RESTRICTED
WORLD TRADE S/NGBT/W/8/Rev.1
12September 1995
ORGANIZATION(95-2655)
Negotiating Group onBasic Telecommunications
Synopsis ofParticipants 'Views onOutstanding Issues
Note bytheSecretariat
Revision
1. Participants agreed attheinformal meeting oftheNegotiating Group onBasic
Telecommunications on27April 1995thattheSecretariat would compile atabular synopsis ofwritten
submissions onoutstanding issues andoftherelevant discussions. Atthemeeting of12-13 July, the
Secretariat wasasked tofurther update thetabular synopsis. Thewritten submissions covered inthis
notearethoseofAustralia (S/NGBT/W/4, S/NGBT/W/4/Add.1, andS/NGBT/W/11), theUnited States
(S/NGBT/W/5), theEuropean Community (S/NGBT/W/6), Canada (non-papers), andJapan (non-
papers) .
2. Theattached tabulation attempts tocapture themainpoints made insubmissions anddiscussions
onissues relating tothenegotiations onbasictelecommunications. Theissues covered include licensing,
interconnection, competition safeguards, transparency, independent regulatory bodies, frequency and
numbering, standards andtypeapproval, tariffs andaccounting rates, termination services, rights of
wayandplanning, anduniversal/public service.
3. Thechoice ofissues corresponds todiscussions intheNegotiating Group. Significant overlap
exists among various topics. Termination services, forexample, encompasses many oftheissues taken
upunder other headings. Similarly, such issues asinterconnection, competition safeguards and
independent regulatory authorities touch upon anumber ofthesame issues. Thisrevision hopefully
minimizes oneareaofoverlap bymoving points made concerning accounting ratesfrom thesection
on"transparency" tothesection on"tariffs andaccounting rates". Thepurpose ofthisnoteisto
summarize andsynthesize thekeyaspects ofpositions taken byparticipants inorder tofacilitate further
discussion. Nojudgment isintended astotherelative merits ofdifferent views.S/NGBT/W/8/Rev.1
Page2European Community
(S/NGBT/W/6)United States (S/NGBT/W/5) Canadian Non-Papers Australia
(S/NGBT/W/4 &Add.1)Japan (Draft Scheduling Guide) Informal Meetings
Licensing Includes licences aswellasapproval, authorization, registration orcertification orother suchprocedures required toengage inanactivity.
Articles VI,XVI, XVII, XVIII
andparagraph 5oftheAnnex all
apply tolicensing criteria,
procedures andconditions, mostly
butnotexclusively inthecontext
ofsectors inwhich specific
commitments areundertaken.
Where alicensing criterion hasa
maximum quantitative element in
terms ofArticle XVI, ora
discriminatory element interms of
Article XVII, thecriterion must
bescheduled.
Conditions outside thescope of
Articles XVIandXVII aresubject
toArticle VI.Article VIrequires
thatallmeasures ofgeneral
application beadministered ina
reasonable, objective and
impartial manner. Article VI
disciplines aretobefurther
developed inthecontext ofthe
paragraph 4work programme, in
order toensure thatlicensing
requirements donotconstitute
unnecessary barriers totrade.Article VIisparticularly
important forlicensing
requirements which should be
based on"objective and
transparent criteria" andnomore
"burdensome thannecessary to
ensure thequality ofthe
service".While notprohibiting Members
from imposing licensing orother
forms ofauthorization toprovide
basic telecommunications
services intheirterritories the
GATS obliges Members to
ensure thatcriteria and
procedures forsuchauthorization
insectors where specific
commitments areundertaken are
subject totheobligations of
Articles II,VI,XVI, XVII and
Paragraph 5ofAnnex on
Telecommunications.
Licensing criteria, whether
specific commitments are
undertaken ornot,must be
applied onaMFN basis. Ifa
Member wishes toapply criteria
(such asreciprocity tests) which
areincompatible withArticle II,
theMember should negotiate an
exemption totheMFN
obligation.Need todiscuss therules that
would apply tolicensing in
general (United States).
Anissue tobeaddressed ishow
toschedule licensing ofearth
stations forsatellite systems in
particular global mobile satellite
systems (Canada).
Theissue ofwhocaninitiate
thelicensing procedure needs to
beaddressed. Thelicensing
procedure started onlyafterthe
notice oftheregulatory body
maybedeemed tobedefacto
barrier (Korea).S/NGBT/W/8/Rev.1
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(S/NGBT/W/4 &Add.1)Japan (Draft Scheduling Guide) Informal Meetings
Licensing (Cont 'd)
Vague ordiscretionary criteria
(e.g. "public interest criteria") are
tooimprecise tobescheduled.Article VI.4and5require that
licensing must bebased on
objective andtransparent criteria
andnotbemore burdensome
thannecessary toensure the
quality oftheservice. Although
the"necessary disciplines" of
Article VI.4aresubject tofuture
negotiations, suchintangible
criteria as"public interest,
necessity orconvenience tests"
arenotconsistent withthese
requirements andmust beeither
eliminated ormade compatible,
butcannot bescheduled.
Japan (Additional commitments)
Regulatory bodies should
establish andmake public, upon
application, (i)thelicensing
criteria and(ii)thestandard
processing period normally
required between thesubmission
ofapplication andthedecision on
whether ornottogrant licences.
(1)Article VI.4oftheGATS
stipulates thatthelicensing is"to
bebased onobjective and
transparent criteria". Thismeans
thatdiscretionary licensing
criteria arenotconsistent with
theintent ofthearticle.
Therefore, clear andconcrete
licensing criteria should be
specified insuchacase.TheGroup needs todetermine
iftherules inGATS are
sufficient todealwith"public
interest criteria", orneedtobe
augmented. Public interest
criteria should beconsistent
withArticle VI(United States).
Need toensure that"public
interest tests" areadministered
inamanner consistent with
Article VI(Canada).
"Public interest criteria" are
taken intoaccount when
licences aregranted in
Australia, butnotina
restrictive orprotectionist sense.
