FCC Issues Sanctions Against Tongan Carrier Over ‘Whipsawing’
The FCC ordered all U.S. carriers to immediately suspend termination payments to Tonga Communications. In an order Monday granting a petition by AT&T, the International Bureau said the Tongan company acted anti-competitively by blocking AT&T and Verizon circuits to Tonga since Nov. 24 (CD June 4 p12). The U.S. companies had refused to pay 30 cents per minute for international calls to Tonga, a new rate set by the Tongan government that’s triple what the carriers agreed to pay.
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The order will remain effective until the Tongan company restores AT&T and Verizon’s circuits and services, the bureau said. On its own motion, the bureau additionally sought comment on whether it should also cease U.S. carrier payments to Digicel Tonga Ltd.
Tonga Communications’s actions are not excused by the fact that the Tongan government ordered the rate hike, the bureau said. “The Commission has recognized the sovereign rights of countries to regulate their telecommunications, but has made it clear that it cannot agree to allow U.S. carriers to settle their traffic at just any rate imposed by entities controlling the foreign end of an international route without regard to the impact on the U.S. public interest. Here, the effect of acquiescing to TCC’s actions would be to agree to a nearly threefold increase in termination rates with no negotiation or cost justification, which could harm U.S. consumers and have negative precedential effect for other U.S.-international routes.”
Notwithstanding the disciplinary action, the bureau prescribed diplomacy to resolve the dispute. The U.S. and Tonga “should consult and work toward an ultimate resolution of this matter,” it said. “Government-to-government communication played a role in facilitating resolution in similar instances in the past.” The U.S. Trade Representative has so far written two letters to the Tongan government, but hasn’t yet received “complete responses” to questions posed about the reasoning behind a 30-cent rate, the bureau said.
Comments are due July 8, replies July 23, on whether the stop payment order should be extended to U.S. carriers with direct arrangements with wireless carrier Digicel. The FCC has learned some U.S. carriers are paying that company 30 cents per minute too, the bureau said.