FOR IMMEDIATE RELEASE NEWS MEDIA CONTACT:

January 18, 2000 Rosemary Kimball (202) 418-0500

**INTERNATIONAL BUREAU ISSUES ANNUAL REPORT ON DEVELOPMENTS IN
INTERNATIONAL TELECOMMUNICATIONS MARKETS TO SENATOR HOLLINGS**

Washington, D.C. \-- As part of its ongoing effort to promote
competition and liberalization in the international telecommunications
services market, the Commission today issued its Report on International
Telecommunications Markets for 1999. The report, which tracks several
trends in international telecommunications markets since the signing of
the historic World Trade Organization Agreement on Basic
Telecommunications (WTO Agreement), is prepared annually at the request
of Senator Ernest F. Hollings (D-SC). The first such report was issued
on December 7, 1998.

As the report indicates, international calling prices have continued to
decline significantly over the past year and many countries are
continuing to open their markets to competition by foreign
telecommunications and satellite companies. In addition to the
Commission's rules implementing the WTO Agreement, other Commission
policies, such as settlement rate reform, have played an important role
in bringing about increased competition, lower prices and more choices
for consumers.

Some of the developments highlighted in the report include:

• Rates paid by U.S. consumers for international service to most foreign
destinations have declined significantly since the WTO Agreement came
into effect. From 1996 to 1998, the average price of an international
long distance call declined from 74 cents per minute to 55 cents per
minute, a 25% decline. By the time the Commission's Benchmarks Order is
fully implemented in 2003, we expect to see much deeper reductions in
international calling rates. On highly competitive routes such as the
U.S.-UK route, prices have fallen even more dramatically, to as low as
10 cents per minute. Although aggregate data for 1999 are not yet
available, all indications are that the trend toward lower rates has
continued and that the current average price is well below 55 cents per
minute.

• International settlement rates continue to decline, especially in WTO
members that have made full market access commitments. The vast majority
of WTO members with full market access commitments have settlement rates
that are at or below the target benchmark rates that were set by the FCC
in its Benchmark proceeding. From 1998 to 1999, there was an average
decline of 15% in settlement rates of WTO members with full market
access commitments. WTO members with full market access commitments have
an average settlement rate of 16.8 cents per minute, while those with
lesser commitments average 39.9 cents per minute.

• As of year-end 1999, the FCC will have achieved benchmarks compliance
for 99% of the net settled minutes for upper income countries (those
that were scheduled to be in compliance by 1/1/99). For upper-middle
income countries (those scheduled to be in compliance by 1/1/00), the
compliance rate is 86% of net settled minutes.

• With the surge in competition since the WTO, non-incumbent
multinational carriers are making inroads into the global telecom
marketplace. Of 14 non-incumbent multinational carriers, both U.S. and
foreign, all but one (for which information is available) showed a
positive growth rate measured by percentage year-to-year change from the
first quarter of 1998 to 1999. Five of the 14 non-incumbent
multinational carriers grew even faster than they did the year before.
Four of these new entrants grew at a staggering rate − more than 100% −
over this period.

• In the top ten markets measured by the number of telephone lines, the
number of new entrants increased from 1998 to 1999 in all ten markets
except for one, which remained unchanged. In Hong Kong, the number of
new entrants climbed dramatically from 4 to 59 − more than a 14-fold
increase. In the top five markets measured by market revenues,
penetration by new entrants was significant in all five countries:
Japan, Germany, United Kingdom, France and Italy. For example, in Japan
the number of new entrants rose from 9 to 42.

• The satellite services sector of the telecommunications market is
growing rapidly and continues to diversify its service offerings. The
new satellite systems are expected to bring business and other consumers
a wide variety of new broadband and mobile voice and data services and
connect users in countries around the globe. The Satellite Industry
Association (SIA) states that 1998 commercial satellite industry revenue
was \$65.9 billion, with double-digit growth forecast for the next
decade.

• The WTO Agreement has set an important benchmark for opening markets
to satellite services around the world. Many countries -- particularly
in Europe and, increasingly, in Latin America, Asia, and Africa -- have
liberalized their regulations. Furthermore, there are a significant
number of countries that now permit multiple entities to obtain licenses
to provide voice, data, or video services for their own use or for
third‑party use; permit ownership and operation of private earth station
equipment; and to permit choice in providers of satellite capacity.

• Spending on telecom equipment and services is estimated to reach \$983
billion by year‑end in Canada, Mexico, Western and Eastern Europe, Latin
America, and the Asia‑Pacific region combined. Spending on transport
services, equipment, and support services will soar to \$1.8 trillion in
2003 at a 16.7% compound annual growth rate. U.S. manufacturers are
expected to garner \$45 billion -- that is 12.7% -- of the estimated
\$345 billion that that will be spent on telecom equipment in 2003.

• A \$10 billion global venture between AT&T and BT aims to serve the
entire communications needs of multinational companies and individuals
around the world. The two companies in the joint venture reportedly have
agreed to invest a total of \$1 billion, split equally between them, in
U.S. businesses involved in high technology and emerging communications
markets, and plan to build an intelligent, managed Internet Protocol
(IP)-based global network.

• The formation of the joint venture between the American company Qwest
and the Dutch company KPN in 1999 to create a pan-European, IP-based
fiber optic network linked to Qwest's infrastructure in North America
for data, voice and video exemplifies the type of carrier combinations
spurred by the WTO Agreement.

• Since last year, the full WTO commitments of three countries, Ireland,
Peru and Portugal, have come into force, bringing the total number to 25
countries that have legal obligations to allow majority foreign-owned
companies seeking to provide international voice service using their
facilities they themselves own and control. There are now 78 WTO members
that have made commitments in the area of basic telecommunication
services.

• Since the signing of the WTO Agreement, many countries have made
inroads in reforming their telecommunications regulatory structure in
order to encourage the development of competition in their
telecommunications industry. As a result, both local and long-distance
interconnection rates have fallen in many countries, but primarily in
Europe.

• According to SIA, satellite companies continue to view the WTO
Agreement as a positive force in the development and growth of the
satellite industry. For example, several countries allow licensed radio
and television broadcasters and cable television providers to own their
own transmission broadcast facilities and to purchase satellite capacity
without restriction.

• Over the past year, the FCC has authorized two non‑U.S. licensed
satellite service providers, TMI and New Skies, to offer service in the
United States.

• The FCC has streamlined its WTO implementation rules by developing a
"Permitted List" of U.S. and non‑U.S. satellite systems whereby nearly
all earth station operators providing fixed‑satellite service in the
conventional C‑ and Ku‑bands may access any of these designated
satellites without additional Commission action, consistent with the
technical parameters authorized in the earth station licenses.

Action by the Chief, International Bureau, January 14, 2000, by Report
(DA 00-87)

\- FCC --

International Bureau Contact: Justin Connor at (202) 418-1476

TTY: (202) 418-2555.