Public interest criteria should be
notmore burdensome than
necessary. Agood benchmark
fortheexamination ofpublic
interest criteria isthedegree of
market access. InAustralia the
openness ofitsmarket
demonstrates thatthiscriterion
isnotincompatible withan
open market (Australia).S/NGBT/W/8/Rev.1
Page4European Community
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(S/NGBT/W/4 &Add.1)Japan (Draft Scheduling Guide) Informal Meetings
Licensing (Cont 'd)
Japan (Additional commitments)
(cont'd)
(2)With respect tothestandard
processing period, Article VI.3
oftheGATS obliges aMember
toinform theapplicant within a
reasonable period oftimeofthe
decision concerning the
application. However, this
provision doesnotfullyspecify
howlongsuchareasonable
period oftimeis.Forexample,
delays indecision-making may
becaused byanexcuse that"the
application iscurrently under
examination" or"public
comments arebeing gathered"
etc,ortheprocessing time may
varyfrom oneapplicant to
another.
Delay indecision-making on
licensing brings especially to
foreign applicants notonlyan
economic burden butalsoa
substantive lossofopportunity to
compete inamarket, because
incumbent operators, conscious
ofnewentrance, caneasily
preempt them. Inorder toavoid
suchasituation, itisnecessary to
determine andpublicize specific
"reasonable period oftime" in
advance.There isaneedtoexamine the
"public interest criteria" (EC).
Need todiscuss further whether
public interest standards should
belisted asamarket access
limitation orwhether apublic
interest approach isinconsistent
withArticle VI,orwhether
certain sub-rules orsub-
conditions ofapublic interest
approach should belisted as
market access limitations
(Japan).S/NGBT/W/8/Rev.1
Page5European Community
(S/NGBT/W/6)United States (S/NGBT/W/5) Canadian Non-Papers Australia
(S/NGBT/W/4 &Add.1)Japan (Draft Scheduling Guide) Informal Meetings
Interconnection Terms andconditions ofinterconnection between telecom service suppliers foraccess tooneanother 'snetworks orcircuits totransmit customers 'communications. (Forbasic
telecoms, interconnection isusually between afacilities-based supplier andasupplier without facilities orbetween facilities-based suppliers).
Interconnection between i)anon-
facilities-based service supplier
andafacilities-based service
supplier andii)between twonon-
facilities-based service suppliers
appear tobeadequately covered
inparagraph 5oftheTelecom
Annex.
Regarding interconnection
between twofacilities-based
service suppliers, theTelecom
Annex alsowould appear to
apply, although further
clarification would beuseful.
Insome countries, theterms and
conditions ofinterconnection for
facilities-based suppliers aredealt
withinindividual licences. Article
VIdoesnotprescribe particular
licensing conditions, but
participants could agree that
general principles should be
included inlicences covering
network-to-network
interconnection.Need todevelop interconnection
regulations toensure thataccess
tothedominant network isopen,
economical andcost-based.
Where access tothenetwork ofa
dominant supplier isconcerned,
mandatory interconnection
policies arenecessary.TheAnnex appears inadequate
where Members make market
access commitments whose
effectiveness requires non-
discriminatory interconnection
between thenetworks of
competing suppliers, particularly
those thatarefacilities-based.
Thisisespecially important
where anincumbent controls
access to"bottleneck" facilities.
Theprinciple ofnon-
discrimination intheregulatory
sense (inaddition totheMFN
andnational treatment sense)
should bedefined more broadly
thanisthecasewithFootnote 2
oftheAnnex.
Keyfeatures ofnetwork
functionalities should be
unbundled, made available in
multiple configurations and
priced onacost-oriented basis.
Theavailability ofequal
access/trunk-side access tolocal
networks should bethenorm, so
countries unwilling orunable to
grant itwould berequired to
negotiate areservation.TheAnnex applies tomeasures
affecting access toanduseof
public telecommunication
transport networks andservices
(Annex paragraphs 2(a)and3
(b)and(c)).Although theAnnex
covers interconnection between
private networks andPTTNS as
wellasbetween twoprivate
networks, itisnotclear whether
suchaccess anduseinclude
interconnection between
facilities-based basic
telecommunication service
suppliers andPTTNS (Annex 5
(b)(ii)).
AsfarastheAnnex is
applicable, suchaccess anduse
should beaccorded toforeign
basic tele-communications
service suppliers onreasonable
andnon-discriminatory terms and
conditions (MFN national
treatment andterms and
conditions nolessfavourable
thanthose accorded toanyother
useroflikePTTNS under like
circumstances), forthesupply of
aservice included initsschedule
(Annex 5(a)andfootnote)
(Japan).
ItmaybesaidthattheAnnex
generally obliges Members who
undertake commitments onbasic
telecommunications services to
ensure thatanyforeign service
supplier isaccorded
interconnection between
facilities-based and/or non-
facilities-based basic
telecommunications service
suppliers onreasonable andnon-Provisions should bedrawn up
tocover interconnection rules
fordominant network operators.
There isaneedtoelaborate on
Articles VIIIandIX.Other
issues notsufficiently covered
include interconnection onan
unbundled basis, dialling parity,
andaccounting rates(United
States).
Standards fornon-discrimination
setoutintheAnnex are
inadequate todealwithsuch
issues as"self-dealing" and
"exclusive dealing" (Canada).
Urge allcountries thathave
monopolies toputinplace a
regulatory framework thatwill
treatvarious players even
handedly withrespect to
interconnection, nomatter what
degree ofmarket access they
areabletocommit tonow
(Canada).S/NGBT/W/8/Rev.1
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Interconnection (Cont 'd)
Itisunclear thatalldominant
carriers willfallwithin Article
VIII. Theextent ofbehaviour
inconsistent withArticle VIII(in
connection withspecific
commitments) isopen to
interpretation. These points
require clarification.
Article IXwillapply todominant
carriers which areneither
monopolies norexclusive service
suppliers within theterms of
Article VIII. Consultations are
envisaged.discriminatory terms and
conditions foraservice included
intheirschedules.
However since thescope ofthe
Annex isnotclearly defined and
concrete details ofsuchterms
andconditions arenot
sufficiently provided forbythe
Annex, Members maynegotiate
andschedule terms and
conditions ofinterconnection
between facilities-based and/or
non-facilities-based
telecommunications service
suppliers under Article XVIII.
Since theAnnex applies toany
service supplier, itsobligations
arerelevant notonlyto
monopolies andexclusive service
suppliers inthemeaning of
Article VIIIbuttoanyother
PTTNS service suppliers,
whether theyaredominant
carriers ornot,forthesupply of
basic telecommunications
services included inaMember 's
schedule.
