**STATEMENT OF**

**COMMISSIONER JONATHAN S. ADELSTEIN**

**APPROVING IN PART, DISSENTING IN PART**

*Re: VERIZON COMMUNICATIONS, INC., Transferor, and AMÉRICA MÓVIL, S.A.
DE C.V., Transferee, Application for Authority to Transfer Control of
Telecomunicaciones de Puerto Rico, Inc. (TELPRI); Memorandum Opinion and
Order and Declaratory Ruling; WT Docket No. 06-113*

Pursuant to Sections 214(a) and 310(d) of the Act, the fundamental
standard of review of a transfer of control by the Commission is whether
the proposed transfer will serve the public interest, convenience, and
necessity. Although I am deeply concerned about whether that standard
has been satisfied by our review of the acquisition by América Móvil of
Telecomunicaciones de Puerto Rico, Inc., the corporate parent of Puerto
Rico Telephone Company (PRTC), I am pleased that this Order includes a
last minute commitment from América Móvil that it will make significant
infrastructure investments in Puerto Rico's communications and
information services.

But for this late development, the record in this proceeding has been
overwhelming -- the public interest is not served by this transaction
absent the adoption of meaningful conditions designed to promote
investment in the PRTC infrastructure, to promote broadband deployment,
to improve service quality, and to facilitate competitive options on the
Island. While the U.S. currently experiences a basic telephone
penetration rate of roughly 95%, the rate for telephone penetration in
Puerto Rico has dipped to roughly 60% and continues to fall. The DSL
services that are available on the Island are \$30-\$50 more expensive
than service in the continental U.S. The four million U.S. citizens
residing in Puerto Rico have suffered with sub-standard communications
for far too long and deserve the types of services and products that the
rest of the United States currently expects and enjoys.

Without conditions, there is no expectation that this transaction will
reverse that troubling trend. Indeed, the record suggests otherwise.
América Móvil is, with limited exceptions, a wireless company, with only
2% of its customer base served by wireline. The alleged benefits
advanced by the company in acquiring PRTC, as vague as they are, largely
address wireless network changes. And the company's purported experience
with managing wireline networks is limited to operations with telephone
penetration rates ranging from 3.8% to 13.8%. Turning over the keys to
PRTC without any meaningful condition of investment by América Móvil in
the Island's telephone service would have been irresponsible.

Indeed, we have heard from a chorus of respected Puerto Rican leaders
expressing concerns about the proposed transaction. They speak from
their own personal experiences with the current state of disrepair of
the PRTC network. They raise a host of objections to the transaction
including valid concerns of service quality ("\[t\]here are no credible
tangible benefits for the consumer in Puerto Rico described in the
application ... the FCC \[should\] condition approval of the transfer
upon PRTC adhering to specific qualify of service measurement and
reporting regulations"[^1]), broadband deployment ("I have been
particularly concerned about the need to promote investment in the
Island's telephone infrastructure. ... Such action by the FCC is
necessary if the residents of Puerto Rico are to receive the benefits to
be derived from the widespread deployment of advanced services"[^2]),
and national security ("national security could be in jeopardy if the
FCC does not take the necessary precautions ... the day-to-day wire-line
communications of federal and local government agencies, including those
concerned with national and local security, would be accessible to a
foreign corporation"[^3]). There are no special measures proposed by our
national security agencies or the FCC to address these operational
concerns. These are all serious issues and would have benefited from
more attention than what we offer today.

We hear so much about promoting broadband deployment, but here the
Commission has a specific opportunity to promote the public interest and
to reverse the troubling decline of telecommunications services in
Puerto Rico. Without conditions, this transaction would offer little in
response to what some commenters have identified as a public crisis.
Despite these grave misgivings, I am persuaded to approve the part of
this Order that conditions approval on América Móvil's commitment to
making a substantial infrastructure investment in Puerto Rico's
communications and information services -- one billion dollars over five
years -- and the Commission's decision to require the company to submit
a written report on an annual basis describing the progress it has made
in deploying infrastructure used to provide basic telephone and
broadband services in Puerto Rico.

I appreciate the Chairman's willingness to work with Commissioner Copps
and me to secure these infrastructure investment conditions. These
provisions give modest hope to consumers that they may experience some
change for the better, although the proof will be measured not in last
minute conditions but in actual progress. Consumers would have been
better served had this proposal been made earlier in this proceeding,
with the opportunity for greater input. This Order and these conditions
also would be improved if we were able to specify with greater detail
how this infrastructure investment will be implemented, targeting
efforts to revitalize the deteriorating network infrastructure and to
expand service to underserved and rural areas. However, I find that, on
balance, these conditions are worthy of support.

I also urge the Commission to engage in a more coherent effort to ensure
that these conditions are fully implemented and that the benefits of
high quality service are delivered to the citizens of Puerto Rico. I
have seen little to suggest that the Commission has engaged in a
thorough review of previous infrastructure commitments to improve
telephone service on the Island. The troubling state of service in
Puerto Rico should highlight the importance of doing more rigorous job
of oversight going-forward.

Finally, I am troubled with the foreign ownership and national security
components of this transaction and must dissent from these findings.
While I am usually comfortable with appropriately documented foreign
ownership that complies with the statute and our existing rules and
precedent, the unidentified foreign equity and voting interests that are
at issue here give me serious pause. I want to highlight that concern
and make clear my position that the remedy advanced in the Declaratory
Ruling to deal with possible ownership by investors from non-WTO members
should not be considered as precedent for any future transactions that
similarly fall far short of our foreign ownership obligations.

For all these reasons, I approve in part, dissent in part.

[^1]: Telecommunications Regulatory Board of Puerto Rico, Petition to
    Deny of the Telecommunications Regulatory Board of Puerto Rico at 2
    (July 14, 2006).

[^2]: Letter from Hon. Luis G. Fortuño, U.S. Member of Congress, to
    Chairman Kevin J. Martin, Federal Communications Commission (August
    11, 2006).

[^3]: The Honorables Kenneth D. McClintock and Orlando Parga, Senators
    of Puerto Rico, Motion to Address Public Interest Concerns at 5
    (July 13, 2006).