The war between the two competing Block Island ferries has intensified -- this time with critics charging favoritism after the state Public Utilities Commission (PUC) decided to keep some of the relevant material secret.

Until last year, only one ferry served the island, with 52-minute trips for $13 each way. Then, after much political wrangling, a newer, faster ferry began making the same trip from Point Judith and cut the travel time in half for twice the price. Recently, the PUC ruled that the new company -- Island Hi-Speed -- can keep its financial records private, even during what is normally an open rate-setting hearing. The ruling came despite a right-to-know challenge by lawyers for the existing ferry -- Interstate Navigation Company. They said the move would erode awareness of how companies are regulated within the PUC's jurisdiction.

Other critics allege worse. They believe the PUC's three appointed members may have been acting under the direction of friends in high legislative places who have stakes in Island Hi-Speed. One of the company's partial investor-owners, Jon Hagopian -- whose father, Jacob Hagopian is a federal magistrate -- has served as a lawyer for the House Judiciary Committee. "When someone connected to the Legislature wants something done, they make one telephone call, and they get something done," says a critic who requested anonymity.

PUC spokesman Terrence Mercer, however, says that this type of favor granting isn't built into the system. Because commissioners serve staggered, six-year terms, it would be difficult for any party or administration to hold sway over them, he says. "Our mission and vision is to decide every case on its merits," Mercer says.

Moreover, he notes that Interstate Navigation Company -- which also runs a ferry to Block Island from New London, Connecticut -- might not be the slighted underdog after all; it may be crying foul because it, too, wants to run a high-speed ferry to Block Island. If this is the case, Mercer says, allowing Interstate to see Island's records would be like "telling Microsoft to give its competitors a blueprint on how to make a Windows chip."

Jim Malachowski chaired the PUC for 11 years. Now an advertising executive, he says this new era of deregulation, not monopolies, will mean more competitive secrecy. "I have clients who would love to know how much their competitors are spending on, say, marketing," he says. "But that's the kind of information you do not release in the competitive world of business."

The PUC's ruling has yet to be issued in writing. When it is, Interstate lawyers say, they will decide whether to appeal. Meantime, the two sides will continue their war elsewhere: two ferry cases are pending in the Rhode Island Supreme Court.

Issue Date: May 24 - 30 2002