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 NEWS  Federal  Communications  Commission  445  12  th  Street,  S.  W.  Washington,  D.  C.  20554  This  is  an  unofficial  announcement  of  Commission  action.  Release  of  the  full  text  of  a  Commission  order  constitutes  official  action.  See  MCI  v.  FCC.  515  F  2d  385  (D.  C.  Circ  1974).  News  Media  Information  202  /  418-  0500  Internet:  http://  www.  fcc.  gov  TTY:  1-  888-  835-  5322 
 INTERNATIONAL  BUREAU  TAKES  ACTION  TO  PROTCT  U.  S.  CONSUMERS  AND  U.  S.  CARRIERS  ON  THE  U.  S.-  PHILIPPINES  ROUTE 
 Washington,  D.  C.  –  Today,  the  International  Bureau  issued  an  order  to  protect  U.  S.  consumers  and  U.  S.  carriers  from  potential  harm  resulting  from  anticompetitive  and  retaliatory 
 behavior  against  U.  S.  carriers  offering  telecommunications  services  between  the  U.  S.  and  the  Philippines.  The  International  Bureau  issued  an  Order  directing  all  U.  S.  carriers  providing 
 facilities-  based  service  on  the  U.  S.-  Philippines  route  to  suspend  all  payments  for  termination  services  to  six  carriers  pending  restoration  of  all  circuits  and  service  on  the  U.  S.-  Philippines 
 route.  These  carriers  are  Philippines  Long  Distance  Telephone  Company  (“  PLDT”),  Globe  Telecom,  Inc.  (“  Globe”),  Bayan  Telecommunications  Company  (“  BayanTel”),  Digitel 
 Telecommunications  Philippines,  Inc.  (“  Digitel”),  Smart  Communications,  Inc.  (“  Smart”),  and  Subic  Telecom  (collectively  referred  to  as  “Philippine  carriers”). 


 The  Bureau  found  that  the  Philippine  carriers’  behavior  constitutes  “whipsawing”  of  U.  S.  carriers,  which  is  contrary  to  the  public  interest  and  violates  the  purpose  of  the  Commission’s 
 longstanding  International  Settlements  Policy  (“  ISP”).  The  ISP  is  a  framework  intended  to  protect  U.  S.  carriers  from  the  abuse  of  market  power  by  carriers  on  the  foreign  end  of  a  U.  S.  -international 
 route.  “Whipsawing”  generally  involves  the  abuse  of  market  power  by  a  foreign  carrier  to  play  U.  S.  carriers  against  one  another  in  order  to  gain  unduly  favorable  terms  and 
 benefits.  This  type  of  anticompetitive  behavior  could  lead  to  higher  costs  for  U.  S.  carriers  and  result  in  higher  calling  prices  and  poorer  service  quality  for  U.  S.  consumers. 


 According  to  the  record,  on  February  1,  2003,  Philippine  carriers  began  to  disrupt  the  U.  S.-  Philippines  networks  of  AT&  T  Corp.  (“  AT&  T”)  and  WorldCom,  Inc.  (“  WorldCom”).  The 
 record  shows  that  the  Philippine  carriers’  actions  were  taken  in  retaliation  for  AT&  T’s  and  WorldCom’s  refusals  to  agree  to  the  Philippine  carriers’  demand  for  rate  increases  for 
 termination  services  on  their  networks  in  the  Philippines.  The  record  shows  that  the  Philippine  carriers  have  not  engaged  in  retaliation  against  the  networks  of  carriers  that  have  agreed  to  the 
 demanded  rate  increases. 
 As  a  result  of  the  Philippine  carriers’  actions,  the  International  Bureau,  in  addition  to  suspending  all  payments,  enforced  the  provisions  of  the  ISP  on  all  U.  S.  carriers  providing 


 FOR  IMMEDIATE  RELEASE:  March  10,  2003  NEWS  MEDIA  CONTACT:  Linda  L.  Haller  (202)  418-  1408 
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 facilities-  based  service  on  the  U.  S.-  Philippines  route  in  order  to  ensure  nondiscriminatory  treatment  of  U.  S.  carriers.  Today’s  action  also  removed  the  Philippines  from  the  Commission’s 
 list  of  approved  routes  for  more  flexible  International  Simple  Resale  (“  ISR”)  agreements,  pending  U.  S.  carrier  compliance  with  the  conditions  set  forth  in  the  Order  and  absence  of  further 
 anticompetitive  behavior. 
 Copies  of  the  Order  are  available  electronically  on  the  Commission’s  web  site  at  www.  fcc.  gov. 


 Action  by  the  International  Bureau,  March  10,  2003. 


 -FCC- 
 IB  Docket  No.  03-  38 
 International  Bureau  Contact:  James  Ball  (202)  418-  0427. 
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