PLDT, GLOBE ASK REVIEW OF U.S. FCC RULING

Makait City, April 15, 2003 -- Two of the country's biggest 
telecommunications companies have asked the US Federal Communications 
Commission (FCC) en banc to review a ruling issued by an FCC bureau which, 
among other things, prohibited American telcos from making any payments for 
services already rendered by these two Philippine firms, The STAR learned.

In separate submissions to the US FCC last April 9, the Philippine Long 
Distance Telephone Co. (PLDT) and Globe Telecom filed their respective 
applications for review with the FCC en banc, questioning the order issued 
by the FCC international bureau headed by Donald Abelson which also found 
Philippine telcos guilty of 'whipsawing' or making US carriers unfairly 
compete with each other.

The 51-page motion of PLDT was filed through its Washington-based legal 
counsel Sullivan & Cromwell while Globe's 108-page application for review 
was submitted by another Washington law firm, Wiley Rein & Fielding.

Both PLDT and Globe, through their US-based lawyers, said the international 
bureau issued the order in excess of its authority, and that the Abelson 
order was baseless and unfounded.

The questioned Abelson order granted separate petitions filed by American 
carriers AT&T and WorldCom in February which questioned an increase in 
'termination rates' imposed by Philippine carriers starting Feb. 1, 2003 
to be paid by all foreign carriers, including US facilities-based ones.

The termination rates, which were increased from nine to 12 cents a minute 
for calls from the US to a Philippine landline and from 12 to 16 cents for 
those terminating in Philippine mobile networks, refers to the amount which 
a foreign carrier pays to a Philippine carrier when using the latter's 
network.

AT&T and WorldCom alleged that when they refused to agree to the new 
Philippine rates, services to them were blocked by the Philippine carriers, 
which include PLDT, Globe, Smart Communications, Digital Telecommunications 
Phils. Inc. (Digitel) and Bayan Telecommunications (Bayantel).

In its controversial ruling, the FCC international bureau, through its 
chief Abelson, ordered all US facilities-based carriers not to make any 
payments to Philippine telcos until services to AT&T and WorldCom are fully 
restored.

Abelson also rebuffed claims by Philippine carriers that the new rates are 
below benchmarks set by the FCC and the International Telecommunications 
Union (ITU), saying that the benchmarks are above costs so that all 
negotiated rates should be below the benchmarks.

In response to the first Abelson order, the Philippines' National 
Telecommunications Commission (NTC) allowed Philippine carriers not to 
accept calls from US telcos that do not make any payments.

Philippine carriers, to avoid unpaid dues from AT&T and Worldcom from 
piling up, have either totally blocked direct calls from US carriers or 
have restricted access.

Because of this, US carriers are now forced to 'refile' calls from the US 
to the Philippines by using third party networks in other countries that 
have accepted the new Philippine rates and are not covered by the Abelson 
stop-payment order.

Philippine telcos, on the one hand, are avoiding using the networks of AT&T 
and Worldcom for calls from the Philippines to the US and are instead 
utilizing smaller American telcos or the so-called 'baby bells' which 
offer lower rates and better services. (Star) 

Reported by: Sol Jose Vanzi

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