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Choice Seeks – ICC Fights – Phone Competition in V.I.

March 4, 2005 — Choice Communications LLC has filed a request with the Federal Communications Commission to become an eligible telecommunications carrier and Innovative Telephone has filed objections to the request.
Choice wants to be regarded by the federal agency as eligible to compete for communications customers in the islands, and to receive Universal Service funds as a subsidy; Innovative, which is currently receiving tens of millions of dollars annually from this subsidy, says that Choice is not eligible for the ETC designation, and it is not in the public interest for FCC to grant it ETC status.
Choice makes a case for the importance of competition in cutting costs and improving service, while Innovative claims there is already plenty of competition.
Two sets of dueling legal documents have been filed in Washington, the latest on Feb. 23, and there will be more filings before a decision is made. Interested persons in the islands can, however, file their thoughts with the Commission now, through a technique described at the end of this article.
Usually a decision as to whether ETC status is granted is made at the state or territorial level, and not in Washington. But in the Virgin Islands the Public Service Commission has decided that it lacks jurisdiction to make the decision, and hence the filings in Washington. Choice has tried unsuccessfully for years in appearances before the PSC to offer competition in the local telephone market; Innovative has argued against such a determination.
Each of the firms has enlisted Washington law firms to argue the case before FCC, and to file thick petitions and counter-petitions. Innovative's law firm is Wiley Rein and Fielding, LLP, headed by Richard Wiley, one-time chair of the FCC during the Reagan years.
Choice's firm is Kelley Drye & Warren LLP.
Both filings are closely-argued legal documents, relating to the specific legal clauses and FCC regulations. One would not know from them that the two principals, Jeffrey Prosser at Innovative and Cornelius Prior at Choice, were once partners, nor would one know about their repeated battles before the PSC.
Further, neither addresses the anomaly in the law which classifies the islands as a rural area, when the population density in the Virgin Islands is much higher than in rural areas on the mainland and elsewhere. That the V.I. is regarded as rural by the FCC is crucial, as it makes the designation of a competitive phone company an option – to be decided in this case by FCC – and not automatic as it would be in a non-rural area.
It is within these settings that Choice argues that it qualifies as an ETC, that: "it is the public interest to designate Choice as an ETC," and that "the telecommunications market in the U.S. Virgin Islands is dominated by . . . Innovative, which has a de facto monopoly on wireline telephony services in the territory and dominates telecommunications in general."
Choice further argues that its designation "not only will bring competition to consumers in the USVI but also will provide consumers with a broader array of telecommunications products and services."
Further: "it is Choice's understanding that [Innovative] customers currently wait up to six weeks for the [incumbent firm] to establish their initial service, and that they then must wait two to three weeks for repair work."
An Innovative official avoided answering the question when asked directly — both by a commissioner and a Source reporter — at a recent PSC meeting how long customers were currently waiting for installation and repairs.
It also argued that "Choice's current service extends to some areas not served by Innovative such as Little St. James Island. Choice also provided . . . service to Lovango Cay, a small island located a few miles off St. Thomas . . . "
In reply, Innovative argues that "Choice has submitted no evidence . . . that it is a common carrier . . . [this] failure to demonstrate that it is a common carrier renders its application flawed and necessitates denial."
Innovative says that in connection with emergency services "Choice has no interconnection or resale agreement in place with Innovative. Therefore, its claim that it provides "911" services . . . is unsupported and unproven." The document is silent on why Choice and Innovative do not have such an agreement.
Innovative also argues that some of the electronic equipment mentioned in the Choice petition is located on the mainland, and cannot be relied upon in bad weather. Further, Innovative strikes back at the claim about Choice, alone, serving Little St. James Island, belittling the "alleged provision of service to one customer who has means to live on the semi-private Little St. James Island."
Innovative also claims to currently accommodate "competition from a number of different providers," and further states that "Choice misrepresents the state of competition in the U.S. Virgin Islands," where Innovative says, "consumers already benefit from vibrant telecommunications competition … with carriers competing directly with Innovative."
The two firms also disagree on the impact on the Universal Service Funds of the Choice application. This is the fund that draws small amounts of money every month from all telephone users to make phone service to rural areas more available and less expensive.
Choice argues that it "will have at most a minimal impact on the Universal Service Fund … Presently the total USF support for the U.S. Virgin Islands is a small fraction of the total fund allocated to carriers."
Innovative replies "Such an argument is wholly unavailing – every ETC applicant could make this same argument with respect to their individually requested service territory."
Ratepayers, or anyone else, can comment on this issue through the FCC's electronic filing system at /www.fcc.gov/e-file/ecfs.html. Comments can also be sent in by mail to the Federal Communications Commission, Office of the Secretary, 445 12th Street, SW, Washington, DC 20554. It is important to include the Docket Number — CC Docket No. 96-45 Choice Petition for ETC Status in the USVI– on the e-mail or letter.
The deadline for comments is March 9.

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