Suspend payments to Pakistan telcos over call price hike: US regulatory body

[AsifAmeer]

http://tribune.com.pk/story/517700/...lcos-over-call-price-hike-us-regulatory-body/

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The Federal Communications Commission (FCC) — the regulatory body for US telecommunication services - ordered all telco service providers to “suspend immediately all US carrier payments” to Pakistani long-distance carriers for “above-cost” price hikes on outgoing calls to Pakistan.

In its order, the FCC said, “We find anti-competitive the Pakistani LDI [long-distance international] carriers’ actions demanding a substantial rate increase above previously negotiated rates in a way that amounts to a rate floor.”

“Their continuation would result in a substantial increase in the cost of and repress demand for calling Pakistan,” the order added.
The order also stated that Pakistani carriers had “acted in concert to impose unilaterally this rate floor without engaging in meaningful negotiations with US carriers and foreclosing future separate negotiations between US and individual LDI correspondent carriers.”
[HI]Action on the part of the FCC was initiated after Vonage Holdings Corporation stated there was a 500% increase in rates charged for outgoing calls to Pakistan. AT&T also supported Vontage’s stance and said that Pakistani carriers’ actions violate the commission’s policies protecting US consumers against “anti-competitive conduct”.[/HI]

Following the FCC order, shares for Pakistan Telecommunication Co (PTC) fell as much as five percent in Karachi trading.
International call hike background

Before October 1, 2012, international call rates had been based on cost and averaged $0.02 per minute by Pakistan’s long-distance carriers.

After the creation of a new “International Clearing House” the Pakistani carriers decided to raise the rate to $0.088 per minute.
On October 25, 2012, the Lahore High Court, in response to an application filed by a telecom company, issued orders against the tax and declared it unlawful.

Consumers and a few telecom companies objected to the tax, claiming it increased the overall cost and burdened international callers.
However, the LHC order was challenged in the Supreme Court’s Lahore registry. A two-member bench of the apex court heard the case and nullified the LHC order.

The Supreme Court said the case should be heard by the Competition Commission of Pakistan and should be resolved in 15 days.
Previously, a local telecom company filed the main petition challenging the levy of the additional tax. This company contended that an additional tax on the incoming international calls was a violation of the rules prescribed in section 4 of the Competition Commission Act which prohibits the price fixing and division of markets through quotas.

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​COMMENTS: So basically US FCC is fighting for Pakistani Expats?

 

[Zaidi Qasim]

What a shame that now American regulatory Athority is fighting this corrupt Government to save the Foreign pakistanis for this rate gouging from Zardari regime.

This is how low this Zardari Tola is. I have no words to describe this pethatic regime.

 

[lurker]

Some Pakistani needs to sue the Pakistani government.

 

[P4kistani]

o kan j ro kuj tai sharam karoooo

 

[gazoomartian]

" COMMENTS: So basically US FCC is fighting for Pakistani Expats? "

Nope, they are fighting for their citizens (be it Pakistanis or other wise). And for their corporate due to unfair competition. They have no reason to fight for Pakistanis.

 

[Aleph]

Every now and then our government amazes/shocks not just us, but the entire world!

 

[shassan655]

I was surprised when I received my telephone bill from Call Select- in Toronto...My rates doubled ...damn

 

[malik1c]

Poore dunya main ruswa kar diya in haraaaaam khoroon nee

 

[Mojo-jojo]

Calls to Pakistan May Get Cheaper From USA

[h=1]Incoming calls to Pakistan: US suspends payments to telecos over call rate hike[/h] By Farooq Baloch
Published: March 8, 2013

Assuming that 11% of incoming international traffic is from the US, the estimated revenue loss for PTCL will be Rs3.1 billion.

KARACHI: The Federal Communications Commission (FCC), an American regulator that oversees interstate and international communications for America, has ordered American telecom operators to suspend all settlement payments to Pakistani long distance international (LDI) carriers for call termination services.
According to a Memorandum Opinion and Order released by the FCC on March 5, American carriers cannot pay any amount exceeding $0.02 per minute in call termination charges to Pakistani LDI operators the termination rates in place prior to when the International Clearing House (ICH), a telecom gateway, was established by Pakistani operators on October 1, 2012.
By this Memorandum Opinion and Order, we seek to protect US consumers from the effects of anti-competitive behaviour and to promote competitive, cost-based termination rates on the US-Pakistan route, read the order.

