RESTRICTED
WORLD TRADE S/NGBT/W/12/Add.3/Rev.1
26February 1996
ORGANIZATION(96-0709)
Original: English Negotiating Group onBasic Telecommunications
COMMUNICATION FROM THE UNITED STATES
Draft Offer onBasic Telecommunications
Revision
Thefollowing communication iscirculated attherequest oftheUnited States tomembers of
theNegotiating Group onBasic Telecommunications.
_______________
TheUnited States hasrevised itsoffer of31July1995 (S/NBGT/W/12/Add.3) inresponse
torequests fromournegotiating partners. Therevision offers unrestricted market access andnational
treatment toforeign telecommunications services andservice suppliers inthe"local" telecom market.
Thus, theUnited States iswilling toremove barriers toaccess atthelocallevel. Thisrevision reflects
theUnited States commitment topromote competitive telecommunications services inorder toincrease
theavailability andvariety oftelecommunications services andtolower theprices atwhich thoseservices
areoffered. With thisrevised offer, theUnited States hassignaled itsintention tocommit to"roll
back" existing restrictions oncompetition atthelocallevelintheevent ofasuccessful conclusion to
these negotiations.
Therevision alsosetsouttheU.S.offerregarding foreign ownership ofcommon carrier radio
licenses inresponse torequests forclarification fromournegotiating partners. TheUnited States offers
upto100% foreign indirect ownership ofcommon carrier radio licenses --there willbenolimits on
indirectownershipofsuchlicensesbyforeigngovernments(includinggovernment-ownedcorporations),
non-U.S. nationals ornon-U.S. corporations orother business entities. Norwillthere beanylimits
onthenationality ofofficers ordirectors ofanycompany holding directly orindirectly acommon carrier
radio license. There isalimitondirect ownership, butitisoneofform notsubstance. Aforeign
government(includingagovernment-ownedcorporation),anon-U.S.nationaloranon-U.S.corporation
orother business entity candirectly ownorcontrol aU.S.holding company, which directly owns or
control 100% ofaU.S.corporation holding acommon carrier radio license.
Thisofferiscontingent upon theagreement byacritical mass ofWTO members toprovide
market access andnational treatment forbasic telecommunications services, aswellastoprovide
commitments similar tothose offered bytheUnited States onpro-competitive regulatory disciplines.
TheUnited States reserves therighttowithdraw oramend thisoffer atanytime.S/NGBT/W/12/Add.3/Rev.1
Page2UNITED STATES -DRAFT OFFER
Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
Commitments inthese subsectors areundertaken inaccordance withthepro-competitive regulatory disciplines described inthecolumn headed "additional
commitments".
2. COMMUNICATION
SERVICES
C. Telecommunication services
Basic local, inter-exchange
andinternational services;
supplied overpublic
telecommunications
transport networks using
anynetwork technology
(e.g., wire-based, radio-
based, cable television);
facilities-based andona
resale basis; ineach ofthe
following market segments:
a. Voice services
b. Packet-switched data
transmission services,
including frame-relay
services
c. Circuit-switched data
transmission services
d. Telex services
e. Telegraph services
f. Facsimile services1) None
2) None
3) -Subject tospectrum availability.
-Comsat hasexclusive rights tolinks
withIntelsat andInmarsat.
-Theright toobtain alicence toland
asubmarine cable mayberestricted.
-Acommon carrier radio license may
notbehelddirectly bya:
(a)foreign government;
(b)non-U.S. citizen;
(c)non-U.S. corporation; or
(d)U.S. corporation ofwhich more
than20% ofthecapital stock is
owned orvoted byaforeign
government, anon-U.S. citizen
oranon-U.S. corporation.
-Access tonetworks ofcompanies
providing local exchange services
withfewer thantwopercent ofthe
United States 'phone lines maybe
limited bystate action.(1) None
(2) None
(3) NonePro-competitive
regulatory disciplines
(attached).S/NGBT/W/12/Add.3/Rev.1
Page3Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
g. Private leased circuit
services
o. Other
Domestic/international
satellite services and
satellite links/capacity.4) Unbound except asindicated inhorizontal
commitments.4) Unbound except asindicated inhorizontal
commitments.
Satellite earth stations
International switching and
other international gateway
facilities
Mobile services
-Analogue/digital
cellular services
-PCS(personal
communication
services)
-Paging services
-Mobile dataservices
Video transport servicesS/NGBT/W/12/Add.3/Rev.1
Page4ATTACHMENT TOTHE UNITED STATES DRAFT OFFER IN
BASIC TELECOMMUNICATIONS SERVICES
Pro-Competitive Regulatory Commitments1
Definitions
Terms defined intheGATS havethesame meaning inthisschedule. Inaddition:
1.Alocal exchange carrier isapublic telecommunications transport network operator thatprovides localbasic telecommunications services toend-users
andinterconnection ofinter-state andinternational telecommunications tothelocalpublic telecommunications transport network.
2.Interconnection istheprovision ofservices fortheorigination ortermination ofinter-state orinternational telecommunications services.
3.Adominant operator isapublic telecommunications transport network operator withmarket power. Adominant localexchange carrier isalocalexchange
carrier withmarket power.
4.Market power istheability tocharge prices above acompetitive level. Inbasic telecommunications services, market power isparticularly relevant with
respect tocontrol overbottleneck facilities forinterconnection topublic telecommunications transport networks.
