I was hoping LU would get some of the contracts, Stan.
U.S. to Hold Off on Iraqi Telecom Reconstruction Award
washingtonpost.com
By Christopher Stern and Jackie Spinner
Washington Post Staff Writers
Friday, May 2, 2003; Page A21
The government has made a preliminary decision not to award a major contract for rebuilding Iraq's telecommunications networks as part of a $2.5 billion reconstruction and humanitarian aid package approved by Congress.
The decision is a blow to U.S. telecommunications companies that would have enjoyed a preference in the bidding process. Instead, U.S. officials say they will leave it to the next Iraqi government to decide how to reconstruct a telecommunications system that has suffered under years of neglect and two U.S.-led wars.
Less than 3 percent of Iraq's population has access to a wired telephone line, and there is almost no internal wireless service outside the Kurdish-controlled north. A report by UBS Warburg estimates that it will cost as much as $900 million to create a modern telecommunications network.
"There is really no reason for the American people to pay for that kind of infrastructure," said one government official familiar with the current thinking.
Telecom executives and lobbyists had expected the U.S. Agency for International Development, a division of the State Department, to award a telecommunications contract, in part, because it has done so in the past for other post-conflict rebuilding projects, including Afghanistan.
But USAID made it clear earlier this week that telecommunications was not part of its portfolio. "We are not going to do telecommunications at all," spokesman Alfonso Aguilar said.
Telecommunications companies including Lucent Technologies Inc., Motorola Inc. and Qualcomm Inc. have been scrambling for information about a potential Iraqi contract since late March, when Rep. Darrell Issa (R-Calif.) announced that USAID was about to award a contract to build a wireless network in Iraq. Issa introduced a bill that would require the contractor to use a wireless technology standard developed by Qualcomm, which is headquartered near Issa's Southern California district.
Issa's announcement appears premature. A government official also said yesterday that even if a contract is eventually awarded, it would not impose a specific standard.
"We feel passionately . . . that government agencies should not predetermine which technology is used," said a government official.
Issa's bill was met with disdain by industry experts who said it made no sense to mandate that an Iraqi wireless network use Qualcomm's Code Division Multiple Access, or CDMA, system. Every other country in the region relies on a rival standard developed in Europe known as the Global System for Mobile Communication (GSM). Motorola is a key supplier of GSM equipment, while Lucent is a leading manufacturer of CDMA equipment.
For the past month industry lobbyists and lawyers have been trying to track down information about the contract, including who would award it and what services it would cover.
"We are still scratching out heads about who is calling the shots and who will make the decisions and what those decisions will be," said one telecommunications industry executive.
Other government sources cautioned that the situation is fluid.
Issa had said in March that he could not reveal his source of information that USAID would award the contract. Diane Bryhn, a spokeswoman for Issa, said yesterday that the congressman has moved on to other issues. "It does have a preference, but the bill is not going to go anywhere," she said.
Several industry sources say the Defense Department plans to hire contractors to build a small wireless network in Baghdad and some other key cities. The network would be limited to 10,000 or so subscribers, mostly U.S. military, humanitarian workers and key Iraqi officials. The Pentagon declined to comment.
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