Task force created to break telco monopoly

Saying that a telecommunications monopoly undermines the CNMI’s security, Gov. Juan N. Babauta yesterday formed an inter-agency task force and vowed to break Verizon’s monopoly—his strongest expression of opposition to the proposed sale of the telecom facility.

The First Responder Task Force, which is composed of at least 10 government agencies, would tap into Homeland Security grants to diversify the CNMI’s telecommunications system. Babauta yesterday designated Attorney General Pamela Brown as the task force’s acting chairperson.

In forming the task force, Babauta yesterday convened officials and representatives from several government agencies that include the Emergency Management Office, the Commonwealth Ports Authority, the Commonwealth Utilities Corp., the AGO, the departments of Public Safety and Public Health, and the offices of the mayors of Saipan, Tinian and Aguigan, Rota, and the Northern Islands.

“A key to both our economic development and our security is telecommunications,” the governor said. “Every person, business, and government organization depends on high quality, low cost communications. And there can be nothing more important in an emergency than a reliable communications network.”

“The monopoly undermines our security,” he stressed. “We must diversify our telecommunications choices, so that we will have more options during emergencies. That is why I will not allow this monopoly to continue.”

Babauta disclosed that a consulting firm hired by the U.S. Homeland Security Department to assist states and territories in seeking grants would help the CNMI develop short- and long-term plans to expand and improve its capabilities. The consulting firm, SPAWAR, has assigned a consultant, John San Nicolas, to help the Commonwealth.

Among the consulting firm’s task is the conduct of an inventory of the CNMI’s current assets, besides the development of capability enhancement plans.

Homeland Security grants, which could range from $5 million to $8 million, would be used to enhance the networks among first responder agencies. “It is a great opportunity to improve our telecommunications infrastructure, improve our ability to respond to emergencies, improve the quality of services delivered to our people,” Babauta said.

Babauta said he has been continuously involved in the pending application approval of Verizon’s sale from Micronesian Telecommunications Corp. to Pacific Telecoms Inc. to ensure that changes are made in the telecommunications industry.

Following a settlement of issues between the parties involved in the sale and the intervenors opposing the approval before the CTC—Babauta and CNMI consumer counsel Brian Caldwell—the commission is left with the monopoly issue to resolve disagreements, besides awaiting findings of an audit to assess PTI’s financial capability.

CTC executive director Adam Turner earlier said the commission could approve the sale even if the monopoly issue has not been addressed. He added, however, that the CTC would still look into the monopoly issue, even if PTI gets a license to operate the telecommunications facility.

Babauta, through Assistant Attorney General James Livingstone, and Caldwell want the monopoly issue resolved first before the CTC possibly approves the Verizon sale.

“It does not matter if someone else could legally replicate its [Verizon’s] network or build a second cable. No one has and Verizon will continue to be a monopoly until someone does,” the governor said. “It controls the communications link between our islands and our only link with the outside world.”

“Verizon has improved our communications over the years. There is no doubt about that. But they have not always brought the newest or cheapest communications options to the CNMI,” he added. “One need only compare the services where Verizon faces competition and where it does not to see how it affects us.”

Babauta said the increasing competition in cellular services prompted Verizon to reduce their prices and increase service offerings. As regards to local services, Babauta said Verizon chose not to offer certain services.

He said that, while ISDN technology—a cheap bulk local phone service with value-added services—has been available in the U.S. mainland for years, Verizon chose to offer centrix services instead.

“Additional services are available for an extra charge. This translates into high prices for less service, especially for the government,” Babauta said.

“Today, it costs $60 per mile for a high-speed line from Guam to Saipan, but only $1 per mile from Guam to Los Angeles,” he added.

The governor said Verizon’s monopoly of the islands’ lone fiber optic cable is anti-business and has discouraged potential investors, including those that looked at Saipan as a potential call center hub.