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PSC OKs Federal Funding for Vitelco, Centennial

Sept. 25, 2008 — A unanimous thumbs-up from Public Services Commission members Thursday evening cleared the path for both Centennial Communications and the V.I. Telephone Co. (Vitelco) to keep using federal Universal Service Funds (USF) to augment and build their bases in the territory.
"Every year, the PSC needs to certify that these entities are going to be using these funds for the purposes intended by the federal Telecommunications Act," explained Walter Schweikert, representing Georgetown Consulting Group, the PSC's advisors on telecommunications matters. "The commission's recommendation is then forwarded to the Federal Communications Commission (FCC) and the Universal Service Administration Company, which serves as the administrator for all federal USF programs. A favorable recommendation allows the funding to continue to flow."
Centennial began receiving its funding — nearly $1 million — in March, after being designated by the PSC an eligible telecommunications carrier (ETC). Vitelco, another local ETC, has been receiving USF funding for at least the past decade, Schweikert said.
The USF is an FCC-controlled program designed to bring better telecommunications services to rural and insular areas. Funding is awarded based on conditions such as whether the money would be used to help subsidize local services, telecommunications infrastructure and building service quality, Schweikert said during Thursday's PSC meeting on St. Thomas.
In Centennial's case, the company is moving rapidly on all aspects of its five-year plan and is running ahead of schedule in most cases, he told commission members.
"They received a large amount of retroactive funds, up to 2007, which gave them a real jump start on their projects, so the plan has been accelerated," Schweikert said. Centennial's petition for ETC status was approved by the PSC retroactive to 2006.
In addition to upgrading several cell sites throughout St. Thomas, negotiations are under way for a cell site on St. Croix, added Jorge Bauermeister, Centennial's attorney.
"The project is on track right now," Baeurmeister said. "We just have to wrap up the final agreement and make sure there's no interference at the site, because it's in the airport."
Schweikert's recommendation to approve Centennial's petition for USF re-certification was unanimously approved by board members Joseph Boschulte, Donald "Ducks" Cole, Verne C. David and Alecia Wells. Board members Sirri Hamad and M. Thomas Jackson were absent.
While the same recommendation was made for Vitelco, Schweikert also asked the commission to begin treating the company "like anyone else."
"In the past, Vitelco was treated differently," he said. "When we went to Vitelco this time, we asked them for information that they had never been asked for before…it was told for years that its responsibility was just to keep the rates low.
"The documents that Vitelco provided us show that the USF funds are being used to underwrite the cost of local service, which is the goal of the program. But Vitelco didn’t have a five-year plan and was never asked for one. We've asked Vitelco to start working on this. But it would also be better if there were an order from the commission for reporting requirements — such as identifying all projects that are going to be using these funds and making sure they stay on track."
The company's quality of service results are below expectations, so more structure also needs to be placed around that, Schweikert added.
Vitelco head E. Clarke Garnett was candid with the commission, saying — as he has in previous PSC meetings — that the company has "quality service issues that need to be addressed." The search is on for a prospective buyer for the company (Vitelco is a subsidiary of Innovative Communication Corp., which is currently in the midst of Chapter 11 bankruptcy reorganization) but in the meantime, efforts are still being made to "put money toward certain projects and to correct problems we've had for years," he added.
"It’s clear that these things need to be done — it's clear a five-year plan needs to be developed," Garnett said. "And we've made that very clear in our presentations to the bidders."
Vitelco's petition also received unanimous approval from the PSC.
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