NTC denies appeal of telcos, orders reduction of SMS cost

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NTC Unless appealed by the telcos, the NTC resolution will become final and executory. The decision also orders the telcos to:

? Pay a fine at the rate of P200.00 day from December 01, 2011, until the date of compliance;

? Refund or reimburse their subscribers the excess charge of P0.20 per ?off-net? SMS (text messages sent to other networks) from the same date until fully settled, by crediting the prepaid load of prepaid subscribers and/or effecting the refund through the respective subscriber billing for postpaid subscribers;

The NTC decision was signed by Commissioner Gamamliel Cordoba and Deputy Commissioners Carlo Jose Martinez and Delilah Deles. In denying the appeal of Smart Communications, Globe Telecom, and Digitel Mobile Philippines, the NTC said the telcos did not present new arguments that would compel the agency to abandon its November 2012 decision. The powerful regulatory body also said the telcos failed to obey its order to furnish the agency with the documents, records and reports pertaining to ?off-net? SMS of all its subscribers. ?[Smart, Globe, and Digitel have] blatantly disregarded a lawful order of the Commission. Such actuation on the part of the respondent[s] is deemed a waiver of its right to support and substantiate its allegations,? the agency said. In their identical motion for reconsiderations that were all filed on December 5, 2012, the telcos raised, among others, the following issues:

? The NTC engaged in quasi-judicial legislation and acted beyond the scope of its statutory authority

? There was no basis for the NTC’s finding that the telcos overcharged its subscribers

? The decision amount to unde interference in the retail rates of SMS, a deregulated service

? The NTC decision was not renderd in pursuit of a genuine “Balancing of Interest” because the baseless fixing of SMS retail rates will result in poor telecom services

But the NTC said it found “no cogent or compelling reason to disturb its previous order which clearly explained the basis for [its] ruling.” The agency said the telcos lowered their interconnection fees for SMS by 20 centavos but did not pass on this reduction in cost to their subscribers. Ayala-owned Globe said it has yet to receive a copy of the NTC decision and “will evaluate the legal merits of the resolution with due consideration for the interest of its subscribers.” Smart, along with sister firm Digitel, has yet to issue a statement on the matter. NTC common carriers divsion chief Edgardo Cabarios was quoted on TV that the telcos could pay more that P6 billion for the refund. The case stemmed from Administrative Case Nos. 2011-098, 2011-099, and 2011-100 which the NTC initiated against the three mobile operators. That case tackled the telcos? non-compliance with NTC Memorandum Circular (MC) No. 02-10-2011 re: ?Interconnection Charge for Short Messaging Service (SMS)? which became effective on December 01, 2011. The MC reduced the SMS interconnection charge from P0.35 to P0.15 for the purpose of making SMS more affordable to the public, pursuant to the directive of the Office of the President. The NTC pointed out that the savings realized from the reduced interconnection charge on off-net SMS was formulated not to simply benefit the telcos but was intended for them to pass on the savings to their subscribers. It added that, while SMS is in the nature of Value Added Service (VAS), the NTC is not prevented from lowering the cost of communication to better serve the interest of the public. NTC also pointed out that the issuance of the MC was a valid exercise by the State of its police power for the benefit of the consuming public. Correction: An earlier version of this story said the decision of the NTC “has become final and executory” with the denial of the motion for reconsideration. A legal opinion from a lawyer said this is not yet the case as the order cannot be enforced yet since the telcos can still elevate the case to the higher courts. ]]>

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