RESTRICTEDWORLD TRADE
ORGANIZATIONS/C/W/130
14 October 1999
(99-4435)
Council for Trade in Services Original:  English
COMMUNICATION FROM THE UNITED STATES
Clarification of the Relationship between Existing
Services Commitments and the Internet
The attached communication has been received from the delegation of the United States with
the request that it be circulated to Members of the Council for Trade in Services.
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1. The following submission responds  in greater detail to a question raised  by some Members
during the work program on electronic commerce concerning how existing services commitments
relate to use and further development of the Internet.
2. As a result of our examination of this question after consultation with delegations, we
recommend that in reporting to the Third Ministerial Conference on the results of the work program,
Members may wish to (1) note the importance of the Internet as the main emerging global platform
for electronic commerce, and (2) highlight that any service listed in a Member’s schedule of
commitments may be supplied using Internet or any other protocols, pursuant to the
Telecommunications Annex (the Telecom Annex) to the General Agreement on Trade in Services
(GATS).
A. DISCUSSION OF THE INTERNET IN THE ELECTRONIC COMMERCE WORK PROGRAMME OF THE
COUNCIL FOR TRADE IN SERVICES
3. In its 31 March 1999 interim  report to the General Council (S /C/8), the Council for Trade in
Services noted confusion regarding the extent to which the Internet  relates to existing GATS
commitments.  In particular, paragraph 5 of the report sets forth several issues which require
considerable further examination, including “the need to clarify the classification and improve thescheduling of Internet access and other related services, and to clarify their relationship with
telecommunications commitments and the obligations in the Annex on Telecommunications.”  The
27 July 1999 progress report of the Council for Trade in Services (S/L/74) expressed similar
uncertainty regarding the relationship of electron ic commerce to existing services commitments.
B. W
HAT IS DENOTED BY THE TERM “INTERNET ”
4. The Internet Society1, representing network professionals from over 100 countries, defines the
Internet as a “global network of networks enabling computers of all kinds to directly and transparently
                                                     
1 “The Internet Society (ISOC) is a professi onal membership society with more than 150
organizational and 6000 individual members in over 100 countries.  The Society’s individual andS/C/W/130
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communicate and share services throughout much of the world.”2  The basis for this connectivity is a
suite of open, non-proprietary protocols.3 As a result of the universal adoption of these protocols, the
Internet “constitutes a shared global resource of information, knowledge, and means of collaboration,
and cooperation among countless diverse communities.”4
5. The foundation of the Internet is the Internet Protocol (IP) that provides for the delivery of
information to unique addresses through a standardized routing and addressing scheme.5  Other
complementary protocols, such as the Transport Control Protocol (TCP), help to govern the
transmission of information.  As with a postal system, these Internet protocols provide a universal
means for formatting, addressing, and ensuring the delivery of data.  Just as the postal system is
indifferent to the language or color of ink used to  write a letter, so the Internet can accept data from
different sources (e.g., different computer systems); just as the postal system uses a variety of
transport vehicles, so the Internet is compatible with wire, fibre optic cable, satellite, or wirelesstransmission.  Thus, Internet protocols provide a seamless way for nearly any device to communicate
with any other device by freeing data from dependence on a specific physical infrastructure or
computer operating system.
C. R
ELEVANT ELEMENTS OF THE TELECOM ANNEX
6. The Telecom Annex is directly relevant to use of the Internet protocols in the supply of
services.  The Telecom Annex obligates Members to ensure that, for the supply of services included
in a Member’s schedule, suppliers have access to and use of any public telecommunications transport
network or service using operating protocols of the service supplier’s choice.6  Paragraph 5(a) of the
                                                                                                                                                                    
organizational members are bound by a common stake in maintaining the viability and global scaling of
the Internet.”  See http://www.isoc.org/isoc.
2 http://ww.isoc.org/internet/
3 Protocols are the rules that permit computers (and other devices) to communicate with one
another through the accurate and intelligible exchange of data between machines.  For example, protocols
determine which machine transmits first, whether an e rror has occurred, what to do if an error occurs, and
in what volumes data should be transmitted.  Prior to  the development of the Internet, various companies
developed different, proprietary protocols (still in use) for exchanging data within networks of linked
computers, producing closed networks that were unable to communicate with other networks.
4 http://www.isoc.org/internet/.
5 In Challenges to the Network: Telecoms and the Internet, the ITU cites the following definition
of the Internet:
"Internet" refers to the global information system that  (i) is logically linked together by a globally
unique address space based on the Internet Protocol  (IP) or its subsequent extensions/follow-ons;
(ii) is able to support communications using the Transmission Control Protocol/Internet Protocol
(TCP/IP) suite or its subsequent extensions/follow-ons, and/or other IP-compatible protocols; and
(iii) provides, uses or makes accessible, either pub licly or privately, high-level services layered on
the communications and related infrastructure described herein.
citing  the U.S. Federal Networking Council, a body of Internet architects.
6 The pertinent obligation is found in paragrap h 5(b)(iii), “Access to and use of the Public
Telecommunications Transport Networks and Services, which reads as follows:
“ (b) Each Member shall ensure that service suppliers of any other Member have access to and
use of any public telecommunications transport network or service offered within or
across the border of that Member, including priv ate leased circuits, and to this end shall
ensure, subject to paragraphs (e) and (f), that such suppliers are permitted...S/C/W/130
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Telecom Annex requires Members to ensure such access and use on reasonable and
non-discriminatory terms and conditions, and paragraph 5(b) further defines this obligation to permit
the use of operating protocols of the service supplier’s choice in the supply of any service, other than
as necessary to ensure the availability of telecommunications transport networks and services to the
public generally.
7. For purposes of electronic commerce, the obligations of the Telecom Annex underscore the
relationship of the Internet to existing GATS commitm ents.  These obligations ensure that suppliers of
telecommunications, financial, retail, or any other service are able to use Internet protocols (such as
TCP/IP or HTTP) or any other protocols  (such as x.25) to supply a service included in a Member’s
schedule over public telecommunications transport networks and services.
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“(iii) to use operating protocols of the service supplier's choice in the supply of any service,
other than as necessary to ensure the av ailability of telecommunications transport
networks and services to the public generally.”