CTC defers decision on two key issues related to Verizon-PTI purchase deal

The Commonwealth Telecommunications Commission has deferred its decision on two major issues concerning the stock purchase of Verizon/Micronesian Telecommunications Corp. while awaiting responses to inquiries by the commission.

CTC officials required that the remaining unresolved matters— enforcement provisions and the $10 million security bond—be resolved at once and ordered that all briefs be submitted in 21 days, in hopes of getting an adequate record of the issues that need to be decided on.

CTC commissioner Josephine DLG. Mesta urged Verizon/MTC and Pacific Telecom Inc. to develop adequate briefs that would be reviewed when the board meets again next month.

During Monday night’s meeting, the commissioners asked several questions of Verizon, PTI, and the lawyers representing the governor and the Attorney General’s Office and asked them to submit their responses in the briefs.

CTC chair Norman Tenorio also asked PTI to provide a comprehensive report on the bonding issue, after the company raised concerns over the difficulty of securing the $10 million bond, which the Babauta administration had proposed through counsels James Livingstone and Brian Caldwell.

In its order, CTC also asked the two parties to address the inter-island cable issue, including cable divestiture and regulated pricing on the existing fiber optic cable.

The commission appointed Assistant Attorney General Alan J. Barak as the hearing officer on the inter-island cable issue.

According to governor’s special adviser Adam Turner, the two remaining issues and the audit report would be discussed when additional information asked from the two parties are submitted. PTI is currently being audited by Deloitte Touche & Tohmatsu.

To be addressed also are issues on Sprint pricing and the ADA compliance of relay services.

Caldwell and Livingstone recently filed a proposal for the establishment of enforcement provisions to ensure that the company would not violate an agreement should the sale be approved by the CTC.

They also proposed to require PTI to post at least $10 million in performance bond to ensure that it has the financial capability to pay a fine, if any, is imposed.

According to Livingstone, the bonding issue is necessary to ensure that PTI, being the proprietor soon to handle Verizon’s local operations on Saipan, would be held liable if violations are incurred.

MTC and PTI opposed the governor’s proposal, saying the bond requirement is unnecessary. PTI’s Jose Ricardo Delgado accused the governor of bias against his company, adding that Babauta’s prejudicial stance is scaring away potential foreign investors.

Before Babauta and Caldwell jointly submitted the proposal, CTC settlement officer Sean Frink released the Final Agreed Negotiation Report that stated that the government and PTI have reached an agreement on 27 issues concerning the Verizon deal, including an end to inter-island long distance charges within the CNMI and the retention of all current employees.

PTI has also reportedly committed to increase local competition and to guarantee certain technological offerings and no rate increases for years.

Babauta also noted PTI’s commitment to open up its network to allow competitors to lease access to parts of the network at wholesale prices. He said this type of activity has happened all over the U.S. and has resulted in higher quality service and lower prices for customers.

Also, PTC agreed to invest a minimum of $20 million in capital expenditures during the five-year period immediately following the closing of the deal; that there will be no local rate hike for two years from deal closing; and that a trust fund would be established for the benefit of all MTC employees.