will now have to pay more to speak to their families simply to fund business class international travels for commissioners and the purchase of new Sports Utility Vehicles. Such insensitivity of the plight of ordinary Liberians comes at a time when the average Liberian must survive on less than a dollar a day. Liberia's economic growth has come to a complete halt with iron ore and rubber export earnings down due to low global commodity prices, thus undermining efforts at job creation. Such a dire situation will no doubt contribute to increased prevalence of poverty and further erosion of social safety nets.

In a conversation with a manager from one of the local telecommunication service providers on the new Order, the manager responded that "we have no fish to fry in this matter. Whatever surcharges the LTA imposes will be passed on to the consumer who will pay for it. We have nothing to do with this new cost. However, we are concerned that imposing such arbitrary surcharges will lead to reduced call volume due to the proposed increase in the cost of making an international call. Any reasonable person should know that means there will be less revenue, thus less taxes will be paid. We have done everything to offer the lowest possible rates to the public and this new surcharge will only reverse the gains we have made to create affordable tariffs."

An industry expert revealed that the new order imposing the 5 US cents surcharge runs contrary to the Telecommunications Act. According to him, the Law states as one of its objective the provision of affordable communications services." The LTA website states that one of its principal objectives is to "promote affordable telecommunications access in all parts and regions of Liberia, relying on market forces and private sector investment when feasible and Government initiatives where appropriate." Adding a surcharge works to the contrary. It undermines price affordability. The consumer already pays a 15% GST, while service operators are paying license fees, spectrum usage fees, and numbering plan fees. Then there is another surcharge imposed on incoming international calls of 14 US cents per minute. The accumulation and increase in these charges works directly to increase communications tariffs.

The Telecom Act requires that decisions made by the regulator should be transparent and involve public participation. The Order to institute a surcharge on international calls did not involve a transparent consultative process. There were no reports presented and the selection of stakeholders lacked transparency. According to a study undertaken by the Georgia Institute of Technology on the Liberia telecom sector, it emphasized the need for transparency in internal decision-making. The Study states that, "While the LTA's internal strategy document is being prepared, there are several points which should be considered. There must be an emphasis on public participation where relevant. Town meetings are a good idea but they must be institutionalized and become a regular part of the LTA's operations. In addition, while the 2006 Act states that most decisions should be made public, the process at arriving at a decision should also be as open as possible and include stakeholder consultations where feasible. These should be part of any internal operational guidelines."

However, the public is totally unaware of the processes of decision making within the LTA and how decisions are arrived at. Most decisions made by the LTA lack transparency; stakeholders are secretly and arbitrarily selected, there are no consultations reports (refer to the LTA website), and key stakeholders are normally left out of so-called "public consultations".

According to an inside source, the Ministry of Post and Telecommunications was not favorable to this order, but the LTA played their politics and pushed through the Order. The source disclosed that "although a surcharge is supposed to support regulatory functions, the LTA pitched the surcharge as a major revenue source for the government that would bring in millions of dollars. Who would go contrary to such an argument? Minister Norkeh has become just a rubber stamp, while Madam Weeks calls the shots?"

The LTA's political manipulation has undermined its very independence by merging policy formation and policy implementation. The intent of the Telecom Law was to separate the policy formulation function from the policy implementation function, thus allowing for independence and accountability. However, the Minister of Post and Telecommunications, described by many as "weak", has failed to assert his statutory role as the policy maker. Thus the LTA Commissioners are both lawmakers and enforcers, giving unto themselves so much power that the essence of checks and balance has been lost.

But one observer commented that "when things hit the fan with public outcry, and people start to stand up to government, Madam Weeks will be quick to say that she is only implementing the policy of government policy approved by the Ministry of Post and Telecommunications."

The privileged minority, such as the well-paid LTA Commissioners, cannot expect to get away with further exploitation of poor Liberians who know what it is to go to bed without proper shelter, food, and medical care. And how can one expect a woman who can charter a private jet to fly her mother from Liberia to Europe to understand the common people's plight? The disconnect of most public officials with the reality of living on under one dollar a day is so pervasive that insensitivity and greed is the order of the day in Liberia. But this cannot continue to go on without a response from the underprivileged majority. A hint to the wise is quite sufficient.

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