The cable-television operations and the wired phone services now jointly owned by the bankrupt Innovative Communication Corporation should be separated to produce competition and better services to V.I. telecommunications consumers, according to a petition filed with the federal government.
That is the position Atlantic Tele-Network (ATN) made in a petition filed last week with the Federal Communications Commission. ATN is the parent company to, among others, Choice Communications LCC, which provides wireless television and wireless broadband services in the U.S. Virgin Islands. ATN and ICC, once associated businesses, separated from each other years ago, long before ICC, owned by Jeffrey Prosser, fell into bankruptcy proceedings.
The FCC is one of several agencies that must approve the proposed sale of ICC to the National Rural Utilities Cooperative Finance Corporation, which lent Prosser and his firms more than half a billion dollars before the bankruptcy. CAC has proposed using some of its credit to acquire ICC’s Carribean telecommunications holdings, including Innovative Cable TV and Vitelco.
While the bankruptcy process has de-linked many of the old Prosser properties from each other, Innovative Cable TV and Vitelco are still affiliated with other in the proposal filed by Stan Springel, the court-appointed trustee for Prosser’s one-time corporate interests, regarding the sale to CAC. Prosser’s one-time commercial real estate holdings, his former newspaper (the V.I. Daily News), his bank interests and his French telecommunications holdings have all been sold, with the bankruptcy court’s permission, to separate entities.
ATN’s brief makes these points: "ICC deliberately operated Vitelco and Innovative Cable so that they did not compete with each other. In particular, Vitelco did not offer any pay-television services, and Innovative Cable did not offer any … Internet access, data services or other local telephone services …. Competition in the provision of [such] services will not occur in the U.S. Virgin Islands unless Vitelco and Innovative Cable compete against each other, and that will not occur unless they are independently owned."
Further, regarding the current system, ATN said: "The current state of the telecommunications infrastructure in the U.S. Virgin Islands is disastrous. A [Public Services Commission]-appointed hearing examiner recently conducted a hearing on Vitelco’s rates and his findings on the state of the network is shocking. The network is a shambles that would embarrass the poorest Third World country, and is held together today with ‘scotch tape and baling wire,’ despite the tens of millions of dollars in annual FCC subsidiaries that Vitelco receives …. And the few services that Vitelco does provide are exorbitantly priced despite their low quality."
The ATN brief asks the FCC to turn down the entire proposed sale to CFC if the cable TV and telephone properties are not separated.
Meanwhile, there was another filing with the FCC on the same matter, this time by a V.I. attorney, Jeffrey Moorhead. He often took what others regarded as pro-Prossser positions in his earlier filings with the U.S. bankruptcy court. Moorhead has asked the FCC to kill the proposed sale of Vitelco and Innovative Cable to CFC.
While in the past Moorhead had sought to represent the Public Services Commission in these matters (he had been, at one point, a hearing examiner for the agency), this time he seeks to intervene as a private citizen. Moorhead’s earlier efforts to represent the PSC in the bankruptcy court were fiercely resisted by other lawyers in the case, and led to his dismissal as the PSC’s representative by the territorial attorney general and to the filing of a contempt-of-court citation against him in U.S. Bankruptcy Court. That contempt citation is still pending in the court, and is likely to be revived if Moorhead seeks to collect fees from the PSC for his efforts to represent the PSC in the bankruptcy court, or so the Source was informed by one of the other lawyers in the case.
Moorhead, in his filing with the FCC, said that the proposed sale of the ICC properties would be "clearly inconsistent with the public interest."
His statement also said that it would give the applicant (the CFC) "de facto control over the editorial contents of news and information in the United States Virgin Islands."
In an unrelated development, ATN announced last month that it had expanded its services to cover 800,000 phone users in rural parts of the U.S. mainland. The additional customers were acquired as an indirect result of a merger of two other telecommunications firms, with the U.S. Justice Department saying that the services to the 800,000 had to be assigned to a third carrier.
While this move will have no direct impact on the U.S. Virgin Islands, ATN’s CEO, Michael T. Prior, told the Source "it does signify the company’s continuing strength and prosperity." According to its news release, ATN used existing corporate cash and existing credit facilities to finance the $200 million acquisition.