According to details, American firm Vonage Holdings Corporation had filed a petition on October 3, 2012, requesting the FCC to issue an order stopping settlement payments to specific Pakistani LDI operators.
The petitioner had stated that the LDI carriers had implemented the ICH for all international incoming calls to Pakistan, creating a monopoly. The FCC found that termination rates to be paid by international telecommunications carriers for terminating calls into Pakistan increased by approximately 400% to more than $0.088 per minute as a result.
The development came as a blow to telecom stocks on Friday as stock prices of four listed LDI operators went down by an average 7.85%.
If companies from the US pay only $0.02 per minute to Pakistan Telecommunication Company (PTCL) the market leader in the telecom sector its earnings per share are likely to be revised downwards, Global Securities, an investment bank, said in a report released by its research wing. Assuming that 11% of incoming international traffic is from the US, the estimated revenue loss for PTCL will be Rs3.1 billion, it said.
But both telecom analysts and LDI operators see this as a short-term impact, as they say that international calls from the US account for only 10% of total traffic. However, analysts also warned that the industry would be hurt more severely if other countries follow suit.
Pakistani LDI operators also seem unfazed by the development.
The Pakistani LDI industry will continue with the existing ICH arrangements for inbound traffic, said Salman Mazhar, public relations and corporate manager at Wateen Telecom. Any adverse order passed in any territory outside Pakistan is of no legal and material effect, and as such must not be relied upon for doing telecom business with Pakistani
licensed operators, he said.
Published in The Express Tribune, March 9[SUP]th[/SUP], 2013.

 

[Night_Hawk]

Re: Calls to Pakistan May Get Cheaper From USA

FCC stops settlement payments to LDI carriers


Jawwad Rizvi
Saturday, March 09, 2013


LAHORE: The Federal Communications Commission (FCC) Washington, D.C, has stopped settlement payments to Pakistan’s long distance international (LDI) carriers due to anticompetitive behaviour adopted by the Pakistani regulator after the implementation of the International Clearing House (ICH).

According to the orders passed by the FCC, D.C, a copy of which is available with The News, “We find that recent actions by certain Pakistani LDI carriers to set rate floors over the previously negotiated rates with US carriers for termination of international telephone calls to Pakistan are anticompetitive and require action to protect US consumers in accordance with FCC’s policy. We, therefore, grant the petition filed by Vonage Holdings Corp. (Vonage), modified as recommended by AT&T, Inc. (AT&T), and order all US carriers with commission authorisations permitting the provision of facilities-based international switched voice services on the US-Pak route to suspend all US carrier payments to Pakistani LDI carriers for termination services that are in excess of the rates that were in effect immediately prior to the rate increase on or around October 1, 2012.”

Vonage is a provider of international communications services from the US, using third party US and international carriers, to terminate its traffic overseas. US carriers separately negotiate rates with Pakistani LDI carriers for the termination of telephone traffic. On October 3, 2012, Vonage filed a petition requesting that the commission issue an order stopping US settlement payments to certain Pakistani LDI carriers.

In its petition, Vonage states that Pakistan’s LDI carriers have established a new ICH exchange for all international incoming calls to Pakistan. Consequently, there has been a 400 percent increase in termination rates to be paid by international telecommunications carriers for terminating calls into Pakistan to more than $0.088 per minute.

Vonage notes that the increase in termination rates has forced it to charge its customers significantly more for calls to Pakistan, thus harming US consumers.

Pakistan’s LDI carriers submitted in 2011 to the Competition Commission of Pakistan (CCP) an application seeking an exemption from the Competition Act of 2010 to allow them to create the ICH exchange.

Pakistan’s LDI carriers later withdrew the application and the CCP subsequently issued an order in February 2012 disposing off the application. In that order, the CCP outlined the following details of the agreement to create the ICH exchange (ICH plan). It assigns the rights of 13 Pakistani LDI carriers to terminate incoming international traffic to Pakistan Telecommunication Company Limited (PTCL), each Pakistani LDI carrier is to suspend all interconnection capacities in relation to incoming international traffic to Pakistan, PTCL is to act as the sole LDI operator to exclusively terminate all incoming traffic to Pakistan, PTCL is to sell its call terminating services to foreign carriers at the approved settlement rates of the Pakistan Telecommunications Authority (PTA); and each Pakistani LDI carrier will get a pre-determined fixed quota from PTCL to terminate calls on its network, and receive a fixed share of revenues generated from all incoming international traffic.

