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By Darwin G. Amojelar, Reporter
The National Telecommunications Commission (NTC)
may impose a cap on retail prices of text and voice calls as an
alternative to interconnection charges that were being opposed by
telecommunications companies.
“The NTC has the power to set a maximum retail
price under Section 17 of Republic Act No. 7925,” an official of
the commission said over the weekend.
The official added that if the regulator has no
power to impose a cap on interconnection charges that were being
resisted by the telecommunications companies, the NTC may impose a
maximum retail price under the law.
Under Republic Act 7925, the commission has the
residual powers to regulate rates or tariffs when ruinous
competition results or when a monopoly or a cartel or combination in
restraint of free competition exists and the rates or tariffs are
distorted or unable to function freely and the public is adversely
affected.
In such cases, the law says the
telecommunications commission shall either establish a floor or
ceiling on the rates or tariffs.
The telecommunications companies earlier said
the NTC circulars on the planned cap must be stopped because the cap
is “contrary to law.”
Rodolfo Salalima, Globe senior vice president
for corporate and regulatory affairs, said the circular violates
Republic Act 7925 and unduly interferes with purely business
decisions.
He added that no matter how laudable, lowering
the interconnection or access charges for both cellular text and
voice services through administrative circulars are “statutorily
infirm and illegal.”
The telecommunications commission last month
issued a draft circular imposing a P0.15-interconnection charge per
text message, which is lower than the current rate of P0.35.
The retail price of a text message consists of
the cost of the network sending the message plus the cost of the
network receiving it, as well as the cost of the interconnection.
At present, the telecommunications companies
charge P1 per text message.
A separate circular that also was issued would
reduce the interconnection charge for voice calls to P1.50 or lower
per minute, or 63 percent cheaper than the current rate of P4
between mobile operators with separate networks.
Smart Communications Inc. said since the
proposed NTC circulars already set the maximum interconnection rates
between operators, the regulator directly contravenes Section 18 of
Republic Act 7925 that mandates that such rates should be negotiated
by the parties.
“The proposed circulars would be
unconstitutional as they would impair the obligations of contracts
and confiscate the proper right of mobile operators to recover their
investment without due process of law,” it added.
The mobile phone service provider said
interconnection is a voluntarily commercial transaction all over the
world. It added that the goal of regulation should be to encourage
economically efficient investment to promote the long-term interest
of end-users.
The same NTC official, however, stressed that
the reduction of text rates to P0.50 from P1 is now a government
policy.
“Anything that was pronounced by the President
during her SONA [State of the Nation Address] is considered as
policy. The thrust of the government is to lower the [costs of]
communication services,” he said.
In her address, the President Gloria Arroyo said
she had asked the telecommunications companies to cut the costs of
messages between networks and, according to her, they responded by
bringing down to 50 centavos the cost of a text message.
The telecommunications companies, however, said
subscribers need to register to avail of the P0.50 per text message
to other networks.
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