CNMI PROPOSAL WOULD BAR FOREIGN TELECOM

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SAIPAN, CNMI (Saipan Tribune, May 31) - The
Commonwealth Development Authority has rejected a resolution that seeks to keep
the local telecommunication industry from the hands of non-U.S. citizens, saying
it cannot support the resolution's intent.

The CNMI's premier business group, Saipan Chamber of Commerce,
also rejected House Resolution 13-146, saying this will send the wrong message
to the world market.

The CDA-the agency that takes the lead in stimulating the local
economy by promoting entrepreneurship-and the Chamber made their stance known
during a public hearing on H.R. 13-146 held Thursday night at the House of
Representatives' chamber.

The resolution, authored by House Committee on Ways and Means
chairman Rep. Stanley T. Torres, seeks to ask the Federal Communications
Commission and the local Commonwealth Telecommunications Commission to deny the
application of Pacific Telecom Inc. and any other foreign-owned corporations to
buy Verizon Pacifica.

CDA executive director Maria Lourdes S. Ada told the committee
that the CDA is an advocate of economic development and has been vocal of open
investment policies, placing it in a position where it cannot support the
resolution in its entirety.

"Additionally, we would prefer to leave the decision on the
application by Pacific Telecom Inc. to the Federal Communications
Commission," said Ada.

The Chamber was unequivocal in stance toward the Verizon sale,
saying its members wholeheartedly support the private sale of Verizon to Citadel
Holdings, PTI's parent company that is based in the Philippines. Citadel is
owned by the Delgado family.

"The Chamber has been promoting growth whether through
local or foreign investments. If we adopt this resolution, we will be sending
the wrong message to the world market," said Chamber vice president Alex
Sablan in his testimony.

In a letter read to the Ways and Means Committee by Verizon's
general manager Tony Mosley, Citadel president Jose Delgado sought to allay the
misgivings of the CNMI government about the sale and invited Gov. Juan N.
Babauta to visit the company's facility in the Philippines to see for himself
the capability of the firm.

Regarding foreign ownership and national security, Delgado
pointed out that the U.S. federal government has put rules and regulations in
place that address these concerns.

"It's also important to mention that the United States and
the Philippines have fostered closer ties than ever. U.S. troops are training
with their Philippine counterparts and are working together in the southern
Philippines for the first time since World War II," Delgado said.

On the rate integration issue, Delgado said that PTI has fully
documented its approach to this issue in both its FCC and CTC applications.

"To verify matters, the rates for Pacific island charges
today, in the form of prepaid cards, are due in large part to competition that
exists in the market. The rates are already lower. Moreover, PTI has voluntarily
pledged to sign a rate integration agreement with the CNMI," said Delgado.

As for the governor's monopoly concerns, Delgado said that
Verizon already faces competition in the market.

The Citadel president stressed that his family has always done
business by the book. "We're proud of our history in the Philippines and we
intend to maintain the highest levels of business practice in the CNMI."

To ensure that the local community benefits from PTI's local
investment, Delgado said that the firm would create a trust fund for the benefit
of its employees in the CNMI. "This initiative demonstrates our commitment
to these employees. I understand that this is the first time in CNMI's history
where a private company has provided such benefit," he added.

Delgado reiterated his earlier invitations to the governor to
visit Cebu City in central Philippines to witness the company's state of the art
$400-million network. "We're confident that by spending some time with us,
you will be comforted by our business philosophy, by our world-class
standards."

Adam Turner, who sits on the CTC panel, declined to issue any
comment during the proceedings, saying the commission respect the submittals as
confidential. "Other than that, it's an open docket question, and it's not
proper of me to make any kind of comment on what we're going to do, except feel
free to submit it to the CTC for their consideration," he added.

The Attorney General's Office, Assistant Attorney General Brian
Caldwell, expressed opposition to the Verizon purchase by PTI, arguing from a
consumer protection standpoint.

The governor also submitted his testimony saying his position
toward the sale has not changed.

June 2, 2003

Saipan Tribune: http://www.tribune.co.mp/ 

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