Extelcom bucks fee for telecommunications transactions

MANILA, Philippines - Express Telecommunications Co. (Extelcom), the pioneer cellular phone service provider in the country, is opposing the congressional oversight committee’s proposal to impose a five-centavo regulatory fee for every telecommunications transactions.

In its position paper filed with the National Telecommunications Commission, the firm said it is also against the setting of price ceiling of SMS or text messaging services at 50 centavo per text.

Extelcom said its opposition is based on the proposal’s unconstitutionality and the fact that further study is needed to ascertain the viability and implementation of the proposed memorandum circulars of the NTC.

“Extelcom views that (the NTC) should reject the committee’s proposal on imposing the five-centavo regulatory fee for being constitutionally infirm. Also, that the said proposal is ultimately impractical and ineffectual since it lacks further planning, consultation and research,” Extelcom said.

On the other hand, Extelcom said it advocates the NTC’s endeavors in providing lower access charges in line with its mandate to promote a fair, efficient and responsive market to stimulate growth and development of the telecommunications industry.

It added that the committee’s proposed MCs regarding the five-centavo regulatory fee and the fixing of the 50-centavo ceiling price on SMS charges would cancel out the economic benefits that the lowering of access charges may provide.

“This includes, in particular, weakening market competition, discouraging new players from entering the market and at the same time becoming a serious disincentive to existing telecommunication companies,” Extelcom said.

Extelcom said it shares the view of the other telecommunication companies that the regulatory fee is in fact a tax imposition and not a regulatory measure.

Even if the NTC can promulgate a regulatory rule, Extelcom said the Supreme Court had ruled in the past that such fees must only be sufficient to cover the expenses of either issuing the license; or funding for the necessary surveillance or inspection needed to enforce the regulatory measure.

Extelcom said the committee’s proposal of imposing the 50-centavo regulatory fee is not commensurate to the cost of purchasing the metering devices estimated at $30 million since it is also suggesting applying the excess proceeds to another program not related to monitoring the revenue of telecommunication companies.

“The proceeds that will be accumulated from the regulatory fee would be exorbitant; thus, there must be an articulation of the scope and limitations as to how the tax measure will be applied not by an executive agency but by the legislative body, whose power is vested upon it by our Constitution,” Extelcom said.

It added that telecommunication companies are already paying for various charges, fees and taxes to the government, not to mention their operational costs.