Governor not opposed to Delgado, PTI

Gov. Juan N. Babauta is not opposed to the sale of Verizon to the Delgados or Pacific Telecom Inc., said governor press secretary Pete Callaghan.

“The issue is not who takes over but the condition,” he said following a media interview with PTI’s Ricardo Delgado who, he said, still has the impression that that the governor is personally against him.

“The governor had told Ricky [Delgado] in their meeting last December that ‘I have nothing against you or PTI. My job is to protect the CNMI,’” he said, quoting the governor.

Callaghan said the Babauta administration at this time only wants to clear what it insists is a “condition” of monopoly in the local telecommunications industry.

“Verizon’ s operation reflects a monopolistic nature. This is one cable in the world that is owed by only one company. Verizon blocks its line from various customers,” he said, citing that the lines of Sprint (USA) 800 customers as well as the toll free 800 number that veterans use to call Hawaii for their medical purposes had been cut off at one time.

Verizon general manager Tony Mosley earlier said, though, that monopoly in the telecommunications business in the CNMI is nonexistent. He cited that prices have remained competitive on the consumers’ part over the years.

“The governor’s statements are unfounded. When he uses words as monopoly, those are designed to inflame a situation that really doesn’t exist. When I say it doesn’t exist, I say that to the taxpayers because when you look across the board with all the pricing in the CNMI for the telecom, its all pretty much competitive,” said Mosley.

Mosley said that Verizon’s rates are “pretty competitive” compared with U.S. rates, citing that local basic phone rate is $19. In the U.S., the basic rate is $25, he said.

“So I don’t understand the concerns about monopoly,” he said, further noting that Verizon has not had any increase in basic rates in 10 years.

“In a monopoly situation, we could raise the rates freely but it’s impossible here because there’s a commission that regulates it,” he said.

In terms of wireless or cellular rates, he said these are “extremely competitive” as there are multiple providers offering services to customers in the CNMI.

The same is true with Internet services, he said.

In an earlier letter to the Saipan Chamber of Commerce, Babauta cited that prices charged for cable services right now are based on the market power of a monopoly, which results in consumers paying more than they would in a competitive market.

Babauta cited that the cost of a T1 line between Saipan and Guam, for instance, is $60 per mile, while the cost for the same line from Guam to Los Angeles is only $1 per mile.

Mosley pointed out, though, that the Guam-Los Angeles fiber optic line has certainly a much larger market than CNMI, thus spreading out the cost among a much larger customer base.

Besides, he said that Verizon also considers the rate of return of its investment.

“It’s like any other industry, you pay more for some things, depending on where you live,” he said.