RESTRICTED
WORLD TRADE S/NGBT/5
10March 1995
ORGANIZATION
(95-0566)
Negotiating Group onBasic Telecommunications
REPORT OFTHE MEETING OF27-28FEBRUARY 1995
1. TheNegotiating Group onBasic Telecommunications held itsfifth meeting on27-28
February1995.TheagendaforthemeetingwascontainedinairgramWTO/AIR/21of15February1995.
2. Under theagenda itemontheconsideration ofrequests forobserver status, theGroup considered
andapproved arequest forobserver status from theRussian Federation. Furthermore, itwasnoted
thatIndia andMauritius hadchanged theirstatus intheGroup from thatofobservers tothatoffull
participants inthenegotiations. Asaresult, thenumber ofparticipants inthenegotiations stood at
241andthenumber ofparticipants withobserver status intheGroup was312.TheChairman welcomed
thetwonewparticipants inthenegotiations andencouraged othergovernments participating asobservers
togivethought todecisions theymaybeconsidering inthisregard.
3. Regardingdiscussionofworkontechnicalandconceptualissues,theChairmaninviteddelegations
tooffertheirviews ontheissues addressed intheSecretariat Noteonoutstanding issues (S/NGBT/W/2)
oranyother outstanding issues ofinterest tothem.
4. Regarding clarification oftheapplication ofmodes ofsupply, some delegations recalled that
theimportance ofexamining modes ofsupply wastoensure thatallmeasures thatwould berelevant
aslimitations would beentered intoschedules. Some representatives saidthatitwasintheirview
possible forlocalanddomestic longdistance telephone service, andinsome cases theinstallation and
maintenance offacilities, tobecarried outonacross-border basis. Examples would include telephone
service, particularly cellular service, being provided cross-border between nearby countries orwhen
servicespersonnelcrossborderstoprovidefacilitiesinstallationwhilethecompanyconcernedestablishes
nocommercial presence. Itwassuggested thatcallbackservices might bethepurest form ofcross
border services, while otherforms ofservice thatmaybesupplied crossborder weremorecomplicated;
inthelatter cases, e.g.termination services, should aservice bedivided intoitscomponent parts as
determined onthebasisofhowtheservice issupplied tothefinaluser? Thequestion wasraised whether
termination services could bescheduled under either thecross-border orconsumption abroad modes
ofsupply. TheChairman observed that,since correspondent relationships fortermination ofcallswas
1Argentina, Australia, Canada, Chile, Cuba, Cyprus, Dominican Republic, Egypt, theEuropean
CommunitiesandtheirMemberStates(Austria,Belgium,Denmark,Finland,France,Germany,Greece,
Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, United Kingdom), Hong Kong,
Hungary, India, Japan, Korea, Mauritius, Mexico, Morocco, NewZealand, Norway, Slovak Republic,
Switzerland, Tunisia, Turkey, andtheUnited States.
2Brazil,BruneiDarussalam,China,ChineseTaipei,Colombia,CostaRica,CzechRepublic,Ecuador,
ElSalvador, Guatemala, Honduras, Iceland, Indonesia, Israel, Jamaica, Madagascar, Malaysia,
Nicaragua, Pakistan, Panama, Philippines, Poland, Romania, Russian Federation, Singapore, Slovenia,
South Africa, Thailand, Trinidad &Tobago, Uruguay, andVenezuela.S/NGBT/5
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thenormal wayofdoing business, itwasmorelikely tobethecasethatlimitations relevant toscheduling
would beimposed ontheability offoreign suppliers tosupply services intotheterritory without such
arrangements. Itwasnoted thatthere hadnotyetbeenagreement inthegroup ontheconcept of
termination services orontheideas onhandling oftermination services proposed bytheAustralian
delegation (S/NGBT/W/4) andthatfurther discussion ontheproposal would benecessary.
5. Regarding technical constraints onnumber ofservice suppliers, itwassuggested thatthere
should beadistinction between measures based ontechnical limitations which might become obsolete
andother quantitative limitations imposed forpolicy reasons thatfitthecriteria ofArticle XVI. The
Chairman recalled thatfinding thedividing linebetween purely technical andother policy reasons for
suchlimitations wasthecruxoftheproblem. Itwasalsonoted thatamainobjective ofthesediscussions
would betoavoid technical reasons being usedtoconceal market entry limitations. Onerepresentative
suggested thatadistinction mayneedtobemade regarding theremoval ofoperators fromfrequency
allocation decisions. Another issuesuggested forexamination inthecontext oftechnological constraints
included numbering schemes, e.g.when doestechnology dictate limitations onsuchschemes andwhen
should policies beadjusted tobemore appropriate inacompetitive environment. Arepresentative
observed thatfuture policy decisions tomatch regulatory changes withtechnological change maydepend
oftheoutcome ofthese discussions, soitwould beimportant toarrive atacommon understanding
inthisGroup.
6. With respect toother technical andconceptual issues, therepresentative oftheUnited States
introduced apaper onPro-competitive Regulatory andother Measures forEffective Market Access
inBasic Telecommunications Services (S/NGBT/W/5). Thefourgroups ofregulatory issues addressed
inthepaper were interconnection ofcompeting basic telecommunications suppliers, competitive
safeguards ondominant service suppliers, transparency ofregulatory processes, andtheindependence
ofregulators. Therepresentative oftheUnited States described thedisciplines outlined inthepaper
asreflecting theU.S.experience inmoving itsdomestic regime frommonopoly tocompetitive supply
andsaidthattheultimate benefit ofthese disciplines would betoensure effective market access and
thereby attract bothdomestic andforeign investment tomarket segments newly opened tocompetition.