Monopolies andexclusive service
suppliers arecovered byArticle
VIII. Dominant carriers other
thanthose whomayfallwithin
thescope ofArticle VIIIare
subject totheobligations of
Article IX.Need toelaborate ontheAnnex
anddiscuss further Articles VIII
andIX.
Thecharacteristics ofour
interconnection regime inthe
EUwillhavetobebased onthe
application ofthefollowing
principles: i)transparency
ii)objectivity andiii)non-
discrimination. Thebasis for
interconnection agreements will
becommercial negotiations.
Thisimplies thatthenumber of
conditions withregard tothe
process willhavetobeseta
priori bythenational regulatory
authorities. Weseeaclear
responsibility forthese,
including thepossibility of
intervening when required by
oneoftheparties andin
addition tothataneffective
mechanism fordispute
resolution. Theissue which we
arecurrently considering with
Member States includes the
publication oftariffs andthe
publication ofinformation on
interconnection features, in
particular theissue ofastandard
interconnection price list(EC).S/NGBT/W/8/Rev.1
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(S/NGBT/W/4 &Add.1)Japan (Draft Scheduling Guide) Informal Meetings
Interconnection (Cont 'd)
Japan (Additional commitments)
Rules regarding interconnection
between operators must be
applied onthebasis of
transparency andnon-
discrimination. Regulatory bodies
needtomake rules based onsuch
principles andtotakeappropriate
measures toassure fair
interconnection. Inparticular,
certain measures should betaken
toensure prevention ofpower
abuse bymonopolistic public
network service suppliers. Japan
believes thateachmember 's
regulatory bodies should take
suchmeasures asbelow.
(1)Toensure thatunfair
conditions arenotimposed on
anyservice supplier and,
especially, thatnoservice
supplier istreated bydominant
carriers innolessfavourable
manner thanterms andcondition
inagreements oninterconnection
which suchdominant carriers
haveconcluded withother
service suppliers (such astheir
subsidiaries).
(2)Toempower regulatory
authorities orneutral thirdparties
withauthority toorder service
suppliers tointerconnect with
other service suppliers (order of
interconnection).
(3)To clarify andmake public
procedures forinterconnection
between non-dominant carriers
anddominant carriers, especially
those withdominant market
power inlocal networks.Theprinciple ofcostorientation
willcertainly havetoapply to
organizations withsignificant
market power andinorder to
make thateffective there will
havetobeclear requirements
withregard tocostaccounting
systems. Incertain cases, these
costaccounting systems maybe
complemented withregard to
requirements foraccounting
separation (i.e.incases where
participants inthemarket have
exclusive orspecial rights in
other areas (EC).
Need toextend theAnnex to
include tariffs, transparency and
independence oftheregulatory
authorities. Support Canada in
encouraging participants where
services aredelivered by
monopolies tothink about and
make commitments on
interconnection (Australia).S/NGBT/W/8/Rev.1
Page8European Community
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(S/NGBT/W/4 &Add.1)Japan (Draft Scheduling Guide) Informal Meetings
Interconnection (Cont 'd)
Japan (Additional commitments)
(cont'd)
Interconnection charges between
facilities-based carriers must be
fairandreasonable inlightof
appropriate costrequired for
interconnection. Each Member 's
regulatory bodies, therefore,
needtotakeappropriate
measures toensure such
reasonable interconnection
charges based onactual costs.
Facilities-based tele-
communications carriers should
offer interfaces notonlytousers
butalsotoresale-based
telecommunications carriers.
Equipment ofresale-based
telecommunications carriers and
terminal equipment ofusers both
tobeconnected tosuchinterfaces
should meet certain technical
standards. Iftherequirements are
notmet,interconnection maybe
refused...
(4)Views maybeexpressed that
GATS andtheAnnex on
Telecommunications are
sufficient tocover theissues of
interconnection. However
existing provisions aremerely
general innature andthere
remain uncertainties of
interpretation astothescope of
theircoverage. Japan believes,
therefore, thatadditional
commitments areuseful inlight
ofensuring what waspointed out
in1,2and3above andthat
urgent discussions arenecessary
onthescope andcontents of
specific commitments inthe
NGBT inthenearfuture.Need tostudy further thematter
ofinterconnection ofanon-
facilities based supplier toa
facilities-based supplier (Japan).
Need tounderstand thediversity
ofinterconnection arrangements
indifferent countries. Further
discussions required onArticles
VIIIandIX(Korea).
There arediverse approaches
thatcanbeusedtoaddress this
issue, there isaneedtoprovide
sufficient flexibility to
accommodate thisdiversity.
NewZealand regulates
competition issues, including
interconnection, through general
competition law,rather than
through industry specific
regulation andalsoprovides for
thefulltextofinterconnection
agreements tobedisclosed
(New Zealand).S/NGBT/W/8/Rev.1
Page9European Community
(S/NGBT/W/6)United States (S/NGBT/W/5) Canadian Non-Papers Australia
(S/NGBT/W/4 &Add.1)Japan (Draft Scheduling Guide) Informal Meetings
Competition Safeguards Safeguards against anti-competitive practices aremeasures which would ensure thatmonopolies ordominant suppliers maynotexploit theirdominant position todistort market forces
andimpede theability ofcompetitors tosupply networks orservices inrespect ofwhich commitments havebeen made.
Interms ofGATS, competitive
safeguards cover allregulatory
measures, provided theyare
governmental "measures".
Competitive safeguards might
include measures todealwith
situations where theregulator ofa
Member sees aneedtocontrol
thesituation attheother endof
aninternational service where the
regulator mayhaveno
jurisdiction. Where measures are
designed toaddress specific
difficulties anddonot
discriminate between service
suppliers onthebasis of
nationality, theycould be
considered legitimate competitive
safeguards. Thisisnotthecaseof
measures which condition market
access ofaservice supplier of
another Member toan
examination ofwhether thatother
Member affords equivalent market
opportunities. There isaneedfor
further clarification ofthispoint.Competition safeguards are
necessary toenforce any
interconnection regime inthe
presence ofadominant network
operator, andtoensure thatany
international alliance follows
agreed-upon rules against anti-
competitive conduct.
Such safeguards mayinclude:
requirements toseparate
accounting forregulated andnon-
regulated services; requirements
forstructural separation; rules to
ensure thatthedominant network
operator accords itscompetitors
access toanduseofitspublic
telecommunications transport
network andservices (PTNNS)
onterms andconditions noless
favourable thanthose itaccords
itself oritsaffiliates; rules to
ensure timely disclosure of
technical standards andchanges
toPTNNS.Theoutcome ofthenegotiations
should include agreement on
minimum requirements tobeput
inplace toproscribe anti-
competitive business conduct and
toenable appropriate preventive
andremedial actions tobetaken.
