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Gov't backs Delgados' purchase of Marianas telco
By CECILLE S. VISTO, Sub-Editor
The National Government wants the US Government to pressure one of its territories to allow a Filipino telecommunications firm to purchase a $60-million telephone company.

The Macapagal-Arroyo administration, wanting the Commonwealth of the Northern Mariana Islands (CNMI) "to honor the principle of reciprocity" and permit the entry of Philippine investments, sent a team to the US in September last year to meet with the US Trade department and the US Federal Communications Commission (FCC).

"Why they can't allow us in their market when we freely allow them to enter ours as long as they comply with all the requirements? There is no reciprocity," said a source, who was part of the RP delegation.

The Delgado family -- former owners of Isla Communications Co., Inc., (Islacom) who sold their controlling stakes to the Ayalas in 1999 -- have obtained FCC permission to purchase Micronesian Telecommunications Corporation (MTC) from GTE Pacifica, Inc. and Bell Atlantic New Zealand Holdings, Inc.

CNMI Governor Juan N. Babauta, who is opposing the deal, last week decided to closely scrutinize the proposal before approving the transfer of MTC to the Delgados' Pacific Telecom Inc. The deal, if it pushes through, it will be the first major Filipino telecom investment in the US.

Pacific Telecom is owned by Prospector Investment Holdings, Inc., a Cayman Islands corporation 100% owned by the Delgado family.

MTC is the Saipan service of Verizon Communications. Verizon is considered one of the world's leading provider of wireline and wireless communications.

Saipan is the administrative region of the territory.

MTC is licensed to operate cellular phone, satellite, submarine cable and various domestic and international services.

The source said Trade and Industry undersecretary Thomas Aquino led the team which pleaded the Delgados' cause. Former National Telecommunications Commission chairman Armi Jane Borje and Customs Commissioner Antonio Bernardo were also part of the delegation.

The Department of Trade and Industry, as part of the Trade and Investment Council, earlier endorsed the application of the Delgado family to operate MTC.

Asked what was the main cause of the disapproval of the CNMI governor, the source said Mr. Babauta is concerned over reports that the Delgado family's former partner, Willie Tan, is behind telephone-based gambling and online lottery in the islands.

"The Philippines took the position that the Delgados were not involved in such things and that this was a legitimate business transaction and that it was above board. The officials pointed out that when Americans invest in the Philippines, they are accommodated, thus, it is not fair for them to block our efforts," the source said.

The convincing apparently worked, since the US FCC gave its go signal to the project in November.

Mr. Babauta, however, is still unconvinced.

"It has become a private crusade of the Marianas Governor. That was their worry. Since it was taken directly to the US Government, the governor would be insulted," the source said.

"But the ball is really on their turf. The US Government must show to the whole world that it is not one-sided," he added.

FCC records showed the commission approved the sale four months ago. Under the rules, Pacific Telecom must still get the approval of the Commonwealth Telecommunications Commission (CTC) board before the sale becomes final.

The CTC is an autonomous agency whose three members are appointed by the governor and confirmed by the Senate.

In opposing the sale, Mr. Babauta also cited national security concerns. The commonwealth last year said the decision will not be appealed.

On Tuesday, CTC commissioners decided to subject the matter to a "settlement process" where all issues will be threshed out.

The CTC had underscored the critical nature of the telecommunications system to the islands' future. A number of issues that the Delgados supposedly failed to clarify included the so-called interisland toll rates and management of the telco system.

The sale, which has been under negotiations since April, will be sealed depending on the results of the deliberations.

Northern Marianas has a land area of barely 500 square kilometers with only a little over 80,000 in population. This island group, which has 14 islands including Saipan, Rota and Tinian, is located just off the Philippine Sea.

http://www.bworld.com.ph/current/TopStories/topstory1.html