Sept. 25, 2005 After spending nearly an hour and a half in executive session, Public Services commissioners emerged to spend 10 minutes to unanimously approve the V.I. Telephone Co.'s application for about $14 million in Universal Service Funds for 2006.
The only discussion on the matter at a special meeting Thursday called to specifically address the issue of the application was a probe by commissioner Jerris T. Browne requesting more detail on how the USF money is spent.
In a theme he has maintained throughout the process, Vitelco President David Sharp said he was not required to provide more detail than what was included in the USF application.
Sharp said, "Bottom line, for every one dollar we get we have $7 in expenses."
The USF money is collected from telephone companies, usually billed back to their ratepayers, across the country and redistributed to local exchange carriers in rural "high cost" areas areas where the cost of providing phone service is deemed to be so expensive that without the funds the telephone companies would not be able to provide "universal" service to residents.
However, commissioners had little time and some had no opportunity to review the audited details of what Vitelco's actual expenses are.
Sharp's company apparently doesn't feel it should be required to provide audited financials though it is mandated by the rules governing the PSC and by agreement that the phone company provide audited financial statements annually on April 1. That had not happened.
So, in a motion made at a Sept. 16 PSC meeting, commissioners agreed to sign off on the USF application only if Vitelco provided the audited financials to the commission by Sept. 20. ( See "PSC Likely to Approve Vitelco's Receiving USF Money").
In a letter dated Sept. 20, ICC attorney J'Ada Finch Sheen, vice president of Innovative Communications Corp., told the commissioners that ICC shouldn't have to provide the financials at all and especially not unless the phone company was provided with a confidentiality agreement. Sheen said, "Information contained in the audited financial statement is proprietary and confidential." She continues, "There is clearly no public purpose in making public disclosure of Innovative's [Vitelco a/k/a Innovative Telephone] audited financials."
However, providing the financials "without any requirement or request that the commissioner agree to keep said financial statements confidential" was what the commission had agreed was the term under which it would sign off on the USF application.
To further her argument, Sheen cites a variety of reasons why ICC should shield the financial reports of the phone company, among them she says a 1986 PSC agreement that allows the company to do so. Sheen also claimed revealing the financial report would offer unfair opportunities to the company's competitors. She further stated information in the report such as "the publication of directories and the sale of broadband data services and the like" could "harm … Innovative "by allowing competitors to examine the finances of a competitor against whom they are competing."
In a letter dated Sept. 21 to PSC attorney Frederick Watts debunked Sheen's arguments.
"Ms. Finch-Sheen's letter is filled with misstatements which I feel compelled to address lest they be accepted as true," Watts wrote.
Watts said "Nowhere in the 1986 Settlement Agreement did the commission agree to give any Vitelco document confidential status."
Watts also said that in his review of the financials, he found "no mention of the publication of directories, nor the sale of broadband data services."
Watts further stated the competition argument doesn't hold up, since "Vitelco has no competitors" since "this commission has refused the petition of Choice Communications seeking to revoke Vitelco's protection from full competition."
Watts told the commissioners they had three choices:
to decline Vitelco's USF certification until the company complied with the order to produce the financials.
amend the order to remove the language that required Vitelco to provide the financials without requiring they be kept confidential.
grant certification without compliance.
Meanwhile, the company did provide commissioners with the financials a day late on Sept. 21. However, at least three of the commissioners never saw them. Commissioner Desmond Maynard refused to accept them, Sen. Juan Figueroa-Serville, one of two non-voting senators who serves on the board also refused to look at the documents, and Sen. Roosevelt David, the other non-voting senator did not receive them
However, the commissioners did not amend the motion about confidentiality, therefore, the financials should be made available to the public under the territory's public records statute unless of course the commissioners reneged on their own order.
However, since requesting the financials on Thursday, the Source has only received a three-sentence letter from Keithley Joseph, PSC executive director, saying the request has been referred to the commission. "You will hear further from us once we receive direction from the commission."
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