Putting cap on phone access fees 'unconstitutional'

MANILA, Philippines - A cap on interconnection fees—charged by phone companies when accessing other networks—would be “unconstitutional," the counsel of the Philippines’ leading mobile phone company said. In a public hearing held on Wednesday, Atty. Enrico L. Español, legal head of Smart Communications Inc., said that putting a ceiling on interconnection charges “would violate the right of telecommunication companies to enter into contracts according to Section 10, Article III of the Bill of Rights." Citing Republic Act 7925, also known as the Public Telecommunications Policy law, Español said that phone companies are allowed to negotiate interconnection rates, which are imposed on customers everytime they call or send a text message to another service provider. Español made this assertion after the National Telecommunications Commission (NTC) sought industry opinion regarding various proposals to cut interconnection rates of telecommunication companies. The move is also expected to reduce voice calls and text messaging fees. Earlier, the Department of Transportation and Communication instructed the agency to study ways to help Filipinos cope with soaring prices of basic goods and services—from food to transport fares to telecommunication costs. In a draft circular, the regulator noted that the interconnection charge for the short message service (SMS)—popularly known as text messaging—is already at 35 centavos per SMS while the cost of sending the SMS can be as low as 15 centavos per SMS. However, the NTC still wants to lower the costs by instructing telcos to set interconnection charges at not lower than 15 centavos per SMS. During the same hearing, officials of Smart and its parent company PLDT said they fully support the government’s initiative to help bring down the cost of the services of utilities. However, unlike other utilities—such as water and power—whose rates have increased over the years, PLDT and Smart noted that fees collected by telecommunications companies have gone down in recent years owing to industry competition. Ray C. Espinosa, who heads PLDT’s regulatory affairs and policy, said that the deregulation has allowed the industry to blossom and flourish. It also encouraged telcos to invest and expand their networks. Ramon Isberto, Smart’s spokesman, said the company has already dramatically reduced text-messaging costs. The company offers an all-day SMS package for as low as 35 centavos per SMS while its subsidiary, Pilipino Telephone Company (Piltel) offers an all-day package for as low as 40 centavos per SMS. A representative of Digitel Mobile Philippines, Inc., which offers mobile services under the Sun Cellular brand, added that it has extensively offered a selection of packages for the public. The latest entrant in the competitive mobile phone market, Sun Cellular entered the market with all-day text promos. The NTC gave telcos seven working days to submit their position paper to include their comments on another draft MC mandating them to lower the cost of voice calls. Competition, not regulation, will bring down the cost of voice calls and text messages, telecommunications companies said. - Veronica C. Silva, GMANews.TV