Supreme Court Upholds Telecoms Price Floor Mandate

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The Supreme Court on Thursday, September 3, refused to accept a contention raised by Orange Liberia, Inc., that the introduction of the ‘LTA Service and Regulatory Fee on Telecommunication Goods, and Services,’ which the Liberia Telecommunication Authority (LTA) imposed on a price floor for on-net voice and for data services, was in violation of the Constitution.

The GSM Company also argued that the order, which is considered as a surcharge, is a means of imposing additional tax, of which is an exclusive right granted the Legislature under Article 34 (d) of the 1986 Constitution.

However, in the Court’s ruling delivered by Associate Justice Yussif Kaba, the court holds that the word ‘surcharge’ is not the exclusive function of the meaning of an additional tax.

“For all purposes,” Justice Kaba ruled, “the  usage of the word in the context order cannot be constructed to mean the imposition of a tax.

“Nothing precludes the LTA from using the word surcharge in its promulgation orders, rules, and regulations under the authority granted by the Telecom Act of 2007,” the Justice continued. “Therefore, the LTA did not invade the province of the Legislature by imposing the surcharges.”

Justice Kaba in his ruling also said that ‘surcharge’ may be interpreted to mean an additional charge or fee other than an additional tax.

According to him, if the argument is that the legislature intended to repeal and amend provisions of the Telecom Act of 2007 affecting the imposition of the regulatory surcharges on on-net voice calls and data services, then, there is no expressed or implied intent of the legislature to do so.

“We see no expressed or implied intent of the legislature to do so. Recourse to the Act to Repeal Section 1165 and amend Section 1021 (B) (2) of the Revenue Code, as amended 2016, clearly shows that the repeal and amendment Act affects Part III, Section 1021, Service Tax imposed and Part IV, section 1165, Exercise Tax.” Justice Kaba explained.

 “This act clearly and exclusively affected the Revenue Code and in no way extended to the Telecom Act of 2007. Nowhere, in the said act is there any reference or inference to the Telecom Act of 2007,” Kaba added.

Initially, the Orange-Liberia lawyer, Cllr. Jallah Barbu, had argued that the passage of the Legislature of the repeal and amendment of the Revenue Code of 2016 extends to affects the Telecom Act 2007 to the extent of barring the LTA from the imposition of any additional tax on the usage of telephone services, which they claim that the surcharge to mean a tax solely.

Cllr. Barbu further argued that a surcharge is a tax, the imposition of which is an exclusive right granted to the Legislature under Article 34 (d) of the 1986 Constitution. “Therefore,” he added, “the Legislature is barred under such textually committed provision of the Constitution to delegate that authority to an administrative agency, a government parastatal, a branch or any government organ.”

Barbu also argued that Orange-Liberia, in its input during the consultation, noted that the concept of unlimited three day free calls is at the core of its marketing strategy and, if stopped, would destabilize the company and create a significant risk on its leadership of the market, operations, revenue and taxes. Besides, affecting vast number of its customers.

“We would find it challenging to comply with a price floor and the scheduled for feedback on the consultation document was extremely short,” Orange-Liberia further argued.

In counter argument, Cllr, Jonathan T. Massaquoi, a lawyer of the LTA had argued that  the LTA on February 25, 2019, issued a publication of its order, captioned: “LTA Service and Regulatory Fee on Telecommunication Goods, and Services.”

Part II, Section 2.1 of the said order, Cllr. Massaquoi argued, sets forth the price floor for on-net voice at US$0.0156 per minute, and Section 2.3 sets the floor for data services at US$0.0218 per megabyte.

The order also provides that after it comes into force on April 15, 2019, [then] on the sixth month anniversary of the order, “there shall be automatically, imposed a surcharge on the on-net voice of US$0.008 per minute and on the data services  surcharge of US$0.0065 for each megabyte,” according to the LTA’s lawyer.

Massaquoi again argued that, as the regulator, LTA has the authority to impose fees, or surcharges under the Telecom Act of 2007, to regulate the telecommunications sector to include making rules, orders, and regulations on matters affecting the telecommunications sector or any component thereof expressly given under Part 111, Section 11 of the Telecom Act of 2007 and to compel a person to comply with or implement the orders, rules or regulation consequences of the exercise of the authority so granted under the telecom Act 2007. 

The Telecom Act of 2007 provides that, “the LTA shall conduct a process of public consultation and take of the result of such consultation in the final exercise of its authority prior to issuing an order or exercising any authority under the Act that is likely to have any substantial impact on network operators, service providers and any other market participant or the general public.”

Cllr. Massaquoi said that, in pursuit of its function, the LTA caused the publication of a notice of public consultation and a consultation document on November 26, 2018, launched a formal period of public consultation regarding request made separately by service providers, for the LTA to intervene in addressing alleged anti-competitive practices in the mobile voice and data markets.

Before the publication of the notice, Massaquoi claims that the LTA set into motion briefing with stakeholders, Including Orange-Liberia.

“The Orange-Liberia expressed concern about the concept of rebalancing the price structure affecting voice calls and data services with the view to improve stability in the markets,” Massaquoi said. 

Massaquoi also argued that Orange-Liberia in its input during the consultation, said that the concept of unlimited, three-day free calls is at the core of its marketing strategy, and, if stopped, would destabilize the company’s and create a significant risk on its leadership of the market, operations, revenue and taxes, besides affecting vast number of its customers.

“We would find it challenging to comply with a price floor and the schedule for feedback on the consultation document was extremely short,” Orange-Liberia further argued.

Author

  • Anthony Kokoi is a young Liberian sports writer who has an ever-growing passion for the development of the game of football (soccer) and other sports. For the past few years, he has been passionately engaged in reporting the developments of the game in the country. He is an associate member of the Sports Writers Association of Liberia (SWAL). He is a promoter of young talents. He also writes match reports and makes an analysis of Liberian Football.

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