OPINION A - The implications of the GATS with respect to basic telecommunication services for the ITU membership

The Second World Telecommunication Policy Forum (Geneva, 1998),

conscious

a) that each Member State has the sovereign right to regulate its own telecommunication sector, in accordance with the ITU Constitution and Convention, and to set its own timetable for adapting to market liberalization;

b) that, in addition, ITU Member States that are also members of the World Trade Organization (WTO) are obliged, under its General Agreement on Trade in Services (GATS), to apply the general principle of most-favoured nation (MFN) treatment to services and service suppliers of other WTO members except where individual exemptions were specified;

c) that WTO members which have made commitments under the agreement on basic telecommunication services, and which entered, in part or in full, into additional commitments contained in the WTO reference paper, undertook substantial obligations towards liberalization of their telecommunication sector and a predictable regulatory framework, including the operation of an independent regulatory body,

recognizing

a) that effective telecommunication networks and low-cost, high quality services are vital to the functioning and development of modern economies, fundamental to business activity and efficient government, and a critical enabler of the emerging world of electronic commerce;

b) that implementation of a telecommunication sector adapted to its environment, within a transparent and predictable regulatory framework, has the potential to provide new and improved services and lower prices for consumers, as well as to increase investments in this sector, from both domestic and foreign sources, and should improve the overall business environment for telecommunication service providers and companies using their services;

c) that the GATS provisions with respect to basic telecommunications will have an impact on all ITU Member States and Sector Members either directly by their participation in the agreement or indirectly through their commercial relationships with operators in countries which have made commitments under the agreement;

d) that in addressing the challenge of narrowing the development gap, and of the transition from traditional to new structures, account should be taken of different national contexts,

recommends ITU Member States

to consider, where appropriate, whether application of WTO principles, notably those contained in the Reference Paper (attached for information), either in a national framework or by making commitments within the WTO framework, might be helpful in benefiting their economies,

invites the ITU Secretary-General

1 to accelerate action required by Kyoto Resolution 1 and, to this effect, while respecting ITU Members' independence of action, to cooperate with the WTO secretariat in identifying areas of common interest, with particular emphasis on regulatory matters, technical studies and development matters, that may foster the purposes of both organizations, and to utilize and give a higher profile to expertise existing in the Sectors of the Union;

2 to report to the forthcoming Council regarding progress made in this respect;

3 to prepare, in cooperation with the WTO secretariat, a draft cooperation agreement for consideration by the Council and the 1998 Plenipotentiary Conference;

4 to take action, where appropriate, in cooperation with other international organizations, towards facilitating informal dialogue among policy-makers and regulators to foster adaptation to the changing environment,

invites the ITU Council

to invite WTO to take account of the urgency attached to the conclusion of a cooperation agreement between WTO and ITU on areas of common interest.

Attachment: WTO reference paper

ATTACHMENT

Scope

The following are definitions and principles on the regulatory framework for the basic telecommunications services.

Users mean service consumers and service suppliers.

Essential facilities mean facilities of a public telecommunications transport network or service that

(a) are exclusively or predominantly provided by a single or limited number of suppliers; and

(b) cannot feasibly be economically or technically substituted in order to provide a service.

A major supplier is a supplier which has the ability to materially affect the terms of participation (having regard to price and supply) in the relevant market for basic telecommunications services as a result of:

(a) control over essential facilities; or

(b) use of its position in the market.

1.1 Prevention of anti-competitive practices in telecommunications

Appropriate measures shall be maintained for the purpose of preventing suppliers who, alone or together, are a major supplier from engaging in or continuing anti-competitive practices.

1.2 Safeguards

The anti-competitive practices referred to above shall include in particular:

(a) engaging in anti-competitive cross-subsidization;

(b) using information obtained from competitors with anti-competitive results; and

(c) not making available to other services suppliers on a timely basis technical information about essential facilities and commercially relevant information which are necessary for them to provide services.

2.1 This section applies to linking with suppliers providing public telecommunications transport networks or services in order to allow the users of one supplier to communicate with users of another supplier and to access services provided by another supplier, where specific commitments undertaken.

2.2 Interconnection to be ensured

Interconnection with a major supplier will be ensured at any technically feasible point in the network. Such interconnection is provided.

(a) under non-discriminatory terms, conditions (including technical standards and specifications) and rates and of a quality no less favourable than that provided for its own like services or for like services of non-affiliated service suppliers or for its subsidiaries or other affiliates;

(b) in a timely fashion, on terms, conditions (including technical standards and specifications) and cost-oriented rates that are transparent, reasonable, having regard to economic feasibility, and sufficiently unbundled so that the supplier need not pay for network components or facilities that it does not require for the service to be provided; and

(c) upon request, at points in addition to the network termination points offered to the majority of users, subject to charges that reflect the cost of construction of necessary additional facilities.

2.3 Public availability of the procedures for interconnection negotiations

The procedures applicable for interconnection to a major supplier will be made publicly available.

2.4 Transparency of interconnection arrangements

It is ensured that a major supplier will make publicly available either its interconnection agreements or a reference interconnection offer.

2.5 Interconnection: dispute settlement

A service supplier requesting interconnection with a major supplier will have recourse, either:

(a) at any time or

(b) after a reasonable period of time which has been made publicly known to an independent domestic body, which may be a regulatory body as referred to in paragraph 5 below, to resolve disputes regarding appropriate terms, conditions and rates for interconnection within a reasonable period of time, to the extent that these have not been established previously.

3 Universal service

Any Member has the right to define the kind of universal service obligation it wishes to maintain. Such obligations will not be regarded as anti-competitive per se, provided they are administered in a transparent, non-discriminatory and competitively neutral manner and are not more burdensome than necessary for the kind of universal service defined by the Member.

4 Public availability of licensing criteria

Where a licence is required, the following will be made publicly available:

(a) all the licensing criteria and the period of time normally required to reach a decision concerning an application for a licence and

(b) the terms and conditions of individual licences.

The reasons for the denial of a licence will be made known to the applicant upon request.

5 Independent regulators

The regulatory body is separate from, and not accountable to, any supplier of basic telecommunications services. The decisions of and the procedures used by regulators shall be impartial with respect to all market participants.

6 Allocation and use of scarce resources

Any procedures for the allocation and use of scarce resources, including frequencies, numbers and rights of way, will be carried out in an objective, timely, transparent and non-discriminatory manner. The current state of allocated frequency bands will be made publicly available, but detailed identification of frequencies allocated for specific government uses is not required.