Henoted thatwhile thescheduling ofadditional commitments could beonewaytoaddress some of
theconcerns raised intheU.S.paper, resort toother modalities ordocuments should notberuled out.
7. Inreaction totheU.S. paper, some delegations agreed thattheGATS aswellasitsAnnex
onTelecommunications might notbeadequate toensure thatscheduled commitments provide effective
market access, while others suggested thatsuchaconclusion wasnotyetclearandfurther examination
ofrelevant provisions oftheGATS inrelation tothese issues, particularly regarding interconnection,
would benecessary. Afewdelegations expressed theviewthattheGATS Annex onTelecommunication
mayalready address anumber oftheissues raised intheU.S.paper. Onerepresentative pointed out
thatthere hadnever beenanyunderstanding thattheAnnex onTelecommunications would notapply
toaccess andusebybasic telecommunications suppliers. Another representative noted thatduring the
negotiations ontheAnnex, there hadnevertheless beenlittleexpectation thatmany commitments on
basictelecommunications would bemade intheUruguay Round. Itwasalsonoted thatamong countries
thathadintroduced competition inthissector there wereavariety ofapproaches intothese problems
inuseandthere would beconcern about anydisciplines thatappeared tosaythatthere wasonlyone
wastoachieve deregulation andcompetitive entry. Itwassuggested thatother important regulatory
issues toexamine thatwerenotaddressed intheU.S.paper included licensing anduniversal service
requirements.S/NGBT/5
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8. Regarding termination services, therepresentative ofAustralia sought toclarify some ofthe
ideas contained initsproposal (S/NGBT/W/4). Hesaidthatthefactthatadomestic consumer ofan
international telephone callreceives onebill,which would seem toimply thatthere hadbeenno
international trade intelecommunications services. However, there clearly issuchtrade, indicated
clearly bythefactthatsome countries runasubstantial deficit onthistrade. HesaidthattheAustralian
paper triedtoisolate thatpartoftheprocess thatseemed tobethetraded service, suchthatwhen, for
example, acalloriginates inAustralia andterminates intheUnited Kingdom, theconsumer ofthe
traded services isinfacttheAustralian operator whopaystheU.K. operator toterminate thatservice.
TheAustralian domestic consumer concerned makes nochoice astowhether itisBritish Telecom or
Mercury thatterminates thecall,ittheAustralian operator whomakes thatchoice andpaysforthat
service. Hesaidthatitwasnotcleartohisdelegation thatso-called jointly-provided service wasin
facttrade.
9. Regarding theformulation andenforcement oftechnical standards, therepresentative of
NewZealand stated thatwhile itrecognized andagreed inprinciple withthegoalofseparation of
operators from regulatory functions, inNewZealand oneapproach thathadbeenadopted withthe
introduction ofcompetition wastopermit eachnetwork operator todetermine thestandards thatwould
apply toattachment toitsownnetwork.
10. Under theagenda itemonthereview ofparticipants 'responses tothequestionnaire onbasic
telecommunications, theGroup reviewed theresponses submitted byMorocco (S/NGBT/W/3/Add.21)
andEgypt (S/NGBT/W/3/Add.22). TheChairman alsoinvited questions onrevised responses submitted
byCanada(S/NGBT/W/Add.13/Rev.1)andTurkey(S/NGBT/W/Add.5/Rev.1).TheChairmanreminded
delegations thatanyhelpful updates ofresponses aswellasresponses fromobservers would bewelcome.
Itwasnoted thatquestionnaire responses fromCuba andMauritius would beavailable forreview at
thenextmeeting oftheGroup. Therepresentatives ofNew Zealand, Japan andtheEuropean
Communities informed theGroup ofsome recent changes orplans regarding regulations intheir
telecommunications regimes. TheChairman thanked delegations fortheinformation andexpressed
thehopethatalldelegations would continue tokeeptheGroup informed ofnewdevelopments both
inthemeetings oftheGroup aswellasinwritten submissions.
11. Moving totheagenda itemonorganization offuture work anddates offuture meetings, it
wasagreed thatthedateofthenextmeeting oftheGroup would be26-27 April withbilateral
consultations alsotobeheldduring thatweek. Theweek of10Julywastentatively scheduled asthe
timeperiod forthesubsequent meeting andbilateral negotiating sessions. Itwasrequested andagreed
thatanexchange ofinformation onprogress inbilateral negotiations would beplaced ontheagenda
offuture meetings oftheGroup. Also, theGroup agreed to1July1995 asadateupon which
participants inthenegotiations would begin tosubmit draftoffers onbasic telecommunications.
12. Under theagenda itemonother business, theChairman asked theGroup toconsider again
whether totakeaspecific decision toderestrict aspecific setofdocuments oftheGroup: the
questionnaire onbasic telecommunications (S/NGBT/W/3) andtheresponses toitcontained inthe
Addenda tothatdocument. TheChairman recalled thatthesedocuments contained factual information
anddidnotcontain thenegtotiating positions ofanyparticipants. Therepresentative oftheEuropean
Communities stated thatitagreed thatthequestionnaire andtheinitial responses tothequestionnaire
could bede-restricted ontheunderstanding thatthiswould notcreate aprecedent inrelation to
derestriction generally andnorwould itprejudice thefactthateachdecision inrelation toderestriction
would havetobetaken onacase-by-case basisandonitsownmerits. There being noobjections raised
totheproposal oftheChairman asclarified bytheunderstanding stated bytherepresentative ofthe
European Communities, theproposal wasadopted bytheGroup.