FCC Okays Sale of Puerto Rico Telephone to Mexican Company
With Comrs. Copps and Adelstein dissenting in part, the FCC approved Verizon’s sale of Puerto Rico Telephone’s parent company, Telecomunicaciones de Puerto Rico,(TELPRI) to America Movil, a Mexican company. The Commission said the transfer is in the public interest because America Movil “has experience in designing products for rural and low income populations,” should be able to speed deployment of “state- of-the-art mobile telephony, including third generation networks,” and “has advantages of scope and scale in bringing mobile telephony to customers.”
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The FCC imposed several conditions on the sale, including 2 related to the foreign ownership, a concern of Copps’, it said: (1) American Movil would need prior FCC approval before it goes private or issues more than 5% of the equity or voting interests of the company. (2) It must notify the FCC within 10 days if it learns an individual has acquired more than 5% of any class of equity security of the company. The FCC wants to be sure TELPRI will remain based in Mexico or another WTO-member country, it said.
Other conditions: (1) America Movil must invest $1 billion over 5 years to improve service in Puerto Rico. (2) It must comply with U.S. laws and regulations, including reporting broadband availability and telephone penetration data to the FCC. American Movil must report annually in writing to the FCC on progress deploying infrastructure for providing basic phone and broadband services in Puerto Rico. (3) The company must adhere to national security and law enforcement conditions requested by other U.S. agencies.
FCC Comr. Copps said America Movil’s commitment to invest $1 billion to improve phone service is “promising,” given the “dreadful” basic phone service in Puerto Rico. But he finds the FCC order’s handling of foreign ownership “troubling,” Copps said: “I remain concerned about our lack of inquiry and analysis to fully understand the implications of our actions in approving a transaction of this sort. To my knowledge, this will be the first time that an incumbent local exchange carrier is wholly-owned by a foreign corporation and this is the largest percentage of unknown foreign ownership the Commission has ever approved… When we consider the sale of our nation’s critical infrastructure to foreign owners -- whether it be ports or telephone networks or utilities -- we must always be extra cautious in our analysis.”
Adelstein was glad that America Movil made “a last minute commitment… that it will make significant infrastructure investments,” he said, adding that he wished the FCC had set conditions “to promote investment in the PRTC infrastructure, to promote broadband deployment, to improve service quality and to facilitate competitive options on the Island.” Adelstein also was “troubled with the foreign ownership and national security components of this transaction,” he said: “The unidentified foreign equity and voting interests that are at issue here give me serious pause.”
The order, originally scheduled for a vote at the FCC’s open meeting Thurs., was pulled from the agenda at the last minute.