RESTRICTED
WORLD TRADE S/GBT/M/2
17October 1996
ORGANIZATION(96-4275)
Group onBasic Telecommunications
REPORT OFTHE MEETING OF20SEPTEMBER 1996
1. TheGroup onBasic Telecommunications helditssecond meeting on20September 1996. The
agenda forthemeeting wascontained inWTO/AIR/398 of20August 1996. TheChairman called
theattention oftheGroup totherequest oftheRepublic ofBelarus, agovernment intheprocess of
accession totheWTO, forobserver status andtherequest wasapproved.
2. Under thefirstagenda item, theexchange ofviews onprogress inbilateral negotiations,
participants reported thattheywereencouraged bythenegotiating sessions theyhadheldthroughout
theweek andbythesense thatthere wasacontinuing commitment towork toasuccessful conclusion
ofthenegotiations. Itwasnoted thatthere were signs ofimproving coverage interms ofpossible
newoffersandimprovementsofexistingoffers.Participantssaidthatinbilateralstheywereencouraging
oneanother tobring forthneworimproved commitments atorbefore theSingapore Ministerial Meeting
soastoobtain theclearest possible picture ofthemarket access deallikely toresult bytheFebruary
deadline. Inbilaterals, anumber ofpartners hadindicated thattherewasdialogue under wayincapitals
thatcould leadtoconcrete results byDecember, andmostmajor trading partners hadindicated that
theywere alsoreviewing ways theycould improve theirownoffers. TheChairman reaffirmed the
importance oftheSingapore Ministerial, recalling thatbecause ofitthere would benoGBTmeeting
aftertheoneinNovember untiltheJanuary resumption forthefinalphase ofnegotiations. Heurged
participants tobegin placing neworimproved offers onthetableassoonaspossible. Henoted that
news ofcontinuing reform under wayinmany participants 'telecommunications regimes should make
thisgoalachievable.
3. Under thesecond agenda item, theexchange ofinformation onrecent developments in
telecommunications policies, therepresentative oftheUnited States informed participants thatthe
proposedFCCrulingsoninterconnection,designedtointroducemeaningfulcompetitioninlocalexchange
markets, hadnowbeenproduced. Regarding thenewly proposed Domestic International Satellite
ConsolidationOrder(DISCOII),theU.S.representativerecalledthatasimilarproposalhadbeenadopted
lastyearbytheFCC. Thatproposal included provisions thatwould make itlegally possible forthe
United States toenact anoffer ofopening itsmarket onamost-favoured-nation basis. Hesaidthat
DISCO IIcontained thesame elements oflegalcertainty regarding implementation oftheU.S.offer
onsatellite services. Therepresentative oftheCôted'Ivoire saidthatregarding radio-electric networks
bywayofsatellites orother means, theCôted'Ivoire hadanopenregime suchthat,inorder tosupply
radio-based services fornational orinternational telephony, asupplier needonlyaskforauthorization
anditwould begranted. Furthermore, henoted thattheCôted'Ivoire looked forward toexpressions
ofinterest from relevant investors.
4. Regarding discussion ofoutstanding issues, theChairman invited views ofparticipants onissues
related tointernational services andsatellite services. Participants noted thatthepastweek had
demonstrated aspirit ofwillingness towork together inauseful andconstructive wayonresolving
theoutstanding issues.S/GBT/M/2
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5. Participants reported thatinformal discussions onsatellite issues hadbeenheldwhere they
hadshared theirviews onquestions circulated informally bytheUnited States. Therepresentative
oftheUnited States saidthattheoverall aimofthequestions wastoarrive atanunderstanding ofwhat
basic telecommunications services satellites deliver, whytheyareimportant andwhat mayneedto
beaccomplished byFebruary toclarify howthesupply ofbasictelecom services oversatellite networks
wold becovered intheoffers thatresult from thenegotiations. Several delegations saidtheywere
pleased thatdiscussions thusfarhadsucceeded innarrowing down thenumber questions tobeaddressed
toamanageable setthatshould bepossible toresolve inthetimeavailable. Thefourissues identified
were (1)finding ways toresolve uncertainties about related entries anddifferent approaches taken
inschedules, (2)clarifying whatbenefits andobligations would ariseunder theGATS withrespect
tosatellite operators thataretreaty-based, intergovernmental satellite organizations (ISOs), (3)
consideration oftherelation between frequency allocation andassignment processes andcommitments
and(4)whether ornotbasictelecommunications services wasunderstood toinclude "broadcast" services
suchasvideo transmission.
