RP backs PTI in Verizon deal
The Philippine government gave a strong backing for Pacific Telecom, Inc. in the company’s bid to purchase all common stock of Micronesian Telecommunications Corp., which operates Verizon.
Acting secretary, Thomas G. Aquino, of the Philippines’ Department of Trade and Industry wrote to Gov. Juan N. Babauta, asking that the latter’s administration display a fair stance on the proposed telecom purchase.
The letter dated Sept. 27, 2004, a copy of which was sent to the Saipan Tribune by PTI yesterday, said PTI’s proposed investment in the CNMI would further strengthen the bond between the Commonwealth and the Philippines.
“We in the Philippine government have been keenly watching developments in the Verizon/PTI transaction for quite some time. As you may know, the principals of PTI are well known in the Philippine business community, and we at the DTI would like to help in any way possible,” the letter stated.
“Over two years ago, Mr. Jose Ricardo Delgado, CEO of PTI, came to us to ask for our help to encourage Philippine corporate investments in the CNMI. He was committed to becoming the bridge between our two countries, and hopefully would be a big help in the creation of new trade and jobs for your people,” it added.
Aquino noted the delay in the approval of the proposed telecom deal due to Babauta’s reservations. PTI and PTC jointly filed with the CTC the application for the approval of the sale on Sept. 5, 2003.
The Philippine official also noted the Federal Communications Commission’s approval of the telecom deal between MTC and PTI.
The governor is now asking the CTC to strip Verizon of part-ownership of the only fiber optic cable in the CNMI, consistent with his declaration to break the telecom firm’s monopoly of the cable facility. Babauta contended that the monopoly has led to higher costs of telecom services in the CNMI.
Babauta, through his lawyer assistant Attorney General James Livingstone, and CNMI consumer counsel Brian Caldwell, proposed that all the assets of the submarine network, including the submerged and terrestrial fiber optic cable, be placed in a trust during the closing of the transaction between MTC and PTI.
They asked that the CTC appoint a trustee, who should hold a public auction for ownership interests in the trust within 90 days.
Under the proposal, the trustee will have the power to sell the assets or ownership interest of the trust, up to 33 percent of the total capacity currently available on the inter-island cable. No party or combination of parties may acquire more than 33 percent of the total ownership interests or assets of the trust. Unsold portions of the trust will devolve back to Verizon’s ownership.
The CTC’s three-man board would meet tomorrow and tackle the governor’s request to divest Verizon of part-ownership of the cable.
“We earnestly hope to see from your administration a fair stance towards PTI. The Philippine government stands behind them, and will support them in their efforts,” Aquino said.
“We view Mr. Delgado’s equity infusion in MTC as a step forward in the continuing effort to strengthen our bond and friendship. More importantly, we see this as a means of improving and strengthening our economic alliance and partnership with the Commonwealth, already host to over 20,000 hardworking Filipino citizens,” the Philippine official said.
PTI stands to become one of the first Filipino-owned investments in the United States’ telecommunications industry if it finally takes over Verizon’s operations in the CNMI.
