Babauta opposes PTI’s proposed board anew

Gov. Juan N. Babauta has asked the Commonwealth Telecommunications Commission anew to reject the prospective board members’ list submitted by Pacific Telecom Inc. in its bid to acquire ownership of the telecommunications firm from Micronesian Telecommunications Co.

Babauta’s lawyer, Assistant Attorney General James Livingstone, and CNMI consumer counsel Brian Caldwell reiterated that PTI’s list does not include an independent local representative.

“Once again, PTI has disappointed us all. It has disrespected the people of the CNMI and the authority of the CTC,” the government lawyers said. “It has not submitted any proposed independent local board members, the board is less independent than before, and it still has not submitted a current resume for Mr. [Robert] Anderson.”

The Saipan Tribune was provided a copy of the governor’s latest submission on Friday.

The government lawyers dismissed PTI’s proposal to have a local advisory board, saying it would be insufficient to address the concern.

While the lawyers recognized the creation of a local advisory board as a “good idea,” they said the advisory body could not sufficiently protect local interests.

“For instance, the members of the proposed local advisory board are non-voting, so they have no influence over the decisions of the real board of directors,” Livingstone and Caldwell said.

“Moreover, no mention is made that they will have full access to the same information that the real directors will have or even will be able to attend board meetings to the same extent as the real directors,” they added.

They insisted that PTI’s prospective board could not be considered independent. The prospective board members include Verizon general manager Tony Mosley and Anderson, who, according to the lawyers, appear to be current or future employees of businesses controlled by the Delgados, the controlling owners of PTI. The proposed board also includes Jovino G. Lorenzo, who allegedly works for the Delgados.

The lawyers said that prospective board member Mark Irwin, Continental Micronesia’s president and executive director, could not make the board independent because the airline company is a business partner of the Delgados’ food service business.

“The general lack of independence of the proposed board is also troublesome and appears contrary to the guidelines of good corporate governance,” they said.

They clarified, though, that they do not object to the proposed board members, saying that they would make fine candidates.

“There is a lack of separation between the Delgados and the board. This is troublesome,” they added.

PTI executive vice president for business development Jose Ricardo Delgado has yet to issue a statement on Babauta’s submission opposing anew PTI’s prospective board.

Delgado had previously decried the governor’s alleged bias against his company, saying that such treatment would paint a negative picture of the CNMI to potential investors.

Just recently, Babauta and Caldwell asked the CTC to divest Verizon of total ownership of the CNMI’s only fiber optic cable, saying that the move would serve the public interest.

MTC and PTI opposed the divestiture request, saying that divesting Verizon of cable ownership would result in “an unprecedented demonstration of government overregulation and interference with private enterprise.”

The companies said there is no statutory and regulatory basis to divest Verizon of total cable ownership, on which MTC’s wholly-owned subsidiary, GTE Pacifica, has invested some $14-16 million seven years ago.

“Divestiture is unreasonable, would be an abuse of CTC’s regulatory authority, would establish dangerous precedent of government intervention on individual property rights and stifle the already anemic investment climate in the Commonwealth,” said the companies, through their lawyer Marcia K. Schultz.

The companies urged the CTC to finally approve the proposed sale of Verizon.