FCC directs to suspend payments to Pak LDCs

MONITORING REPORT IBD: The Federal Communications Commission, the regulatory body in US, has directed all US telecommunications service providers to freeze payments to Pakistani long-distance carriers for termination services in excess of two cents per minute.

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Such rates prior to October 1, 2012, had been based on cost, averaging $0.02 per minute, but the Pakistani carriers had decided to raise the rate to $0.088 per minute following the creation of a new “International Clearing House”.

The ATandT Inc. also supported Vonages petition, and said that Pakistani carriers actions violate the commissions policies protecting US consumers against anti-competitive conduct by foreign carriers to force “above-cost” settlement rate hikes.

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However, instead of issuing a full stop payment order as requested by Vonage, the ATandT recommended that the commission issue an order prohibiting increased US settlement payments above the rates that existed before October 1, 2012.

It merits mentioning here that telecom operators in Pakistan were charging higher calls and hence had posted tremendous increase in stock value and revenues during the second quarter of the year 2012. With this order, and possibly the similar action in other markets, operators are likely to face the monetary brunt.

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