May 3, 2007 — The Public Service Commission's failure to act on a wireless provider's petition to become an eligible telecommunications carrier (ETC) will cost the U.S. Virgin Islands $1.2 million a year in federal funds for infrastructure improvements. That's according to William Roughton, vice president of Centennial Communications, a Puerto Rican-based wireless provider that has been working since 2005 to gain PSC certification.
The federal funds would come from the Universal Service Fund (USF), a Federal Communications Commission-controlled program designed to bring better telecommunications services to rural and insular areas. In order for the money to flow to the islands, Centennial would need to be certified by the commission as a competitive ETC.
Earlier this week, the PSC, as it has before, refused to take action on the matter (See Wireless Provider Put Off by PSC, Yet Again). PSC members said that they were not prepared to make a decision at the time, but raised no substantive arguments against it.
At the meeting, Roughton predicted that the FCC would very soon put a cap on such grants, freezing them at 2006 levels, in effect, barring newly designated ETCs from joining the program.
Yesterday an FCC advisory committee, the Federal-State Joint Board on Universal Service, took the first step in that direction, recommending to the FCC that such a freeze be put in place because of soaring demand for these funds, coupled with diminishing resources. At the PSC meeting, former Vitelco President Samuel Ebbesen was dismissive of the possibility of such action.
Roughton predicted that the FCC could order such a freeze as early as August 1.
The $1.2 million, would be used by Centennial, Roughton said, to improve wireless service in the islands and would not be deducted from the millions in USF moneys that come to Innovative every year. Furthermore, the territory would not have to provide matching funds.
Why the PSC thus far has refused to act on the petition remains a mystery.
Roughton agreed, in part, with a comparison of the non-use of federal funds by the PSC to the non-use of federal education funds by the V.I. Department of Education, which routinely sends back more than $2 million annually to the U.S. Treasury because it fails to make noncompetitive applications for readily available funds.
The difference, however, according to Roughton, is that the PSC does not even have to fill out the forms because Centennial has already drafted them, and secured agreement on them from both the PSCs consultant, Gregory Mann, and from its attorney, Jeffrey Moorhead.
The $1.2 million estimate is based on the several thousand cell phones now leased by Centennial times the standard per-line USF subsidy now enjoyed by Innovative. Roughton was not able to supply either the rate or the number of phones but said that the estimate was roughly correct.
Roughton said that his firm has 19 cell phone towers in the islands, the most of any wireless provider. The $1.2 million could finance new and improved towers, he said.
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