PHONE METERING AND TERMINATION RATES

I have been fortunate to being at the right place at the right time. I became a lawyer in 1986 and got exposure in various fields – the drafting of the 1987 Constitution, Court of Appeals, House of Representatives, Australian law (including immigration, trusts and constitutional law), Philippine court litigation, taxation, estate planning, labor, broadcasting, telecommunications, and information technology.

When PLDT and the other telcos proposed phone metering a few years ago, I represented the Philippine Internet Services Organization (PISO) in their suit filed at the National Telecommunications Commission (NTC) against the mandatory phone metering plan.

That case commenced in 1997 and PLDT got a provisional authority even if we in the opposition had not yet presented a single piece of evidence. Then NTC Commissioner Simeon Kintanar (now Congressman) can explain why perhaps? We were in favor of optional metering and the standard flat rate as the choice for consumers. We discovered that PLDT did not submit a technical, marketing, or financial plan to support the metering application filed by Tony Boy Cojuangco’s external counsel. Such plans should be filed together with any application for licensing at the NTC under its judicial procedure. Such requirement is jurisdictional and mandatory under the NTC rules of procedure.

They got the provisional authority anyway during the Ramos presidency. When Joseph Estrada became President, we dialogued with his Department of Transportation and Communications (DOTC) Secretary Jun Rivera to put the planned phone metering on hold and he listened. Estrada ordered the NTC to withdraw the mandatory phone metering decision and review the policy. Eventually, the NTC under then Commisioner Joseph Santiago formulated with the telco industry a voluntary metering policy which stands today.

PLDT today sees that they are making a decent income with this voluntary metering, first with its TELETIPID and now with its TELESULIT scheme. By the way, do not forget to reload your landline phones with prepaid units not later than two months from your last reload, otherwise your PLDT unit and number will be rendered unusable.

President Estrada listened to consumers to balance their interests with the telcos who were sure to earn gold. This is a major change in policy as Digitel Telecommunications
eventually junked its mandatory metering and offered flat rate plans depending on your consumption habits. Remember that Digitel had metering as part of its package when the Digitel facility was included in a lease-purchase agreement with the DOTC.

The Internet industry lived another day. Two-thirds of the revenues and expenses of the Internet Service Providers (ISPs) go to the dollar-denominated leased lines – the E1s and the T1s – to handle traffic primarily to the US, since most Web sites are US-based or hosted there. I am no longer the legal counsel of PISO. I believe Atty. Kokok Pimentel recently filed a suit on the supposed discrimination by telcos on pricing and access of such leased lines.

Filing suit of this nature, with due respect, is normally not done unless all opportunities for dialogue are exhausted. Even the suit of the US telcos filed at the Federal Communications Commission (FCC) should not have happened had the parties exhausted their negotiation opportunities and good offices.

The hot issue of the day, of course, is on the termination rates charged by the local telcos to their US counterparts, which prompted the likes of AT&T to raise a heated battle with them. The questions I like to ask our own telcos are these: How did you negotiate the increased termination rates to 12 cents per minute? Did you force AT&T and the other telcos to accept such an increase just because other telcos in other jurisdictions agreed to the increase?

As of this writing, AT&T had invited the local telcos to a dialogue in Hongkong. PLDT is supposedly attending the dialogue. Smart does not consider the FCC decision as legal. Globe believes the FCC has no jurisdiction over the local telcos. The American telcos owe the local telcos millions of dollars since there are more incoming voice and data traffic than outgoing traffic. Incoming traffic from the US into the Philippines is now being routed using other countries since many local telcos have barred direct entry of traffic from the US, especially from AT&T. Worldcom supposedly signed an agreement until March 31, 2003 with local telcos, so that its traffic is not barred entry.
This column appeared in Enterprise magazine in May 2003 discusses legal issues in the telecommunications, broadcasting, e-commerce, information and communications technology, intellectual property, among others. I am open to your ideas. You can e-mail Atty. Sison at dado@nsclub.net and also listen to 104.3 FM DWBR Monday and Friday from 6 to 8 in the morning. That’s his talk show, Broadcasters Bureau, which has been airing since July 1995. You can text him as well at 639178973231 for questions.

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