Court asked to stop NTC circular vs 'spam' text

MANILA, Philippines - One of the country’s biggest value-added services (VAS) providers has asked the Quezon City Regional Trial Court to declare as null and void a just-issued memorandum circular of the National Telecommunications Commission (NTC) prohibiting “spam” text messages to mobile phone subscribers.

Rising Tide Mobile Entertainment, a duly registered VAS provider authorized by the NTC to offer mobile content and information services, also asked the court to issue a 20-day temporary restraining order and a writ of preliminary injunction to stop the implementation of NTC circular 04-07-2009 which will take effect tomorrow.

The company noted that the demand for VAS has seen an exponential rise in recent years and there has been a marked growth in digital content and information service providers offering broadcast messaging services.

RTMEI said it has commercial agreements with several public telecommunications entities (PTE) and network providers like Smart Communications and Globe Telecom for access to and lease or use of their network, equipment and facilities.

These agreements, it explained, allow RTMEI to provide content services to mobile phone subscribers, adding that it has a corresponding obligation under these contracts to market and advertise its services to the subscribers.

RTMEI provides SMS infotext services, SMS logs and picture message services, multi-media service products such as wallpapers and pictures, ring tones and JAVA games and applications.

As for its contract with the subscribers, RTMEI explained that a subscription is activated only by a positive act on the part of the subscriber such as a click on a link or SMS sent through designated access codes which identify the content provider to whom the PTE will transmit the subscription message.

It told the court it has adequate safeguards in place to ensure that the subscriber is not charged for any service to which he has not subscribed to.

Last July 7, the NTC issued a circular which RTMEI emphasized is premised on the purported responsibility of the VAS industry for alleged vanishing loads and on-push messaging as the source of dispute among subscribers, PTEs and content and information service providers.

It added that for the last three years, the NTC has received 400 complaints, or a small percentage of total complaints received, for vanishing loads, not one of which relate to RTMEI.

RTMEI said that the circular is unconstitutional having been issued without due process, noting that it has been approved and promulgated with undue haste and without any formal hearing.

It added that the key provisions of the draft circular that were given to select industry players for comment were substantially different from the provisions of the approved circular, and that the comments and position papers submitted by the providers affected were not even considered by the NTC. The circular was issued on July 7 or a day after the affected players submitted their position papers, RTMEI informed the court.

The company also said the circular is null and void when it violated the non-impairment of contracts clause under the Constitution. It explained that the new rules infringe on the existing subscription agreements between the PTEs and VAS providers on one hand, and the subscribers on the other.

RTMEI also noted that the circular violates the equal protection guarantee since it fails to distinguish between content providers who do not employ adequate safeguards and those which do, and that it is partial in favor of traditional methods of advertising when it banned the sending of “push” messages.

Push messaging is defined by the NTC as information transmitted to mobile phones, either subscribed or unsolicited message, without a user request and are initiated by the server of the content provider.

RTMEI stressed that the circular denied legitimate providers the option to employ push messaging as a legitimate means of promoting and conducting business.

“Since push messaging includes subscribed information transmitted to mobile phones, then the definition covers the basic platform of content providers’ operation and the very foundation of their business. The definition of push practically covers everything that content and information service providers do. It is an absolute prohibition that deprives them from conducting business,” it said.

It added that the NTC circular, in imposing a blanket prohibition, presupposes that all content providers are unscrupulous businessmen, cheating subscribers of their loads.