Specific disciplines onanti-
competitive behaviour should
include measures toaddress
cross-subsidization, cross-
ownership andmergers, self-
dealing, exclusive dealing,
market foreclosure through
vertical integration, control of
scarce facilities, predatory
pricing, non-price predation, and
contractual practices with
exclusionary effects orwhich
otherwise limitcompetition. In
non-competitive markets, rates,
terms, andother conditions of
service must beapproved byan
independent authority.
Appropriate mechanisms for
redress must alsobeputinplace.With respect tocompetition
safeguards thefollowing GATS
provisions arerelevant:
monopolies andexclusive service
suppliers (Article VIII), business
practices (Article IX)and
Paragraph 5oftheAnnex. Issues
notcovered bythese provisions
arenegotiable andmaybe
scheduled asadditional
commitments under Article
XVIII.
Japan (Additional commitments)
Regulatory bodies needtobe
endowed withthepower toissue
orders ofinterconnection in
accordance withlawsregulating
thetelecommunication business
inthefollowing cases, upon
request from oneoftheparties
concerned:
(a)When agreements cannot be
reached innegotiations on
interconnection between carriers;
or
(b)When suchnegotiations
cannot beheld.
Itisessential totakemeasures
which provide effective
safeguards andhinder cross-
subsidization inorder toprevent
thedominant network operators
from abusing itsmarket power
byanti-competitive conduct.Competition issues needtobe
studied further. GATS
disciplines areweak inthis
regard (EC).
Animportant issue which needs
tobeaddressed istheabuse of
information bydominant
operators. Safeguards are
required regarding theuseof
commercially sensitive
information (Japan).
Issues tobeaddressed as
additional commitments include
accounting safeguards, tariffing,
andenforcement arrangements,
including theability ofone
Member toaskanother totake
appropriate actions under its
laws, prior toWTO dispute
settlement. Dominant supplier
issues arenotadequately
covered inArticle VIII(which
deals withmonopolies and
exclusive service suppliers) or
inArticle IX(which provides
forconsultations) (Canada).S/NGBT/W/8/Rev.1
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Competition Safeguards
(Cont 'd)
Japan (Additional commitments)
(cont'd)
Dominant network operators are
required totakeappropriate
actions toprevent misuse of
information regarding other
telecommunications operators '
business obtained through
interconnection negotiations.
Such dominant operators arealso
required tomake public the
contents ofsuchactions. For
example, information
management incustomer 's
service systems should bestrictly
enforced soastoprevent
dominant operators oflocal
monopolies from using
customers 'information togain
competitive advantage inthearea
oflong-distance
telecommunications services.
Measures should betaken for
disclosure ofsuchinformation,
which isindispensable forfair
andeffective competition, as
basic andtechnical information
related tonetworks ofdominant
operators.Competition safeguards involve
boththecustomary norms of
competition policy andtelecom
specific issues. Thelatter
includes theproblem ofsharing
information withthedominant
operator intheprocess of
securing interconnection, rights
ofway, andnumber portability
(United States).
Theoutcome ofthese
negotiations must bearticulated
interms ofthespecifics of
scheduled commitments or
through some other multilateral
instrument (Argentina).
"Equivalency test"aimed at
ensuring reciprocity based on
thenationality ofservice
supplier isagainst MFN
(Korea).S/NGBT/W/8/Rev.1
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Transparency1Theready availability ofinformation onallrelevant measures ofgeneral application affecting services andservice suppliers, including inrespect ofrelevant international agreements,
subject tosafeguards against thedisclosure ofconfidential information.
Article IIIrequires Members to
make public allrelevant measures
ofgeneral application. Itdoesnot
apply todecisions affecting a
particular service supplier (e.g.
terms andconditions oflicenses
orinterconnection terms ina
particular case).
There isaneed toclarify the
inter-relation between paragraph
4oftheTelecom Annex and
Article IIIbiswhich excludes
from transparency requirements
thedisclosure ofinformation
which would becontrary tothe
public interest orprejudice
legitimate commercial interests.
Article IIIbisGATS isageneral
provision which should prevail
overparagraph 4oftheAnnex.
Paragraph 4oftheAnnex expands
upon Article III,andapplies to
tariffs andterms andconditions
foraccess toanduseofPTTNS.Atransparent rule-making and
complaint process iscrucial to
thedevelopment ofafairand
competitive market.
Thetransparency obligations of
Article IIIofGATS andthe
Telecommunications Annex
apply togovernmental measures
ofgeneral application, regardless
ofwhether specific commitments
havebeenscheduled.
More specific disciplines are
needed. These disciplines would
require publicly tariffed
interconnection charges for
dominant network operators.
They would alsorequire that
where policy objectives suchas
universal service affect
interconnection arrangements,
suchpolicies should be
considered collectively inan
open manner.Existing provisions areadequate. Paragraph 4oftheAnnex which
applies intheapplication of
Article IIIoftheGATS, requires
thatinformation onthe
conditions affecting access toand
useofPTTNS ispublicly
available. Such information
includes thatoftariffs
specification oftechnical
interfaces withthose networks
andservices bodies responsible
forthepreparation andadoption
ofstandards affecting suchaccess
anduseconditions applying to
attachment ofterminal andother
equipment andnotifications,
registrations orlicensing
requirements. Itshould benoted
thatthese specifications arenot
exhaustive butillustrative.
Regulatory procedures and
licensing criteria arealsosubject
tothese transparency
requirements aslongastheyare
generally applied. Disclosure of
information possessed byprivate
service suppliers isnotsubject to
anyobligations oftheGATS.
Japan (Additional commitments)
(Seeentries under licensing,
standards andtypeapproval and
frequencies forpoints made also
relevant totransparency ).Transparency disciplines are
adequate, although clarification
isneeded astotherelationship
between Article IIIbisand
paragraph 4oftheAnnex (EC).
Regulatory procedures and
licensing criteria arenot
adequately covered inthe
transparency provisions (United
States).
Transparency isanessential
condition forensuring non-
discrimination (Argentina).
Agree ontheimportance of
transparency. Itishowever
necessary torecognize that
commercial confidentiality also
hasanimportant place inthe
sector andhasparameters that
needtobepreserved (New
Zealand).
