No Verizon-MPLA deal yet in the bag

No deal is expected to be sealed today between Micronesian Telecommunications Corp. and Pacific Telecom, Inc. regarding the multi-million-dollar sale of Verizon Micronesia, as negotiations between the companies and the Marianas Public Lands Authority ended last night with no agreement in the bag.

One of the issues on the bargaining table include MPLA’s consent to the transfer of at least four public lands leases from MTC to PTI before the telecom deal could be consummated. The Commonwealth Telecommunications Commission had given the companies until Aug. 31 to close the deal, but MTC and PTI sought an extension of the deadline to Sept. 7, today, because the MPLA issues had remained unresolved. The CTC could not be reached at press time regarding the deadline extension request.

Verizon controller Lawrence P. Knecht said there have been disagreements regarding “dollar amounts” in the negotiations between the companies and the MPLA. But Knecht said the negotiations were still going on. He added, though, that a settlement might not be reached by today.

MPLA attorney Ramon K. Quichocho earlier said that Verizon has at least 11 leases with the MPLA. Three major issues are being addressed on the bargaining table.

One of those issues involve the renewal of Verizon’s lease for its Susupe facility, which Quichocho said was very close to being settled in an interview Tuesday last week. Also being negotiated is a permit agreement for public lands easement for Verizon’s underground cable.

Of the 11 leases, Quichocho said four of them explicitly require MPLA’s consent to their assignment from the original lessee. He said the MPLA would give its consent once the other issues are resolved.

Until yesterday, Quichocho said the parties had not arrived at a complete resolution of the issues. But he said good faith negotiations continue, and the MPLA remains open to continuing talks.

“It’s all up to MTC. As far as MPLA is concerned, MPLA continues to want to resolve the MPLA issues and preferably before the closing so that their would be no adverse impact [on] any of the parties—MPLA, MTC, PTI and Verizon,” Quichocho said.

“Assuming there’s a deadlock, MPLA will deal with it when it comes, and MPLA will do what it needs to protect the interests of the Northern Marianas descent,” Quichocho said.

PTI has expressed its intention to close the deal as soon as the MPLA gives its consent to the assignment of certain public lands leases from the MTC.

Once PTI takes over Verizon’s operations, there will be an end to interisland long distance charges for calls within the CNMI, pursuant to the 27-point settlement agreement that the companies reached in May 2004 with the intervenors in the CTC proceeding, Gov. Juan N. Babauta and CNMI consumer counsel Brian Caldwell.

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

PTI recently disclosed that there would be no change in Verizon’s management and employees, except for the board’s membership. PTI has also disclosed its interest to become a regional player in the Pacific islands, and that it would join the National Exchange Carrier Association.