May 3, 2002 – Sen. Adlah "Foncie" Donastorg, the driving force behind efforts to investigate the finances of Innovative Telephone, said Friday he does not believe the $25 million the phone company receives in federal subsidies each year goes toward providing better service.
"They're getting the subsidies from the federal government to make improvements, and we're not getting it. We have primitive service here," he said. "We should have the best telephone service on the planet for what we pay."
An article posted on the Source on Thursday showed that Innovative Telephone, the Jeffrey Prosser-owned phone company formerly known as Vitelco, receives more than $25 million a year in federal subsidies. (See "Innovative telephone heavily subsidized"
One of the subsidies gives Innovative $22.07 each month for each of its more than 68,000 phone lines. That nearly doubles the money that the phone company receives for each line since the basic service rate is $18.55, plus $6.34 in other charges.
On Thursday, Innovative Telephone president Samuel Ebbeson defended the subsidies, saying they keep costs down for the consumer. The money comes from a federal fund designed to make phone service affordable to people in areas that may be difficult to access.
"Federal subsidies assure available and affordable telephone service, especially in high cost areas such as the U.S. Virgin Islands," Ebbeson stated in a written response to questions about the subsidies.
Ebbeson said the company actively protects the subsidies, which benefit the V.I. consumer because the cost of phone service would more than double without them.
On Friday, Donastorg said he knew Innovative Telephone was receiving the subsidies but does not know where the money goes. He has been a longtime critic of the V.I. Public Services Commission, the entity charged with oversight of public utilities, saying the PSC has not fully examined the phone company's finances to ensure the best possible phone service.
"I don't consider it a public utility. It's a private company making big profits," Donastorg said. "They're making money from every direction."
The PSC is now doing a rate investigation of Innovative Telephone and other utilities, based on legislation that Donastorg pushed through the Senate. However, he said Friday that he is not confident that the results of that investigation will reveal the whole truth.
He did not know when the investigation would be complete.
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