‘CTC has jurisdiction over Verizon cable issue’

Gov. Juan N. Babauta insisted that the Commonwealth Telecommunications Commission has jurisdiction over his pending request to divest Verizon of cable ownership, saying it is the commission’s duty to encourage competition in the telecommunications industry.

Babauta’s lawyer, assistant attorney general James Livingstone, and CNMI consumer counsel Brian Caldwell pointed this out in a joint submission to the CTC recently, which responded to questions by the commission.

The lawyers also cited the CNMI’s public policy of encouraging competition, noting that such conditions would likely result in high quality services at affordable prices.

“The Federal Communications Act of 1934 states that nothing in federal law shall be construed to apply or to give the FCC jurisdiction with respect to charges, classifications, practices, services, facilities, or regulations for or in connection with intrastate communications service by wire (including cable) of any carrier,” they stated in their submission.

They also cited a provision in the Telecommunications Act of 1996 that allows states to impose requirements on a telecommunications carrier for intrastate services that are necessary to further competition in providing telephone service.

“The commission must ensure that the holders of franchises and certificates of public convenience and necessity do not utilize their market power in prejudice to the users of the services, nor abuse their market position, nor incur inefficiencies attributable to lack of competition, nor impede the utilization of new technological developments,” the lawyers said.

They said divesting Verizon of cable ownership would advance a legitimate state interest to protect consumers against unfair business practices. They said the cable monopoly has become a bottleneck facility that limits competition and services.

Under their proposal, all the assets of the submarine network, including the submerged and terrestial fiber optic cable, will be placed in a trust when Micronesian Telecommunications Corp. and prospective purchaser Pacific Telecom Inc. finalize their transaction.

They asked that the CTC appoint a trustee, who should hold a public auction for ownership interests in the trust within 90 days. The lawyers proposed that the possible bidding be held open for one week.

The trustee should have the power to sell the assets or ownership interest of the trust, up to 33 percent of the total capacity currently available on the interisland cable, the lawyers said. No party or combination of parties could acquire more than 33 percent of the total ownership interests or assets of the trust. Unsold portions of the trust would then devolve back to Verizon.

While MTC and PTI have opposed the request to divest Verizon of cable ownership, the governor had earlier indicated that he could ease his opposition to the telecom deal, particularly the divestiture issue, if certain commitments are made by PTI.

Livingstone had said that, if PTI agrees to significantly lower cable rates, the divestiture dispute would come to an end, noting that lower cable rates would allow its users to pass on the savings to consumers.

Livingstone also lauded the statement by PTI vice chair Jovino Lorenzo, who disclosed PTI’s plan to expand Verizon’s broadband capacities, enhance e-health, which allows live medical consultation from off-island doctors online, and e-learning. Target beneficiaries of these plans are schools, libraries, hospital and health centers. Lorenzo had also said the sale would also pave the way for additional investments in the CNMI, such as call centers.