‘Don’t be blinded by glitter of gold’

Former Marianas Public Lands Corp. executive director William R. Concepcion took the cudgels for Verizon owner Micronesian Telecommunications Corp., telling the current Marianas Public Lands Authority’s board not to be blinded by strict monetary gain, following the agency’s filing of a Superior Court lawsuit against the telecom firm.

“The MPLA board of directors should not be blinded by strict monetary gain and overlook the significant role that the good and proper use of public land has in improving and enhancing the quality of life for the population and those of Northern Marianas descent,” Concepcion said.

Rep. Heinz S. Hofs-chneider, who is an independent candidate for governor in the Nov. 5 elections, accused Gov. Juan N. Babauta of being behind the MPLA lawsuit, saying yesterday that it “has [Babauta’s] fingerprints all over it.”

“For reasons that have never been clear to anyone except a few who work at the Office the Governor, [Babauta] seems to bear a vendetta against this foreign investor and has worked the machinery of the government that he controls hard to trip up this purchase,” Hofschneider said. “Apparently he can’t let go and this lawsuit is a by-product of that.”

MPLC is the MPLA’s predecessor. Concepcion was the MPLC’s executive director from October 1989 to May 1994, rising from the ranks since joining the agency as chief planner in July 1979. Concepcion was the MPLC’s executive director when the agency entered into four lease agreements with MTC, which are among the subjects of the current MPLA suit.

In the MPLA’s suit against MTC and its new owner, Pacific Telecom, Inc., the agency sought to evict Verizon from public lands, accusing the telecom firm of breaching five land leases, including the one for the Susupe lot that houses the company’s main offices. The MPLA also wants Verizon to pay for public lands easement for buried cables, from which no payment has allegedly been made by the telecom firm to the public corporation since the 1980s. It also accused Verizon of violating the Fiber Optic Cable by charging interisland tolls from 1997 to Sept. 19, 2005.

Concepcion said there was an understanding between MTC and the Trust Territory government that the company has the right to use the public right of way to place its buried cables and telephone boxes.

“There was never an issue raised during my 15 years with MPLC by either the staff or the board of directors regarding charging MTC rent or some form of royalty for the use of the public right of way,” Concepcion said. “The improvement and expansion of the telephone system was viewed by the MPLC not as commercial venture but a quasi-public capital improvement project in partnership with the CNMI government.”

“The expansion project significantly improved the reliability and accessibility of telephone service in each of the three islands. The public land rental generated by the switching center leases were a welcome addition to MPLC rental income but the primary source of rental income were the hotel and golf course public land leases,” he added.

‘Personal grudge’

Hofschneider said that it is particularly offensive that MPLA is claiming that this lawsuit was filed for the benefit of persons of Northern Marianas descent.

“Does it help persons of NMI descent to send the message to foreign investors that if the governor has some petty personal grudge he will use every means at his disposal to destroy their business plans?” Hofschneider asked.

Hofschneider said that every resident of Saipan has benefited from the decision of MTC years ago to put its cables underground, making it one utility that always works during typhoons. He also indicated that he looks forward to further improvements to telecommunications in the CNMI.

As far as violations of the Fiber Optic Act go, Hofschneider said, “Governor Babauta should offer an explanation of why the Attorney General did not prosecute Verizon for its clear violation of public law by insisting on charging illegal inter-island tolls, which was evidently resolved with the PTI purchase.”

A bigger picture for NMI

During his term, Concepcion said public lands were being leased not just for strict monetary gain but for the “greater impact in inducing the economic growth and enhancing the quality of life of the people.”

When he was MPLC executive director, the agency entered into four lease agreements with MTC, which are among the subjects of the current MPLA suit. The leases pertain to public lands in As Gonno, Garapan and Kagman, with each measuring 929-square meter, and a 2,090-square meter lot in Sinapalu, Rota. The MPLA and Verizon executed the lease agreements on the first three properties in 1990, while they agreed on the Sinapalu lease in 1992. All the leases have a term of 25 years and entail an option for Verizon to extend the term for an additional 15 years.

MPLA’s attorneys pointed out that those leases provided that Verizon should pay the public agency any surplus resulting from subtracting the minimum annual rental from 3 percent of the gross receipts within 45 days from the end of the quarter, in addition to the guaranteed minimum annual rental. Gross receipts pertain to any revenue derived by Verizon from its services in connection with the use of the leased public lands.

The agency said Verizon failed to honor the gross receipt provision of the lease agreements. They also said that MPLA had no consent to the assignment of the leases from MTC to PTI, when the latter company acquired the former’s outstanding stocks last Sept. 20. The lease agreements required MPLA’s approval to any lease assignment.

The MPLA and its board sued MTC and PTI at the Superior Court after negotiations apparently resulted in a deadlock. The MPLA earlier demanded payment of some $2.1 million from Verizon.

The suit seeks to evict the companies from their main Susupe offices and other facilities. It also asked for still unspecified damages for Verizon’s use of public lands where the telecom firm’s cables are buried. The MPLA sued Verizon for alleged violation of the Fiber Optic Act by charging inter-island tolls since it began providing services between Saipan, Tinian, and Rota over the fiber optic cables in 1997. Verizon only began to phase out inter-island tolls when PTI took over MTC last Sept. 20.