Dec 27^th^ 2006

Ms. Gloria Blue

Executive Secretary, Trade Policy Staff Committee,

Attn: Section 1377 Comments

Office of the United States Trade Representative

1724 F Street, N.W.

Washington, DC 20508

Dear Ms. Blue:

ALLVOICE NET appreciates the opportunity to express ALLVOICE views
regarding the operations and effectiveness of trade agreements that
impact the provisioning of telecommunication service particularly the
Voice over Internet Protocol (VOIP) which we try to introduce at
non-saturated markets around the globe as an alternative to the
regulated incumbent service.

ALLVOICE strives to offer alternative international termination service
to US carriers, who are no longer interested in having to work with
limited exclusive resources in the Middle East to provide last mile
connection. Particularly, when such incumbents around the globe are
using VOIP technology to terminate their calls over the Internet to the
US and from there, they are free to use as many as what the open US
telecom market has to offer in terms of flexibility and wide
competition. Unfortunately, these incumbents take advantage of the open
competition in the US while restricting US telecom companies to use only
their net work by classifying any other alternative as an "illegal"
method of termination which could inure severe penalties and or
imprisonment on any US investors willing to provide such alternatives on
a foreign country soil.

The problem we encountered lately in Egypt which in our opinion went too
far into discrimination by the Egyptian Ministry of Communication, as
well as National Telecom Regulatory Authority in Cairo who recently
drafted and made active a law that classifies VOIP origination and
termination interconnection with any land line or GSM network in Egypt
as a crime with penalties up to 1 year in prison.

Keeping in mind, that during WTO negotiations, committee agreed to grant
the incumbent, Telecom Egypt (TE) an exclusive right to send and receive
international calls to and from Egypt until the end of 2005, the
regulatory body of telecom in Egypt (NTRA) are not publishing any
licensing procedure for foreign investors willing to provide an
alternative termination, rather, they are making it more difficult on
competition by coming up with news that they will only allow competition
in the international telecom via a bid on limited number of licenses for
gateway operators in spite that so far is not even announced but we
expect it to be discriminating and expensive.

NTRA do not seem to care that such restriction is a violation of WTO
commitment that calls for transparency in licensing especially after the
expiry of the incumbent's protective period.

Moreover, NTRA is encouraging the opening of call centers throughout
Egypt that offer customer service and telemarketing calls for US
companies. However, these call centers need be tied up with an agreement
to use only TE for their traffic and they do admit that TE is allowed to
use VOIP to terminate and originate calls for these call centers.
ALLVOICE applied to open a call center in Egypt and obtained a verbal
confirmation that if ALLVOICE will only serve it's own customers in the
US via this call center, ALLVOICE is not tied up to use the incumbent.
However, ALLVOICE is still waiting for an "exceptional" approval to do
so by NTRA with equipments being held at the customs for the past two
weeks pending NTRA release which is being so far delayed with no clear
schedule.

Conclusion:

It looks like Egypt is still willing to protect their incumbent and is
working hard to make it difficult for independent service providers to
provide alternative VOIP networks bypassing Telecom Egypt while granting
Telecom Egypt the exclusive right to use VOIP for their traffic to the
US and rest of the world. TE who provides the Egyptian back bone of
Internet service to Egyptian ISPS monitors IP traffic for VOIP and when
a VOIP network is detected, TE together with NTRA and police attack the
location, destroy or hostage all gateways found on the scene, arrest
workers and prosecute owners for "fraud". A new law permits up to one
year in prison and heavy fine.

Should this practice continue, Telecom Egypt will be benefiting from the
nature of the US open competition in telecom and forbid competition on
their soil with the aid of their regulatory bodies that are there to
protect the incumbent not the consumer. However a serious enforcement
measures could result in forcing TE to accept independent competition,
such measures may include implying a heavy fine on foreign incumbent
telecom company who participate in VOIP banning, should they use VOIP
for termination on US soil either directly or via a third party. Such
restrictions by the US means TE will no longer be able to offer cheap US
terminations to its call centers and that in turn could hurt the
Egyptian unemployment rate. After all, our aim is to allow competition
fairly within WTO members and not be wide open to competition selling
our air time to incumbents who dictate their rates on us.