1Information relevant totransparency andaccounting rateshasbeenplaced under "tariffs andaccounting rates" heading.S/NGBT/W/8/Rev.1
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Independent Regulatory Bodies Theindependence ofregulatory functions fromthedecisions ofbasic telecommunications operators.
Nothing inGATS requires
Members toadopt aparticular
regulatory structure.
Interms oftheGATS, Members
maymaintain regulatory
authorities which arenot
independent from thetelecom
operator provided measures are
compatible withArticle VI.
Where aservice supplier subject
toArticle VIIIisalsoresponsible
forregulation, theMember may
haveanobligation toensure that
itdoesnotabuse thispower.Thedisciplines setforth by
Article VIandVIIIoftheGATS
willapply insectors where
specific commitments are
undertaken. Inaddition tothese
regulatory disciplines, a
commitment toensure the
effective independence ofthe
regulator would eliminate
potential conflicts ofinterest.
Such conflicts areinevitable
where governments areowners
responsible forthefinancial
performance ofadominant
network operator.
Theregulator must beableto
adjudicate equitably theinterests
ofinterconnecting entities.Thefunction ofregulating
telecom services should be
exercised byagovernment-
mandated agency thatisseparate
from anyoperating entities that
provide services tothepublic.Noprovisions oftheGATS
specifically require Members to
adopt aparticular regulatory
structure aslongasthemeasures
taken byregulatory authorities
areconsistent withtheGATS and
withtheprovisions ofArticle VI
inparticular. Although there may
beaconsensus overtheneedto
ensure theimpartiality of
regulatory bodies, itremains
unclear howfartheGATS
should address thisissue.
Nonetheless, itmaybedesirable
thatMembers change theforms
ofregulatory authorities ifthey
arenotcompletely independent
from basic telecommunications
operators.Theregulator canbepartofthe
government aslongasitdoes
notmanage orcontrol the
operator. Provisions require
independence, nottheseparation
ofregulator andgovernment.
Stress thattheindependence of
theregulatory body isvery
important (EC).
GATS doesnotaddress this
issue. There isaneedtoadopt
aregulatory framework to
ensure anindependent authority
separate from thegovernment
office withvested interest inthe
public network operator (United
States).
There must beflexibility for
eachcountry toadopt itsown
internal regulatory structure. If
theregulatory authority ispart
ofthegovernment, andthe
government retains an
ownership interest inatelecom
operator, there isthepossibility
ofaconflict interest. Isthe
regulator thengenuinely
independent? (Canada).S/NGBT/W/8/Rev.1
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Independent Regulatory Bodies
(Cont 'd)
Countries should retain
flexibility intheirapproach to
regulation ofthesector,
including howtoregulate
competition, which could be
done through either general
competition lawordetailed
sector-specific means. Agree
following principles are
important: regulatory and
operational functions should be
separate; regulator should be
independent; needforseparation
ofgovernment ownership
interests from regulatory
measures. Thisneednot
however require specific
institutional arrangements, such
asanindustry specified body
(New Zealand).
Theimportant issue isthatthe
regulatory authority should be
impartial, which doesnotimply
itshould beindependent.
Administrative structures in
some countries maymake it
difficult inpractice toachieve
complete institutional
independence, atleastinthe
short-term (Argentina).
Thecoreoftheissue isto
ensure theseparation of
regulatory decisions from
business operations. Anything
beyond thatshould belefttothe
Members 'ownlegal system
(Korea).S/NGBT/W/8/Rev.1
Page14European Community
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Frequency andNumbering Terms andconditions fortheallotment andassignment ofradio frequencies andschemes forthedesignation andassignment ofnumbers tobasic telecom suppliers.
Requires frequency tobeallotted
andnumbers tobedistributed ina
reasonable, objective and
impartial manner, inaccordance
withparagraphs 1and2ofArticle
VI.There must beapossibility of
review andremedies, where
appropriate.
Given thataccess tofrequency
and/or tonumbering isa
precondition forobtaining
authorization toprovide services,
Article VI.4(c)isalsorelevant
(therequirement thatlicensing
procedures inthemselves donot
constitute arestriction onthe
supply ofaservice).IfaMember maintains measures
inconsistent withArticles XVI
andXVII (i.e.economic needs
tests, limitations onlegal forms
ofcommercial presence and/or
limitations onforeign equity
participation, etc.)terms and
conditions ofsuchmeasures shall
beinscribed inaMember 's
schedule.
Theterms andconditions on
allocation offrequencies and
numbering other thanthose
subject toArticle XVIandXVII
arestillsubject toArticle VI.
However, further discussions are
necessary onhowfartheGATS
provisions address these issues,
inparticular withrespect tothose
of"dialling parity" and"number
portability".
Japan (Additional commitments)
Under theprinciple of
transparency, charts ofradio
frequencies should beprepared
andmade public toindicate
assignable radio frequencies and
thecurrent status ofassigned
frequencies.Article VIprovisions are
adequate. Linkthisissue with
licensing. Regarding frequency,
donotthink thattheyshould a
priori bereasoned tolimitthe
number oflicences tobeissued.
Only incases where efficient
useoffrequencies requires a
limitation thatshould bethe
case. With regards to
numbering, normally there isno
scarcity ofnumbers sothere
would notbeanapriori reason
tolimitthenumber oflicences
(EC).
More clarity isrequired on
some issues, suchasdialling
parity, which istherequirement
thatanewentrant notbe
disadvantaged withregard tothe
number ofdigits tobedialled
(United States).S/NGBT/W/8/Rev.1
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Standards andtypeapproval Technical requirements inrelation tostandards fortelecom services andservice suppliers, andstandards andtypeapproval fortelecommunications equipment.
Timely publication ofstandards is
dealt withinArticle IIIand
paragraph 4oftheAnnex.
Paragraph 5(f)(ii) oftheAnnex
requires theuseofspecified
technical interfaces foraccess to
anduseofPTTNS.
Paragraph 7oftheAnnex
recognises theimportance of
international standards forglobal
compatibility andinter-operability
oftelecom networks andservices.
Members have undertaken to
promote suchstandards through
thework ofrelevant international
bodies.
TheGATS contains no
provisions onparticipation of
service suppliers ofanother
Member inthestandards-setting
process. Where suchnon-
participation leads toadoption of
standards which, inthemselves,
restrict trade, Articles VI.4and
VI.5would apply.Provisions areadequate.
