THE governor of Guam, the U.S. Department of Justice and the Federal Bureau of Investigation are also opposed to the purchase of Verizon’s local franchise by a consortium that includes Tan Holdings and Citadel Corp.
Guam Gov. Carl T.C. Gutierrez recently filed a nine-page petition urging the Federal Communications Commission to deny the application of the consortium as this will prove to be detrimental to public interest and will likewise impact consumers and businesses on Guam that are currently benefiting from the reduced telecommunications service available under Verizon’s nationwide integrated plans.
DOJ and the FBI filed a four-page petition urging the FCC to defer action on the licenses and applications of the consortium, citing national security, law enforcement and public safety concerns.
Gov. Juan N. Babauta and key House members earlier submitted a petition opposed to the purchase.
Gutierrez cited four reasons why the FCC should deny the consortium’s application. First, he said, the proposed sale would violate two provisions in the Communications Act of 1934 that would negatively impact the low rates and other benefit packages being offered by Verizon to Guam consumers.
“The applications should be denied because the proposed sale would erode the implementation of rate integration on Guam, violating section 254(g) of the Act and result in unlawfully discriminatory rates in violation of section 202(a) of the Act as applied to Guam consumers,” said the governor in his June 17 petition.
He said Verizon, GTE Pacifica’s parent company, has substantial operations in the U.S. which facilitates lower rates as well as the availability of beneficial nationwide calling plans on Guam.
The rate integration, he said, also led to the introduction of new products and services in the Guam marketplace “on which many consumers have come to rely.”
But Gutierrez said this will not be the case when the consortium takes over Verizon because “it will have no continental U.S. operations.”
“Since it lacks a continental U.S. rate base, (the consortium) will not be required to sustain the same products and services which Micronesian Telecommunications Co. did as a Verizon company. Instead, (the consortium) will likely have no incentive to maintain these products and services and would be permitted to select continental service offerings priced at higher rates into which to integrate its pricing,” he said.
He said the consortium’s lack of continental U.S. operations would result in the discontinuance or reduction of service offerings currently provided by Verizon to Guam consumers.
Also, Gutierrez said that since the applications failed to “accurately characterize the proposed transaction as “one constituting a service discontinuance,” the consortium would violate section 214(a) of the Act.
Also, Gutierrez said the allowing foreign control over the fiber optic cable connecting Guam to the CNMI “is not in the public interest.” He said allowing the consortium up to 72.1 percent ownership with additional authority to increase it to 87.1 percent “in this domestic, strategically located cable would be imprudent.”
Moreover, the governor claimed that the FCC’s public notice on the proposed transfer of Verizon to PTA violates the Administrative Procedures Act “since by failing to even mention Guam, it provides no effective notice to the public that the (proposal) will impact consumers and businesses on Guam as well as others with an interest in the Guam market.”
DOJ and the FBI’s June 17 petition argued that the transfer of Verizon to the consortium would constitute a “monopoly” of landline local exchange and inter-exchange facilities, satellite earth station facilities and wireless service facilities as well as submarine cable and Internet facilities.
“Given the breadth of control over all telecommunications services in the CNMI noted above, DOJ and the FBI believe that the proposed transaction has the potential for impairing the ability authorized governmental agencies of the U.S. to satisfy their obligations to preserve the national security, enforce the laws and protect public safety.”
