TMCnet News
NTC wants control over value-added service firms(Business World (Philippines) Via Thomson Dialog NewsEdge) The National Telecommunications Commission (NTC) has released a draft circular that seeks to put value-added service (VAS) providers in the telecom and technology industry under its ambit. If the proposed rules are approved, all firms in the loose VAS provider industry - from mom-and-pop ventures to those owned by large multinationals - would have to register with the regulator. The NTC said the draft was designed to protect consumers from sudden service rate increases and to promote healthy competition among industry players. Services covered by the proposed rules include messaging, audio and video conferencing, voice mail, e-mail, information services such as road traffic and visa application data, gaming services except gambling, applications services such as mobile banking, content and program services such as music and ring tones, audio text, domain name hosting, fax, IP multicasting, virtual private networks, and PBX hosting. "The foregoing list of value-added services may be revised, modified, expanded or shortened by the Commission after due public consultation," the regulator said. The NTC defined "value-added services", in an earlier circular signed in 2005, as "enhanced services" beyond those ordinarily offered by incumbent local and foreign telecom operators. It noted the proposed rules would not apply to the Voice over Internet Protocol (VoIP) service which allows for cheaper voice calls over the Internet. The VoIP service was already covered in a previous circular which ruled the service is not exclusive to telcos and could also be offered by Internet service providers. The NTC also classified the leased line service as a value-added service. Doing so, it said, will prohibit telecom players offering the service from discriminating against other VAS providers. "Value-added service providers shall be provided with the same quality of service provided to other subscribers and at prices not higher than the prices offered to other subscribers," the NTC said. Rates for value-added services will still be deregulated, the NTC said, but the VAS provider needs to inform the regulator of its rates at least three days prior to the offering. VAS providers planning increases in rates, meanwhile, will need to inform the NTC at least five days prior to implementation. In an apparent disparity, the NTC also said it reserves the right to reject rate increases: "The Commission, in the exercise of its mandate to protect consumers may not allow the increase. If the Commission does not act on the information within five days from receipt of the same, the VAS provider can impose the new rates." Winston Padojinog, an analyst from the University of Asia and the Pacific, said "This is weird. If it's deregulated already, why is there a need to approve price increases?" The certificate of registration the VAS provider will have to apply for, meanwhile, will be valid for a maximum five years but can be for as short as one year, the NTC said. A filing fee of P300, an annual registration fee of P6,000 for the first five services and P1,000 for each additional service will be required. The proposed guidelines followed Zed Phils. - a 100% foreign-owned firm - and Chikka Asia's requests for clarification. Zed asked the NTC last year whether it was required to register as a content provider and if it needed to comply with the 60% Filipino ownership requirement. Zed is the Finnish phone content aggregator partner of Smart Communications, Inc. Chikka also wrote the NTC a letter last year, asking if the company was required to register as a VAS provider. In response to Zed's letter, the NTC said the firm should register with the regulator as content provider and should abide with the constitutionally-set ownership requirement for such firms. "It is clear that Zed is a content provider and must register as VAS provider. The requirement of 60% Filipino equity must also be complied [with]," the NTC said in its comment. For Chikka, the NTC initially said in its reply last Feb. 21 that the firm need not register as a VAS provider. The position was premised on the firm's justification that the service was free of charge and not directly offered to mobile phone subscribers. "However, since [the] Chikka.com service is no longer free to mobile subscribers sending SMS (short messaging service or text) to PC users and since the database is being maintained by the company, it is of our opinion that Chikka Asia, Inc., must now register as VAS provider," the NTC said. Copyright 2007 BusinessWorld (Philippines). Source: Financial Times Information Limited - Asia Intelligence Wire. |