Aservice supplier 'sinternal
network standards should beof
thesupplier 'schoice, butitis
legitimate torequire theuseof
specified technical interfaces.
While standards must notactas
barriers totrade, theyshould
facilitate competition byensuring
maximum interconnectability and
interoperability between
networks.
Standards should bedeveloped
onaconsensus basis withthe
opportunity tocomment open to
allparticipants inanational
market.Even ifcommitments aremade
forinterconnection, detailed
conditions orrequirements
applied totechnical andother
kinds ofstandards forservices
andservice suppliers, including
those oftypeapproval for
telecommunications equipment
mayrestrict trade inbasic
telecommunications services.
Such standards areusually
required byaMember 's
government forthepurpose of
attaining andenhancing
compatibility, interconnectability
andinter-operability of
telecommunications networks and
services. TheGATS recognizes
theneedtoimpose those
conditions asstipulated in
Paragraph 5(f)(ii), (iii)and(iv)
oftheAnnex, inorder toprotect
thetechnical integrity ofpublic
telecommunications transport
networks orservices.Type approval should be
reinforced byadditional
commitments interms ofresale
service. TheAnnex itself does
notprovide thattypeapproval is
done byanindependent
regulatory body (Japan).
Regarding typeapproval for
resale-based telecom service
providers, thatissue is
adequately dealt withby
Telecom Annex {Paragraph 5(a)
andParagraph 5(f)(iv)}
(Korea).
Agree thatanindependent body
fortypeapproval isnot
something explicitly provided
forandonecould consider that
asanadditional commitment
(Canada).
What isimportant isnot
necessarily theinstitutional
arrangements buttheprocess by
which standards aresetisa
transparent oneandthere are
adequate remedies inplace
(New Zealand).S/NGBT/W/8/Rev.1
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Standards andtypeapproval
(Cont 'd)
Standards arealsosubject tothe
provisions ofArticle VIofthe
GATS. However, untilnecessary
disciplines areestablished by
Members through thework
program setoutinParagraph 4
ofArticle VI,standards
requirements, where specific
commitments areundertaken,
shallnotbeapplied tonullify or
impair itsspecific commitments
inamanner prescribed in
Paragraph 5(a)ofArticle VI.
Theabove provisions areonly
negative criteria. Any
liberalization measures which are
consistent withthese provisions
arenegotiable andmaybe
scheduled asadditional
commitments under Article
XVIII oftheGATS.
Japan (Additional commitments)
...What isalsoimportant in
interconnection forresale-based
telecommunications carriers isto
assure fairness andtosimplify
procedures of"type approval"
which istoverify whether
specific equipment match
technical standards ofthe
interface offered byfacilities-
based telecommunications
carriers. Especially, the
following needtobeassured.Agrees withJapan thatthere
should beindependent
authorities responsible inthat
area. Support thepromotion of
international standards, butalso
consider thatinthisareathere
willbeacertain tendency
towards standards tobeapplied
inavoluntary way. That
flexibility should bebuiltinthe
concepts which weare
developing (EC).
Standard-setting doesnotneed
tofallunder thetelecom
regulatory authority, itcould be
aseparate body which could set
thestandards. Anytechnology-
driven specifications should not
betreated asacommitment
(India).S/NGBT/W/8/Rev.1
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Standards andtypeapproval
(Cont 'd)
Japan (Additional commitments)
(cont'd)
(1)Inview ofseparation of
regulatory andoperational
functions, thegranter ofapproval
should beregulatory bodies (and
nottelecommunications carriers)
soastoprevent discrimination
byfacilities-based
telecommunications carriers
against particular manufacturers
orusers.
(2)Technical standards applied
intypeapproval should be
confined totheminimum soasto
cause noharm to
telecommunications network
facilities andnottodisturb other
users.
(3)Type approval procedures are
expeditious andonlyrequire
submission ofdocuments.
[Submission] ofequipment isnot
required andonceanapproval is
given, there should beno
additional procedures.
(4)Approvals should begiven to
applicants ontheNational
Treatment basis. Inconcrete
terms, applicants must betreated
equally regardless oftheir
residency anddirect application
from abroad should beaccepted.
Inaddition, testdataobtained in
foreign countries should alsobe
accepted.
Assurance oftransparency is
essential informulating technical
conditions andstandards.
Regulatory bodies must allowS/NGBT/W/8/Rev.1
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Standards andtypeapproval
(Cont 'd)
Japan (Additional commitments)
(cont'd)
opportunities forpublic studies
andcomments inorder toassure
transparency inaccordance with
theintent ofArticle VI.4ofthe
GATS. InJapan, drafttechnical
standards areexamined, prior to
theirenactment, byexperts ofthe
Telecommunications Technology
Council. Opportunities forpublic
comments arealsoprovided.
Japan willinform WTO members
ofsuchdraftstandards under the
Standards Agreement andallow
opportunities forMembers to
comment onthem. Finally, prior
totheenactment ofabillof
technical standards based onthe
afore-mentioned draft, thebill
willbesubject tothescrutiny of
theTelecommunications Council
ortheRadio Regulatory Council.
TheTelecommunications
Technology Committee (TTC)
which isaprivate standardization
body establishing voluntary
standards ensures fairness and
transparency inthefollowing
manner: (i)Foreign companies
canparticipate inthediscussions
ondraftstandards atmeeting of
TTC; (ii)TTC holds preliminary
briefing sessions ondraft
Standards; (iii)TTC provides a
period forhearing public
comments.
Alltechnical conditions and
standards established as
mentioned above arefully
publicized.S/NGBT/W/8/Rev.1
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Tariffs andaccounting rates Prices charged forservices andtherates usedtosettle accounts forthetransmission oftraffic across borders between twobasic telecom suppliers.
Nothing intheGATS deals with
theregulation byMembers of
tariffs orcosts in
telecommunications. Noprovision
enforces the"cost-orientation" of
prices inanysector, although
tariffs andother terms or
conditions ofservice foraccess to
anduseofthePTTNS aresubject
tothetransparency requirements
ofparagraph 4oftheAnnex.
