SCC: Verizon’s cable ownership not a monopoly

The Saipan Chamber of Commerce lauded the Commonwealth Telecommunications Commission for allowing the sale of Verizon Pacifica to proceed, but it disagreed with the commission’s finding that the telecom firm’s ownership of the only fiber optic cable in the CNMI is a monopoly.

House Speaker Benigno R. Fitial also commended the CTC and said that, although the approval is conditional, he regards the development as a major breakthrough after many months of protracted negotiations.

“I congratulate CTC for finally approving [Pacific Telecom Inc.’s] long-sought purchase of Verizon,” Fitial said yesterday.

Chamber president Alex Sablan urged the Babauta administration not to push for split ownership of the cable, saying any business would want a return on its investments.

Sablan said the installation of the $16-million cable facility by Micronesian Telecommunications Corp. came about following a fair bidding process solicited by the administration of former Gov. Froilan Tenorio.

“To say that this is now a monopoly because of the change of administration is not proper,” Sablan said. “We side with PTI and Verizon that this is not a monopoly. There is an open opportunity for other people to come in with a cable line.”

PTI and Verizon had been engaged in intense negotiations with CTC and the Babauta administration for more than two years now for the government’s permission to allow a long-sought transfer of telecommunications assets between the two telecom companies. The CTC’s commissioners finally voted on Tuesday to grant PTI the license to operate Verizon, but they also ruled to tackle the issue on the cable “monopoly” in a separate proceeding.

“We like the fact that the decision has been made to grant them this license. It seems to be a preliminary license, though, because this administration is still focusing on breaking the perceived monopoly,” Sablan said.

Sablan said that the companies should not be faulted if any other investor does not venture in putting up another cable facility in the CNMI.

PTI’s takeover of Verizon will result in an end to interisland long distance charges for calls within the CNMI, pursuant to the settlement agreement reached between MTC and PTI and the intervenors in the CTC proceeding, Gov. Juan N. Babauta and CNMI consumer counsel Brian Caldwell.

PTI had also assured that there would be no local rate hike for two years from the transaction’s closing and that it would invest a minimum of $20 million in capital expenditures during the next five

Fitial said he is “very pleased” to know that the consummated sale will result in many benefits for consumers, including the elimination of long distance charges for local inter-island calls. He noted that the people of Tinian and Rota will especially benefit form the sale.

According to Fitial, the only settlement condition remaining is the Deloitte Touche review of PTI’s financial health, which will be presented before the commission.

Fitial said, however, that he is confident that the accounting firms’ review will show that PTI clearly has the financial capability to run a first-rate telecommunications business in the CNMI, as it has amply demonstrated in the Philippines.

PTI executive vice president for business development Jose Ricardo P.R. Delgado had welcomed CTC’s decision and lauded its commissioners, saying the commission’s integrity and independence would project a positive investment climate for the CNMI. The CTC’s three-man board consists of chair Norman Tenorio and commissioners Mike Fitzgerald and Josephine Mesta.

PTI, a direct, wholly owned subsidiary of Prospector Investment Holdings Inc., is a registered corporation in the Cayman Islands owned by father-and-son Ricardo and Jose Ricardo P.R. Delgado.

MTC is selling Verizon to PTI for about $60 million. PTI disclosed that it would consummate the multi-million-dollar deal so it could take over Verizon soon. It plans to rename Verizon to Pacific Telecom.