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.