RESTRICTED
WORLD TRADE S/NGBT/W/3/Add.23/Rev.1*
12April 1995
ORGANIZATION(95-0963)
Original: Spanish Negotiating Group onBasic Telecommunications
COMMUNICATION FROM CUBA
Response toQuestionnaire onBasic Telecommunications
Revision
Theattached revision iscirculated attherequest ofCuba toMembers oftheNegotiating Group
onBasic Telecommunications.
__________________________
*English onlyS/NGBT/W/3/Add.23/Rev.1
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PART I
Definition
1. Thebasic public telephone service hasbeendefined asthefinaltelecommunications service
bymeans ofwhich thecomplete capacity forcommunicating voice signals between users isprovided,
including thetransmission ofsignals between telecommunications terminals, aswellasthelocallines
andterminal devices, inthefollowing modes: local telephone service, rural telephone service and
domestic andinternational longdistance telephone service. Thetermbasicpublic telecommunications
service isnotdefined.
2. Nodistinction ismade between networks andservices indefining basic telephone services.
3. Inaccordance withthedefinition ofthebasic telephone service, therearesome services which
could beincluded within thescope ofGATS definition andarenotamong those mentioned intheanswer
toquestion 1above.
Market structure
4. Empresa deTelecommunicaciones deCuba S.A.(ETECSA) hasbeengranted aconcession
forthemanagement ofpublic telecommunications services foraperiod of25years, including a12-year
period ofexclusivity, starting from thepresent year, forthefollowing services:
- Basic telephone service, bothdomestic andinternational.
- Signal transmission service, bothdomestic andinternational.
- Datatransmission service, bothdomestic andinternational.
- Telex service, bothdomestic andinternational.
Attheendofthisexclusivity period, further concessions could begranted tothirdparties or
entities tooperate, onanequal footing, inallorpartofthenational territory, services identical or
similar tothose mentioned above.
However, thisexclusivity willonlybeineffect aslongasETECSA fulfils theexpansion,
upgrading andperformance conditions laiddown intheconcession ithasbeengranted.
5. Noexclusive rights havebeengranted sofaronageographical basis.
6. Foreign participation isallowed uptoa49percentshare, although exceptions arepossible
subject topriorauthorization bytheCouncil ofMinisters. Forexample, inthecaseofcellular telephone
services, aforeign participation of50percentwasapproved bytheCouncil ofMinisters through
Decree 167of22January 1992.
7.(a) Subject toprior authorization from theMinistry ofCommunications, thefollowing services
maybesupplied without exclusive rights:
- Public pay-phones
- Value-added telecommunications services
- Trunked mobile radiocommunication serviceS/NGBT/W/3/ Add.23/Rev.1
Page3
These aredefined as:
Publicpay-phones:operationofterminalequipmentconnectedtothepublictelecommunications
network soastosupply thepublic telephone service tothegeneral public against payment;
charges maybecollected automatically ormanually.
Value-addedtelecommunicationsservices:servicesusingthepublictelecommunicationsnetworks
orfinalservices towhich facilities areadded soastoprovide newtelecommunications services
oraddinformation services tothebasic service.
Trunked mobile radiocommunication service: alandmobile radio communication service that
usesanalog ordigital technology forvoice anddatacommunications, withtrunking, automatic
vehicle location, queuing andpossibility ofestablishing dynamically reallocatable user
groups/subgroups.
7.(b) There areoperating andinterconnection arrangements oragreements withforeign operators
forinternational telecommunications traffic. Forthebasic telephone service amanagement
concession hasbeengranted toETECSA, asmentioned above intheanswer toquestion 4.
8. Agreements ontelecommunications networks andservices withforeign suppliers areentered
intobytheenterprises authorized tooperate inthecountry.
Ifagreements havetobesigned withaforeign government, theMinistry ofCommunications
willberesponsible fordeciding onhowtoproceed, afterconsidering theviews oftheenterprise
concerned.
PART II
Competition
(i) Overview
Asmentioned inPartI,point 4,basic telephone services arecovered bya12-year exclusivity
period starting from 1994.
Nevertheless, foreign suppliers mayoffer their ownform ofparticipation intheservices
mentioned inPartI,point 7(a). Suchoffers willbesubmitted totheMinistry ofCommunications for
approval. Ministry ofCommunications approval isnecessary ineachcase.
