Digitel asks US FCC to junk AT&T complaint

Digital Telecommunications Phils. Inc. (Digitel) has asked the US Federal Communications Commission (FCC) to dismiss the case filed against it by American carrier AT&T for alleged unfair international telecommunications practices.

This, as Digitel warned that it reserves the right to file a claim against AT&T for damages for wrongly accusing it of blocking calls from AT&T. "They (AT&T) have no case against us," according to Digitel senior vice-president and legal counsel William Pamintuan.

Pamintuan also confirmed that Digitel has already terminated its existing settlement agreement with AT&T following its refusal to abide by the increased termination rates. He explained that unlike the other Philippine carriers whose agreements with AT&T and Worldcom expired either Dec. 31, 2002 or Jan. 31, 2003, Digitel’s agreement with AT&T is a continuing one.

Meanwhile, other Philippine carriers, including the Philippine Long Distance Telephone Co. (PLDT), Globe Telecom, Bayan Telecommunications (Bayantel), and Smart Communications, are preparing their respective responses to separate petitions filed by AT&T and another US-based carrier MCI Worldcom with the US FCC accusing local telcos of Œwhipsawing‚ or unfairly pitting one US carrier against the other to get more favorable terms.

In the case of PLDT, a top official said their response will be filed early next week and their US-based counsel is in the process of finalizing the answer.

AT&T, which filed the petition against PLDT, Globe, Bayantel, Smart, Digitel, and Subic Telecom, and Worldcom which named only PLDT, assailed local carrier following their decision to increase termination rates for calls from the US to the Philippines from eight to 12 cents per minute for calls terminating to fixed line networks and from 12 cents to 16 cents for those terminating to mobile networks effective Feb. 1 this year. The petitions of the two largest US carriers were filed Feb. 7.

Termination charges are the fees that network operators charge each other for terminating calls on their networks.

Pamintuan explained that the increased cost alone due to the devaluation of the peso against the dollar more than justifies the increase in termination rates, which is the first in 10 years.

Meanwhile, Smart said yesterday the key issue in this dispute is not the increase in termination rates but rather the severe imbalance in revenue sharing between US and Philippine carrirers.

"The current revenue sharing is more than three times in favor of foreign carriers, particularly US carriers like AT&T," Smart head for legal and carrier relations Rogelio Quevedo said in yesterday’s news briefing.

He said that in 2001 alone, AT&T raked in $186.6 million in net revenues from US calls bound for the Philippines while its settlement payments to Philippine carriers amounted to only $52.4 million.

"Even after the adjustment in termination rates, revenue sharing is still hugely in favor of international carriers," Quevedo added.

He also noted that it is ironic that AT&T accused Philippine carriers of blocking calls from the US when that is precisely what AT&T did to Smart last year. From Sept. 17 to Oct. 11, 2002, AT&T reduced its traffic to Smart to virtually zero while negotiation for new termination rates were ongoing.

For its part, Globe, in a separate news conference yesterday, emphasized that contrary to AT&T’s claim, it has not walked away from the negotiating table and has not terminated in-bound calls from AT&T.

Globe spokesman Rodolfo Salalima said that AT&T only gave a counterproposal to the new rates last Feb. 11 well after the expiration of the old rates and only after it had already filed a case with the US FCC.

"Judging from its behavior, AT&T did not wish to negotiate with us and expects the FCC to now do its negotiating for it," he emphasized.

He also stressed that the increase in termination rates by Philippine carriers will not affect overseas Filipino workers and their families in the Philippines since more than 27 of Globe’s major correspondents have agreed to the new rates.

Salalima also emphasized that the new termination rates need not necessarily result in an increase in the rate which these foreign carriers in turn collect from their consumers. "What we are asking for is an increase in what US carriers pay the Philippine carriers," he said.

Also yesterday, BayanTel clarified that it did not and does not block calls emanating from AT&T in the US into its network.

"That’s why we are greatly disturbed by AT&T’s petition to the US FCC to prohibit other US carriers, who accepted our increased termination rates, from making payments to the Philippine carriers. Their petition is detrimental not only to the business interests of the local carriers but ultimately to the general public who relies on the local carriers for their communication needs and to some people, for their livelihood," according to Sherry Ann Supelana, BayanTel vice president for international business.

Supelana said that contrary to AT&T’s claim that the significant jump in call volume between the US and the Philippines is primarily because of lower fees, the increase is largely due to the rising number of Filipino migrants.