SingTel sues U.S. regulator over rates

SingTel sues U.S. regulator over rates

SINGAPORE (AFP): Singapore Telecommunications Ltd. (SingTel)
said yesterday that it was suing the U.S. Federal Communications
Commission (FCC) over a dispute in fees for settlement of
international calls.

Lawyers for SingTel, one of Asia's top listed companies, filed
a petition Thursday with the U.S. Court of Appeals in the
District of Columbia for a review of an FCC benchmark for
international settlement rates, a statement said.

A settlement rate is the amount which carriers charge each
other to complete the connection of an international call.

Critics say non-U.S. carriers stand to lose billions of dollar
in revenues if Washington unilaterally slashes rates.

Under the FCC benchmark, Singapore is categorized as a high
income country and U.S. carriers may be ordered by the FCC to
adopt the benchmark settlement rate of 15 U.S. cents a minute
from Jan. 1, 1999, a SingTel statement said.

SingTel's current settlement rate with U.S. carriers is 42
cents.

"SingTel does not agree with such unilateral action and
believes that global reform of settlement rates should be done on
a multilateral basis, in an international forum like ITU (the
International Telecommunications Union), " the statement said.

It called for the FCC order to be invalidated so that "all
carriers could jointly work together to achieve an amicable
solution towards global reform of accounting rates."

The United States has been spearheading efforts to liberalize
the world telecommunications industry and lower international
rates. According to FCC studies, international calls from the
United States cost 99 cents a minute on average while U.S.
domestic calls cost 16 cents.

It blames the U.S. telecommunication deficit of US$5.5 billion
a year on allegedly exorbitant rates which foreign monopolies
charge U.S. carriers for completing calls.

U.S. officials had told an Asian telecommunications industry
conference here in June that foreign countries would be given
varying periods of time to negotiate lower rates with U.S.
carriers.

If no agreement is reached, the FCC will order U.S. carriers
to refuse to pay a foreign counterpart more than the rate set by
the FCC.

SingTel's statement Friday said this "violates the well-
settled ITU principles of mutuality and international
cooperation."

"SingTel filed the petition for review on the grounds that the
order is outside the FCC's lawful jurisdiction and the order is
arbitrary due to the unilateral setting of benchmark levels, in
spite of lack of cost data," it said.

SingTel will lose its monopoly on basic services including
international direct dialing on April 1, 2000. Its monopoly was
eased earlier this year when new cellular and pager services were
allowed to operate.

SingTel declared net profits of S$1.66 billion ($1.2 billion)
for the year to March 1997 on a turnover of $4.4 billion, making
it Singapore's most profitable company.

Other Asian countries have opposed the U.S. rate-slashing
moves while expressing support for lowering charges and opening
up the international telecommunications market.

Asia is the world's fastest growing telecommunications market.

The number of telephone lines in the region is forecast to
reach 327 million in 2000, from less than 200 million in 1996.
Mobile phone subscribers are expected to multiply to 125 million
from 33 million during the same period.