Agreements between operators on
termination services should be
subject tothetransparency
provisions ofArticle III,except
where thedisclosure of
confidential information would be
contrary tothepublic interest or
would prejudice legitimate
commercial interests (Article III
bis).Itisdifficult tothink of
grounds onwhich these legitimate
commercial interests would be
prejudiced.TheAnnex doesnotspecifically
address measures related tocost-
based pricing which arenotonly
subject tothedisciplines of
Article VIbutalsonegotiable
andmaybescheduled as
additional commitments under
Article
XVIII.During thetransition phase
towards liberalization, cost-
orientation isjustified inthe
presence ofadominant operator
(United States)
Atissue hereistheapplication
ofthenon-discrimination
principle initsbroadest sense,
aswellasthequestion ofcost-
oriented pricing (Canada).
Itisimportant todisaggregate
cross-border trade intelecom
services; unbundling istheonly
waytoachieve transparency in
theaccounting ratesystem.
Crucial aspects aretransparency
andMFN (Australia).
Transparency inaccounting
ratesisimportant. There isa
needtoexamine further the
issue ofcosts. Thepublication
ofaccounting ratesisan
important transitional stepto
reduced interconnection charges
forinternational traffic (United
States).S/NGBT/W/8/Rev.1
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Tariffs andaccounting rates
(Cont 'd)
Tariffs imposed byprivate
enterprises oftheirownfreewill
donotconstitute "measures" ofa
Member andaretherefore outside
thescope ofGATS.Australia (S/NGBT/W/11)
Australia considers thatthe
agreements underpinning the
current trade intermination
services asconducted under the
ITUtreaties constitutes ameasure
asdefined intheGATS byvirtue
of:
(i)thegovernment decisions
involved inbecoming party tothe
ITUtreaties andinauthorizing a
ROA; and(ii)thedegree of
government 's(oritsdelegated
authority) involvement inthe
operator agreement process itself.
There maybesome cases where
operator agreements themselves
maynotbeameasure intheir
ownrightorameasure affecting
trade intermination services.
However, thenumber ossuch
cases arelikely tobeverysmall.Authorization oftariffs and
accounting ratesaremeasures
which arewithin thescope ofthe
GATS including theprovisions
ofArticle IIIandVI.Such
regulations together withrelevant
information ontariffs or
accounting rates, ifapplied
generally, shallbemade public
under Article IIIoftheGATS
andParagraph 4oftheAnnex,
unless suchinformation is
identified asconfidential within
themeaning ofArticle IIIbisof
theGATS.
Accounting ratessetupbybasic
telecommunications service
suppliers other thanthose
accounting ratesmentioned inthe
previous paragraph arenot
subject tospecific provisions of
theGATS, except inthecase
where Article IXoftheGATS or
Paragraph 5oftheAnnex are
applicable.Information onaccounting rates
should bepublished. Suggest
thattherules ontransparency
arenotclear enough and
encourage allcountries tomake
commitments thatwould make
theaccounting ratesprocess
more transparent (United
States).
Australia agrees withUS
position. There isnothing inthe
GATS ortheAnnex that
convincingly argues thatthe
provisions oftransparency do
notapply toaccounting rates
(Australia).
Depending onthenature ofthe
regime ineachcountry, some
international operating
agreements andaccounting rates
willbemeasures subject to
GATS disciplines, while in
other cases suchagreements
willnotbecaptured bythe
scope ofGATS. Thequestion
which isbeing addressed is
what isthescope ofthe
Agreement? Only apanel
decision would bedefinitive in
resolving this(Canada).S/NGBT/W/8/Rev.1
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Tariffs andaccounting rates
(Cont 'd)
Ifthere isameasure suchasthe
approval ofthegovernment in
theapplication ofaccounting
ratesortariffs, there maybea
measure which iswithin the
scope oftheGATS. Theissue
oftransparency willalsobe
subject tothenegotiations and
canbescheduled under
additional commitments (Japan).
Need further clarification ofthe
linkbetween government
measures andcommercial
arrangements forthepurposes
oftransparency obligations.
Transparency provisions ofthe
Telecom Annex include tariffs
andterms andconditions of
services. Inthisregard,
international accounting rates
usually taketheform oftariffs
andsometimes canbe
commercial arrangements.
However, most ofthetimethe
arrangements areapproved by
thegovernment (Korea).S/NGBT/W/8/Rev.1
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Termination services Thetraded services which network operators provide eachother when theyallow access totheirnetworks through international interconnection.
Traded elements ofbasic
telecommunications should be
recognized assuch, andthese
elements should besubject to
agreed trade disciplines.
Existing accounting andsettlement
ratesystems forpayment of
termination services, combined
withconcentrated ownership and
persuasive government control,
leads toarbitrary setting of
charges above costs andto
discrimination.
Increased competition alone,
without theapplication ofGATS
disciplines totheexisting
framework, willnotforce reform
oftheaccounting ratesystem.
Agreements between operators are
unlikely tobeconsistent withthe
MFN provisions ofArticle II
because ofthedifferential pricing
system entrenched insuch
agreements. Ifagreements are
maintained, theymayneedtobe
scheduled asArticle II
exemptions.S/NGBT/W/8/Rev.1
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(S/NGBT/W/4 &Add.1)Japan (Draft Scheduling Guide) Informal Meetings
Termination services
(Cont 'd)
Thetransparency provisions of
Article IIIarerelevant toall
aspects oftermination services.
Article IIIbiscovers confidential
information relating tothepublic
interest andlegitimate commercial
interests, although itisdifficult to
envisage circumstances where
legitimate commercial interests
might beprejudiced.
Article VIIIonmonopolies and
exclusive service suppliers is
applicable tothesector, ensuring
thatthese suppliers donotact
inconsistently withArticle IIand
specific commitments. Article IX
isalsorelevant, providing for
consultations inrelation to
business practices considered to
restrain competition andtrade.S/NGBT/W/8/Rev.1
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Termination services
(Cont 'd)
Inmaking specific commitments,
Members must schedule
quantitative access limitations and
departures from national treatment
under Articles XVIandXVII.
Thescheduling oftermination
services could beachieved
through creating asub-sector for
termination services, orindirectly
through agreement thatmodes 1
and2would bydefinition cover
termination services. Measures
notfalling under Articles XVIor
XVII could beadopted as
negotiated commitments and
scheduled under Article XVIII
(additional commitments).
Without scheduling ofspecific
commitments, itwould bedifficult
toargue thattheNGBT haddealt
adequately withtermination
services.S/NGBT/W/8/Rev.1
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Rights ofwayandplanning Conditions governing thebuilding andinstallation oftelecommunications infrastructure.
