Court of Appeals stops refund order of NTC

The Court of Appeals has placed a TRO (temporary restraining order) on the demand of the NTC for a refund of almost Php7USD 0.12INR 10EUR 0.11CNY 0.87 billion to subscribers. The TRO was granted this week after telcos filed an appeal last May.

The TRO is effective for 60 days upon payment of a bond of Php500,000USD 8,520INR 722,300EUR 8,115CNY 62,050 by the appellant which is Sun Cellular. The court is also giving NTC 10 days to show cause, otherwise the TRO might become permanent.

Last May, the NTC has ordered all telcos to refund their subscribers for over-charging after a decision was made back in 2011 that SMS should only cost Php0.80USD 0.01INR 1EUR 0.01CNY 0.10 instead of Php1.00USD 0.02INR 1EUR 0.02CNY 0.12. This was due to the fact that the inter-connection rates were adjusted from Php0.35USD 0.01INR 0.51EUR 0.01CNY 0.04 to just Php0.15USD 0.00INR 0.22EUR 0.00CNY 0.02 allowing for the Php0.20USD 0.00INR 0.29EUR 0.00CNY 0.02 reduced cost to be passed on to consumers.

However, since then, the telcos have not reduced the price of their SMS rates and continue to charge subscribers Php1.00USD 0.02INR 1EUR 0.02CNY 0.12 per regular SMS. The NTC has computed that because of this, telcos owe the consumers about Php7USD 0.12INR 10EUR 0.11CNY 0.87 billion.

After asking for motion for reconsideration from the NTC, the telcos have escalated the issue to the Court of Appeals.

The appeal has now been granted due to several reasons:

* Telcos claim that the NTC has no power to make such orders for a refund.

* SMS is considered a “value added service” and thus, exempted from tariff regulations.

Aside from Sun Cellular, Globe and Smart have also filed similar but separate petitions in the court for the same issue.

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