Feb 27, 2006
PLDT invokes FCC in rate war
PHILIPPINE telecommunications companies may yet catch the ire of the US Federal Communications Commission (FCC) if Globe Telecom insists on being paid lower termination rates by foreign carriers, an official of the Philippine Long Distance Telephone Co. (PLDT) Group said over the weekend.
Rogelio Quevedo, PLDT Group head for wholesale carrier business, said in an interview last week that local carriers, including Globe, stand nothing to gain if these fees are reduced.
Globe has called for a 75-percent reduction in termination rates from the current 12 US cents per minute on landline calls to three cents per minute, and a 56-percent decline from 16 US cents on mobile calls to seven cents per minute. The US carriers pay the termination rates which represent fees for every minute of call that passes through the network of the local telcos.
"The issue of international termination rates is something that has reached the level of the US Department of Justice. The Philippines is the only country that was able to withstand US pressure. The next thing we don't want to happen is for Philippine telcos to be investigated again," said Quevedo.
Globe's plan is part of the counterproposal it wanted PLDT to approve. Specifically, Globe wants to pay lower access charges to PLDT. However, the proposal included changes in international termination rates.
"In fact, Globe is bound to earn if termination rates are retained. However, if termination rates are lowered then this will not redound to the benefit of the subscribers but to the foreign carriers, because they will not reduce the amount they collect from their subscribers," said Quevedo.
"This is something that the US carriers had wanted to happen before and the Philippine carriers were able to fight it out. Termination rates should not be changed and PLDT will not agree to any move that will change these rates," the PLDT official added.
In March last year, Philippine telcos won a favorable decision from the District Court of Hawaii, which effectively declared that it has no jurisdiction on the antitrust case being pursued by the US Justice department against local carriers.
The Hawaii court issued on March 23, 2005 an order granting Globe's petition for a motion to quash a US DOJ 2004 order for Globe to submit documents related to the antitrust case.
US Justice officials said these documents were crucial in deciding whether local players behaved like a cartel when they raised termination rates in February 2003. At least 30 Philippine telco executives were subpoenaed to appear before an American grand jury. This was in connection with the US FCC ruling that Philippine telcos whipsawed or pitted American carriers when local telcos raised termination fees simultaneously.
Globe senior vice president Rodolfo Salalima had said that the Hawaii court ruled in favor of Globe on two counts. One is that the court has no "personal jurisdiction" over Globe because the company does not have continuous and systematic business contact in the US . Second is that the court has "no specific jurisdiction" over Globe because the "acts of Globe [are] not specifically intentioned against the US ." L. Lectura
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