CA stops refund to telco subscribers

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Friday, August 22, 2014

MOBILE phone subscribers could not expect a refund from providers for alleged excessive text messaging service after a directive by the National Telecommunications Commission (NTC) was blocked by the Court of Appeals (CA).

In a resolution dated August 20, the CA sixth division granted a 60-day temporary restraining order (TRO) in favor of Digitel Philippines, Inc., operator of Sun Cellular.

Covered by the TRO were the November 20, 2012 decision by the NTC that ordered the refund and the May 7, 2014 resolution that dismissed the motion for reconsideration filed by Digitel and two other telecommunications firms, Globe and Smart.

The CA also ordered NTC to explain within 10 days why Digitel's application for issuance of a writ of preliminary injunction should not be granted.

An injunction, if granted, would mean the telcos are not required to undertake the refund until a decision on the merits of the case is reached.

Digitel has to post a cash bond or surety bond worth P500,000 for the TRO to take effect.

"To our minds, justice would be better served if the implementation of the NTC decision is restrained at this stage of the proceeding, especially that those who recently intervened (Bayan Muna party-list) in the case, had already moved for the issuance of a writ of execution," the resolution read, adding the TRO will prevent "irremediable injury" to Digitel while the case is being heard.

The telcos have refused to comply with the NTC order to lower the text charge from P1 to 80 centavos, which was a result of the reduction of the interconnection charge for text messaging from 35 centavos to 15 centavos under Memorandum Circular (MC) No. 02-10-2011.

But Digitel said in its petition that the interconnection rate is not only the component of the retail price of short message service (SMS) or text and the circular did not categorically require telcos to cut charges for SMS.

NTC's decision would also entail additional logistical and technical work for Digitel since it has to make individual computations of every amount due per subscriber on the number of regular text messages sent to other networks starting December 1, 2011.

It will also be required to determine if the subscriber availed of the existing promos or bucket rates.

The CA noted that the NTC, through MC No. 02-05-2008, has classified text as a value-added service and exempted it from rate or tariff regulations, thus Digitel has "clear and unmistakable right" to impose its own retail price for SMS.

"NTC cannot validly dictate upon it how much it should price its SMS retail rates nor order the refund of any excess charge to its subscribers," the appellate court said.

Reports say the refund by the telcos could cost at least P7 billion. (Sunnex)

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