Liberia’s Supreme Court has ruled that the Liberia Telecommunications Authority (LTA’s) imposition of surcharges on data services and on – net-voice calls did not invade the Legislature’s authority to levy tax, a slap in the face of GSM company Orange Liberia, which had continuously opposed the move.
Reading the Supreme Court’s decision Thursday, 3 September, Associate Justice Yussif D. Kaba said it was not the intent of the Legislature to preclude the LTA from imposing surcharges on data services and on-net voice calls when it repealed and amended Sections 1165 (Mobile Telephone Usage) and 1022 (B) (2) of the Amended Revenue Code as Amended 2016.
On 25 February 2019, LTA caused the publication of its order captioned LTA Services and a Regulatory Fee on Telecommunication Goods and Services, and set forth the price floor for on – net voice at US$0.0156 per minutes and US$0.0218 per megabyte for data services.
The order also provides that after it comes into force on 15 April 2019, and 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 a surcharge of US$0.0065 for each megabyte.
But following the publication of this order in 2019, the Supreme Court says Orange Liberia continued to engage the LTA by numerous letters, outlining its objection to the order.
However the Supreme Court rules that the purposes of establishing the LTA are to address concerns such as the ones raised by Orange Liberia.
It says that it is the LTA that has the requisite capacity, skills and technologies to examine Orange Liberia’s concerns and decide what will best conduce to the purpose for which the Legislature enacted the Telecom Act of 2007.
In the Supreme Court’s decision as read by Associate Justice Kaba, the court recounts requests for consultation made separately by service providers for LTA’s intervention in addressing alleged anti- competitive practices in the mobile voice and data markets.
The Supreme Court notes that Orange Liberia noted in its inputs during the consultation 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 significant risks on its leadership of the market, operations, revenues and taxes.
Besides, Orange had complained also that this would affect a vast number of its customers, and argued that it would find it challenging to comply with a price floor.
Orange Liberia had further insisted that the reduction in the telecommunication market value by more than 33% between 2014 and 2017 was due to a combination of other facts, apart from a price war between service providers.
In response to the concerns raised by Orange Liberia, the Supreme Court notes that the LTA agreed that a combination of economic and other factors might have contributed to the telecommunications market’s destabilization.
However, the Supreme Court says LTA noted that to rebalance the price structure and stabilize the telecommunications market, as the regulator, it could only act on those factors within its direct control, such as the service providers’ cost price.
LTA further noted that it understands that the marketing gimmick of “unlimited calls” to be customers’ unlimited minutes or megabytes at a defined cost within a specified period.
The regulatory agency therefore suggested that the service providers apply a cap to all such unlimited offers “under a price floor, and that the ‘unlimited marketing offers’ may continue as long as the appropriate caps are applied to ensure compliance with the price floors.
Having heard the case, the Supreme Court rules that the word “surcharge” as used in the LTA’s order published on 25 February 2019 is construed within the context of an imposition of additional fees or charges on data services and on – net voice calls.
The court says this is under the authority of the Telecommunications Act of 2007, hence, the imposition of surcharges by the LTA did not invade the Legislature’s authority to levy tax. Further, it says that the trial judge who had earlier ruled in the case was not in error when he held that Orange Liberia did not allege sufficient legal grounds for the granting of its petition for judicial review.
It says further that the judge was not in error in ruling that LTA, acting under the Telecommunications Act of 2007 did not exceed its jurisdiction in the publication of its order.
“Wherefore and in view of the foregoing, the final judgment of the trial court is affirmed. The Clerk of this Court is ordered to send a mandate to the court below to resume jurisdiction over this case and give effect to this judgment. Costs are ruled against the appellant,” the Supreme Court says.
When the case was called for hearing, Cllr. Jallah A. Barbu appeared for Orange Liberia and its CEO MamadouCoulibaly, while Cllr. Jonathan T. Massaquoi and Osborn Diggs, LTA In-house Counsel, appeared for the LTA.
By Winston W. Parley