(ii) Modes ofsupply
There arenoconstraints regarding consideration ofanyformandmode ofsupply thatforeign
suppliers maywishtopropose.
(iii) Market access
There arenolimitations regarding market access possibilities, butinallcases theapproval
andlicense oftheMinistry ofCommunications isrequired.S/NGBT/W/3/Add.23/Rev.1
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(iv) National treatment
There arenolimitations onresidency ofmanagers, directors orboard members inthecountry.
Thequestion ofnationality isgoverned bythearticles oftheenterprise.
Inaddition, therearenorestrictions onforeign ownership ofbuildings, andthelandonwhich
theystand maybegranted inusufruct. Allthisapplies during theconcession period.
Foreign suppliers canmake, without limitations, theirownproposals which willbesubmitted
totheMinistry ofCommunications forapproval.
(v) Licensing
Licence applications mustbesubmitted totheMinistry ofCommunications. Depending on
theareaofspecialization concerned, theyaretransmitted forstudy andproposals, tothe
Ministry 'sdifferent departments.
Each areaofspecialization hasitsownestablished procedures andrequirements.
Services suchas:voice telephony, packet-switched datatransmission, circuit-switched data
transmission, telexandprivate leased circuits areexclusive services for12years, while the
telegraph service isprovided exclusively byaState-owned enterprise.
Facsimile services andallother services mentioned inPartI,point 7(a),arenotreserved for
exclusive suppliers andsameprocedures apply asdescribed intheanswers toquestions (i)to(v)above.
B. Categories
Local/long-distance/international
Local callsarethose made within acityoradetermined territorial areacorresponding toa
numbering areadefined foreachlocality.
Long distance callsarethose notincluded intheprevious definition. They arenational when
made within thecountry, andinternational when theservice isprovided withusersofforeign networks.
2. Wire-based
There arenoregulatory distinctions asbetween domestic andnetworks services (local and
long-distance) orbetween possible suppliers ofbasic telecommunications inthese market segments.
Radio-based
Same answer asfor"wire-based". Inaddition, forradio-based services alicence tousethe
radioelectric spectrum isrequired.
Forbothcategories (wire- andradio-based), asalready described inPartI,point 4,a12-year
exclusive concession hasbeengranted toEmpresa deTelecomunicaciones deCuba, S.A.forbasic
telephony services.S/NGBT/W/3/ Add.23/Rev.1
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Forcellular mobile communications there isajointventure inoperation inthecountry with
service exclusivity for20years byvirtue oftheDecree 167of22January 1992 oftheExecutive
Committee oftheCouncil ofMinisters.
Resale basis
3. Theinternational resale ofprivate leased circuit capacity connected tothepublic network is
notpermitted.
4. Notypeofbasictelecommunicationsresaleisallowedinordertoprovideservicetothirdparties.
Facilities-based
5. Construction andoperation ofbasic telecommunications network infrastructures arecarried
outbytheauthorized enterprises themselves. Contracts fortechnical assistance andsupervision as
wellas"turn-key" projects areallowed.
Public/non-public supply
6. Adistinction ismade between public andprivate telecommunications services.
Public telecommunications services arethose intended tomeetthetelecommunications needs
ofthegeneral public andareprovided viaapublic telecommunications network.
Private telecommunications services include allservices provided byanatural orlegalperson
using itsowninfrastructure orbymeans ofdedicated orswitched linesleased fromthepublic services
tobeusedforitsowninternal orprivate telecommunications. These services arenotallowed tobe
made available tothirdparties.
Aprivate telecommunications network (non-public) cannot bemarketed tothirdparties, and
isestablished using theinfrastructure ofpublic telecommunications networks, except when theuser
installs itsownnetwork, inwhich caseapproval from theMinistry ofCommunications isrequired.
7. Basic public telephony services must bemade available tothepublic generally.
8. Allbasic public telephony services defined inPartI,point 1,aremade available tothepublic.
9. After aconcession hasbeengranted toatelecommunications supplier, thefollowing obligations,
among others, areimposed:
- Theprovisions oftheConstitution oftheRepublic;
- Theprovisions ofsections (a),(b)and(c)ofArticle 67oftheDecree ofLaw67,on
theorganization oftheState'sCentral Administration, dated 19April 1983;
- Theprovisions relating toservice contracts asestablished inArticles 320,321and
322oftheCivil Code;
- Theexisting lawsinforce inthisarea;S/NGBT/W/3/Add.23/Rev.1
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- International agreements, conventions andtreaties inthisfieldentered intobyCuba;
- Theobligations established intheconcession itself andinthefuture bythe
Telecommunications Law.