Therights ofMembers toregulate
theinstallation oftelecom
infrastructure isprotected by
Articles VI.1, VI.2, VI.4and
VI.5, totheextent thatsuch
considerations arebased on
objective andtransparent criteria
andarenotmore burdensome
thannecessary.
Elaboration ofthese general
principles inadvance ofanArticle
VIwork programme appears
difficult.
Nevertheless, there arecertain
limits inthepossibility ofa
Member torefuse rights ofway
fortheconstruction of
infrastructure inamanner which
nullifies benefits inrelation to
facilities-based
telecommunications service.Although Members havethe
righttoregulate conditions for
theinstallation ofbasic
telecommunications
infrastructure, suchregulatory
measures aresubject toArticle
VIandshallnotbeapplied ina
manner thatmayimpair or
nullify specific commitments in
facilities-based
telecommunications services. Ifa
Member wishes tomaintain such
measures thatareinconsistent
withArticle XVIandXVII, they
should bedulyinscribed inthe
schedule.
Themeasures toregulate "rights
ofway" which arenot
inconsistent withcommitments
undertaken intheschedule are
subject totheprovisions of
Article VI.They shallbe
implemented inareasonable,
objective andimpartial manner
based onobjective and
transparent criteria andshallnot
bemore burdensome than
necessary.Facilities-based suppliers of
public telecommunications
transport networks should have
transparent, reasonable andnon-
discriminatory access torights
ofway(Canada).S/NGBT/W/8/Rev.1
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Universal/
public serviceTherequirement, either explicitly orineffect, tomake services available tothepublic generally, i.e.ataffordable prices tothepopulation atlarge, irrespective ofcommercial
viability.
Members arefreetoregulate
basic telecommunications taking
intoaccount universal/public
service obligations astheyseefit,
provided thattheregulation
conforms toArticles VI.1and2,
andpossibly toArticles VI.3, 4
and5.
Paragraph 5oftheAnnex
exhaustively liststhereasons for
which Members maylimitaccess
toanduseofPTTNS, although
theirinterpretation issubject to
Article VI.Universal/public services
responsibilities arenot
incompatible withliberalization
intrade inbasic
telecommunications services.
Modalities forexpressing
universal/public service
obligations should bedesigned
andstipulated inatransparent
manner thereby avoiding the
possibility thatsuchobligations
maybecome barriers totrade in
basic telecommunications
services.
Members should notimpose
conditions onaccess toanduse
ofPPTNS except forensuring
public service responsibilities,
safeguarding thetechnical
integrity ofthenetwork, and
guarding against thesupply of
services bysuppliers ofanother
Member thathavenotbeen
permitted pursuant tospecific
commitments (Annex 5(e)).There isaneedtoclarify the
dominant operator 'sobligations
withrespect touniversal
service. There isalsoaneedto
examine further howtodeal
withuniversal service andhow
itrelates totransparency and
market entry (India, Morocco,
Korea).
Theexperience oftheUnited
States shows thatwhere
competition hasbeen
introduced, universal service
hasimproved. Forthepurposes
ofscheduling GATS
commitments themost
important point isthatwhatever
mechanism offinancing
universal service aMember
mayadopt, thatmethod does
notimpede competition ordoes
notrender market access
commitments lessvaluable
(United States).S/NGBT/W/8/Rev.1
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Universal/
public service (Cont 'd)
Although thescope of"public
service responsibilities" isnot
welldefined, itisreasonable to
interpret theterm"public service
responsibilities" withparticular
emphasis on(butnotconfined to)
theability tomake theirnetworks
andservices available tothe
public generally. AMember shall
notimpose conditions onaccess
toanduseofPTTNS except to
safeguard those responsibilities.
Theburden ofjustification for
restrictive measures taken on
public service responsibility
grounds lieswiththeMember
taking themeasures.
Finally, itisimportant tonote
that,notwithstanding this
provision, measures related to
safeguarding the"public service
responsibilities" arealso
negotiable andmaybescheduled
asadditional commitments under
Article XVIII.Iftheopening ofmarkets isto
succeed itisimportant thatthe
level ofuniversal services
currently achieved iseither
maintained orimproved. Within
theEU:There willbe
obligations placed oncertain
operators toprovide thedefined
minimum range of
telecommunication services of
specified quality atan
affordable price. There needto
becommon principles for
determining thefinancial
compensation which maybe
justified bysuchobligation. We
donotseethatuniversal service
obligations needtobelimited
onasingle dominant provider.
Inmany cases, there willbe
verygood reasons tohaveafair
sharing oftheobligations andto
haveafairsharing ofthecost.
Thenational regulatory
authorities haveastrong
responsibility tosupervise the
system aiming ataminimum
distortion ofcompetition (EC).S/NGBT/W/8/Rev.1
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Universal/
public service (Cont 'd)
Where teledensity ishighthe
USargument isvalid. However,
theGroup needs toaddress the
development oftheuniversal
service objective indeveloping
countries withlowteledensity.
Agrees withtheEC:there
should beenough flexibility for
acountry toensure thatthe
basic aspect ofuniversal service
ismet.ThisNGBT should not
impose anyspecific method by
which thisobjective ismet
(India).
Thepossible approaches to
universal service are:i)
specification ofprofitable and
non-profitable areas of
operation; andii)theprovision
ofafundorarrangements for
contributions (Japan).
Thefocus should beonthe
means bywhich thefunding for
universal service isderived. It
should betransparent and
consistent withtheAgreement
(Australia).S/NGBT/W/8/Rev.1
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(S/NGBT/W/4 &Add.1)Japan (Draft Scheduling Guide) Informal Meetings
Universal/
public service (Cont 'd)
Universal service wasaddressed
intheGATS Telecom Annex
specifically inparagraph 5(e)
(i),where itrefers tomeasures
tosafeguard thepublic service
responsibilities ofsuppliers of
PTTNS. Weexpect thatanyone
introducing funding mechanisms
would apply them onanon-
discriminatory basis (Canada).
Need todebate whether ornot
imposing universal service
obligations through whatever
mechanism itmaybeby
licensing conditions isconsistent
withArticle VIobligation. Need
toform some understanding on
whether ornotuniversal service
obligation canbeshared by
some kindofmechanism
(Korea).
Three things should be
considered: i)thedefinition of
universal service ii)an
independent regulator to
determine therules and
regulation ofuniversal service
iii)itmust befairand
transparent (Hong Kong).