Exclusive interview with Representative J. Fonati Koffa on House Decision to Amend the Telecommunications Act of 2007
The House of Representatives recently voted to amend the Telecommunications Act of 2007, with all the rumors swirling about right now; we thought it was the perfect opportunity to get a bit of inside information. We have spoken to Grand Kru County District no.2 Representative J. Fonati Koffa, Chairman of the lower House’s Committee on Judiciary and the man who led the joint committee, to talk in depth about what prompted their decision, and much more!
Question: The House of Representatives on Tuesday voted to amend the Telecommunications Act of 2007 to expand the functions of LIBTELCO, allowing it to become a GSM operator, and as sponsor of the bill, Rep. Roland, Telecommunications committee Chairman, recused himself, What is your interest in this bill that you agreed to lead the joint committee?
Answer: “Very simple, I would like to firstly correct the general line that we expand the functions of LIBTELCO. We did not expand the functions of LIBTELCO! LIBTELCO was a designated national operator from 2007. The Telecommunications Act of 2007 made them a designated or national operator. What we did was clarified further what that meant in order to give them little bit more privileges as a national operator. You cannot put the government on the same plane as a private company. I think the Liberia Telecommunications Authority (LTA), the regulator, took the view that if LIBTELCO wants to engage in the telecommunications sector, we must treat them as a purely private company, and that was stifling LIBTELCO’s ability to do investment. What impressed the sector’s oversight on LIBTELCO is the fact that its current management apparently understands the technology. I mean everybody here now wants to get LIBTELCO’s internet. It will cost me at least US$20.00 worth of internet on both Lonestar and Orange networks to watch a movie on Netflix, but I can watch unlimited Netflix movies for a month on LIBTELCO for US$90.00. It is that impression that people begin to see that maybe LIBTELCO is going somewhere or maybe they can expand in the Telecommunications sector. When they attempt to do so then, we treat them like a private operator that is required to pay license fees equal to what others pay? Obviously government does not have 15million dollars to pay license fees or 40 plus million dollars to do additional investments. Nevertheless, LIBTELCO had been putting up towers to enhance its internet distribution. So, we simply clarified to LTA that LIBTELCO is the designated national operator; we put in provisions that are generally found in laws for national operators like British Telecom, China Telecom, Dutch Telecom and other national operators that are still in existence or have been in existence such that, reduced license fees for example. Also we are looking at the National Security implications for example, we are blessed that our National Security apparatus rely on foreign private companies for their network. There was even an allegation before that one of the foreign operators shut down the network during a time of crisis with the security. It was investigated sometimes during the administration of Madam Sirleaf. So, these are things you look at and as you progress in this sector, you say these are some of the corrections that need to be made. That is what the sector oversight Chair saw that he drafted the bill. What’s my involvement? Every bill that comes here, Judiciary has to review for legal compliance. It has to meet constitutional standards, statutory standards to the extent that if there is conflict, we have to make those corrections, we have to review them. So, we have to do extensive research on all of the bills, especially those that are assigned to our committee. This was assigned to Telecom and Judiciary. Once the telecom Chair, who will be the lead committee, recuses himself, I, then, as the ranking Chairman leads the debate, and if we have a committee report that says pass this bill that we recommended after consultations, it is only natural that I lead the debate on the floor. That is the only interest. Now, I hear people talking about 4G, 5G and all sorts of things. Remember, this bill was introduced on July 9, 2020 but was rejected by plenary for lack of clarification. Committee went back and did what it needed to do, forwarded it and did the necessary consultations for smooth flow”.
Question: In 2016, LIBTELCO attempted the acquisition of Novafone to enable them (LIBTELCO) use their (Novafone) existing infrastructure to enhance service delivery but unfortunately, that acquisition was denied by the 53rd Legislature, what has changed today? And considering the fact that LIBTELCO currently lacks the needed infrastructure for nationwide distribution, would it be expensive? If yes, where do they intend to get the needed resources from?
