Reverse privatization in NMI?

Congratulations are in order for the Commonwealth Telecommunications Commission. Despite intense political pressure, the commission issued a decision on the sale of Verizon Pacifica to Pacific Telecom Inc. that reflects well on the kind of businessmaking that we would like to see more on the islands: less government interference and more wiggle room for businesses to make decisions that ensure their continued health and viability amid the challenging economic climate.

The commission, however, has left the alleged “monopoly” on the fiber optic cable on the table, voting to address the issue in a separate proceeding. Just before the commission issued its decision last week, Gov. Juan N. Babauta also disclosed that he is now in favor of purchasing a part of the cable at market price, whereas before he wanted to buy on a depreciated basis. Surely, the governor is becoming more realistic and appears to show a better understanding of business.

However, the real issue is why should government be in business at all? Most governments around the world are privatizing their assets, converting them to cash and allowing private enterprise to take them over. But this government’s action is reverse privatization. Is it not the generally accepted principle that private sector can do a better job in running a business enterprise than government? Or is it being forgotten that government officials are government servants, not private entrepreneurs?

Surely, a divestiture order will just scare away foreign investment. How would you feel, after pouring in millions of dollars on an investment, to have the government come up to you requiring you to give up in whole or parts of that investment?

Then again, maybe the government has a different agenda on the matter. How true is the report that the government wants to buy part of the cable and sub-lease it to another on the condition that it would undercut Verizon’s rates? This would create an artificial base rate that ignores the law of supply and demand as a function of price. Whether true or not, this is definitely not in accordance with the principles of free market enterprise and is not the optimum way to encourage business growth. In fact, it would hurt ALL telecom businesses on the island and not just Verizon.

Regardless of the motives, the commission has to recognize that there is no case law supporting the intervenors’ request for cable divestiture. That’s the unembellished truth, plain and simple. It is now up to the commissioners to do the right thing and have the cojones to remain independent and to stand its ground on what is right and proper in deciding this case.

As for Gov. Babauta, you’ve got to hand it to the man. His obstinate refusal to support the PTI-Verizon deal and the obduracy with which he opposed it has elicited reluctant respect even from his opponents. The governor must be cautioned, though, that too much obstinacy can quickly descend into just plain pigheadedness. He must learn the value of giving up ground without losing his dignity. As Sun Tzu said in The Art of War, “The general who advances without coveting fame and retreats without fearing disgrace, whose only thought is to protect his country and do good service for his sovereign, is the jewel of the kingdom.” There is a valuable lessen there, Gov. Babauta, that will be worth your while if you stop to think and ponder about it. Maybe it’s time for you to stop listening to the misguided advice of your cordon sanitaire and be the bigger man that you can be. PTI’s Ricky Delgado himself has consistently said that he is willing to work with the governor and has assured that he is here to do a good job. Isn’t it about time that Gov. Babauta give this person the benefit of the doubt?