Mobile telcos brace for legal battle with NTC

MANILA, Philippines - The country’s cellular mobile telephone service (CMTS) providers are bracing for a legal battle, even up to the Supreme Court, to prevent the National Telecommunications Commission (NTC) from mandating the shift from a per-minute to a six-second-per-pulse billing system used for mobile voice calls.

Industry sources said the CMTS providers, namely Smart Communications, Globe Telecom, Digital Telecommunications Phils. Inc. (Digitel) and Connectivity Unlimited Resources Enterprise (CURE) will appeal the decision of the Court of Appeals to the Supreme Court.

Last Jan. 19, the former special 11th division of the CA ruled that it finds merit in the NTC’s contention that with the implementation of this new billing scheme, the average subscribers are going to realize huge savings.

The CA ruled against the motion for reconsideration filed by Smart, Globe, Innove, CURE and Digitel against the appellate court’s decision handed down on Dec. 28, 2010.

In its ruling, the CA said it finds no sufficient basis to uphold CURE’s claim that the NTC had long deregulated the rates for CMTS service, pointing out that the NTC correctly maintains that there is no showing that the CMTS for voice calls has ever been deregulated.

CURE and Smart have claimed that no law gives the NTC authority to impose a billing system, much less a uniform billing system to be applied by all CMTS providers.

Globe maintained that there is nothing in NTC’s Memorandum Circular 05-07-2009 that requires them to adopt or which prohibits them from adopting a particular method for implementing the six-second-per-pulse billing system. It added that since the prefix dialing system is neither prescribed by the circular nor runs contrary to law or the rules, the prohibition constitutes an unwarranted interference with petitioners’ sound business judgment in its choice of method for implementing the new regime.

But the court said that the arguments of petitioners are untenable.

On the CMTS providers insistence on their use of prefix dialing to implement the six-second-per-pulse billing regime, the CA said that the same contravenes the mandatory nature of the provision of the NTC circular.

“To allow petitioners to require its subscribers to resort to prefix dialing before the latter may avail of the six-second-per-pulse-billing regime destroys the mandatory nature of such billing regime and converts the same into a mere option in the same way that the one-minute-per-pulse billing regime and the petitioners’ unlimited service offerings are optional on the part of petitioners’ subscribers,” the appellate court said.

It added that it shares NTC’s view that while the conversion of the present system of billing may entail some degree of inconvenience, technical adjustment and expenditures on the part of petitioners, the business and operations of petitioners must ultimately give way to public interest.

On July 23, 2009, the NTC issued MC 05-07-2009 which, among others, imposed a six-second-per-pulse unit of billing for CMTS providers.