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PSC SAYS NO TO LOCAL TELEPHONE COMPETITION

Sept. 8, 2001 — The Public Services Commission voted Friday to deny a request by Wireless World that would have allowed it to enter the local phone business and end the monopoly held by Innovative Telephone, formerly Vitelco.
The 4-0 vote to accept the recommendation of the PSC's legal counsel and hearing examiner, St. Thomas attorney Fred Watts, was unanimous and came without debate. Wireless World will seek reconsideration of the decision, its attorney, Darryl Dodson, said afterward.
Voting in favor of the recommendation to deny Wireless World’s request to remove Innovative's status as a rural telephone company were board chairman Walter Challenger, Patrick Williams, Alecia Wells and Dora Hill. Absent from the meeting were members Desmond Maynard and Luther Renee.
The vote, which Dodson characterized as a "rubber stamp," came after the board denied a motion by Wireless World to postpone the meeting. Dodson argued that Wireless World and its expert legal counsel weren't given adequate notice of the Sept. 7 meeting and that, because of that, the company's Texas-based expert lawyers in telecommunications law were unable to attend the hearing.
Watts urged the PSC to proceed, stating that if a decision wasn't made by the commission by Sept. 25, it would be made by the Federal Communications Commission. He also said that Wireless World was notified of the meeting by at least Aug. 28, and that the company’s lawyers had known for months that a hearing would be held sometime in September and therefore should have been prepared.
Dodson said Wireless World's attorneys were notified of Friday’s hearing by Innovative’s legal counsel, Gregory Vogt, on Aug. 27. Also, he said, while the PSC circulated notice of a Sept. 7 "regular meeting" on Aug. 20, the commission didn't release the agenda for the meeting until Sept. 4.
The V.I. Code states that formal PSC hearings are to be held "on no less than 10 days' notice to the public utility or person involved."
"We are only asking for one thing: time to present our case," Dodson told the PSC members.
He said the fact that Watts left it to Innovative’s attorneys to notify Wireless World’s counsel of the hearing constituted "private notice" rather than public notice.
Dodson also refuted Watts’ claim that if the board postponed the decision, the FCC would take over to resolve the issue.
"The FCC doesn’t act as a nationwide nanny," Dodson said, adding that the issue would come to the attention of the federal agency only if someone were to file a petition. And that, he contended, was something neither Wireless World nor Innovative would do.
The PSC shot down Dodson’s request for a postponement. Challenger was critical of Wireless World’s motion, saying that the company was bearing hardly any of the cost of its petition, compared to Innovative and the PSC. In voting to deny the motion to postpone, he essentially said the process had gone on long enough.
"It’s like when you have been sandbagged, you say at the last minute you don’t understand," Challenger said.
"Whether you believe it or not," Challenger said later in the hearing, "it’s not the telephone company that pays; it’s the consumers."
Innovative’s Washington, D.C.-based expert legal counsel, Gregory Vogt, said that Wireless World’s motion was "duplicative" and that approving it would have been giving the company a second chance after a seven-month process.
"There is simply no reason why they should get two bites at the apple," Vogt said.
Competition
The federal Telecommunications Act of 1996 opened up telecommunications markets to competition. The act requires existing telecommunications carriers, upon reasonable request, to interconnect directly with the facilities and equipment of other carriers.
Wireless World sought to enter the V.I. market last summer; in order to do so, it needed an interconnection agreement with Innovative. Because the two firms couldn’t work out an agreement, the PSC appointed Watts to oversee arbitration.
See the earlier Source story "Ruling due on second local phone carrier" for details.
Wireless World’s request sought to have Innovative’s status as a rural telephone company removed, on grounds that Innovative is using the rural status to restrict competition. In testimony earlier this year, Wireless World claimed that in many cases across the country, rural telecommunications companies have made room for other local service providers in their areas without losing substantial business themselves.
The PSC has the power to determine whether Innovative is entitled to hold its rural exemption.
Before the vote to deny Wireless World’s request to remove Innovative’s exempt status, the PSC voted to certify that the Innovative was, in fact, using FCC funds to meet the universal service goal of ensuring low-cost telephone service to all residents. Had the PSC not certified Innovative by Oct. 1, the phone company could have been in danger of losing some $16 million in federal subsidies, according to Gregory Mann, a telecommunications lawyer working for AUS Consultants, the firm hired by the PSC as a technical adviser.
Watts, with the help of AUS, had to determine if lifting the exemption would be financially burdensome to Innovative, whether removing the exemption would affect universal service goals set by the FCC, and if interconnection was technically feasible.
Watts argued there was "no question" that lifting the exemption and allowing Wireless World into the market would provide more competition. He also said the economic burden was manageable. The key, however, he said, was that universal service would be threatened.
"We concluded that the rural exemption shouldn’t be lifted," Watts said. His recommendation was drafted after about nine months of negotiations and arbitration.
Dodson said Wireless World would file a motion to reconsider.

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