The three firms - AT&T, MCI and Sprint - made the request after the US Federal Commmunications Commission (FCC) solicited their comments on the tax as part of its probe into the issue.

The FCC, which also invited comments from the Jamaican authorities, has said that it could rule the tax to be anti-competitive if the American firms can demonstrate harm to their customers, and would seek remedy, which could include instructing the US telecoms not to pay the fees.

The 'universal service charge' as it is called, became effective June 1, 2005, doubling, in some instances, the cost for Americans to make calls to Jamaica.  The fee at US$0.03 per minute on all incoming international calls terminating on fixed wire networks, and US$0.02 per minute for mobile networks, is intended to raise $1 billion over three years to fund Jamaica's e-learning development.

In their comments posted on the FCC's website, both Cable and Wireless and Digicel Jamaica argued that the cess was not their decision, essentially that the directive was a government policy - an argument that the US carriers dismissed as irrelevant, as it did not matter who in Jamaica imposed the fine.

Digicel's agrument is that the FCC should not consider as anti-competitive the decision by the Jamaican carriers in June to block the calls of those US telecoms that refused to pay the cess, as this was a situation where "foreign carriers have been compelled to comply with policy directives issued by the local government".

Digicel recommended that the issue be resolved outside of the private sector and between the "two sovereign governments affected".

C&W made a similar argument, arguing that there was no attempt by the local carriers to be anti-competitive and that not only did it not profit from the surcharge, but it lost "substantial monies" after the imposition.

The surcharge was operationalised when technology minister Phillip Paulwell made it clear to the local telecoms that they would be liable to pay the fee, if they allowed foreign carriers to place calls to Jamaica without paying it.  The local telecoms were allowed by Paulwell to block the calls from those carriers that refused to pay the fees.

Paulwell's ministry, in defending the action, said it was allowable under Jamaican laws, and that it reflected "the legitimacy of the actions of the Jamaican government in exercising its sovereign right to set policy in regard to universal service so as to benefit its own citizenry".

The government has already raised $160 million from the surcharge, with Colin Campbell, chairman of the Universal Service Fund Company, anticipating a rapid increase in inflow after the end of October.

"The different carriers have varying time periods to pay, some have 30 days and others 120 days to pay," explained Campbell.  "Carriers with larger volumes will have longer contracts," he added.  "The amount should change significantly by the end of this month."

Over 80 per cent of calls to Jamaica originate in the USA Last week, Campbell downplayed any practical outcome to the FCC review process, arguing that the 'notice of inquiry' - as the Americans call the process - would likely only serve to guide the FCC on possible future actions.

But the FCC rules make it clear that though the inquiry now being carried out is "designed primarily for fact-gathering," after reviewing the comments submitted, it may issue what it calls a "notice of proposed rule-making" under which action could be taken against the offending jurisdiction.

Importantly, on June 1, the effective date of the cess, the circuits to five US carriers were blocked by local carriers because of their failure to comply with the government's mandate to pay the surcharge.

These carriers subsequently agreed to pay the surcharges, and most had service to Jamaica restored within days.  But the US carriers agreed to make the payments under protest, which was reflected in their comments and complaints to the FCC.

Said AT&T in its complaint submitted on October 7: "The rules should address all threats of or actual service disruption in support of efforts to force US carriers to pay non-cost-based increases in termination rates.

There certainly should be no exception for efforts to increase rates for inbound international calls purportedly to pay for so-called 'universal service' purposes, when no similar charges are imposed on their domestic and outbound international services."  All three insisted that "expedited interim measures" or "immediate injunctive relief" should be pursued with the preferred form being a stop payment order.

"AT&T believes that the most appropriate relief in these circumstances is likely to be a prohibition on the payment of any increased rate until the threat of network or service disruption is removed," declared the US telecom.

Added Sprint: "Stop-payment orders could be granted on an immediate, ex parte basis based on the above described requirements.  For these orders to be effective, however, the commission must open the possibility of a much more severe outcome in a decision on the merits.

Specifically, the commission should propose and establish, through a rule-making, a remedy of "no-payment" for a specified period by all US carriers for any international traffic terminated with a foreign carrier upon a finding that during that period any US carrier has had its circuits blocked as a result of the foreign carrier's implementation of a whipsawing strategy."

MCI: "The commission should also adopt procedures for taking interim measures upon notice that foreign carriers have threatened US carriers with circuit disruption or otherwise tried to whipsaw US carriers into accepting terms and conditions that are harmful to US consumers and carriers.

The commission made clear almost ten years ago in the international settlement rate benchmarks proceeding that there is no basis to claims that 'universal service requirements' [should] be financed disproportionately through settlements revenues."

The US FCC got involved in the case following a June 29 formal complaint from a member of America's congress.  The FCC is expected make a determination by the end of October.

http://www.jamaicaobserver.com/magazines/Business/html/20051018T230000-0500_90667_OBS_US_CARRIERS_SEEK_TO_BLOCK_CALL_TAX_PAYMENTS_TO_JA.asp