Gov. Juan N. Babauta has pushed for the adoption of enforcement provisions and bonding requirements in connection with the proposed purchase of Verizon\u2019s local operations, saying that prospective buyer Pacific Telecom Inc. has already violated an agreement sanctioned by the Commonwealth Telecommunications Commission by failing to disclose who its board members would be.<\/p>\n
That, according to PTI\u2019s Jose Ricardo Delgado, is only because, with the overlong process his company has been subjected to by the Babauta administration, PTI has been scrambling to keep its prospective board members onboard and interested in going through with the matter. Delgado said PTI has already lost one of these potential board members, Warren Harruki, who had agreed to be PTI\u2019s vice chairman.<\/p>\n
\u201cIt is of little wonder that PTI is having trouble convincing its all star cast of board members to remain interested in being part of the CNMI business community when almost nine months have passed since the latest submission to the CTC and there is no clear-cut approval, when this administration is intent on favoring some companies to the detriment of others, and when there is a threat of continued litigation and harassment of PTI by the administration on an ongoing basis.<\/p>\n
\u201cThe fact that PTI has not submitted a final list is simply because we have been trying to hold on to some of those who signified their intentions to join the board. Harruki, who had been on standby for six months, has since moved on to other endeavors. Because of all the roadblocks thrown in PTI\u2019s way by the administration, the CNMI has yet again squandered the possibility of a having top notch business person contribute to the development of its economy,\u201d said Delgado.<\/p>\n
He added that PTI is surprised that the administration would actually make an issue out of the matter since the administration\u2019s \u201chighly controversial tactics\u201d are ultimately the reasons why the company could not submit a complete list on time. <\/p>\n
\u201cMoreover, this unrelenting harassment of PTI will continue to sour the investment climate in the CNMI. Based on the existing state of the economy, this is something this administration should take full responsibility for,\u201d he added.<\/p>\n
Babauta\u2019s lawyer, Assistant Attorney General James D. Livingstone, and CNMI consumer counsel Brian Caldwell said the list of prospective board members was supposed to be submitted by the PTI pursuant to one of the agreed points in the Final Agreed Negotiation Report, which was earlier released by CTC settlement officer Sean Frink.<\/p>\n
They said PTI\u2019s \u201cwritten commitment\u201d to disclose the prospective board members and their resumes was due on May 15. To date, however, the PTI has yet to make the disclosure before them and the CTC.<\/p>\n
\u201cIt is extremely disappointing that the purchasers have failed to comply with their first obligation. We hope that they take their obligations much more seriously,\u201d the government lawyers said.<\/p>\n
Livingstone and Caldwell filed Monday with the CTC a joint submission answering certain questions about their proposal for the establishment of enforcement provisions to ensure PTI\u2019s compliance with its obligations. They have also proposed requiring the company to post at least $10 million as performance bond to ensure its financial capability to fulfill its obligations.<\/p>\n
Delgado also said the delay in the submission of their list of prospective board members is because \u201cthere are some who are no longer sure they want to be part of the mess that Saipan has become under this present administration: power failures, a bankrupt government, and an administration hell bent on scaring away and impairing foreign investment.<\/p>\n
\u201cAfter all, after repeatedly violating agreements with the CTC as far as bringing in new points of contention, this latest salvo with the bond and other ludicrous proposals has delayed our approval,\u201d he said.<\/p>\n
The two lawyers said strong enforcement provisions are necessary to curtail alleged abuses that have been committed by Micronesian Telecommunications Corp., the company currently operating Verizon.<\/p>\n
Despite the existence of the Commonwealth Telecommunications Act, they said that MTC has been charging separate toll for interisland calls within the CNMI and rates based upon tariffs \u201cthat were never properly subjected to the tariff implementation process,\u201d among other alleged abuses.<\/p>\n
\u201cClearly, despite being a regulated company, MTC does, and will continue to, abuse the present system. Therefore, any aggrieved party should be able to seek minimum substantial penalties from MTC for their non-compliance with [an approved settlement]. A strong minimum penalty amount would further deter abuses,\u201d they said.<\/p>\n
The governor\u2019s proposed enforcement procedures outline provisions providing for a $10,000 minimum penalty against PTI if the firm violates an approved settlement. Livingstone and Caldwell noted, however, that the amount is even well below the $25,000 per day fine the CTC is currently authorized to impose.<\/p>\n
The proposed enforcement provisions would also require PTI to submit an annual report to ensure compliance with its obligations, which should cover the notices of violations it received for the year and the actions done to correct them. This, among other provisions, would help ensure that the CTC knows what is happening with PTI, so that it could conduct an investigation when necessary, the lawyers said.<\/p>\n
\u201cThe enforcement mechanism does not limit the power of the Commission to undertake enforcement actions and it places the Commission in a role similar to that of a court in which it sets the ground rules and makes all final decisions,\u201d they added.<\/p>\n
They said that, while current laws allow for remedy by an aggrieved party, the proposed enforcement mechanism would help avert future litigation, saving time and money and encouraging the parties to assert their rights. The government lawyers also considered the funding problem the CTC is currently facing to emphasize the need for a special enforcement mechanism.<\/p>\n
The proposed enforcement provisions state that the CTC should retain jurisdiction over enforcing an order that would approve the telecommunications sale. They seek to allow any individual or organization to file a complaint with the CTC and serve it on PTI to enforce the order.<\/p>\n
Under the proposal, anyone who believes that PTI is violating the settlement can provide the company a written notice of violation, which will give the firm 30 days to cure violation. After 30 days, the complaining entity may then file with the CTC a complaint that attaches the written notice.<\/p>\n
The CTC shall then retain jurisdiction to award damages and costs incidental to the complaint. The proposal also provides for a minimum penalty of $10,000 per day of violation up to $500,000 under existing law from the first day after the cure period or from the day the violation started until it is remedied. The penalty will accrue from the first day of the violation if it was intentionally committed.<\/p>\n
As for the proposed bond requirement, the lawyers said the form of security does not matter, as long a financial guarantee exists to ensure PTI\u2019s compliance with its commitment. As an example, they said the PTI could secure a letter-of-credit from a bank or create an escrow account that the CTC could draw upon for violations.<\/p>\n
\u2018Anti-business\u2019<\/b><\/p>\n
Delgado earlier said the bond proposal is a manifestation of Babauta\u2019s bias against him, noting that the governor has not given his company any incentive instead.<\/p>\n
Delgado had said that the administration\u2019s prejudicial stance against his company\u2019s proposed venture in the CNMI paints a negative picture of the islands to potential foreign investors.<\/p>\n
The MTC had also expressed its disagreement over the proposed enforcement provisions and bond requirement, saying the bond would just add to the cost of business operations, curtailing the money\u2019s use for other purposes that could benefit employees.<\/p>\n
The MTC underscored the existence of the CTC\u2019s regulatory enforcement powers over telecom companies, claiming that the company has operated well since 1981 and has one of the largest workforce locally.<\/p>\n","protected":false},"excerpt":{"rendered":"
Gov. Juan N. Babauta has pushed for the adoption of enforcement provisions and bonding requirements in connection with the proposed purchase of Verizon\u2019s local operations, saying that prospective buyer Pacific Telecom Inc. has already violated an agreement sanctioned by the Commonwealth Telecommunications Commission by failing to disclose who its board members would be.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-81781","post","type-post","status-publish","format-standard","hentry","category-local-news"],"_links":{"self":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts\/81781","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/comments?post=81781"}],"version-history":[{"count":0,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts\/81781\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/media?parent=81781"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/categories?post=81781"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/tags?post=81781"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}