PLDT: Reducing interconnection charges is unconstitutional

Philippine Long Distance Telephone Co. (PLDT) on Thursday claimed the proposed reduction in access charges for voice and text messages is unconstitutional, citing existing interconnection agreements among the country’s telcos. "At present, there are still valid, legal and subsisting interconnection agreements between telcos that will be curtailed by the draft memorandum circulars, if issued," said Alfredo Carrera, head of PLDT regulatory strategy and support, in a position paper submitted to the National Telecommunications Commission (NTC). Carrera said the NTC's proposed rates are also unreasonable and unfair when compared to the country's present access charges against that of neighboring countries. "The draft memo failed to consider other factors such as the average revenue per user and other peculiar conditions in the countries used as a benchmark," he said. The proliferation of local bypass activities, Carrera said, should also warrant attention from the regulator, as these drastically cut international inbound revenues. "As such, the government also stands to lose significant tax collections from these illegal bypass activities," he said. Meanwhile, Digital Telecommunications Philippines Inc. (Digitel), operator of mobile brand Sun Cellular, proposed to extend the implementation period of the circular from three years to five years. Impact on financial standing Digitel, in its position paper, said the proposed reduction in access charges will significantly impact its financial standing. "With the imposed reduction on access charges, our revenues are further challenged," said William Pamintuan, Digitel senior vice president for legal services. To cushion the impact of lower charges, Digitel is proposing a five-year “glide path" for voice services and a four-year phased implementation for text messaging services. In Digitel's proposal, access charges for voice calls will go down to P3.50 for the first year, P3 for the second year, P2.50 for the third year, P2 for the fourth year and P1.50 for the last year. For text messages, Digitel proposes an access charge reduction of P0.30 for the first year, P0.25 for the second year, P0.20 for the third year and P0.15 for the last year of implementation. In contrast, the NTC draft memo proposes a reduction plan for voice access charges of P2 per minute for the first year, P1.50 for the second year and P1 for the third year. For text messages, the regulator wants the charged lowered to P0.25 per text message in the first year, no higher than P0.20 in the second year and no more than P0.15 in the third year. Like competitor Globe Telecom, Digitel has asked the NTC to defer the start of the draft memo's implementation to January 2012, and called on the regulator to also look into the access charges for local exchange carrier services, or landline calls. —JMT/VS, GMA News