Another major obligation ofthebasictelephony public service isthatofexpanding thetelephone
service insuchawaythatthepopulation ingeneral hasaccess toit,particularly theresidential service
andpublic payphones. Inorder toachieve thisaplanforupgrading andexpansion aswellasfor
improving thequality ofservice must befulfilled.
10. There arenorestrictions onorganizing andoffering aprivate network byatelecommunications
supplier.
Theinstallation ofaprivate telecommunications network byauserrequires priorauthorization
bytheMinistry ofCommunications.
11. Theoperation ofpublic pay-phones asdefined intheanswer toPartI,Question 7,isnotreserved
tomonopoly orexclusive suppliers.
PART III
Regulatory Issues
Relationship between regulatory andoperational functions
1. TheMinistry ofCommunications isresponsible forbothpolicy andenforcement ofregulations.
Itisalsoresponsible fortheenforcement andapproval oftelecommunications standards.
2. TheMinistry ofCommunications istheauthority responsible forformulating andenforcing
telecommunications standards.
These standards maybeproposed either bythebasic telecommunications supplier orbythe
Ministry ofCommunications orthirdparties.
3. Inadditiontoitsfunctionsasacentralgovernmentorganization,theMinistryofCommunications
istheadministrative authority acting asaregulatory body responsible forsupervising andinspecting
theequipment, facilities anddevices ofthebasic telecommunications supplier andfordischarging all
duties entrusted toitinorder tosecure thecontinuity andeffectiveness ofpublic telecommunications
services.
Incaseofconflicts, alldisputes thatmayarisearetoberesolved bytheCuban administrative
orjudicial authority, asapplicable.
Forinstance, inthecaseoftheEmpresa deTelecomunicaciones deCuba, S.A.: (ETECSA),
theconcession granted (Decree 1990of17August 1994) point 1.8,second paragraph, provides that:
"ETECSA mayappeal totheExecutive Committee oftheCouncil ofMinisters against any
resolution issued bytheMinistry ofCommunication which isconsidered toharm itsinterestsS/NGBT/W/3/ Add.23/Rev.1
Page7
within 30calendar daysafteritsissue, formulating thearguments andpresenting theevidence
which itconsiders support itsrights".
Frequency allotment orassignment
4. Forexample, inthecaseoflicence applications forfrequency assignment inaradio
communication station, theMinistry ofCommunication generally decides oneachauthorization taking
intoconsideration therelevant rulesofthelawonthismatter, andincompliance withtheregulations,
procedures andtechnical standards established bytheMinistry itselfand,inaddition, taking intoaccount
therules andrecommendations inforce issued byinternational organizations andthecountry 's
commitments under them.
5. Foreign telecommunications suppliers authorized toestablish ajointventure withaCuban
enterprise byvirtue ofanadministrative concession receive national treatment under theprocedures
andcriteria asdescribed above. There isnodifference inthetreatment given onceallrequirements
aremetandthepermits, licences orconcessions havebeengranted bytherelevant administrative
authorities forproviding aspecific service.
Numbering andidentification codes
6. TheEmpresa deTelecomunicaciones deCuba (ETECSA) iscommitted towork outaproposal
forthefundamental technical plans, among them, thenumbering planandinconsequence thenumbering
andidentification codes, within thefirstyearoftheconcession, which aretobesubmitted totheMinistry
ofCommunication forapproval.
Aschanges intheseplans become necessary, ETECSA willsubmit thecorresponding proposal
totheMinistry ofCommunications forapproval. Aninterested thirdparty mayalsopropose changes
toETECSA. Incaseofdisagreement between ETECSA andthethird party, theMinistry of
Communications willdecide onthefinalversion oftheplans, afterconsidering thearguments ofthe
parties.
