House OKs CTC’s funding via telecom fee increase

Stressing that its passage is crucial to the sale of Verizon, the House of Representatives voted 10-4 yesterday in favor of a bill that essentially raises the funding of the Commonwealth Telecommunications Commission by increasing the franchise fee of telecommunication companies such as Verizon.

After a lengthy deliberation yesterday, the House eventually approved House Bill 14-251, which aims to raise the funding for CTC by charging telecommunication companies up to 2.5 percent of their annual gross revenues.

The House, however, deleted a contentious provision that allows telecom companies to pass on the increased charge to consumers. Lawmakers acknowledged, though, that the deletion does not prevent telecom firms from passing it on to consumers.

“It means that we’re not sanctioning the ‘pass on’ but it doesn’t prevent them from doing it,” said Rep. Clyde Norita.

Voting against the bill were Reps. Jesus Attao, Arnold Palacios, Ray Tebuteb, and Janet Maratita.

During discussion, Attao moved to lower the charges from 2.5 percent to 1.5 percent, saying this would be enough to fund CTC’s operations considering a $200,000 appropriated budget for it. His motion did not materialize after getting a 7-7 vote.

Supporting the 1.5 percent proposal were Reps. Attao, Palacios, Tebuteb, Maratita, Crispin Ogo, Joseph Deleon Guerrero, and Justo Quitugua. Voting against the move were Reps. Martin Ada, House Speaker Benigno Fitial, Timothy Villagomez, Clyde Norita, Norman Palacios, Oscar M. Babauta, and Jesus Lizama.

Reps. Heinz Hofschneider and David Apatang were initially present but left the session prior to the voting.

Fitial said the main issue is how to fund CTC. He noted that CTC’s request for $400,000 has not been accommodated by the budget conference for the 2005 appropriation. As such, the CTC would only be getting $200,000 from the general fund.

“The problem is the budget is not yet passed and we may not even have a budget,” said the speaker.

Fitial, in efforts to convince the body to approve the measure, also took note that the passage of the bill “is the only issue pending” in the sale of Verizon.

“This is the only settlement agreement that’s pending before the sale is approved,” he said. “The only reason we deferred action [last month] was because we had hoped to provide $400,000 to CTC. Unfortunately, we failed to do that.”

In a previous legislative hearing, both CTC’s Adam Turner and Verizon legal counsel Marsha Schultz confirmed that part of the parties’ agreement for the sale of Verizon was the passage of the bill.

The bill, authored by Babauta, explains that the telecommunication law, P.L. 12-39, reduced CTC’s funding to less than 20 percent of the funding level for its predecessor entity, resulting in “extreme difficulty for the CTC to carry out its obligation in an effective and efficient manner.”

The measure aims to amend the Act “to restore CTC funding to approximately 60 percent of its previous level, to provide funding for telecom consumer advocacy, to set up a Universal Service Fund, and to provide CTC with discretion for spending a portion of its budget on items to be addressed in the CNMI Universal Service fund regulations, which will result in significant benefit for consumers at minimal cost.”