MTC vows to fight phone rate hike

Despite IT&E’s recent decision to drop its legal challenge, Micronesian Telecommunications Corporation (MTC) and its parent, GTE Corporation (GTE), continue to pursue their appeal of the Federal Communications Commission’s (FCC’s) rate integration policy.

If successful, MTC/GTE’s lawsuit could result in significant rate increase for CNMI consumers who make off-island telephone calls to Guam or the mainland U.S., according to a press release issued by the Governor’s Public Information Office.

Under the FCC’s rate integration policy, carriers operating in the CNMI (as well as Hawaii, Guam and American Samoa) are required to conform their long distance telephone rates with the generally lower rates which they charge consumers in the U.S. mainland.

The policy was initially applied to Hawaii, Alaska, Puerto Rico and the U.S. Virgin Islands in the early 1970s to promote national unity and to stop telephone companies from charging higher international rates to these more distant geographic U.S. points.

The policy was subsequently applied to the CNMI and Guam in 1997 by order of the FCC, and resulted in an immediate and significant drop in off-island rates for calls to U.S. points. GTE immediately appealed the 1997 FCC ruling, and after procedural delays, the case is now moving forward.

On Nov. 23, 1999, MTC and GTE filed an initial brief in the pending appeal before the U.S. Court of Appeals for the District of Columbia Circuit. MTC/GTE are joined in their appeal by MCI WorldCom, Bell Atlantic Mobile, BellSouth Corporation, SBC Communications, and three other parties which also filed appeals of the FCC’s 1997 rate integration ruling.

MTC/GTE had also been joined in the appeal by IT&E Overseas, Inc. However, on Nov. 22, 1999, IT&E filed a motion in the court asking that its appeal of the FCC’s rate integration ruling be dismissed. The court is expected to grant IT&E’s request to drop its challenge.

In their brief, MTC/GTE advance two fundamental arguments under the Telecommunications Act of 1996. First, they contend that the FCC lacked the legal authority to require MTC to conform its rates with the comparatively lower rates charged by other GTE companies in the mainland U.S. Second, MTC/GTE argue that the FCC improperly extended the obligation to integrate rates to wireless (including cellular) services.

Opposing briefs are expected to be filed over the next several weeks by the CNMI and other parties which support the FCC’s 1997 rate integration ruling. These parties include the FCC itself as well as Hawaii, Alaska and Guam.

Oral argument in the case is set for April 4, 2000.