5.Collocation isthephysical presence, oritsfunctional equivalent, ofacompeting service supplier 'sequipment atthefacility ofanother service supplier
toenable thecompeting service supplier toprovide ascheduled service.
6.Dialing parity istheability ofallcompeting service suppliers toofferandusetelephone numbering systems sothatacustomer dialsanequal number
ofdigits tousetheservice ofanycompeting service supplier.
7.Anaccounting rateisdefined astheratepertraffic unitagreed upon between administrations foragiven relation, which isusedfortheestablishment
ofinternationalaccounts,asperInternationalTelecommunicationsUnionrecommendationD.150,"NewSystemforAccountinginInternationalTelephony".
1"The United States believes thatthework ontheReference Paper willresult inatextacceptable toallNGBT participants andhasalready stated itsview that
such atextisbestmade binding byitsinclusion intheadditional commitments column."S/NGBT/W/12/Add.3/Rev.1
Page58.Number portability istheability ofacustomer toretain itsexisting phone number nomatter which competing service supplier thecustomer uses.
FairandEconomical Interconnection
TheUnited States undertakes thefollowing commitments regarding fairandeconomical interconnection ofinter-state andinternational telecommunications
services:
1.Adominant localexchange carrier willprovide interconnection toitspublic telecommunications transport network fortheprovision ofinter-state and
international telecommunications services:
(a)atratesthatarepublicly tariffed, non-discriminatory andcost-based andonterms andconditions thatarepublicly tariffed, non-discriminatory and
reasonable;
(b)atanynetwork interconnection point, subject tocost-sharing fornecessary construction ofadditional facilities; and
(c)inamanner thatpermits service suppliers tobuyonlythefacilities orservices theyactually needtoprovide abasic telecommunications service.
2.Theregulator willmake publicly available anycostinformation presented toitbyadominant localexchange carrier insupport ofitsinterconnection
rates.
3.Adominant localexchange carrier withannual revenues inexcess ofaminimum leveldefined bytheregulatory authority willprovide collocation.
4.Adominant operator ofinternational basic telecommunications services willnotimpose unreasonable entry barriers onother international basic
telecommunications service suppliers.
5.Adominant localexchange carrier willprovide equal access, including dialing parity, toitspublic telecommunications transport networks fortheprovision
ofinter-state andinternational basic telecommunications services.
6.International accounting ratesmaintained withforeign correspondents willbepublicly available. Adominant operator willberequired tojustify any
international accounting ratethatdiffers significantly from domestic interconnection rates.
7.Adominant localexchange carrier willprovide interconnection toitspublic telecommunications transport network tosuppliers ofcellular mobile radio
services onreasonable, non-discriminatory terms andconditions.S/NGBT/W/12/Add.3/Rev.1
Page68.Anyuniversal service support obligation willbeadministered inatransparent, competitively neutral manner.
Competition Safeguards
TheUnited States undertakes thefollowing commitments toprevent adominant operator fromabusing itsmarket power byengaging inanti-competitive
activity intheprovision ofinter-state andinternational telecommunications services:
1.Adominant operator willnotbepermitted tocross-subsidize itsnon-regulated services byshifting thecosts ofsuchservices toservices inwhich the
dominant operator retains market power.
2.Adominant localexchange carrier withannual revenues inexcess ofaminimum leveldefined bytheregulatory authority willadopt structural separation
orcostaccounting safeguards toprevent theallocation ofcosts ofnon-regulated services toregulated services.
3.Adominant localexchange carrier willmake publicly available toallsuppliers ofbasic telecommunications services, onanon-discriminatory basisand
consistent withcustomer privacy requirements, network information thatis:
(a)necessary tofacilitate interconnection toitsnetwork; or
(b)which otherwise isnecessary tofacilitate thesupply ofcompetitive telecommunications services.
Information affecting changes tothepublic telecommunications network willbemade publicly available prior toimplementation andwithreasonable
advance notice.
4.There willbenumber portability forinter-state andinternational services.
5.Allinterested members ofthepublic, including non-dominant suppliers ofbasictelecommunications services, willhaveafairandreasonable opportunity
toparticipate inthedevelopment oftechnical standards governing public telecommunications transport networks andservices.
Transparent Regulation
1.TheUnited States willprovide public notice of,andfairopportunity forcomment on:
(a)allproposed regulations, licensing criteria, andotherrequirements governing theprovision ofinter-state andinternational telecommunications services
andinfrastructure; andS/NGBT/W/12/Add.3/Rev.1
Page7(b)allapplications forlicences andother authorizations toprovide inter-state andinternational telecommunications services andinfrastructure.
2.TheUnited States willaccord allinterested parties timely andreasonable access toallinformation supporting regulatory decisions, subject toreasonable
limitations toprotect confidential information.
Effective Independence oftheRegulator
TheUnited States will:
1.Notownanyinterest inanypublic telecommunications transport network andwillmaintain aregulatory authority thatisnotaccountable toanypublic
network operator nortoanyauthorities thatexercise direct orindirect control overanypublic network operator.
2.Ensure thatanindependent regulator isempowered toresolve disputes involving basic telecommunications service suppliers andimpose meaningful
sanctions forviolations ofrelevant statutes, regulations andlicence terms.
3.Ensure thatanindependent regulator isempowered toreview publicly tariffed interconnection arrangements toensure thatrates, terms andconditions
arereasonable andnon-discriminatory.
4.Ensure thatanindependent regulator isempowered toadopt andenforce theinterconnection andcompetition safeguards described above.