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By Sheryll Cassanova, Reporter and George Amurao,
Correspondent
(Conclusion)
The message from telecommunication firms is loud
and clear: Cell phone users will bear the brunt of any tax imposed
on text messaging.
The government may need revenues to narrow its
budget deficit. But it will be getting funds from the masses, not
big business.
Government officials knew the proposal to tax
text messaging would spawn tirades among subscribers. They’d
already been forewarned last year by the outcry that greeted the
telecommunications companies’ decision to slash the number of free
text messages.
Rodolfo Salalima, Globe Telecoms senior vice
president for corporate and regulatory affairs, spells it out rather
coldly: “Any tax on public utilities can be passed on legally to
the consumer, not as tax but as cost of production.”
Smart Communication’s Ramon Isberto says a
thorough study is needed to assess the impact of new taxes on the
telecoms industry. Even a five percent tax on text messages — five
centavos for every P1 text message — would provide a bonanza for
the government. With text traffic hitting the 100 million mark
daily, the national treasury stands to gain P5 million a day. But
would it be fair to cell phone service subscribers?
Salalima, presenting the case of Globe,
complains that the telecoms industry is already overtaxed. He notes
that telcos have to pay more than 30 percent of their taxable income
as corporate income tax. Imported telecom equipment is subject to
import taxes ranging from 10 percent to 20 percent. Local
government units also impose local taxes like real property tax and
franchise tax.
On top of this, telecom companies are paying millions of pesos in
supervision and administrative fees to the NTC.
Salalima points out that voice and SMS are
already covered by a 10-percent expanded value-added tax (e-VAT). By
adding another 10-percent tax on text messages, text, in effect,
would be subjected to a 20-percent tax.
Burden
“Globe is currently expanding its services to
the rural areas and we are in part relying on borrowings to finance
this expansion and improve our services. So ultimately, taxes will
be borne by the people. More than anyone else, it is the
masses that will be greatly hit by this new tax proposal,” he
notes.
Instead of a new tax scheme, Salalima says, the government should
improve tax collection and ensure that existing tax laws are
strictly implemented.
Any new tax would need Congress approval. With
elections nearing, and public surveys showing citizens’ concern
about the state of their pockets, there is little likelihood of such
legislation passing.
Even Justice Secretary Hernando Perez has
weighed in against plans to tax text messages, saying it will be
“taxing freedom of expression.”
Taxes, he said, should be “fair, practical,
collectible, and equitable.”
“But in the case of taxing text messaging,
that will be hard to impose. It will be like subjecting freedom of
expression to taxation,” Perez says.
He made it clear, however, that he is speaking
not as Justice secretary but as a former chairman of the House ways
and means committee.
While imposing tax measures on text messaging
may not be illegal, it might not be practical or fair, he adds.
Think twice
“The question is not if it is legal or not,
the question is, is it wise to impose that? We might be paying more
for what we bargained. So I think whoever proposed this should think
twice and hard,” Perez said.
Consumer groups, however, are taking no chances.
Texting is a national mania. Politicians and technocrats can hardly
expect Filipinos to shrug off the potential consequence of a text
tax — higher priced prepaid cards and no more free text. It could
also lead to a contraction of the market and loss of income for the
telcos.
Smart and Globe have already reduced their
allocations for free text messages by as much as 66 percent (the
reduction was done in two phases: November last year and January
this year.) Now, subscribers can send only 50 free text messages a
month.
This might have significantly cut the number of
text messages made daily, but the telcos continue to spend on
promotional gimmicks and expensive advertisements to keep the texts
coming.
Every major telenovela in TV today has quiz
contests where viewers can participate by sending their answers via
text for P1 a pop. Game shows like ABS-CBN’s Game K N B? allow
viewers to become “home partners” by purchasing ring tones and
logos. Globe recently launched a novelty quiz show on GMA 7 called
TXTRS 5.
In a country that, until recently, suffered from
a dearth in telephones, the cellular phone industry has become a
great social equalizer.
The price range could be broad — from a Trium
worth P2,500 to a Nokia 9210 that would set you back by P36,000. But
a young saleswoman living in a rented room knows she enjoys the same
activity that has coeds from exclusive girls’ schools and yuppies
staring at their hands rather than their companions.
“Right now, the basic instrument of
communication for many Filipinos is the cellular phone. And the
most inexpensive way to communicate is through text messaging,”
Salalima notes.
