FCC sanctions telco for foreign ownership violations
By Mar-Vic Cagurangan
Tokyo’s NTT Docomo Pacific intends to divest Docomo Pacific following a recent Federal Communications Commission ruling, which declared the company in violation of authorized limits on foreign ownership.
According to sources at Docomo Pacific headquarters, employees were notified of the parent company’s plan to sell its Guam subsidiary during a meeting earlier this month.
Docomo Pacific, which provides mobile phone, cable and internet service, operates on Guam and the CNMI. It also provides services to the Navy.
On June 27, FCC entered into a consent decree with Docomo Pacific, capping its investigation into the Guam company's violation of a foreign ownership limit based on a 2015 ruling.
"To settle this matter, DPAC admits that it exceeded its previously approved foreign ownership limits, will implement a compliance plan, and will pay a $50,000 civil penalty," the consent decree states.
Docomo Pacific declined to comment.
“We have no plans to make public statements,” said Jared Roberto, Docomo Pacific’s public relations director.
According to a source, no information was provided to the employees, other than "the statement that NTT is planning to look for a buyer. That's all we know."
NTT has not responded to the Pacific Island Times' repeated requests for comment.
The Federal Telecommunications Act limits foreign ownership in U.S. wireless carriers to 25 percent. However, the FCC granted Docomo Pacific's request for a waiver in 2015, holding that "the public interest would not be served by prohibiting foreign ownership of (Docomo Guam Holdings) in excess of the 25 percent benchmarks."
The FCC approved Docomo Pacific's application for its ownership structure to have 100 percent foreign ownership consisting of NTT (up to and including 65.15 percent of the equity and voting interests) and (Japan’s Minister of Finance (up to and including 26.95 percent of the equity interests and 41.53 percent of the voting interests).
On Nov. 24, 2020, NTT acquired its outstanding shares, increasing its indirect ownership interests in Docomo Pacific to 91.46 percent.
"NTT acquired all shares of NTT Docomo’s common stock held by the remaining minority shareholders as of Dec. 29, 2020, and, as a result of this transaction, currently owns 100 percent of the equity and voting interests of Docomo Pacific," the FCC said.
Subsequently, Japan's Ministry of Finance "indirectly held 33.93 percent equity and voting interests in Docomo Pacific resulting in a slightly higher equity interest and lower voting interest than previously approved in the 2015 ruling," the FCC said.
Under the June 27 consent decree, NTT Docomo was required "to hold up to and including 100 percent equity and voting interests," and the Japan Ministry of Finance "to hold up to and including a 33.93 percent interest, with advance approval to acquire up to a non-controlling 49.99 percent indirect equity and/or voting interest in DGH and DPAC."
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Formerly known as Guam Cellular and Paging, Docomo Pacific acquired MCV Guam Holding Corp. in May 2013 for 12.7 billion Japanese yen.
The company has since beefed up its investments, including the acquisition of the old Ben Franklin building in Tamuning where it relocated its Guam headquarters in 2018, and the expansion of its outlet at Micronesia Mall in December last year.
According to FCC documents, Docomo Pacific holds both domestic and international authorization, 84 wireless licenses, three submarine cable licenses, and an earth station satellite license.
In February this year, Docomo Pacific announced the completion of its multi-million dollar mobile network investment aimed at “enhancing its service in Guam and the CNMI with faster mobile speeds, improved reliability and greater coverage.”
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In March, Docomo Pacific's network system was compromised by a cyberattack purportedly perpetrated by a Chinese government-sanctioned hacker.
On May 24, Typhoon Mawar took its toll on Docomo Pacific’s infrastructure, disrupting the carrier’s phone, cable and internet services for more than two months. NTT sent its network engineers and repair equipment in July to help speed up the restoration of IT and communications infrastructure on Guam.
“Unfortunately, the sheer scale of super typhoon Mawar overwhelmed our resources, and it is taking us far longer than it should to restore our network,” Roderick Boss, Docomo Pacific CEO, said in his letter to subscribers in August. “Storms like Mawar are on the rise, and it seems unlikely that it will be another 20 years until the next one."
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