FCC punished Pakistan. Is Bangladesh next?

Posted on March 12, 2013 / 2 Comments

The Federal Communications Commission (FCC) has asked US carriers not to pay more than US$0.02 per minute to their Pakistani counterparts. This decree has been slapped after Pakistan has raised its international termination rate to $0.88 per minute, which the FCC calls anti-competitive. Pakistan’s 14 Long Distance and International (LDI) operators have formed a single international gateway called International Clearing House (ICH) and raised international termination prices in October 2012. TeleGeography said:

“The LDI operators and telecoms ministry colluded to determine rates, with a quota of incoming international calls distributed amongst the parties involved. The creation of the ICH was immediately followed by a jump in termination fees, which had previously been set at cost level. In its order, the FCC described the actions of the LDI carriers as anti-competitive, noting: ‘By establishing the ICH plan, the Pakistani carriers acted in concert to impose unilaterally this rate floor without engaging in meaningful negotiations with US carriers and foreclosing future separate negotiations between US and individual LDI correspondent carriers.’ The potential impact of the FCC’s instruction is unclear, however; the Express Tribune notes that the LDI operators claimed that US calls account for just 10% of total traffic, whilst business analysts claim the figure is closer to 30%.”

Bangladesh is following a worst recipe. Bangladesh Telecommunication Regulatory Commission (BTRC) dictates international termination rate and straight away takes 51.75% of it. Recently the international gateway operators and BTRC have agreed to form an ICH, as Pakistan did. And the termination rate will be increased from $0.03 per minute to $0.0345 per minute from March 19, 2013. Currently few operators are unofficially terminating traffic bellow $0.03 per minute in Bangladesh. All of them will start charging $0.0345 once the ICH officially kicks off. International Bureau of the FCC may become busy thereafter.

2 Comments

Aslam Hayat
March 13, 2013, 3:48 am
Competition Commission of Pakistan has also issued show cause notice on this ICH issue:
http://propakistani.pk/wp-content/uploads/2013/03/CCP-Notice-to-PTCL-on-ICH.pdf
Abu Saeed Khan
March 13, 2013, 7:55 am
Bangladesh has passed the Competition Act in 2012. The Competition Commission is yet to be formed.