Court of Appeals stops P7-B text refund

MANILA, Philippines—The Court of Appeals has stopped the National Telecommunications Commission (NTC) from enforcing the P7-billion refund and reduced text messaging fee, granting the petition filed by Digitel Mobile Philippines Inc. (DMPI), which operates Sun Cellular.

The country’s biggest telecom firms contested in May the order to refund an estimated P7 billion in “excess” charges for certain text messages over the past two years.

The firms said there were no overcharged short message service (SMS) rates and therefore no basis for the NTC order.

60-day TRO

“It is respectfully prayed that upon the filing of the instant petition for review, the Honorable Court issue a 60-day temporary restraining order…,” DMPI said in its petition.

“We agree with the petitioner that there is no means for it to ascertain the existence of the subscribers and the identities of the actual users of the Mobile Identification Numbers as may be found in its system. In addition, most of its subscribers are prepaid SIM (Subscriber Identity Module) card users. To our mind, justice would be better served if the implementation of the NTC decision is restrained at this stage of the proceeding, especially that those who had intervened in the case had already moved for the writ of execution,” the appellate court’s Sixth Division said.

The resolution was penned by Justice Priscilla Baltazar-Padilla. Justices Noel Tijam and Agnes Reyes-Carpio concurred.

The NTC decision mentioned in the resolution is NTC Memorandum Circular No. 02-10-2011, which required the telecommunications companies Digitel, Globe and Smart Communications Inc. to reduce their interconnection charge from P0.35 to P0.15.

P500-K cash bond

The temporary restraining order is effective for 60 days from notice unless terminated by the Court.

The Court directed the NTC to cease and desist from enforcing the NTC memorandum circular upon Digitel’s filing of a P500,000 cash bond or approval of a surety bond in favor of its affected subscribers “for any or all damages” that the latter may sustain if ultimately it is determined that the company is not entitled to the TRO that it petitioned against the NTC.

Interconnection rate

In its resolution, the Court took note of Digitel’s argument that the interconnection rate is not the only component of the retail rate of a regular SMS. Digitel argued that “the reduction of the former does not necessarily follow the reduction of the latter.”

Digitel also said there was nothing in the circular that required the reduction of the retail prices of SMS.

The Philippines had been called the “text capital of the world” because of the sheer volume of text messages sent and received daily.