PLDT baulks at ‘free’ interconnection plan

16 Feb 2007

The Philippines’ dominant fixed line telecoms operator Philippine Long Distance Telephone (PLDT) has reacted strongly to proposals to make it provide interconnection to its competitors for free. PLDT has submitted a position paper to the regulator, the National Telecommunications Commission (NTC), in which it argues that such a move would do more harm than good to the development of the local market. The industry watchdog is advocating the removal of access charges for interconnected local exchange carriers (LECs) for local and provincial calls, but PLDT says that as a result of the arrival of VoIP technology, the proposed new interconnection plan would not provide for ‘safety nets wherein an LEC prevents or penalises an interconnected local provider that practices uncompensated bypass’. According to news portal MSN/Sunnex, ‘bypass’ is defined here as the situation where a company other than the LEC provides long-distance services by making a direct access connection to an end-user within that LEC’s local exchange franchise area.

A spokesman for PLDT said: ‘With the coming of so-called ‘VoIP free carriers’ such as Skype, Yahoo messenger and Vonage and with the introduction of bucket pricing schemes in LEC and CMTS (cellular mobile telephone system), it seems that the cross subsidy for LECs would be far more difficult now to imagine.’ The incumbent says interconnection fees between two local networks of different size should not be free and rather, are necessary. ‘The spirit of voluntary bilateral commercial negotiations shall always rule over involuntary commercial arrangement that is to be dictated by regulatory rules. Commercial arrangement shall never be dictated by regulation but should be looked into carefully as determined by its economics,’ it said.

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