Smart: Infocom refused to pursue linkup talks

Claiming that government erred in penalizing it for refusing to interconnect with Infocom Communications Network, Inc. (formerly Nextel), Smart Communications, Inc. said it was Infocom which refused to pursue bilateral negotiations for the interconnection of its network with that of Smart.

The National Telecommunications Commission (NTC) last Dec. 18 suspended action on all pending and future applications for permits, licenses or authorizations by Smart until such time that the latter interconnects its cellular mobile telephone system (CMTS) with the trunk radio network (TRN) of Infocom.

In an order signed by NTC Commissioner Joseph Santiago and deputy commissioners Nestor Dacanay and Aurelio Umali dated Dec. 18 but released only recently, the body said the administrative penalty will last until Smart abides by the Dec. 23, 1999 NTC ruling on the interconnection of Smart’s CMTS with Infocom’s TRN.

The NTC said the suspension will include any action on the renewal of Smart’s provisional authority to engage in the mobile telephone business.

Smart, in its motion for reconsideration filed Dec. 29 a copy of which was furnished The STAR, said it has in good faith complied with the Dec. 23, 1999 ruling of NTC to effect a workable and equitable interconnection and traffic settlement with Infocom.

The NTC’s Dec. 23, 1999 ruling order required that the settlement between the two be based on the incremental costs to be determined by the commission after the parties have submitted their respective costs. Pending determination of the incremental costs, the NTC in its Dec. 23, 1999 ruling ordered that the interconnect facilities between the two networks be equally shared; that the facilities needed to carry the interconnect traffic within each network be equally shared; that the facilities needed to carry the interconnect traffic within each network be the responsibility of each carrier, and that the interconnect charges to and from each operator in the interim be equal to P1.50 per minute. NTC rejected motions by Smart to reconsider the Dec. 23 ruling.

NTC, in its new order, said that from the various motions filed by Smart after the commission issued the Dec. 23, 1999 order, it appears that the company had no intention to abide by the NTC order.

This refusal, it said was even made clearer by Smart’s letter to Infocom dated Sept. 19, 2000 wherein Smart imposed additional onerous conditions,’ such as payment of full airtime of P9.69 per minute inclusive of foreign currency adjustment, and P2,400 per trunk per month for the use of the trunks that will interconnect their respective facilities as well as putting up by Infocom of a performance bond of P200 million, all of which the NTC said were not included in its Dec. 23, 1999 order.

Smart, in its new motion, said Infocom wrote Smart last Sept. 26 rejecting the abovementioned offer. It added that its proposal to Infocom did not contravene the Dec. 23 order since the NTC merely provided for the interconnect charge which is separate and distinct from the other charges that Smart is allowed to charge under its provisional authority.

"We see no conflict in our proposal as in fact we agreed to apply the P1.50 interconnect charge. It now appears that Infocom/Nextel is not sincere in the realization of the interconnection, but would rather inconvenience subscribers for the sake of grandstanding," Smart said.

It added that Infocom admitted in a position paper last Sept. 14 that its network and that of Smart are already connected and the traffic between the two systems were tested and proven to be ready for commercial use.

In asking Infocom to put up a P200 million performance bond as a precondition for full implementation of their interconnect agreement. Smart said that since Infocom/Nextel has no track record, it is a must that adequate securities he placed to ensure prompt payment of financial obligations, emphasizing that Smart already has accounts receivables amounting to P2 billion from various carriers, prospects of collection of which are already dim.

Smart added that there is no reason why the settlement with Infocom should be P1.50 in the light of the fact that the latter is a trunk radio operator and not a CMTs operator. "The interconnection charge that should be mandated should be equal to one-half only of the existing interconnection charge between the two leading cellular phone operators (Smart and Globe which is P1 per minute," it said.