PLDT, AT&T talks on call rates moving slowly

The Philippine Long Distance Telephone Co. (PLDT) has admitted that discussions with US carrier AT&T Corp. on a possible interim agreement on new termination rates are moving "slower than anticipated."

"We are still talking. It’s making progress, probably slower than we anticipated," PLDT president and CEO Manuel Pangilinan said.

Smart Communications Inc. already signed an interim agreement ahead of its parent firm with AT&T and MCI Worldcom Inc. recently.

However, Pangilinan clarified that this does not in anyway alarm PLDT inasmuch as both firms are run independently.

"Smart and PLDT actually run quite independently. They pursue independent causes. In this particular matter, it is quite important that it demonstrate to the US FCC (Federal Communications Commission) that they are not acting in collusion, and indeed we are not. In this particular matter, they have to make a decision what’s good for Smart. They have to make a decision what’s good for PLDT," Pangilinan explained.

Early this year, local carriers reached an impasse regarding termination rates with their US counterparts. Termination rates are the fees charged by Philippine carriers to their foreign counterparts for terminating calls to the Philippines through their gateways.

Local carriers, as a result of rapidly declining revenues from long distance services, wanted to increase termination rates- 12 US cents per minute for calls terminating to landlines and 16 cents per minute – for calls terminating to mobile phones-charged to US carriers to a level still lower than the US FCC benchmark rate.

However, the US carriers opposed this and requested the FCC to authorize US facility based carriers to stop making settlement payments to Philippine carriers.

Thereafter, the FCC issued a March 10, 2003 order that prohibited US carriers from paying Philippine carriers on the basis of a petition brought by US carrier AT&T Corp.

It claimed that Philippine carriers had "whipsawed" US carriers when the Philippine carriers raised their termination rates to all their interconnect parties throughout the world.

To date, PLDT, Smart, Globe Telecom and Digital Telecommunications Inc. are those that have already sealed an interim deal with MCI Worldcom. Smart, on the other hand, is the lone carrier that has signed a deal with AT&T.

With the continuing negotiations of the carriers and the openness to reach mutually agreeable termination rates, it is expected that PLDT and other local carriers will soon fully restore normal business relations with US carriers.

The NTC, in its directive last Oct. 17, asked all local phone companies "to immediately accept terminating traffic via direct circuits from US facilities-based carriers on mutually acceptable final or interim termination rates, on terms and conditions agreed upon by the parties."