Thefundamental technical plans arebinding onallauthorized suppliers oroperators ofthe
country andonusers (authorized) thatestablish theirownprivate networks orbuytheirownequipment,
should theywanttoconnect them tothepublic networks.
7. Asestablished inPartIII,point 5,foreign telecommunications suppliers under theprocedures
andcriteria asdescribed above donotreceive lessfavourable treatment thandomestic suppliers.
Standards, typeapproval andequipment attachment
8. Allstandards approved bytheMinistry ofCommunications aremandatory.
9. Standards proposals arecirculated among theparties involved before theirapproval bythe
Ministry ofCommunications.
These proposals mayemanate from theMinistry ofCommunications, thelicensee ofthe
telecommunications services, orthirdparties.
Foreign suppliers withaconcession orauthorization toprovide telecommunications services
mayparticipate intheprocess ofdeveloping technical standards related totheauthorized services.
10. Self-certification isnotallowed. Thestandards must beapproved bytheMinistry ofS/NGBT/W/3/Add.23/Rev.1
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Communications.
11. Aslongastheequipment complies withthestandards, thetype-approval certification andthe
regulations established bytheMinistry ofCommunications, itcanbeauthorized tobeattached tothe
network.
12. Basic telecommunications suppliers mayusetheirownswitches thathavebeenauthorized by
theMinistry ofCommunications.
13. Topermit attachment ofcustomer-supplied terminal equipment tothenetwork, suchequipment
mustcomply withthestandards, type-approval certification andregulations established bytheMinistry
ofCommunications.
Interconnection
14. Thebasic telephone service supplier, inthiscaseETECSA, hastheobligation toestablish and
toaccept interconnections inorder toprovide users access toallinstalled public services.
Interconnection isregulated bymeans oftechnical standards approved bytheMinistry of
Communications. These could beproposed either bytheservice supplier, bytheMinistry of
Communications orbythirdparties, butalways taking intoaccount theviews oftheservice supplier.
Theservice supplier hasnoobligation toestablish andtoaccept interconnections when the
equipment, device ornetwork tobeinterconnected doesnotcomply withthetechnical standards
previously approved bytheMinistry ofCommunications.
Once those requirements aremet,theparties involved arefreetoagree theinterconnection
terms andconditions, including tariffs, andtosignthecorresponding contract.
Interconnection agreements must include following aspects:
- methods usedtoestablish andmaintain theconnections;
- number ofconnection points tobeused;
- dates orperiods inwhich interconnections aretoberequested;
- capacity required topermit aneffective interconnection;
- special arrangements needed tomaintain anacceptable signal quality;
- procedures andobligations forbothparties forunforeseen situations;
- payment conditions.
15. Foraccessing thepublic telecommunications network, theinterconnection hastobemade with
thelicensee, inthiscase, ETECSA.
16. Thepublic datanetwork isincluded within theconcession granted toETECSA, andthesame
procedures andregulations asdescribed above (points 14and15)apply.S/NGBT/W/3/ Add.23/Rev.1
Page9
17. There isfreedom toagree theinterconnection tariffs between theservice supplier oroperator
andtheuser.
Theservice supplier hastotakeintoaccount thefollowing terms andconditions:
- Tariffs forinterconnection services should notbediscriminatory;
- Access andcharges have tobeidentical forusers having similar interconnection
conditions;
- Interconnection tariffs comprise afixed partandavariable part.
Thefixed partreflects thecostsrequired toestablish theconnection. Intheparticular
caseofETECSA, itisallowed torecover itscosts andinclude aprofit.
Thevariable parttakes intoaccount timeuseratesandcosts incurred forproviding
theservice, andisindependent ofthevalue oftheactual traffic.
- Interconnection charges mayinclude with theprior approval oftheMinistry of
Communications, acontribution tocover thecostsofthelocaltelephone service, insofar
asthese costs arenotcovered bytheirowntariffs.
Whenrequestedbyeitheroftheparties,theMinistryofCommunicationswillresolveanydispute
arisingbetweenthemrelatedtothetermsandconditionsofinterconnections,includingdisputesregarding
theapplicable tariffs.
Competitive safeguards
18. Safeguard isaresponsibility oftheMinistry ofCommunications, which istheState body
responsible forensuring secure thecontinuity andefficiency ofthepublic telecommunications service.
