THE administration opposes the proposed purchase of Verizon’s local franchise by a consortium that includes Tan Holdings and Citadel.
Gov. Juan N. Babauta, in a statement, pointed to the almost total foreign ownership of the proposed company that would take over Verizon. Citing national security concerns, he said the administration’s preference is for local or U.S. ownership.
There are no local telephone companies that are foreign-owned, the administration said. There are foreign-owned long distance companies but none that control the local network, it added.
The administration’s other concerns include rate integration and competitive issues.
“Were the proposed sale to occur, a risk exists that the current guiding rate would be lost and off-island rates from the CNMI to the…U.S. would threaten the very benefit of rate integration as mandated by the 1996 Telecommunications Act,” the administration said.
It also noted the “limited amount of information” given to the Commonwealth Telecommunications Commission to support the sale.
“We must regulate these key institutions carefully. We must be sure and comfortable. This community (is) not close to being comfortable yet,” the administration said, referring to “the Bank of Saipan situation.”
Tan Holdings is one of the scandal-plagued bank’s major shareholders.
The administration at the same time pledged to work with Verizon “to develop other options available.”
CNMI legal counsel Thomas K. Crowe will file in Washington, D.C. today (local time) the administration’s petition to beat the June 17 deadline set by the Federal Communications Commission, according to Adam Turner, policy consultant to the governor.
In the petition, the governor said allowing foreign ownership in excess of the statutory limit should be denied, as this would “jeopardize U.S. national security as well as public safety.”
He said the applications should also be denied as the consortium has “failed to prove that the transfers of control are in the public interest, failing to prove that (it) is qualified to operate the commonwealth’s telecommunications network.”
“Finally, the applications, if granted, would jeopardize rate integration in the commonwealth,” the governor added.
Lt. Gov. Diego T. Benavente said the consortium’s filing does not contain much of the information needed to determine whether the group has the experience, capital and other requirements necessary to be granted these licenses.
“I note that the sale took six months to be finally signed. Now they are giving CTC only 30 days or actually even less to review it,” Babauta said.
Rep. Gloria DLC. Cabrera, R-Saipan, Rep. Stanley T. Torres, R-Saipan, and four other House members yesterday sent their four-page petition to ask the FCC to deny the consortium’s purchase proposal.
Cabrera said their move “is not a position against anyone but simply to ensure that the interest of the CNMI people is safeguarded.”
The House petition was also signed by House Floor Leader Jesus T. Attao, R-Saipan, Andrew S. Salas, R-Saipan, Joe P. Deleon Guerrero, R-Saipan, and Benjamin B. Seman, R-Saipan.
Jose Ricky Delgado. Jr., chief financial officer of Citadel Holdings, Inc., yesterday expressed confidence that the FCC would approve the purchase proposal despite the petitions filed by the CNMI government.
“This is a public process wherein everyone has the right to say his opinion. I’m confident that despite this, the deal will stand on its merit,” he said.
“Verizon, before choosing us, did extensive checks on our businesses, what we have accomplished and what we intend to do,” Delgado said in a telephone interview from the Philippines.
Anthony Mosley, acting general manager of Verizon, echoed Delgado’s statement.
J. Michael Fitzgerald, vice chairman of the Commonwealth Telecommunications Commission, said the petitions filed with the FCC would be considered when CTC decides on the local application filed by the consortium.
Verizon gave its CNMI affiliates up to June 30 to close the over $60 million purchase deal with the consortium.
