CNMI GOVERNOR RAPS VERIZON ‘MONOPOLY’

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By Ma. Stella F. Arnaldo

SAIPAN, CNMI (Marianas Variety, April 30) - On the day that the Commonwealth Telecommunications Commission was to decide on the purchase by Pacific Telecom Inc. of Verizon Pacifica, Commonwealth of the Northern Marianas Gov. Juan N. Babauta lost no time in blasting once more the virtual monopoly held by Verizon, during his State of the Commonwealth Address yesterday.

In one of his most applauded statements during his 48-minute speech which focused on "systemic changes" his government has made and still plan to do, Babauta vowed to break, specifically, the company’s monopoly over a fiber optic cable between CNMI and Guam.

He said because there was no competition in the local telecommunication industry, calls are expensive to make even among the islands. This monopoly, he added, has driven away would-be investors specifically in call centers. This situation, the governor decribed as "anti-business."

"I know investors have looked at Saipan as a location for call centers. But high cable costs drove them away. That’s right: we are already losing business because of overpriced telecommunications. I will not allow this monopoly to continue," said Babauta, to the applause of the audience, composed mostly of legislators, senior government officials and business leaders.

The CTC was expected to have met late afternoon yesterday to finally issue a decision on the $60 million PTI-Verizon deal.

PTI, an offshore subsidiary of the Manila-based Citadel Holdings Inc., is owned by the Delgado family. The prominent business family used to own Isla Communications, a firm in the Philippines which was tasked to roll out some 300,000 landlines in the Visayas region in three years. The company also went in the cellular phone business. The business was eventually sold in the late 90s to another prominent family-owned conglomerate, the Ayala Corp.’s Globe Telecoms, due to financial difficulties.

"Look: today it costs $7,000 per month for a high-speed line from Guam to Saipan, but only $1,000 per month from Guam to Los Angeles. Or put another way: $60 per mile to Saipan; 20 cents per mile to LA – that’s a 30,000 percent difference! Why is it so expensive for us? No competition. There is monopoly control. That hurts our development," Babauta said.

The governor underscored the role of telecommunications in boosting the economy, adding that the inclusion of insular areas like CNMI in the 1996 Telecommunications Act which deregulated the U.S. telecom sector, cut long distance rates to the mainland from $3 to three cents a minute.

"That is why I am so involved with the Verizon sale; why I will insist any new owner – at the very least – keeps investing in equipment and training, so we always have state-of-the-art telecommunications; why I will insist that toll charges between Saipan, Rota, and Tinian be eliminated, so a call from Susupe to Songsong Village (in Rota) costs the same as a call from Susupe to Chalan Kanoa; why I will insist we break the monopoly on the fiber cable and create a competitive market for telecommunications between the Marianas and the rest of the world."

The only other telco operating in CNMI is SaipanCell, which runs a cellular phone business. There is no interconnection of cellphone services between Verizon and SaipanCell. The latter is a subsidiary of GuamCell, a major telco in Guam which also has landline services.May 3, 2004

Marianas Variety: www.mvariety.com

 

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