Court stops NTC from implementing billing circular

The Quezon City Regional Trial Court stopped the National Telecommunications Commission (NTC) yesterday from implementing its order regulating the sale and use of prepaid call cards and changing the unit of billing for cellular phone operations.

The court said a temporary restraining order against NTC on the implementation of memorandum circular no. 13-6-2000 issued last June 16, in response to a motion filed by Isla Communications Co., Inc., (Islacom) and Pilipino Telephone Corp. (Piltel) questioning the said NTC issuance.

Smart Communications and Globe Telecoms have joined Islacom and Piltel in assailing the validity of said NTC issuance when they wrote NTC last July 5 asking for the suspension of the implementation of the said billing circular.

Last Oct. 6, NTC Commissioner Joseph Santiago issued a memorandum reminding the said companies that all prepaid cards sold on Oct. 7, 2000 and beyond shall be valid for at least two years from date of first use pursuant to MC 13-6-2000.

In addition, Santiago said all CMTS operators are reminded that all SIM packs used by subscribers of prepaid cards sold on Oct. 7, 2000 and beyond shall be valid for at least two years from date of first use.

Right now, a prepaid card is valid only for two months from first use. Any unused minutes are forefeited. However, the customer can still accept incoming calls for four months without reloading.

The NTC also said that the billing unit shall be on a per pulse of six seconds basis effective Oct. 7, 2000. At present, cellular phone use is billed on a ‘per minute’ basis.

The operators are against the change in the billing unit, saying there must first be a change in the interconnection charged between carriers before such change should be effected.

Right now, the interconnection charge between carriers is fixed. Thus, if the change in the billing unit is effected, Globe for instance will have to pay P2 per minute, for instance, to PLDT, even if the customer only pays for one second use.

Islacom and Piltel considered the issuance by Santiago a denial of their request for the suspension of the questioned billing circular submitted to the NTC on July 4, forcing them to seek a court restraining order.

Judge Vivencio Baclig, in his order, said that while NTC is empowered to regulate telecommunications services, it cannot resort to virtual confiscation of property without compensation.

He said the billing circular allows the enjoyment of a service by a person without paying the compensation contained in a valid contract between the parties. "The subscriber has enjoyed a service and must, therefore, compensate the public utility operator," Baclig said.

Baclig said that in issuing the subject circular, the NTC attempts to regulate the sale and use of prepaid call cards, the period and delivery of billing statements, and the units of billing for cellular phones, particularly by changing it from a ‘per minute billing’ to a ‘six-second per pulse billing.’

Section A of the circular mandates that the monthly billing statement (MBS) shall be received by the subscriber/customer not later than 30 days from the end of each monthly billing cycle. If the MBS is received 180 days or beyond from the end of the monthly billing cycle, the NTC shall impose sanctions against the public telecommunications entities which may include the consideration of the bill having been paid. The court said such provision on bill payments contravenes provisions of the Civil Code against unjust enrichment and on the obligation of one party to pay for the services rendered by another.

"The billing circular not only destroys the nature and character of sales of services as reciprocal. It also allows the customers of the operators not to pay their bill for services contracted and duly rendered if the bill is received beyond the period stipulated by the circular," it said.

It added that by not allowing the operator to disconnect service to the delinquent subscriber during the time the bill remains unpaid, the delinquent subscriber is given the right to determine whether he would like to pay or not, without regard to his contractual obligation to pay for services already availed of by him.