Call rate issue to escalate into RP-US dispute, says solon

An administration solon warned yesterday the ongoing commercial quarrel between local telephone firms and American carriers over call termination fees is likely to develop into a Philippine-US dispute.

Catanduanes Rep. Joseph Santiago, former chief of the National Telecommunications Commission (NTC), said the dispute is now out of the hands of local and US carriers.

"It is now between the regulatory agencies of the two countries – the NTC and the US Federal Communications Commission (FCC)," Santiago said.

"This means the NTC and the FCC must resolve the matter first before the carriers themselves can work out any commercial settlement," he said.

If the dispute is not settled quickly at the level of the two regulatory agencies, the governments of both countries may have to step in, he said.

The NTC ordered local telephone firms last week to stop servicing call traffic from US operators that refuse to pay higher Philippine termination rates of 12 cents and 16 cents per minute for landline and wireless calls, respectively.

The NTC order was in response to a previous FCC International Bureau directive for US carriers to suspend payment of outbound calls terminating in the networks of Philippine carriers.

Santiago said he does not expect the dispute to hurt local carriers in a big way as international calls as a whole account for only 15 percent of their gross revenues.

He said local carriers derive the bulk of their income from domestic mobile phone operators.

Philippine carriers stand to lose as much as $80 million (P4.4 billion) in receivables if the dispute is settled in favor of AT&T Corp. and other US operators.

"We support the position taken by the NTC and local carriers that the higher termination rates are fair and reasonable, considering they’re within the 19 cent per minute set by the FCC itself," Santiago said.

He said the dispute would not necessarily disrupt in a big way the servicing of calls from the US to the Philippines.

US carriers can reroute calls through third countries that have big volumes of Philippine-bound calls, such as Japan and Singapore. The calls from the US will be then lumped with calls coming from Japan or Singapore.

"However, this process will prove costlier to US carriers. They will have to pay higher third party fees," Santiago said.