America at the forefront of a lesser war

(First of a series)

When I was a student at the Yale Law School many years ago, and saw America for the first time, I remember that The Ugly American was a bestseller of a phrase and I indeed was on the look-out for some of them. The good news was that almost every American student and professor I got to know then turned out to be a damned nice guy. Those words of old that I had read about like Thomas Jefferson’s "I tremble for my country when I reflect that God is just"; Sigmund Freud’s "America is a mistake, a giant mistake," a painful indictment of the US; and of course Eugene O’Neill’s then oft quoted and much publicized statement: "We talk about the American Dream, but what is that Dream, in most cases, but the dream of material things? I sometimes think that the United States for this reason is the greatest failure the world has ever seen."

One of the first friends I had who was my classmate in Taxation, and a course called Law, Science and Policy, Bert Schader, and who was kind enough to invite me to spend my first Thanksgiving Day in the US with his parents and the rest of the family was, by itself a revelation and a realization of such warmth and hospitality that I thought reposed only among us Filipinos. All the more awed was I when, during one of the earliest weeks of the school term, I listened to the lecture of a linguistics professor who discussed the etymology of our language, "Pilipino." What was inspiring about it was the fact that I learned quite a great deal from this American professor about my very own language, and who spoke Tagalog so well with just a trace of an accent.

My honeymoon then with this new great big world called "United States of America" got its first big shocker when the student president of an organization of students, many of them foreign, indulged me in conversation and told me that as a former "colony" of America, the Philippines had done immensely well. The words he used have, for decades, been etched in my mind. Here was an outstanding Yale student leader, good-looking and charming, poised and self-assured, telling me that he knew everything about how America gave my country the educational system she now has. After enjoying that moment of enlightening him that the oldest university in the Philippines, the "University of Santo Tomas" had been very much around before America’s oldest university was born, Harvard University, he thanked me for the correction, said it was important for him to know this as the president of the student world organization, and we became good friends throughout the entire year of his presidency...still no "Ugly American," I told myself.

Today, however, in this "lesser war," the telecommunications war that the US is confronted with, where two US telecom carriers, AT&T and MCI WorldCom filed separate petitions before the US regulatory body for telecom, the Federal Communications Commission (FCC) alleging "whipsawing" and "disruption of service" in the US-Philippine corridor, involving the Philippine Long Distance Telephone Co., Globe Telecom, Digital Telecommunications Philippines, Inc., Smart Communications Inc, and Bayan Telecommunications Inc, there is certainly a potent ricefield for the harvest of an Ugly American or two. AT&T is actually protesting the demand by the Philippine telecom companies (telcos), for new rates for AT&T’s calls terminating in the Philippines. The telcos had asked for an increase in the termination rates, from US$0.08 cents to US$ 0.12 cents for calls terminating with fixed line networks; and from US$0.12 cents to US$0.16 cents for calls terminating with mobile networks. PLDT and Globe, among others, were specifically cited in the petition of AT&T. MCI WorldCOm filed a similar petition citing PLDT.

Yes, "whipsawing" actually exists in Webster’s dictionary which says, "to beset with two or more adverse conditions or situations at once." And, is that what the Philippine telcos have done...have they beset adverse situations on AT&T and MCI WorldCom, by asking through the negotiating table, not hiding under the skirt of the National Telecommunications Commission, the Philippine regulatory body for telecommunications? For this is exactly what the two US carriers have done, behave like the dog with its proverbial tail lowered between its two hind legs, and hide underneath the skirt of the US’ FCC.

In all the 18 years I was in government, specifically with the Department of Transportation and Communications (DOTC), and especially when we demonopolized and liberalized the telecom environment, interconnection arrangements and the financial charges attendant thereto, as provided by law, were treated as bilateral commercial matters for the telcos to negotiate upon and reach an agreement on, within the parameters laid down by law and the regulations pursuant thereto. As regards their dealings on this matter with foreign carriers, the same was true. The NTC, in effect, as in the past, with the local telcos, and now in this unfortunate situation with the American telcos, which I call a "lesser American war," has very rightly in keeping with international practice, commercial arrangements, and national laws, stated that "termination rates are private commercial arrangements entered into by carriers of their own free will, pursuant to the constitutional guarantee of freedom to contract."

