Dear Source:
Mr. Smith, I believe you are right about making sure that the profits from the ownership of the phone company (I would say Innovative but that will change) stay in the VI so that the revenue circulates in our own economy. Mr. Prosser was able to live a lavish lifestyle by taking huge amounts of corporate profit and the company still did very well. I also agree that the company could be a bargain given the current financial woes of the parent company. If the phone company was treated as a separate entity and not part of the ICC mess with all it's fiscal problems, then perhaps local businessmen should purchase it.
Since GERS is now investing a portion of its portfolio, and if it can be proved that the phone company is, in fact, the "cash cow" you say it is then GERS has the right to invest in it. Invest, not own! I would suggest that history has shown us that government-owned utilities can be a fiasco. Case in point: WAPA. If WAPA was privatized, I believe our power bills would not be as they are today. Private firms tend to cut costs to make more profits. WAPA has no real incentive to do so because it's a government-owned entity and the only the Legislature can make the big decisions required to cut costs. They have not taken bold initiatives such as using alternative fuels like coal or trash to energy or even mandated solar or wind. Since the Legislature has left it up to WAPA to make these decisions, we have had little change in our energy policy because there is no money to make the changes and being a government entity, it is fearful of being high-tech because jobs may be lost. Private ownership is a far better way to run utilities. Efficiency is tantamount to good business, especially in the utility business where profits are supposed to be low. Utility oversight is an important government function but not ownership. When the government owns utilities, they historical become a burden through the taxation of people whether it be actual or through utility rates. Some of our tax dollars go to WAPA for improvements and not only through the collection of utility bills. In other words we have to bear the cost of failure to be efficient. Private ownership needs to be efficient in order to profit. How about employee-owned? Or perhaps a cooperative of VI businessmen could make the investment? For the same reasons, do we want to have some of our tax dollars also go to the phone company?
I do not believe GERS should purchase the phone company nor do I believe the VI government should invest a dime. I do believe the now semi-autonomous oversight commission-the PSC- should have utility-trained members who understand the business of running utilities of every kind. That is GOOD oversight. Government-owned anything is a thing of the past.
Paul Devine
St. John
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