Govt wants to buy a pair of Verizon cable

The CNMI government is willing to buy a pair of fiber optic cable as part of its move to break what it insists is a “monopoly” in the Commonwealth’s telecommunication business.

According to Gov. Juan N. Babauta, Pacific Telecom Inc., Verizon’s prospective buyer, offered to sell a pair of Verizon’s six-pair cable system.

But PTI executive vice president for business development Jose Ricardo P.R. Delgado denied making any offer to sell part of the facility, saying it was actually the government that wanted to partake in the cable ownership. He stressed that the cable is not for sale.

“PTI is not soliciting any offer from the CNMI government. If they happen to make an offer, I will consider it. Whatever offer they make, it will only be considered if it is in the best long-term interest of the company and the employees,” Delgado said.

Delgado, however, doubted the government’s ability to purchase a portion of the cable, adding that the use of taxpayer’s money might result in legal questions.

He also said that the matter might just delay the consummation of the sale of Verizon from Micronesian Telecommunications Corp. to PTI, noting that there are legal procedures that need to be observed in the disbursement of public funds, such as the need for legislative appropriation.

In a Jan. 26, 2005 letter addressed to Delgado, Babauta said he was “pleased” to hear PTI’s recent offer to sell the CNMI one fiber pair.

“I wanted to let you know that I am excited about this solution to the dispute. I look forward to continuing the dialogue so that we can bring this matter to a close for everyone’s benefit,” said Babauta.

Yesterday, Babauta said that he has not received any response from Delgado on the matter.

The purchase of the cable, he suggested, would have resulted in a settlement agreement for the sale of Verizon.

“That addresses the divestiture issue that I’m concerned about,” he said. “We would come to the table to talk about the details and the divestiture because it constitutes the divestiture.”

Babauta filed last year a motion demanding that PTI divest 33 percent of Micronesia Telecommunications Corp.’s 100 percent ownership of the CNMI’s only fiber optic cable facility. His position is shared with CNMI consumer protection lawyer Brian Caldwell.

Caldwell and the governor’s lawyer, James Livingstone, have proposed that all the assets of the submarine network, including the submerged and terrestial fiber optic cable, be placed in a trust during the closing of the transaction between MTC and PTI.

They asked that the Commonwealth Telecommunication Commission appoint a trustee, who should hold a public auction for ownership interests in the trust within 90 days.

Babauta, in an interview with reporters yesterday, said he continues to hope that the Delgados would pursue the sale of the cable pair.

“I’m hoping that they would support my position because it’s good for the community and the future of CNMI economy,” he said.

Babauta in his letter to Delgado said that his primary goal throughout the proceeding “has been to ensure that our community has access to the best technology at reasonable prices.”

“It is the only way for our community to sustain and develop our economy. Unfortunately, Verizon has used its monopoly on the inter-island cable as a bottleneck to hold back our economy,” Babauta said.

“I believe this change [cable sale] will greatly benefit the CNMI and its people as well as bring the sale dispute to a close,” the governor told Delgado.

The CTC said last week that it might come up today with a decision on the divestiture request, the main issue that remains in dispute between the government and the private companies. (with John Ravelo)