Local telcos rap ‘divide & rule’ tactic of US FCC

The country’s biggest telecommunications companies assailed yesterday a recent decision by the US Federal Communications Commission (FCC) branding the ruling as "reverse whipsawing" or making Philippine telcos unfairly compete with one another.

The Philippine Long Distance Telephone Co. (PLDT), Smart Communications and Globe Telecom criticized a US FCC decision allowing American carriers to make payments for services rendered to Digital Telecommunications Phils. Inc. (Digitel) and Bayan Telecommunications (Bayantel) after the two companies allowed US calls from AT&T and WorldCom to come in.

But officials from PLDT, Smart, and Globe told The STAR that the "scare tactic" being employed by AT&T through the FCC will not change their position that unless AT&T and WorldCom pay for past services rendered, they will continue to block calls which the National Telecommunications Commission (NTC) itself sanctions.

Digitel legal affairs head William Pamintuan has said that they themselves were surprised with the FCC order, which was based on submissions made by AT&T, since Digitel has already terminated its existing agreement with AT&T.

Telco officials interviewed said that the FCC order was solicited by AT&T as part of a "divide and conquer" strategy to make Philippine carriers unduly compete with one another.

Because of a previous order issued by the US FCC international bureau as well as a subsequent order by the Philippines’ National Telecommunications Commission (NTC), local carriers have not allowed direct calls from US carriers, especially AT&T and WorldCom, because the FCC bureau order precludes American telcos from making any payments unless services to AT&T and WorldCom are fully restored.

The dispute between Philippine and American carriers stemmed from an increase in charges for services imposed by the local telcos on all foreign carriers, including those in the US. AT&T and WorldCom questioned the increase, branding Philippine carriers as engaging in whipsawing or making US telcos compete with each other to get better terms during negotiations.

The US FCC international bureau, headed by Donald Abelson, issued a ruling that ordered US carriers not to make any payments until services to AT&T and WorldCom are fully restored. It also found Philippine carriers guilty of whipsawing.

AT&T met with Philippine carriers to try to arrive at a compromise, but failed since the Abelson order has made it difficult for both parties to come to any agreement. Philippine telcos insist that there will be no new agreements regarding rates unless they are paid for past services rendered. On the one hand, AT&T says they cannot make any payments because of the Abelson order.

In the meantime, all US direct calls to the Philippine could not get through since Philippine carriers either totally blocked or partially blocked the circuits. American carriers thus have to ‘refile’ the calls or use a third party network in another country , which is willing to pay the increased Philippine rate plus a little profit.

It was learned that AT&T has already increased its calls rates to its customers to as much as 48 cents a minute to answer for the increased costs due to refilling of calls.

To the surprise of Philippine carriers, the FCC issued another order, this time, allowing payments only to Digitel and Bayantel.

Because of this, US carriers can now make direct calls to Digitel and Bayantel and spend less than if they refile the calls to terminate these to the networks of PLDT, Smart, and Globe Telecom.

But officials from PLDT, Smart, and Globe told The STAR that if their total number of subscribers are to be taken into account, those of Digitel and Bayantel are small and would hardly benefit AT&T.

"AT&T is hoping that with this new FCC order, we (PLDT, Smart, Globe) will be forced to accede to their wishes. But our position remains. AT&T and WorldCom have to pay what they owe us," a telco official said.