US asks Palace, DOTC to pressure local telcos to roll back their rates

The US government has asked Malacañang and the Department of Transportation and Communications to put pressure on Philippine telecommunications companies to force them into withdrawing their increased call termination rates from the US to the Philippines, The STAR learned yesterday.

The local telecommunications industry, meanwhile, is set to ask Congress and the Senate to call local representatives of AT&T and MCI WorldCom to explain why they are allowing their foreign principals to bully local telcos.

Local telcos — Philippine Long Distance Telephone Co. (PLDT), Globe Telecom, Digital Telecommunications Phils. Inc. (Digitel), Smart Communications, and Bayan Telecommunications (Bayantel) — increased their call termination or settlement rates from the US to the Philippines as well as from other countries effective last Feb. 1.

From eight to 9.5 cents a minute, Philippine telcos have raised their rate to 12 cents a minute on a call from the US to the Philippines that is being charged as high as 40 cents a minute. In case of calls terminating in mobile phones, the settlement has been raised from 12 cents to 16 cents a minute. The larger part of the call rate goes to the US carrier.

US giants AT&T and WorldCom have filed a petition with the US Federal Communications Commission (FCC) asking that the Philippine telcos be ordered to open their circuits and maintain the old rates.

Cable and Wireless has reportedly joined AT&T and WorldCom and filed a similar complaint against PLDT and the other telcos but accepted the termination rates of local firm Eastern Telecommunications Phils. Inc. (ETPI).

"We are at a quandary as to why Cable and Wireless will accept the rates of ETPI yet at the same time file a complaint against us for charging exactly the same rates," a PLDT source said.

Because of this, industry sources told The STAR that US embassy officials here have been incessantly calling Malacanang and DOTC officials asking them to put the pressure on the Philippine carriers.

Local telcos said they are united in facing the matter. "Our government cannot do anything about it. Termination rate agreements are private commercial arrangements covered by the freedom of contract and protected by the non-impairment of contracts clause guaranteed under our Constitution," an official said.

They also stressed that even without AT&T and WorldCom, business will go on. "In fact, now, AT&T traffic from the US to the Philippines is being coursed by AT&T to other international carriers that have accepted the new rates," the source said. At least 15 US carriers, including Sprint, have already agreed to the increased Philippine rates.

According to the NTC, the new termination rates are still well below the US FCC benchmark of 19 cents per minute for low income economies like the Philippines. "AT&T and MCI-WorldCom just want to keep more profits at the expense of the Philippines even as these two US carriers are paying higher termination rates in other countries," a top official of a leading telco told The STAR.

In the case of PLDT, it said it has already concluded agreements for new termination rates with 92 carriers worldwide. With respect to AT&T and WorldCom, PLDT remains open to negotiating an agreement on the new rate. The old agreement expired on Dec. 31, 2002.

The Ayala-controlled Globe Telecom said it will file its comments to the petition of AT&T with the FCC within this week, pointing out that it continues to accept call traffic both to and from AT&T.

Ma. Caridad Gonzales, head of Globe’s legal services division, said the agreements with AT&T for termination rates for Philippine carriers had expired last Jan. 31 "without AT&T having come to an agreement with them on a new rate for the following year." – With Conrado Diaz Jr.