ITU has its work cut out - Telecom Planet - International Telecommunication Union's funding shortfall may lead to job cuts - Column

Telecom Asia, Dec, 2002 by Grahame Lynch

The world's peak telecom body may have to cut 25% of its staff as it faces a funding shortfall and a loss of relevance. In many respects, the 135-year old International Telecommunication Union should be more important than ever. The telecom industry is now becoming truly globalized, especially with the rise of Korean and Chinese manufacturers and the gains made in developing genuinely sizable and competitive international telecom markets in recent years.

And with real solutions to the so-called digital divide now in sight--for example, the spread of cellular telephony and VoIP--the need for an effective global clearinghouse of ideas, resources and expertise remains compelling.

But despite the best efforts of reform-minded leadership in recent years, the ITU remains a moribund organization. It has some 189 member states, who delegate their authority to an ITU Council made up of a weighty 46 of their number. Its recent plenipotentiary in Morocco took one month to complete--and for the most part was dedicated to largely pointless discussions about ITU structure and procedures.

For every regional bloc that proposed concrete action--for example, the Europeans wanted to implement reforms from next year--there was a bloc, typically the Arab states, to oppose them. The meeting, which attracted some 1,300 delegates, even spent days discussing how to elect its own office-holders. One amazing resolution proposed that in the event of a vote deadlock, the older candidate wins!

Four weeks is a lot of time to pass a lot of resolutions that generate obligations--and passed they were. However, the most disturbing, if not unsurprising, result of the conference was that while the ITU faces an increased workload, its pledged funding is likely to fall way short of requirements.

Funding shortfall

Secretary-general Yoshio Utsumi warned the 1,300 delegates in attendance at the meeting that "the implementation of this drastic reduction will result in a deterioration of the functions of the secretariat to an extent that the membership will find difficult to tolerate". A staff union member went further, describing it as a massacre.

Under its unique system of funding, ITU members have the ability to effectively set their own level of contribution. By the end of the conference, country members--who provide two-thirds of the ITU's funding--had pledged contributions some $14m short of the required amount. Most of the funding reductions came from European countries, in contrast to Asian and African countries, who in most cases committed to maintain existing funding or to even increase their contributions.

The shortfall means that the ITU will now have to lean heavily on private sector members, who currently provide 13% of funding, to provide more revenue. But given current industry conditions, this appears unlikely. Furthermore, several proposals aimed at providing a greater role for the private sector in ITU affairs were watered down, reducing the appeal of their membership. Another source of revenue for ITU activities--its TELECOM tradeshows--is also down, following cancellations of events in Latin America and the Middle East recently and the general pressures on industry marketing budgets.

The pressures are exacerbated by several resolutions adopted at the conference that will increase the ITU's costs. One is a plan to double the ITU's set of major working languages from three--English, Spanish and French--to six--adding Chinese, Russian and Arabic. The cost of translations already constitutes one of the ITU's biggest overheads. The shortfall also places at risk a plan to convene a World Summit on the Information Society, which aimed to bring together national leaders to develop a strategy for eliminating the digital divide.

Staff cull

The shortfall could lead to a mass culling of ITU staff--perhaps as many as 25% of the total--further reducing the body's effectiveness at a time when it is losing its relevance to regional standards bodies and Internet regulatory organizations.

The ITU has been largely missing-in-action when it comes to the Internet, with private representative bodies such as the Internet Society and ICANN taking a leading role. In recent years, much of the ITU's policy work has been largely reactive to American-created initiatives, such as Internet telephony and the FCC-led push to reduce international termination rates. And the ITU conspicuously failed to achieve a goal it set for itself in the field of 3G wireless--the next-generation harmonization of what were the balkanised 26 standards of GSM, TDMA and cdmaOne. If anything, the world of 3G is more fractured and confused than 2G.

The reality is that some ITU members don't value its role as much as before--hence, the reduced pledges. The ITU is already a relatively mean-and-lean organization--it operates with about one-sixth the staff numbers of the FCC and spends only $300m or so a year. But a loss of 25% of its staff is tantamount to a death notice, especially given the expectations placed on it these days.