Local telcos demand payment from AT&T

The country’s biggest telecommunications companies are contemplating drastic measures against US carrier AT&T due to its continued refusal to pay for services rendered by the Philippine carriers prior to Feb. 1 this year when the local telcos raised their charges to AT&T and other foreign carriers.

The STAR learned that Smart Communications already sent a demand letter to AT&T last week asking that it be paid immediately roughly $3 million (P162 million) representing amounts due before Feb.1.

However, AT&T responded by saying that it will not make any payments due to the order issued by the US Federal Communications Commission (FCC) ordering all facilities-based US carriers not to make any payments until Philippine-based carriers fully restore service to AT&T and MCI-WorldCom.

AT&T and WorldCom filed separate petitions before the US FCC last Feb. 7 accusing local carriers of blocking calls from the US to the Philippines after the, two US carriers opposed the increase in ‘termination rates,’ or charges imposed by Philippine telcos on foreign carriers for calls from the US. The new rates effective last Feb. 1 are 12 cents per minute for calls to Philippine landlines and 16 cents for calls to mobile networks.

The US FCC international bureau not only granted the interim relief sought by AT&T and WorldCom (non-payment by US carriers) but also ruled that the Philippine carriers are guilty of ‘whipsawing’ by using their market power to force US carriers to agree to the new rates.

The Philippine carriers concerned are now in consultations with their US-based lawyers in preparing for their respective motions to the FCC en banc to ask for a reconsideration of the FCC bureau decision which they said was illegal and baseless since only the commission en banc can rule on the merits.

Smart legal and carrier relations head Rogelio Quevedo said that they are now awaiting the advice of their US-based counsel on the possibility of referring the case to a US collection agency.

"If AT&T continues to refuse, then we can ask that our claims be satisfied by attaching their properties and other assets, including bank accounts in the Philippines," Quevedo told The STAR.

For its part, telecommunications giant Philippine Long Distance Telephone Co. (PLDT) has just sent a demand letter to AT&T asking for the immediate payment of $4 million (P216 million) in past due receivables.

It was learned that the demand letter was sent by the ACCRA law firm to AT&T just last Tuesday.