“Actually, providing communications services
is the basic function of government but since the government cannot
provide the same, the private sector assumed this obligation to the
public,” he adds.
Sloppy service
Even as consumers gird for another battle, this
time against the government, they are also groping for mechanisms of
redress in the face of sloppy service from telcos.
Dropped calls. Unexplained billings. What’s a
subscriber to do?
Anne Frances Sangil, an assistant professor at
De La Salle University, says filing a complaint is no joke.
“Mahirap mag-file ng complaint dahil sa hassle. Pupunta ka pa ng
office nila, do paperworks, etc. (It’s hard to file a complaint
because of the hassles, such as you have to go to their office [NTC
or the telecom firm], do paperwork, etc.)”
Still, those persistent and patient subscribers
who want to file complaints can do it either with the NTC or the
telcos.
NTC Commissioner Eliseo M. Rio Jr. cites bloated
call charges as the most common complaint. Interconnection doesn’t
seem too much of a problem these days, except when you’re using a
PLDT landline to call one of Globe’s newer services, like Touch
Mobile.
Rio says subscribers with complaints should go
first to the customer service representatives of the cell phone
service provider. They can move to the NTC only if the issue is not
resolved. In worst-case scenarios, cases can be filed before the
courts.
The last time a complaint reached the court was
in 1998 when Globe issued defective SIM cards. The telco stopped
selling SIM packs and twice gave rebates for customers.
The NTC has its specific complaint center for
cell phone subscribers: the One-Stop Public Assistance Center (OSPAC)
in Agham Rd., Diliman, Quezon City. When OSPAC receives a complaint,
it sends a notice to the operator.
According to Rio, sanctions for erring telcos
could extend to recalling the authority to operate. However, he said
that they haven’t recalled any yet, as revoking one’s authority
would affect not only one complainant, but also the rest of a
firm’s customers.
“We weigh things. Every complaint is viewed on
a case-to-case basis,” Rio says.
A staff in the OSPAC says that at the moment,
NTC’s focus is assisting persons who wish to block their stolen
cell phones. NTC receives an average of 120 applications a day to
block lost or stolen handsets.
Rio said there were already about 4,700 blocked
cell phones this year. Four of these were returned to the owners (so
far, only four stolen cell phones were turned over to the telecom
firms’ business centers).
The Filipino cell phone user can take consolation in the fact that
in the United States, where technology is more advanced and the
infrastructure more complete, cell phone users are plagued with the
same troubles.
Disconnected calls have become common. Telephia,
a San Francisco company that measures network performance, pegs the
chances of getting disconnected at two percent in a two-minute call.
Billing problems are another headache. The US
Federal Communications Commission’s (FCC) first report on cellular
complaints showed billing problems topping the complaints chart,
accounting for 55 percent of the 3,076 problems logged in over a
three-month period.
Proposal
Because of an increasing trend in cellular
“complaints and inquiries,” another US government agency, the
California Public Utilities Commission, is proposing a state
consumer bill of rights for telecommunications. The agency reported
a 47-percent increase in complaints last year, where billing
disputes and service quality topped the list.
Cell phone networks also don’t have enough
capacity to handle large traffic, making cell phones worthless
during emergencies. With 86 million American cellular phone users
and 30,000 new users signing up daily, we can expect huge traffic
every day.
Could carriers solve the problem by continually
upgrading infrastructure whenever their customer database increases?
That would be easier said than done, considering that a new cell
site tower would cost as much as $300,000 to build.
So the US government is pushing carriers to
quickly set up a priority access system. It would give precedence to
the cell phones that rescuers may carry — their calls would shoot
to the front of a site’s queue when an emergency is declared.
Kathryn Condello, a spokeswoman for the Cellular
Telecommunications and Internet Association, a trade group, said the
US telecoms industry is expecting to have 50,000 priority lines in
place by the end of the year.
Two bills in the Philippine Senate seek to
address cell phone users’ woes.
One, filed by Sen. Luisa Ejercito-Estrada, calls
for the establishment of minimum quality standards for wireless
phone service and directs the NTC to set up a monitoring system for
users’ complaints.
The other measure, filed by Sen. Sergio Osmeńa,
penalizes telegraph, radio or other communications companies who
“by design or neglect fail to deliver the services that they have
been contracted out to deliver.” 
With Joshua Dancel and Johnna Villaviray
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