Answer: “You cannot say they don’t have the infrastructure when they are already running internet. And based on the revenue they are getting from internet, they are about to expand to Buchanan, Grand Bassa County. So they are expanding, they will not do all at once. The Novafone acquisition had less to do with capacity and more to do with politics. At the time because certain politically exposed persons were affiliated with LIBTELCO and they had to use government funds, the International Monetary Funds (IMF) were very leary to approve that kind of transaction. I think that’s why it didn’t go through. But LIBTELCO is now free, considering they don’t have US$40million to do GSM or expand; they can go out there in the private market and find a joint venture partner, do a bill, operate and transfer for maybe about 10 -25 years, and they will then work with that partner and increase their financial and technical capacities to offer that service. They have a number of options, they can do it like they are doing now, one step at the time – self-financing or they can go find partner. It’s up to them. We don’t know yet what mechanism they are going to use. All we are saying is, they must have the capacity, must have the privilege to be able to do that without overregulation by the LTA”.
Question: The joint committee said and I quote: “In an effort to counter the devastating impact of COVID-19 pandemic on the economy and to support maximum returns on internal resources government for economic recovery, we strongly believe that amending the provisions of the Telecommunications Act of 2007 to expand LIBTELCO’s functions as a National Operator, will have a positive effect on the economy and will enable growth of various sectors, such as education, healthcare, banking, energy and serving the masses, at large”, how is this expansion of LIBTELCO as a GSM operator going to help grow the following sectors: education and health for example?
Answer: “Remember, one of the biggest industries in this country is Telecommunications sector. The two GSM companies that are here are foreign companies. Lonestar Cell MTN announced last quarter that its revenue increased by 11 percent; they announced this quarter that their revenue increased by 9 percent. When Lonestar make a profit or Orange makes a profit, Lonestar profit goes to South Africa; Orange profit goes to Ivory Coast and France. What stays here? You’re paying and you are expatriating. So, what we are saying is, if LIBTELCO were to be here then, we can use portion of their profit accumulated to provide free internet to all University of Liberia students. Because government owns 100 percent of LIBTELCO’s profit, we can then also use portion of that profit to improve additional healthcare facilities. Remember this, the one thing we had before COVID-19, for people like us who used to neglect the healthcare sector for the masses, by the time we get sick we jump on the plane and go to America, Britain or somewhere else for treatment. Now, we cannot go anywhere, we are all stuck here so if that is the incentive to improve the healthcare sector, we can take money from LIBTELCO, which is a telecom giant, and improve other sectors. It becomes a large part of the budget that is that kind of thing you are looking at”.
Question: Unfortunately, LIBTELCO does not currently have the needed infrastructure to match Lonestar cell MTN and Orange service delivery to the masses, how are our people in Grand Kru and Pleebo, Maryland counties going to benefit from this endeavor?
Answer: “Take a step back, the baby got to crawl before it walks, right? So they are starting from somewhere. I am not saying that if LIBTELCO GSM came tomorrow, they will automatically make the same US$93million that these other companies are making, right? But remember, two years ago, LIBTELCO internet was not pervasive in the urban areas as it is now, but we have to start from somewhere. In my district for example, there are places without network coverage. Everybody who campaigns to the people promises GSM network, but cannot deliver on that promise because the private GSM companies assessments results show that investing in those areas are not going to reap a lot of returns. So, those areas are only depending on something called Universal Access Fund (money collected from the purchase of internet from GSM companies operating in Liberia stored and manage by LTA for investment in internet and access to the internet for rural masses). When the Universal Access Funds put in their tower, because the towel construction is the biggest expense, then you can grant Lonestar and Orange the permission to use the tower for the provision of internet coverage. We will go one step further with LIBTELCO. We can instruct them to use portion of their profit to construct towers where needed. LIBTELCO profit will not go in the pockets of individuals or foreign owners; it will go straight in government of Liberia covers because GoL is the 100 percent owner of LIBTELCO. That’s the benefit to the rural masses”.
Question: There are speculations in the media, especially in the general public that Lawmakers, especially you and other key members of the joint committee, received kickbacks in getting this Act amended, is there any true to it?
Answer: “It is absolutely not true! First of all, LIBTELCO does not have five dollars to give anyone kickbacks. Secondly, that would be patently illegal. The idea of kickback is one that circulates because of general Liberian suspicion of each other, we endure it. But trust me; LIBTELCO does not have a dime to give anybody kickbacks”.
Question: Do you believe that LIBTELCO has the capacity, if given the authority to operate the GSM, to get into a good partnership that we all can benefit from?