On August 28, 2012, the CCP sent a policy note to the PTA and the Ministry of Information Technology of Pakistan (MOIT), warning that the ICH plan was illegal under the Competition Act.

Vonage states in its petition that the MOIT, despite CCP’s order, issued a directive calling for the implementation of the ICH plan. Subsequently, Pakistan’s LDI carriers, PTA and MOIT moved forward with the ICH plan and have implemented the rate increase to more than $0.088 per minute as of October 1, 2012.

AT&T contends in its reply to the FCC that the Pakistani carriers’ actions violate the commission’s policies protecting US consumers against anticompetitive conduct by foreign carriers to force above-cost settlement rate increases. However, AT&T suggests that, instead of issuing a full stop payment order as requested by Vonage, the commission issued an order prohibiting increased US settlement payments above the rates that existed before October 1, 2012, prior to the anticompetitive conduct.

In response to AT&T’s reply comments, Vonage stated it supports the issuance of an order prohibiting payment of any amount over the settlement rates that prevailed prior to ICH plan’s implementation.

The record reflects that the new $0.088 per minute rate is the minimum settlement rate for all inbound international telephone traffic for Pakistan, and this rate floor is significantly above the previous levels of $0.02 per minute. Moreover, the rate floor does not permit additional commercial negotiation below that level.
http://www.thenews.com.pk/Todays-News-3-164172-FCC-stops-settlement-payments-to-LDI-carriers

 

[Night_Hawk]

Re: Calls to Pakistan May Get Cheaper From USA

[h=1]US stops payment to Pakistan telecoms[/h] From the Newspaper | Anwar Iqbal | 2 hours ago





WASHINGTON, March 8: The Federal Communications Commission, a US regulatory body, has immediately suspended all payments to Pakistani long-distance carriers for making “above-cost” price hikes.
“We seek to protect US consumers from the effects of anticompetitive behaviour,” said a statement issued by the commission’s head office in Washington.
The suspension order also aims to “promote competitive, cost-based termination rates on the US-Pakistan route,” the commission observed.
The commission determined that recent and on-going actions by certain Pakistani long distance international carriers were anticompetitive and required action to protect US consumers.
Pakistani carriers had set rate floors over previously negotiated rates with US carriers for termination of international telephone calls to Pakistan, which the commission rejected as unacceptable.
“Their continuation would result in a substantial increase in the cost of and repress demand for calling Pakistan,” the US commission observed.
The order followed a petition filed by two US carriers, Vonage and AT&T against an unprecedented price-hike by Pakistani carriers.
“We, therefore, grant the petition… and order all US carriers… to suspend immediately all… payments to Pakistani carriers for termination of services that are in excess of the rates that were
in effect immediately prior to the rate increase on or
around Oct 1, 2012,” the order said.
The order also stated that Pakistani carriers had “acted in concert to impose unilaterally this rate floor without engaging in meaningful negotiations with US carriers and foreclosing future separate negotiations between US and individual (long distance) correspondent carriers.”
In its petition, the Vonage Holdings Corporation had complained since Oct 1, there has been a 500 per cent increase in rates charged for outgoing calls to Pakistan.
AT&T also supported Vontage’s stance, stating that Pakistani carriers’ actions violate commission’s policies protecting US consumers against “anti-competitive conduct”.
Following the FCC order, shares for Pakistan Telecommunication Co fell as much as five per cent in Karachi trading.
The order also includes a “background” of the price-hike, noting that before Oct 1, 2012, international call rates to Pakistan had been based on cost and averaged $0.02 per minute.
After the creation of a new “International Clearing House” the Pakistani carriers decided to raise the rate to $0.088 per minute.
The Pakistan Telecommunication Authority established the telecom gateway, requiring all incoming international traffic to go through a centralised system, to be operated and maintained by the PTCL.
Under the arrangement, long distance operators were to share the revenues from international incoming traffic based on their respective market shares with fixed termination charges.
The establishment of the clearing house resulted in a massive increase — about 200 to 800 per cent depending upon the location of the caller — for international calls made to the landlines and cell phones in Pakistan, annoying the expats by a great deal.

http://dawn.com/2013/03/09/us-stops-payment-to-pakistan-telecoms/

 

[habib22]

Re: Calls to Pakistan May Get Cheaper From USA

Thanks, now so called Pakistani business mens who are infact looter, will not be able to loot us callers.

 

[AsifAmeer]

And the best comment award goes to....

o kan j ro kuj tai sharam karoooo

Poore dunya main ruswa kar diya in haraaaaam khoroon nee