WASHINGTON, March 8: The Federal Communications Commission, a US regulatory body, has immediately suspended all payments to Pakistani long-distance carriers for making “above-cost” price hikes.

“We seek to protect US consumers from the effects of anticompetitive behaviour,” said a statement issued by the commission’s head office in Washington.

The suspension order also aims to “promote competitive, cost-based termination rates on the US-Pakistan route,” the commission observed.

The commission determined that recent and on-going actions by certain Pakistani long distance international carriers were anticompetitive and required action to protect US consumers.

Pakistani carriers had set rate floors over previously negotiated rates with US carriers for termination of international telephone calls to Pakistan, which the commission rejected as unacceptable.

“Their continuation would result in a substantial increase in the cost of and repress demand for calling Pakistan,” the US commission observed. The order followed a petition filed by two US carriers, Vonage and AT&T against an unprecedented price-hike by Pakistani carriers. “We, therefore, grant the petition… and order all US carriers… to suspend immediately all… payments to Pakistani carriers for termination of services that are in excess of the rates that were in effect immediately prior to the rate increase on or around Oct 1, 2012,” the order said. The order also stated that Pakistani carriers had “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 (long distance) correspondent carriers.” In its petition, the Vonage Holdings Corporation had complained since Oct 1, there has been a 500 per cent increase in rates charged for outgoing calls to Pakistan. AT&T also supported Vontage’s stance, stating that Pakistani carriers’ actions violate commission’s policies protecting US consumers against “anti-competitive conduct”. Following the FCC order, shares for Pakistan Telecommunication Co fell as much as five per cent in Karachi trading. The order also includes a “background” of the price-hike, noting that before Oct 1, 2012, international call rates to Pakistan had been based on cost and averaged $0.02 per minute. After the creation of a new “International Clearing House” the Pakistani carriers decided to raise the rate to $0.088 per minute. The Pakistan Telecommunication Authority established the telecom gateway, requiring all incoming international traffic to go through a centralised system, to be operated and maintained by the PTCL. Under the arrangement, long distance operators were to share the revenues from international incoming traffic based on their respective market shares with fixed termination charges. The establishment of the clearing house resulted in a massive increase — about 200 to 800 per cent depending upon the location of the caller — for international calls made to the landlines and cell phones in Pakistan, annoying the expats by a great deal.