NTC to telcos: Reject calls from US carriers

The National Telecommunications Commission (NTC) branded yesterday the order issued by the international bureau of the US Federal Communications Commission (FCC) stopping all payments by American carriers to their Filipino counterparts as ‘baseless,’ even as the NTC directed all Philippine carriers not to accept calls from US carriers which do not pay for services rendered and who comply with the FCC bureau’s order.

In effect, the NTC categorically directed Philippine carriers to bar calls from US carriers.

According to NTC Commissioner Armi Jane Borje, their order is without prejudice to whatever actions each of the local carriers may take to protect their own interest.

At least three of the carriers affected, namely Philippine Long Distance Telephone Co., Smart Communications, and Globe Telecom, have said the FCC bureau had no jurisdiction to decide on the merits of the case, which only the FCC en banc can do. PLDT and Globe are considering filing a motion for reconsideration with the FCC first, and in case of an adverse decision, appeal the FCC decision to the US Federal District Court of Appeals. On the other hand, Smart said it will not appeal the decision since it was illegal in the first place. Instead, Smart will just bar all calls from AT&T.

PLDT lawyers said they will fully comply with the NTC order and shall take all necessary legal actions and measures to protect and defend its rights and interests. "PLDT will take strong legal action against any US carrier that fails to pay termination charges for telecom services already rendered pursuant to valid termination rate agreements. A US carrier cannot use the FCC bureau order, which is contrary to Philippine laws and public policy, to avoid the performance of its contractual obligations," they told The STAR.

In an order issued late Wednesday, the NTC also directed Philippine carriers to take all measures necessary to collect payments for services rendered in order to preserve the viability, efficiency, sustained growth and development, and continued competitiveness of the Philippine telecommunications industry.

In an interview, Borje said the FCC bureau has no jurisdiction over Philippine carriers and it should have realized that this matter is just between the US and Philippine carriers.

In response to the NTC order, PLDT board member and legal panel head Ray Espinosa told The STAR: "The NTC order vindicates the position taken by PLDT in its termination rate dispute with A&T and WorldCom. It fortifies our resolve to vigorously defend ourself against the high-handed tactics of AT&T and the abusive order of the US FCC international bureau. The NTC order also supports our earlier position that the AT&T/WorldCom action and the bureau order amount to economic blackmail and sabotage with the clear intended effect of financially punishing all Philippine carriers and undermining the very viability of the Philippine telecommunications industry in order to bludgeon us into accepting the unreasonably low rates AT&T has dictated."

Espinosa added that in prohibiting US carriers from paying termination rates for services rendered by Philippine carriers even prior to Feb. 1, 2003, the Abelson order authorizes AT&T and other US carriers to breach their contracts with Philippine carriers which is contrary to Philippine laws.

"The Philippine government should join the NTC and Philippine carriers in denouncing the unjust, abusive, and illegal Abelson order. The relevant committees of Congress should investigate the matter in aid of legislation aimed at protecting the local industry from egregious conduct of foreign telecom carriers and abusive foreign government agencies," he told The STAR.

Last March 10, the US FCC international bureau, headed by Donald Abelson, granted separate petitions filed by American carriers AT&T and MCI-Worldcom and ordered all facilities-based US carriers with direct circuits to the Philippines to stop payments to Filipino carriers for charges on US calls that they land in the Philippines.

The FCC bureau also found PLDT, Smart, Globe, Bayan Telecommunications (BayanTel), and Digital Telecommunications Phils. Inc., (Digitel) guilty of ‘whipsawing‚’ by using their market power to force US carriers into agreeing to their increased termination rates.

The NTC order, signed by Commissioner Armi Jane Borje and deputy commissioners Kathleen Heceta and Jorge Sarmiento, said the conclusions in the Abelson order are without basis. It maintained that the increased rates of 12 cents per minute (for calls to fixed lines in the Philippines) and 16 cents (for calls terminating to mobile networks) are fair and reasonable, being well within the benchmarks for both the FCC and the International Telecommunications Union (ITU).

Abelson, in his order, said the benchmarks that it and the ITU have set are still above costs such that negotiations should be above the benchmarks. "It is ironic that the Abelson order now puts in question and negates the very benchmarks established by the US FCC," the NTC said.

The NTC emphasized that the FCC bureau order is detrimental to the attainment of the former‚s objective, which is to develop and maintain a viable, efficient, and universal telecommunications infrastructure. To attain this objective, the Philippine telecommunications industry must be able to generate and collect revenues on a timely basis and plow these back into expansion and improvement of telecommunications infrastructure for sustained growth and development.

"The ultimate effect of the Abelson order is first, to punish Philippine carriers who are within the jurisdiction of the NTC and not of the US FCC; second, to increase the cost of calls on Filipino consumers; and third, to impair established rights and obligations arising from contracts already perfected. Therefore, it is incumbent upon this commission to assert its jurisdiction," the NTC said.