WorldCom to withdraw complaint vs RP telcos

Leading US telecommunications carrier MCI-WorldCom is expected to withdraw anytime its complaint with the US Federal Communications Commission (FCC) against its Philippine counterparts for unfair practices, leaving AT&T to fight the war alone, The STAR learned yesterday.

MCI-WorldCom and local carrier Philippine Long Distance Telephone Co. have entered into an interim agreement covering the period Feb. 28 to March 31, 2003 on new rates for US calls entering PDLT’s network.

The interim agreement was entered into by the parties to provide continuity of flow of traffic while they are in the process of negotiating for new termination rates. The interim rates are retroactive to Feb. 1, 2003.

PLDT subsidiary, Smart Communications, Inc. in an effort to resolve an apparent impasse on termination rates with WorldCom, had entered into an interim agreement with WorldCom covering the period from March 1 to 3.

As in the case of PLDT, Smart and WorldCom entered into this interim agreement to provide for a provisional rate arrangement between the parties while they are in the process of negotiating for new termination rates.

PDLT and Smart’s termination rate agreements with WorldCom expired last Jan. 31. With the interim rate agreement, calls from Worldcom to PLDT and Smart are expected to go back normal levels.

Earlier, Worldcom opposed before the US FCC a move by PLDT and Smart to increase their termination rates (rates charged for calls from the US through WorldCom to PLDT and Smart’s network) to 12 cents for calls to PDLT’s landline and 16 cents for calls to Smart mobile phone network.

AT&T on the one hand named as respondents PLDT, Smart, Globe Telecom, Digital Telecommunications Phils. Inc. (Digitel), Bayan Telecommunications (BayanTel), and PLDT subsidiary Subic Telecom.

The twin petitions were filed with the US FCC last Feb. 1 AT&T and WorldCom likewise asked the FCC to order US carriers not to make any payments to Philippine carriers as interim measure.

Industry officials told The STAR that the provisional agreements indicate that WorldCom has already accepted the new termination rates. Similar interim agreements are expected to be entered anytime now with other Philippine carriers.

A high-level team from the PLDT flew to Washington last week to personally defend its move to increase the rates being charged AT&T and WorldCom before the US FCC.

The team, led by PLDT board member lawyer Ray Espinosa, met with US FCC international bureau chief Donald Abelson to emphasize among others that the upward adjustment in termination on rates for calls originating from the US was reasonable and has in fact been accepted by other US carriers.

The local telcos have expressed confidence that the US FCC will dismiss the petitions, especially after the Philippines’ National Telecommunications Commission (NTC) in a recent letter to the FCC emphasized that the rates are beyond FCC’s own benchmark rates as well as those of the International Telecommunications Union (ITU).

The NTC also warned the FCC of the dire consequences of any adverse decision of the US regulatory agency to the Philippine economy, even as it allowed local carriers to terminate any provisional or interim agreements they may have with AT&T and Worldcom.

Internal monitoring of PLDT, meanwhile, has shown the stabilization of international inbound calls terminating on its network.

"We are pleased that international inbound have staged to stabilize and has shown minimal reduction," according to PLDT spokesperson. Butch Jimenez. "This clearly means that the worldwide market has started to accept our reasonable rates and we expect AT&T to realize this as well."

"We are pleased with the recent developments, and are hopeful that a favorable ruling from the US FCC is forthcoming," Jimenez added.