COMMUNICATION: In Phone Rates War, AT&T Severs Service to Guyana

By IPS Correspondents Reprint | | Print |

Bert Wilkinson

GEORGETOWN, Jan 10 2000 (IPS) - When a relative telephoned Frankie Joseph to tell him that his sister in New York had been trying to call him for most of New Year’s Day, he – like many Guyanese – had no idea that links between the Guyana Telephone and Telegraph Company (GT&T) and American giant AT&T had been severed.

But when the news broke here recently that the two companies had cut all inter-network relations because of a bitter row over rates, people started coming forward to complain that their customary New Year’s Day calls from relatives in the US had not come through.

Many had speculated that the silent telephones were due to an overloaded network. In the end, GT&T went public and blamed AT&T for switching off its systems to Guyana, thereby severing calls from the US to this South American republic.

The row between the two companies has laid bare a simmering dispute between the Clinton administration and dozens of countries in regions around the world, including the Caribbean, Asia and Europe. At its core is a determined effort by Washington to slash the rates paid by American telephone carriers to foreign companies for helping them to complete incoming calls.

By all appearances, Guyana is the first victim of a continuing rates war that dates back to 1997, when the US Federal Communications Commission (FCC) decided to unilaterally order American carriers to cut rates paid to companies by as much as 80 percent.

Japan, Europe and other countries have opposed the move, but GT&T says that AT&T went ahead and terminated service to Guyana despite the unresolved status of the proposed rate slash.

The US-owned AT&T counters that the US had long signalled its intention to implement the system at the start of this year, pending agreement by the International Telecommunications Union (ITU).

In the meantime, the company has asked most of the 400,000 Guyanese living in the US to switch to MCI or Sprint, both of which have so far opted not to pressure the company of about 70,000 subscribers into agreeing to a rate reduction.

“We are therefore asking all those who want to call Guyana to switch carriers to MCI or Sprint. We knew this might have happened, but we are very unhappy with the way they did it, by just putting up a continuous busy signal,” said spokesman Lennox Cornette.

“I am extremely pleased that MCI, Sprint and a host of smaller US long distance telephone companies are continuing to send calls to Guyana at the regular accounting rate on behalf of their US customers despite the actions of the FCC,” said Cornelius Prior, Chairman of GT&T and its US Virgin Islands-based parent company, Atlantic Tele Network (ATN).

ATN acquired 80 percent of the company in 1991.

The local firm appears to be on solid legal ground. Late last year, the Caribbean Association of National Telecommunications Organisations (CANTO) asked its 35 members not to enter into any new rate agreements with U.S. carriers until the issue was resolved.

Selby Wilson, CANTO’s spokesperson, says that the ITU is scheduled to meet in October and the dispute is expected to be settled by then, one way or the other.

Caribbean leaders have several times raised the issue with US President Bill Clinton and other key officials, arguing that such a drastic reduction in revenues would seriously affect regional economies – to the tune of up to one billion dollars a year.

But Washington says that the huge sums paid to companies for sharing network facilities constitute a drain on US resources and should be drastically reduced. Specifically, GT&T would have had its fees slashed from 85 US cents to 23 – a major blow, according to Guyanese officials.

As the dispute continues, CANTO has appointed Jamaican diplomat Anthony Hill to head up a special committee to work with the US.

“AT&T’s proposed decrease would have created hardship, resulting in a substantial increase in telephone bills for the average Guyanese since GT&T’s revenue from incoming calls would have been lowered,” GT&T said.