InthecaseofETECSA, attheendoftheexclusivity rights granted forthose services, the
Ministry ofCommunications maygrantotherconcessions infavour ofthirdparties orentities toprovide
theseservices, while taking carethatallofthemhavethesame conditions ,inallorpartofthenational
territory.
Atthetimewhen other concessions aregranted, regulations willexistonthose conditions,
taking intoaccount thecompetitive level ofthetariffs approved forETECSA andthesubsidy level
(ifany)withrespecttothelocaltelephoneserviceandotherservicesoperatingunderthesameconditions.
19. Nodistinction ismade sofarregarding dominant andnon-dominant suppliers.
20. Notapplicable inourcase.
21. When quality andprices arecompetitive, thesupply ofequipment manufactured inthecountry
ispreferred.
Pricing-related measures
22. Distributionratesoraccountingratesaredirectlyagreedbetweentheoperatororservicesupplier
andforeign suppliers ofinternational telecommunications services.S/NGBT/W/3/Add.23/Rev.1
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Regarding collection ratesortariffs tobecharged tothepublic, aprocedure isestablished by
theDecree 190oftheCouncil ofMinisters dated 17August 1994, Chapter IX,thecontent ofwhich
issummarized below:
- Basic telephone services offered innon-convertible localcurrency willbeproposed
bytheEmpresa deTelecomunicaciones deCuba, S.A.(ETECSA) andapproved by
theMinistry ofCommunications. These tariffs willbereviewed every twoyears and
canbeadjusted taking intoconsideration thechange intheaverage working wage and
therealcosts innon-convertible local currency, oftheservice supplied during the
elapsed period;
- However, when requested andjustified byETECSA, theMinistry ofCommunications
mayauthorize achange inthese tariffs atanytime;
- Regarding thebasic telephone services offered infreely convertible foreign exchange
orinconvertible localcurrency, ETECSA willsetthetariffs every year. During the
firstquarter thesemayberevised andadjusted either upwards ordownwards according
toarevenue capcriterion;
- Ineither caseETECSA mustnotify theMinistry ofCommunications ofthetariffs to
beapplied;
- Thetariffs fortheother services under theconcession aretobeproposed byETECSA
andapproved bytheMinistry ofCommunications.
23. Please seetheanswer toQuestion 22above.
24. Asmentioned intheanswer toQuestion 22,ETECSA isresponsible forsetting theaccounting
rateswiththedifferent foreign service suppliers.
Oneofthecriteria usedbyouradministrations istotakeintoconsideration thecosts ofthe
domestic network.
There arenovolume discount ratesontariffs.
25. Theparticipation ofabasic telecommunication supplier inestablishing thetariffs isexplained
intheanswer toQuestion 22.
26. Included intheanswer toQuestion 24.
27. Asyetthere arenospecific rules andsame procedures apply asdescribed intheanswer to
Question 22.However, these tariffs willgenerally beapproved bytheMinistry ofCommunications,
andtheproposals cancome from bythelicensee ortheMinistry ofCommunications itself.
Rights ofwayfortheconstruction ofinfrastructure
28. Basic telecommunications suppliers oroperators arepermitted tobuildtheirowninfrastructure
orfacilities.S/NGBT/W/3/ Add.23/Rev.1
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Forinstance, inthecaseofEmpresa deTelecomunicaciones deCuba (ETECSA), Chapter 5,
point 5.1,oftheConcession reads asfollows:
"Forbuilding, refurbishing, improving orupgrading theessential facilities inorder tosupply
thepublic telecommunication service, ETECSA maybeauthorized bytheExecutive Committee
oftheCouncil ofMinisters tooccupy oruseState andprivate property ...".
29. Under these procedures andcriteria, national treatment isextended tothebasic
telecommunications suppliers previously authorized bytheMinistry ofCommunications.
Newtelecommunications services
30. Theregulatory process fornewtelecommunication services willbeanalysed bytheMinistry
ofCommunications induecourse.
Theintroduction andoperation ofanewservice inthecountry requires theanalysis andapproval
bytheMinistry ofCommunications.
31. TheMinistry ofCommunications isresponsible fordetermining whether anewservice isto
beconsidered abasicorvalue-added one,taking intoaccount theelements contained inthelaws, decrees,
regulations, concessions, authorizations andprocedures inforce atthatmoment.