William Jefferson's Letter To Atiku

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William Jefferson's Letter To Vice President Atiku Abubakar

The controversial letter by William J. Jefferson, a U.S. congressman, found in the U.S. house of Vice President Abubakar Atiku, by the Federal Bureau of Investigation (FBI).

I wish to bring a project to your attention by which a U.S. company desires to invest over USD $60,000,000 to provide the high speed Internet service to Nigeria over NITEL's copper wire infrastructure. Under the proposal, there would be no costs to NITEL or the Federal Republic of Nigeria. To the contrary, the project proposes to pay substantial amount to NITEL for the use of its copper wire and for the co-location of D-Slam and switches at NITEL facilities of approximately USD $5,000,000 in Year 1; USD $28,000,000 in Year 2; USD $69,000,000 Year 3; USD $103,000,000 in Year 4; and USD $106,000,000 in Year 5 and thereafter. This would add substantially to NITEL's operating income and to the value of NITEL in its efforts to privatize.

A small Nigerian Internet Service Provider (ISP), Rosecom.net, is partnering with the US company to bring this high speed Internet service to Nigeria. The speeds provided will be up to one (1) megabit per customer, speeds that will revolutionize business transactions and personal communication in Nigeria. Rosecom presented this project to NITEL and negotiated with its agents for a right to co-locate its D-Slams and other equipment at NITEL locations, and for a lease price for the use of NITEL's lines. NITEL responded in a written quotation to Rosecom dated 29 April 2005, a copy of which I attached offering Rosecom the opportunity to co-locate its equipment with NITEL's at prices ranging from USD $7,500 for one (1) megabit, discounted to USD $3,992 for thirty (30) megabits. (Attachment A). On 11 May 2005, Rosecom accepted NITEL's offer, with two inquiries: Since Rosecom desired to pay for the right to use 150 megabits rising to 1500 over time, were discounts available to it for megabit use purchased beyond 30 megabits listed in "Section 6.2. Volume Discounts" of the Quotation; and was it possible for Rosecom and its partner to enter into a long term deal with NITEL to provide Internet service for a price, but on a non-exclusive basis. (Attachment "B"). Having accepted NITEL's offer, Rosecom and its U.S partner began making preparations and incurring obligations to launch their project in Nigeria during July 2005.

However, on 3rd June 2005, to the surprise of Rosecom and its U.S. partner, NITEL issued a letter offering Rosecom an entirely new deal from the one offered in its 29 April, 2005 Quotation to Rosecom and making no reference to Rosecom's acceptance of NITEL's earlier offer (Attachment "C). Indeed, the 3 June 2005 letter from NITEL offered Rosecom the right to resell NITEL's Internet service to be supplied through NITEL's own ADSL-based network services. Upon a further search, it would appear that NITEL has decided to acquire its own D-Slams and to establish it own wholesale Internet service, using an ADSL model. The equipment NITEL is acquiring is a Chinese product. The Chinese-produced D-Slam is technically incapable of delivering guaranteed speeds of one (1) megabit over copper wire for the distances required, so that the service to the end users in Nigeria will be very slow and expensive. Additionally, NITEL will have to incur the considerable expense of purchasing the D-Slams whereas the Rosecom project is presented at no costs to NITEL, with Rosecom and its U.S. partners paying all of the costs incurred.

From the point of view of U.S. business, it is very important to be able to rely on the acceptance of an offer as a deal if U.S Investment is to be encouraged in Nigeria. Thus it is important that NITEL recognize the acceptance by Rosecom, on behalf of itself and its U.S. partner, and permit them to launch their project in Nigeria as expected. Both Rosecom and its U.S. partner have already incurred considerable expense in preparing for the launch subsequent to receiving NITEL's referenced Quotation.

It is important to note, that for NITEL to honor Rosecom's acceptance of its offer presented in its 29 April 2005 Quotation does not mean that it must abandon the use of the Chinese technology that it appears to be purchasing for its D-Slams, nor that NITEL abandon its plan to offer its own ADSL-based services for resale to ISPs. Rosecom and its U.S. partner believe that their product can compete favorably with any ADSL project. Therefore, the U.S. partnership seeks to co-locate its D-Slams at NITEL facilities along with any other D-Slams NITEL may desire to use and pay NITEL may desire to use and pay NITEL the same prices accepted by Rosecom in its 11 May 2005 acceptance of NITEL's offer.

It would be a huge step forward on building a stronger reputation for the business climate in Nigeria, bring great benefits to the Nigerian economy, and bring an extraordinary amount of recurring revenue to NITEL, if it would be possible in your wisdom to support the request of the U.S/Nigeria partnership for NITEL to permit its project to be carried out side-by-side with any other ADSL/Internet-over-copper-wire solution that is willing to invest in providing high speed Internet access to the country of Nigeria.

I hope you will be able to check into this matter with the Managing Director of NITEL prior to your trip to the U.S. in July 2005. I look forward to having a chance to meet with you then to discuss or to conclude this matter at that time.

Thank you and may God continue to bless your service to Nigeria, Africa and the world community.

 

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