Globe, MCI agree on termination rates

Globe Telecom and US carrier MCI have reached an interim commercial agreement on termination rates for US-Philippine traffic.

The interim agreement continues to allow MCI to terminate traffic on direct circuits with Globe.

Gil Genio, head of carrier Services at Globe Telecom, stated that the interim agreement is an important first step to normalizing the relationship between the parties, subject to the lifting of the stop-payment order earlier issued by the International Bureau of the US Federal Communications Commission (FCC).

It will be recalled that the US FCC issued an order last March 10, 2003, prohibiting US carriers from paying Philippine carriers on the basis of a petition brought by US carrier AT&T alleging that Philippine carriers had "whipsawed" US carriers when the Philippine carriers raised their termination rates to all their interconnect parties throughout the world.

Termination rates are the fees charged by Philippine carriers to their foreign counterparts for terminating calls to the Philippines through their gateways.

AT&T’s petition was filed in opposition to the local carriers’ negotiating position of charging US$0.12 per minute for calls terminating to landlines and US$0.16 per minute for calls terminating to mobile phones. US carriers resisted the increase and filed petitions with the FCC. The Philippines’ National Telecommunications Commission subsequently upheld these Philippine termination rates.

Globe also explained that although it had not blocked the circuits with MCI as a consequence of the FCC order, the stop-payment order issued by the US FCC did create some disruption in the relationship since Globe could not be assured that it would, and when it would, be paid for traffic received from US carriers.

Genio added that he hopes that the conclusion of these interim agreements will pave the way for the US FCC to ultimately lift its stop-payment order and end the long-drawn dispute with US carriers that began 10 months ago.