The Supreme Court has been asked to compel major telecommunication companies in the country to refund their subscribers for overpriced text message rates amounting to more than P17.7 billion.\
In a 44-page petition, Bayan Muna Representatives Neri Colmenares and Carlos Isagani Zarate asked the SC to reverse the decision of the Court of Appeals dated June 27, 2016 enjoining the National Telecommunications Commission from implementing its November 2012 orders mandating mobile phone companies to immediately refund and cut text messaging charges to P0.80 from P1.
Covered by the NTC order were Globe Telecom, Smart Communications Inc. and Digitel Philippines Inc., which operates Sun Cellular.
The three telcos were impleaded as respondents in the petition.
The NTC order also directed the three telecom companies to refund or reimburse their subscribers the excess charge of P0.20 per off-net SMS from the effectivity of Memorandum Circular (MC) No. 02-10-2011 in October 2011 until fully settled, by crediting the load of prepaid subscribers or effecting the refund through the respective bills for postpaid subscribers.
NTC Memorandum Circular (MC) No. 02-10-2011 orders the lowering of the interconnection charge between networks from Php0.35 to not more than Php0.15 which the telco companies acceded to.
But despite the supposed adjustment, the NTC found out that subscribers continued to be charged P1.00 for each regular off-net text message.
This prompted the NTC to order the P.20 refund, which it insisted was a necessary consequence of lowering the interconnection charge.
The controversy arose after the telco companies filed a petition before the CA assailing the validity of the P.20 refund.
In its June 27, 2016 decision, the CA ruled in favor of the telco companies and struck down the orders of the NTC “for being bereft of legal basis and for having been rendered in utter disregard of the requirements of due process.”
It held that to penalize the three telco companies for not lowering the SMS retail rate “will be the height of injustice and unfairness” considering that it is not mandated under MC Memorandum Circular (MC) No. 02-10-2011.
The appellate court also said that “the demands of justice and fair play should not be relegated to the background for the sake of popularity.”
The Computer Professionals Union, one of the parties pushing for the implementation of the NTC order, claims that for PLDT, Smart, and Sun, the excessive amount collected daily from overcharged standard text message is at least P17.5 million.
It based this data from the 2013 PLDT report and the third quarter report of Globe for 2013.
The petitioner said using this CPU data, the amount of over-collection by Smart and Globe as of September 11, 2014 is not less than P17.7 billion.
In its petition, Bayan Muna claimed that the reduction of SMS retail rate was merely a necessary consequence of the lowering of the interconnection charge and not act of regulation by the NTC.
“Respondents claim that interconnection charges do not form part of the SMS retail rate and lowering interconnection charge will not result in the lowering of the rates imposed on subscribers. This incredible claim lacks factual basis and should not have been used as the Court‘s basis for overturning the NTC Decision,” the petitioner said.
The petitioner noted that even Globe has admitted in several media reports that lowering of interconnection rates is a factor in the lowering of SMS retail rates.
The petitioner explained that while telco companies’ report interconnection charges as expenses, they pass this on to consumers through a higher SMS retail rate.
“It is absurd for respondents to claim that while interconnection charge costs them billions in expenses they are so altruistic as to absorb these losses and not pass them on to the consumers,” the petitioner said.
“The Court a quo instead of relying merely on the Respondents incredible claim, should have asked these telcos to prove this claim of spending billions to connect users to each other without charging these users for the interconnection,” it added.
The petitioner also argued that the CA erred in ruling that the telco companies were not accorded due process when the NTC issued the assailed orders.
It noted that several hearings were conducted since 2008 where it was discussed that the issue of lowering interconnection charges shall cause the lowering of the SMS retail rates.
However, the petitioner said when the hearings continued in 2011, the respondents began to change their tune claiming that interconnection charges have no relation to SMS retail rates.
“In this case, the telcos were afforded the fair and reasonable opportunity to ventilate their postures with respect the matter of lowering of text message rates as a necessary consequence of the lowering of the interconnection rates. That there was “•no hearing conducted regarding the reduction of the SMS retail rate”– is inaccurate, considering that several opportunities were given to the telcos to present their side,” the group said.
The telco companies earlier said the NTC’s refund order will put into jeopardy the financial viability of the entire telecommunications industry and the public will likely suffer if it is not enjoined.