In a letter dated 26 February, 2003, addressed to the FCC commissioners in Washington D.C., signed by two ladies that I have known and worked with for a good long time in the past, and respect very highly, NTC chairman Armi Jane R. Borje, and deputy commissioner Kathleen G. Heceta, the NTC position was very clearly emphasized that the Philippine telcos’ proposed rate increases as above specified, are still well below the US$0.19 charge per minute FCC benchmark, and the International Telecommunications Union’s (ITU), the UN specialized agency regulating world telecommunications, suggested rate of US$0.238 applicable to countries such as the Philippines, and are therefore "fair and reasonable." As of the 26th of February, more than 90 foreign telcos had already agreed to the new termination rates. Other significant telcos of the United Kingdom, Japan, Singapore, New Zealand, Malaysia, Brunei, Indonesia, Australia, Spain, Switzerland, Denmark, Germany, the United Arab Emirates, Norway, Portugal, Qatar, Guam, Israel, and I understand, even Hong Kong who initially had a problem with it, have agreed to the new termination rates. And in the US, more than 10 at least, have signified their consent and Canada’s two carriers likewise.

How can AT&T and MCI WorldCom SQUAWK before their very own regulatory body, the FCC, and allege "whipsawing" and "disruption of service" which have been vehemently denied by our very own telcos, without even bothering about going to the negotiating table like gentlemen of honor, and deal with the matter with the utmost urgency and fairness, and thereby arrive at a bilateral agreement. Let me emphasize that the Philippine termination rates petitioned for are in accord with the benchmarks of the US and ITU, and as shown above, have been accepted by most foreign operating administrations the world over.

Atty. Rodolfo Salalima, one of the best telecom lawyers in the country, with tremendous experience locally and in the ITU told me personally that AT&T had been withholding payments on as much as US$13.5 million in debts to Globe Telecom pressuring the firm to give in to the demand for lower termination rates. US$3.5 million was supposed to have been paid by AT&T to Globe Telecom last December, but not a cent has been paid today. This, by the way, is an act of a hoodlum-entity, and I think I have come across the first "Ugly American" in a long while whose ugly chicanery is spelled out in this manner: "I owe you money, you will not get paid unless you say ‘Amen’ to me." Hey, this indeed is a hold-up! Here I can smell an Ugly American loud and clear.

Another horror dimension emanates from another Philippine carrier, one of the five earlier mentioned, Smart Communications Inc. One clever lawyer, the head of legal and carrier relations of Smart COM, Atty. Roger Quevedo states that the key issue in the dispute is not so much the increase in termination rates but rather the severe imbalance in revenue sharing between the US and Philippine carriers. "The current revenue sharing," Quevedo cites, "is more than three times in favor of foreign carriers, particularly US carriers like AT&T. In 2001, AT&T raked in US$ 186.6 million in net revenues from US calls bound for the Philippines while its settlement payments to Philippine carriers amounted to only US$ 52.4 million." These statistics had been drawn from the 2001 Report under Section 43.61 or the International Traffic Data of the US Federal Communications Commission. What should be very critically considered is the fact that even after the specified increase urgently petitioned for by our telcos, revenue sharing will still be greatly and indeed absurdly in favor of international carriers.

No wonder Governor Jerry Brown not too long ago did say, "This is still a very wealthy country. The failure very sadly however is of the spirit and insight." In the face of an imminent war avowed to be brought upon Iraq by the US, in all likelihood and for all intents and purposes, with or without an official declaration of support by the United Nations, the words of a successful investment banker, Archibald Cox, in a speech delivered about four years ago, before 9/11 and the Iraqi undertones, now rings ever so clearly in my mind...Archie’s words were strong about his own country: "I confess that I cannot understand how one can plot, lie, cheat, and commit murder abroad and remain humane, honorable, trustworthy and trusted at home." (to be continued)