For illegal bypass
PLDT blocks calls from Innove’s GlobeQUEST
WebPhone service

MANILA, Philippines, October 13, 2006 - The Philippine Long Distance Telephone Company (PLDT) has temporarily barred incoming calls to its landlines via Innove Communications’ GlobeQUEST Webphone service while the two parties work out an interconnection agreement.

This developed after PLDT filed a complaint with the National Telecommunications Commission (NTC) against Innove, a wholly-owned subsidiary of Globe Telecom, Inc., for routing international calls to PLDT’s network without an interconnection agreement.

In its letter to the telco regulator, PLDT said calls from the United States and the United Kingdom were being routed and connected as a local call to PLDT landlines through Innove’s GlobeQUEST Webphone, its PC-to-phone Voice over Internet Protocol (VoIP) service.

“Routine monitoring done by PLDT has disclosed that incoming calls from GlobeQUEST WebPhone service from the US and United Kingdom, and from the regional area to a local PLDT phone were routed at the local interconnect of PLDT and Innove without the benefit of an interconnect arrangement and are charged and/or rated as local calls to Metro Manila,” PLDT stated in its letter to the NTC.

PLDT said the practice violated the terms and conditions of its local Interconnection Agreement with Innove, where both parties have agreed not to engage in an operation or service that constitutes uncompensated bypass of their respective systems.

The illegal uncompensated bypass deprived PLDT of the required access charges, PLDT added.

During the hearing at the NTC, Innove acknowledged that there was indeed a call bypass. As a result, Innove put the GlobeQUEST WebPhone service “temporarily on hold and initiated the immediate blocking of access to PLDT network.”

In a letter to PLDT, Innove added there was “no intention on its part to avoid the payment of appropriate access charges to PLDT. However, there are some unscrupulous users who bring Globe1 cards abroad and use the WebPhone service to call PLDT subscribers. This was done despite the clear instructions in the website that the GlobeQUEST WebPhone service is limited to Philippine users only.”

Negotiation between the two parties is on-going and is being facilitated by the NTC.

Interconnection refers to the linkage, by wire, radio, satellite or other means, of two or more existing carriers with one another to enable subscribers of one operator to reach the subscribers of the other carriers.

Without an interconnection arrangement, the routing of calls from GlobeQUEST WebPhone to the local subscribers of PLDT is tantamount to a bypass, PLDT said. Bypass is defined as a situation where an entity other than the local exchange carrier (LEC) provides long distance service by establishing direct access to an end-user within the LEC’s authorized local exchange service area.

Section 8, Article IV of Republic Act 7925 mandates that a local exchange operator should “be protected from uncompensated bypass or overlapping operations of other telecommunications entities… except when it is unable to provide, within a reasonable period of time and at desired standard, the interconnection arrangements required by such entities.”

The rules on VoIP likewise provides that no value-added service provider shall provide VoIP services to the public for compensation – where such services require access to or use of a network provider’s facilities – unless it has entered into an agreement with the network provider.