Answer: “Excellent! Yes”!
Question: Are you a rich man? I asked this question because a popular talk show host was on the radio this morning venting anger over quote – unquote perception that Rep. Koffa is a rich man that doesn’t care about the general wellbeing of the people, are you such a person?
Answer: “I don’t know what you called rich. I am blessed to be able to afford my needs. I usually tell people I don’t have needs because usually the things I need, I get them. If that’s what you called rich, I will say yes, I am rich by the grace of God. Do I have cash and all those other things? I don’t know how to answer the question because people just cast expressions on others. I have property and business in the United States, and here in Liberia, I was blessed to found and operate one of the most lucrative Law firms. It is what it is”.
Question: Also this morning I heard him say you were born in the United States, is that true? Were you born in the United States?
Answer: Rep. Koffa laughs…..” No”!
Follow up: That was strange to me because an American citizen, under our constitution, will not have the right to hold such position you currently hold.
Answer: “Now, you can see the degree of the venom. My Sass Town mother and my Sass Town father will be shocked to know that I was born in the United States. No, I was not”!
Question: Let’s talk a little about you district, Honorable Kofa. Now that we are heading to the midterm senatorial election, everyone is making promises to various districts, how do you hope to see your district taking part in the senatorial election?
Answer: “As you know, I announced that I will not take part in the senatorial race. I just did not really feel comfortable in terms of level of achievements and record on my district level to then jump to a senatorial level. I am out of senatorial politics; I am basically focusing on my district”.
Question: Can you tell us some of the challenges that your district currently faced?
Answer: “Road is the main challenge; healthcare, education. Basically, my district lacks the basic necessities. I am from one of the poorest districts in the country. The roads conditions are terrible and because of that, goods and services are more expensive. People are very poor. Healthcare is difficult to get to. You name it. Our district is in dire need of almost everything”.
Question: One of the things people from the southeast were hoping on is the eastern coastal highway, how far is that project? What are some of the mechanisms toward that project?
Answer: “We are continuing to look for financier. It’s an expensive project. Over US$500 million, the government wouldn’t have that so we are trying to find a financier. The first two did not work. We are not discouraged, we will continue to look”.
Question: Would you support LIBTELCO acquisition of Novafone if the deal were placed back on the table again?
Answer: “Yes, I definitely will”.
Answer: “Because Novafone has the infrastructure and I supported it when they presented the deal the first time. I felt that was a good deal for LIBTELCO. I will support it because the infrastructure is already there”.
Question: Beside the news that every Lawmaker got money for the passage of this bill, there are rumors that you got US$50.000.00, is that true?
Answer: ”No! If I got US$50,000.00 for the passage of this bill, you would be sitting here”.
Question: Do you have share in any telecommunications company in the country?
Answer: ”No, I don’t share in a telecommunications company in the country, I have share in a financial technology company”.
Question: Why if your company decided to express interest for acquisition or partnership with LIBTELCO, will you support it?
Answer: “I will review that. We don’t have that kind of money”.
Question: Is there anything that you would like to add?
Answer: ”The news about this particular deal is just corporate panic. Corporate interest, people who feel that we are going to step into the area of financial dealings are afraid that I am bringing a GSM company or a company to compete with them. I am not sure the FIU will allow me to do that. I just got off the phone with the guy who is looking after my own financial transactions and risk management here; it looks like for people like me, investing in Liberia is almost a no, no so I don’t think they will allow me to do it. Or if they allow me, there will be all these scrutiny and disclosures. I don’t have the money to do it. I don’t understand how the GSM market works. It is not my interest. I am sorry; I am just doing my job. That is my job as the Lawyer for the House, when these bills come, to take them, scrutinize them and ensure they are in the best interest of the country, it is constitutionally sound, statutorily sound to recommend them. What was at my disadvantage? The person who should have been proffering it had a conflict. So it steps up to me and I couldn’t say people might think I am trying to cross a deal. Everybody thinks that I am always crossing deals. That is something from my legal past that people think I carried to the Legislature. I have never brought a client before this place. Never! If I had a client that has ever been summoned by any committee here, I don’t come there, neither do I lobby. I simply do not interfere. Unfortunately, speculation is part of the business we are in. We have to take that and we have to live with it”.