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Smart Communications slammed the “abuse of dominance” complaint made by DITO Telecommunity before the Philippine Competition Commission (PCC) as “blatant forum shopping” for having an existing capacity petition with the National Telecommunications Commission (NTC).

Smart vice president for regulatory affairs Roy Ibay said Smart and DITO have an existing interconnection agreement which “Smart continues to honor” and the latter has requested additional interconnection capacity in a pending petition with the NTC.

“DITO’s filing of the PCC complaint on the same subject matter is blatant forum-shopping,” Ibay said in a statement Tuesday.


The statement came a day after DITO filed a complaint before the PCC, accusing Smart and Globe Telecom of abuse of market dominance, resulting in as little as 20 to 30 percent of calls from DITO going through to users of the two larger companies.

In the NTC petition, he said DITO asked for extra capacity for interconnection, citing congestion and “overutilization of trunks.”

However, Smart asked DITO to clamp down on its users who have abused international simple resale (ISR) calls -- fraudulent international callers who make calls under local rates --before they provide extra capacity.

“Simply put, DITO has failed to prevent its network from being misused for fraud, with DITO SIMs masking international calls as domestic, resulting in huge monetary losses for Smart,” he said.

He said Smart, on its end, is able to track and block such illegal calls through “robust monitoring and fraud detection systems.”

“Smart reiterates its willingness to grant DITO’s request for capacity augmentation, provided that it signs an agreement to compensate Smart fairly in the event that such fraudulent calls continue to proliferate. Otherwise, Smart cannot allow its interconnection arrangement with DITO to perpetuate fraud,” he said.

He added that the PCC complaint is DITO’s attempt to “avoid liability” for the illegal ISR calls.

“It should have instead acknowledged that PLDT, Smart’s parent company, was instrumental in helping DITO fulfill its commitments to the NTC and Congress as a third telco, considering that PLDT built for DITO a big portion of its telco infrastructure,” he said.

In response, DITO chief administrative officer Adel Tamano said bringing up the ISR issue on the abuse of dominance complaint is an “admission” that they are making interconnection subject to their request for compensation.

Tamano said Section 15 (C) of the Philippine Competition Act deems abuse of dominant position when a dominant entity makes a “transaction subject to acceptance by the other parties of other obligations which, by their nature or according to commercial usage, have no connection with the transaction.”

Revealing the issues on ISR calls to the public, he said, is also a “disclosure of confidential business information” that is a violation of the PCC’s rules and noted that DITO has now a right to respond.

He said the illegal ISR calls were made by third parties -- with DITO “equally” a victim -- and that there are also ISR calls from Smart to DITO.

“It is not true that DITO has not taken steps to stop ISR calls to Smart. We have the data and the facts to show the steps undertaken by DITO to minimize these ISR calls,” he said.

On the issue of forum shopping, he said the petition with the NTC is for violations of the Telecom Policy Act and their memorandums while complaints with the PCC are for violations of the Philippine Competition Act.

“There is no forum shopping in this case,” he said.

Following Ibay’s statement that PLDT built a big portion of DITO’s infrastructure, Tamano said such infrastructure was “paid for by DITO.”

“And the building of that infrastructure was done in compliance with the legal mandate for interconnection and not to help DITO fulfill its commitments to the NTC and Congress,” Tamano said.

In response to a similar PCC complaint, Globe earlier asked the NTC to penalize DITO for interconnection violations amounting to PHP622 million.

The penalty was due to ISR calls made using a DITO SIM to the Globe network which bypassed proper voice traffic channels, resulting in international calls being billed as a local calls.

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