Smart, AT&T agree to end dispute

Wireless services provider Smart Communications Inc. and American carrier AT&T have signed an interim agreement that paves the way for the resumption of services between the two telecommunications companies.

Under the interim agreement, Smart will restore bilateral facilities while AT&T will settle all outstanding amounts and termination fees to Smart, once the US Federal Communications Commission (FCC) lifts the stop-payment order against Smart.

AT&T will also be granted direct inbound Smart calls and access from the US to Smart’s network.

The agreement is expected to improve relationships and future negotiations between the two parties.

"I am proud to say that both the Philippine and US governments played a major role in resolving the commercial impasse between Smart and AT&T", according to Rogelio Quevedo, head of Smart’s carrier business group.

Quevedo said the two companies have agreed to put aside their differences and come up with a win-win situation. "AT&T knows that Smart is now the trendsetter in the Philippine telecommunications industry, so they saw it fit to agree on a mutually acceptable solution. Smart got what it wanted and AT&T also got an acceptable result in the interim," Quevedo added.

Interconnection was disrupted last February due to disputes between Philippine carriers and their US counterparts on termination fees. The Philippine telcos, which include Smart, PLDT, Globe Telecom, Digitel, BayanTel, and Subic Telecom, increased the said charges from 12 cents a minute to 16 cents in the case of calls from the US to mobile phone networks in the Philippines, and from eights cents a minute to 12 cents in the case of calls to landline phones.

While many foreign carriers agreed to the increased termination rates of Philippine telecommunication companies which took effect on Feb. 1, 2003, AT&T and MCI opposed them and petitioned the US FCC to order all US carriers not to pay all Philippine carriers while the rate dispute was unresolved.

The FCC international bureau, headed by Donald Abelson, issued the controversial ruling in March that prohibited American carriers from making any payments, even for those that were already overdue.

But just recently, the National Telecommunications Commission (NTC) revealed that the US FCC has already agreed to lift its stop-payment order. In exchange, the NTC will likewise recall an order which allowed Philippine telcos to close their circuits to calls from US carriers that do not pay. A meeting is scheduled this month between top FCC and NTC officials.

NTC commissioner Armi Jane Borje explained that such a development will now allow for negotiations between US and Philippine carriers on commercial rate agreements.

The STAR earlier reported that PLDT officials are also in discussions with AT&T and MCI Worldcom on the commercial termination rates. But before PLDT opens its circuits to these US carriers, it wants the two companies to pay their obligations and a commercial rate, rather than an interim rate, be agreed upon.