Put On Hold

Tony Mosley, Verizon's general manager, said no one at his company or at PTI understands Babauta's continued objections, with new conditions almost every week. "His original basis for opposing the deal is foreign ownership, national security, technical capability, financial and character references. The FCC found no merits in those arguments," Mosley told Pacific Magazine.

The parties to the sale moved from the national level at FCC, through the Commonwealth Telecommunications Commission (CTC). CTC, whose members are appointed by Babauta, reviewed the sale process and conducted public hearings. But on the advice of legal counsel, CTC allowed Babauta to intervene based on the basis of public interest.

Adam Turner, Executive Director of CTC, says 27 out of 30 issues have already been settled, including the elimination of inter-island toll charges between Tinian and Rota. The three remaining issues are the on-going financial audit, enforcement and most controversially, the fiber optic cable monopoly.

Mosley at Verizon argues that this is a non-issue. "The cable landing licenses are given out by the FCC. We were given landing rights (on Saipan) in 1995. Furthermore, there really isn't anything stopping any competitor from coming in here and laying cable into the CNMI," Mosley says. He notes that while Verizon is the sole cable provider, CTC still has to concur with all proposed hikes in fees. "We haven't had a rate increase in 10 years," Mosley emphasizes.

Adam Turner disagrees. "Monopoly is defined as a sole provider of service," he says, noting that local Verizon company is one of the most profitable franchises of that U.S. communications company. "I keep hearing that somehow Verizon has done this community a favor," Turner says, "I disagree with that."

For 10 years, Turner says Verizon was charging $3 a minute for calls to the U.S. That changed after U.S. Congress gave the CNMI and most other U.S. insular areas the same rights as rural areas in the United States. Now long distance charges are anywhere between 2-cents and 4-cents per minute. Turner claims Verizon still made "a ton of money" during the past five years but put very little improvements into the system.

That's not true, counters Mosley. He says Verizon has spent more than $20 million in the CNMI during the past five years. The settlement agreement provides that the new company spends a minimum of $20 million in capital expenditure during the five-year period immediately following the closing of the sale.

Asked why Verizon is selling its business in the CNMI, Mosley says company officials in the U.S. have made a "strategic decision to stay with America's footprint, which includes both North and South American countries as the focus of its business." (Verizon is also selling its Hawaii operation to telecom investors headed by the Carlyle Group.)

Both Turner and Mosley are confident that the remaining issues can be worked out within two to three months. "We're working as hard as we can to get this done quickly as we can because it's been out there for a long time," Mosley says.