Globe Telecom hits NTC for rate rollback order

Globe Telecom has lashed out at the National Telecommunications Commission (NTC) for ordering the company to roll back its unlimited texting rates to pre-Feb. 1 levels, saying the order has no legal basis and deprives the company of due process for having been issued without prior notice and hearing.

The NTC, acting on the letter-complaint of consumer group TxtPower, ordered Globe last Monday to suspend its current Unlimitxt promotion, priced at P20 per day, with optional day-only pricing of P15 and night-only pricing of P10, and to instead reinstate its previous Unlimited text promotion at P15 for one day, P25 for two days, and P10 for five days.

Globe officials explained that its previous promotion had been withdrawn from the market, with the prior approval of the NTC last Jan. 31, 2007, and new rates implemented on Feb. 1, also with the approval of the commission.

TxtPower had complained last Feb. 5 that the new Unlimitxt promotion was a price increase and that the NTC should recall its approval of the new promotion. Following reports that Globe had not suspended its new promotion despite the NTC order of Feb. 5, the NTC issued a show-cause order on Feb. 6, requiring Globe to explain why it had not complied with the Feb. 5 order to suspend the new promotion and reinstate its old promo.

In its position paper, Globe stated that the NTC could not suspend the new Unlimitxt promotion as to do so would violate Globe’s contracts with subscribers who had already subscribed to the new promotion. It added that the NTC could not order the reinstatement of promotional rates and contracts that had already ceased to exist.

Globe clarified that its recent promotion and its earlier promotion were two separate and distinct offerings, and that the new promotion had different mechanics and was not a price increase over the old promotion. Globe also explained that in determining whether a promotional rate for text is a price increase or not, the rates should be compared against the approved rate of P1 per text, and not against the rates of the promotion that immediately preceded it. Otherwise, Globe claims, no carrier could ever implement a promotion that was different from the one that came before it, and this would deprive consumers of freedom of choice.

Viewed in this manner, Globe said the new promotion at P20 unlimited texting per day is still lower than the approved rate of P1. "If the NTC were to order a suspension of the new promotion, prices would revert to the approved rate of P1 per text, and not to the previous unlimited text promotional rates of P15 for one day, P25 for two days, and P50 for five days, since the latter promotion had already been withdrawn with the commission’s approval effective Jan. 31," the mobile phone service provider noted.

Globe also emphasized that the NTC had no authority to impose a specific tariff for the text service, as it reminded the regulatory body that the Supreme Court had, in a case filed by Globe against the NTC several years ago, affirmed that the text messaging service was classified as a special feature of the network, and therefore de-regulated under NTC Memorandum Circular 14-7-2000.

"Telecom carriers are, therefore, authorized to fix their own rates for de-regulated services, and need only notify the NTC of their new rates but do not require the commission’s approval," the company said.

Globe also decried the NTC’s alleged lack of due process in ordering the reinstatement of the old promotion without a prior hearing. Globe’s position paper cited a number of judicial precedents where the Supreme Court had specifically admonished the NTC that it could not impose new rates on a carrier, even on a temporary basis, without prior notice and hearing.
By Mary Ann Ll. Reyes - The Philippine Star