Delgado: PTI will be vindicated by audit report

Citing an independent study on Pacific Telecom Inc.’s financial capability, the company said it would remain financially solvent regardless of any realistic scenarios that might happen in the coming years, vowing to close the $60-million purchase of Verizon Pacifica from Micronesian Telecommunications Corp. soon.

PTI executive vice president for business development Jose Ricardo P.R. Delgado and MTC general manager Tony Mosley said both companies are working quickly to seal the telecom deal, following the decision of the Commonwealth Telecommunications Commission to grant PTI a license to operate Verizon.

They said that the deal would be consummated anytime soon until the second quarter of the year.

“Based on the Delloitte and Touche report, the company [PTI] can fulfill its obligations and promises [under different] realistic scenarios,” Delgado said.

The study on PTI’s financial capability incorporated projections of worst-case, baseline, and best-case scenarios.

“When the facts are demonstrated, our position all along will be vindicated because we have said from Day 1 that we are financially and technically qualified,” Delgado said.

Delgado said that, despite the long process in obtaining the license to operate Verizon, his company remains committed to the proposed purchase of Verizon. This, he said, also demonstrates PTI’s commitment to serve the community through telecom services.

Both PTI and MTC expressed optimism that they would prevail in the “contested case” proceeding that would tackle Verizon’s alleged monopoly of the CNMI’s only fiber optic cable.

In its decision last week, the CTC granted conditional approval for the sale to proceed, but said the license should contain conditions that provide for a separate proceeding to look into the monopoly issue. The CTC said that Verizon’s cable ownership is a monopoly.

The Saipan Chamber of Commerce, however, viewed the “monopoly” finding as erroneous, saying that nothing prevents another investor from putting up another cable facility.

Contrary to earlier statements by his staff and lawyer, Gov. Juan N. Babauta expressed dissatisfaction over the CTC decision, saying that it left the monopoly issue unresolved. Babauta reportedly said that he had wanted the issue on monopoly and competitive pricing resolved first before the transfer of ownership of Verizon from MTC to PTI is approved.

Delgado defended Verizon’s existing cable rates, saying that the Federal Communications Commission found them to be reasonable.

“If they were so high, why has nobody written the FCC and complained? Because they know they will get thrown out,” Delgado said. “If the cable is so lucrative, and we are charging exorbitant rates, why does no one build a second cable? The reason is that they know that it is cheaper to rent than to build.”

“MTC was the only bold company [that] built and took the risk. The governor can have a competitive market, just ask one of the other companies to invest $10M or so to build a new cable,” he said.

Delgado challenged its competitors to build their own cable and to stop secret lobby efforts in favor of partly divesting Verizon of cable ownership.

“Does this mean that if you have a three-bedroom house and no one is using your guest room, you are obliged to lease it out to a homeless man? We are not doing business in Cuba,” he said. “I am happy [that] the Chamber stands with me. They are the businessmen who understand Economics 101.”