Keng Yaik should explain why one of his last acts as Cabinet Minister is to violate the National Broadband Plan to take extended  C-band spectrum away from seven wireless broadband providers in favour of MEASAT 3 satellite, destroying some RM407 million investment with some 400 workers facing retrenchment, undermining the planned investment of some RM300 million in next 24 months and giving Malaysians a lower broadband capacity

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Speech during 2006 Supplementary Estimates committee stage debate         
by Lim Kit Siang  
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(Dewan Rakyat, Monday) : The Ministry of Energy, Water and Communications has recently created havoc among wireless broadband providers  with its proposal to violate the National Broadband Plan (NBP) to revoke licences to broadband service providers to operate on the 3.4-3.6-Gigahertz (GHz) frequency – the extended C-Band spectrum. 

Ten days ago, the Minister concerned, Datuk Seri Dr. Lim Keng Yaik said use of the extended C-band frequency by the wireless broadband providers was interfering with the operations of the Measat-3 communications satellite. 

He blamed the Malaysian Communications and Multimedia Commission (MCMC) which had given out the licences for the predicament. 

Seven FWA (Fixed Wireless Access) broadband operators i.e. Airzed, AtlasONE, eB Tech, Nasioncom, TTDotCom, Maxis Broadband and TM who are now operating between spectrum 3.4 – 3.6 GHz - the extended C-band spectrum licensed to them by the Regulator (MCMC) since 2003 - are now seeing their total investment of over RM400 million  going  down the drain, threatening the ricebowls of some 400 workers, as well as scuttling their investment plans for some RM300 million in the next 24 months! 

These companies are operating mainly in Klang Valley. In a presentation with broadband industry players, MEASAT told them on 5^th April 2007 that the continued use of the 3.4 –3.6 GHz band by FWA services will have catastrophic impact on the viability of the MEASAT-3 satellite, MEASAT and the wider Malaysian ICT industry. 

MEASAT claimed that they had requested MCMC to clearly and promptly reconfirm the priority given to them in the 3.4 –3.6 GHz band, seek alternative frequency bands for FWA services and migrate these services to allow MEASAT to use the entire 3.4 –3.6 GHz band before Q4 2007. 

MEASAT also claimed that MCMC had in 2003 assured MEASAT that the 3.4 –3.5 GHz extended C-band frequency band would be cleared of FWA services within 5 years (by Q4 2007) and will be given to MEASAT. 

If MEASAT has its way,  then probably  all the seven FWA broadband operators will have to shut down their existing operations which are clearly against the public interest for four reasons: 

1: regulatory and policy breach 

This conradicts the National Broadband Plan (NBP) because NBP Section 2 Clause 7 has stipulated as ‘National Policy on satellite-based communications” that satellite networks will play the role as “complementing transmission medium” to provide “critical services reachable using satellite”, i.e. Satellite networks will take up the balance of the market economically unreachable (mainly rural area) by the earlier conventional wired or wireless services. 

The Communications and Multimedia Act 1998 Session 133 also stipulated that “A licensee shall not engage in any conduct which has the purpose of substantially lessening competition in a communications market”. 

Since all the seven FWA (Fixed Wireless Access) broadband operators are operating in the  Klang Valley which does not need satellite broadband support by MEASAT, it will be illogical to require them to operate under a satellite system provided by MEASAT with a lower bandwidth. 

2: losses of installed broadband investment 

To-date, Airzed, atlasONE, eB tech, Nasioncom and TM have a total investment of RM 407 million and they have already planned to invest a total of RM 297 million in the next 24 months.  

Requirement for them to operate under MEASAT will means that they will lose their RM 407 million investment and affecting the future RM 297 million allocations which are to be spent on their current broadband framework. Furthermore, the ricebowls of some 400 workers are at stake. 

3: broadband capacity reduction 

To-date, Airzed, atlasONE, eB tech, Nasioncom and TM have managed to provide a broadband capacity totaling 6.8 GBps. With their planned investment for the next 24 months, their combined broadband capacity will be increased by another 9.5 GBps.

They will not be able to do that if they were to switch to operate under MEASAT as MEASAT can only provide a mere  300 Mbps, which is not only of lower bandwidth capacity but have to be shared by Malaysia with the whole continent of Africa, Southern China, Indonesia, Thailand, Philippines, etc with a total population of more than 2 billion people. 

4: lessening of competition and price monopoly by dominant carrier (MEASAT) 

It is obvious that if these FWA companies were to operate under MEASAT, they will be charged a price higher as MEASAT as a dominant carrier will tend to monopolise broadband market in the country. 

This is also in contradiction with NBP which encourage competition. 

Industry players have been seeking clarifications from MCMC to clarify the confusion but MCMC is still silent on the issue.  

China and India have banned satellites from using the Extended C-Band reserving it for wireless broadband, which is the international trend. Why are we going against the international trend?    

(23/4/2007)