6. Onsatellite-related scheduling issues, participants suggested thatwork towards acommon
understanding would beuseful andtheChairman suggested thattheSecretariat might beabletoprovide
some technical assistance inthisrespect. OnIntergovernmental Satellite Organizations, itwasnoted
thattheGATS-related legal questions involved maynothavebeenforeseen bythedrafters ofthe
Agreement, sothere might beaneedtoconsider language toclarify whether ISOsshould betreated,
withregard toaccess, national treatment, MFN orother obligations, likeanyother service suppliers.
Onedelegation saidthatwork onclarifying thelegalissues should beundertaken inthemultilateral
setting andsuggested thatsome guidance from theSecretariat onwhatelements oftheGATS were
relevant would beuseful. Onfrequency-related issues, itwassuggested thatalthough thenegotiations
should aimatproviding reasonable, transparent andnon-discriminatory treatment forservice suppliers
whousedspectrum tosupply services, itwasnottheroleofthenegotiations toleadtofrequency and
spectrum allocation toindividual organizations, norwastheGATS theforum fordealing withthe
assigning andallocation offrequencies. Onedelegation emphasized thatthecentral issue wasthat
measures suchasfrequency assignment orlicensing should notbeabused soastocause tradebarriers.
Regarding thequestion ofwhether "broadcast" services suchasvideo transmission fellwithin thescope
ofbasic telecommunications, theviewwaswidely expressed thatsuchservices werenotcovered by
these negotiations. Itwasalsosuggested thataneffort toexpand thescope inthismanner could put
intoquestion thepossibility ofachieving asuccessful conclusion tothenegotiations.
7. Onissues related tointernational services, therepresentative oftheUnited States stressed that
itwassearching forways toensure thatthenegotiations would promote competition inevery market
openedasaresultofthem,withoutcreatingtheopportunityfordistortionofthatcompetitionbyoperators
from non-liberalized markets. Bytaking advantage oftrade obligations, hesaid, anoperator could
useitsmarket power tolimitcompetition andengage inanti-competitive practices intheinternational
services market tothedisadvantage ofcompetitors. TheUnited States wanted toaddress thisissue
inanMFN-consistent way,consistent withevery Member 'sregime forcompetition lawandantitrust
protection. Delegations suggested anumber ofpoints thattheyfeltneeded tobetaken intoaccount
inrelation tosafeguard measures usedtoaddress distortions ininternational services. Mostparticipants
expressed theview thattheproblem must beaddressed inanMFN-consistent way, butwere not
convinced thatsuchasolution hadyetbeenfound. Itwasalsosaidthatcorrective measures should
betemporary innature, possibly being subject to"sunset" clauses orperiodic review mechanisms.
Anumber ofdelegations expressed aclearpreference forsafeguards thatwould beapplied onanex-post
rather thanex-ante basis. However, some suggested thatalthough itwasreasonable toviewex-ante
measures withcaution, either ex-ante orex-post measures could beapplied consistently withGATS
rules, including MFN treatment. Itwasalsoproposed thatassuchsafeguards should boost competition
rather thancreate trade barriers, theyshould beproportional totheobjective sought. OnedelegationS/GBT/M/2
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questioned therealmagnitude oftheproblem oftradedistortion, while another suggested thattheextent
oftheproblem mayindeed begreater forsome Members thanforothers.
8. There were suggestions thattoresolve theproblem would needtoinvolve thewidespread
liberalization oftelecommunications markets andreform oftheregime forinternational accounting
rates, butthatthese solutions would notfitwithin thetimeframe ofthenegotiations. Onedelegation
saidthatsolongasdiffering levels andpaces ofliberalization weretoco-exist, therewasvalidconcern
about howtheremaining monopolies would conduct themselves inopenmarkets. Itwassuggested
thatgetting atthesource oftheproblem should involve obtaining commitments fromMembers who
choose tomaintain monopolies toensure thattheirmonopolies donotengage insuchpractices. It
wasnoted thatthererouting oftraffic andother practices occurring inthedynamic market for
telecommunications, (such ascallback, calling cards andrefiling) alsohaveaconsiderable impact
ontheproblem ofoutpayments. Itwasnevertheless acknowledged byanumber ofparticipants that
safeguards maybenecessary intheshort run. Participants generally agreed thatthere wasaneedto
arrive atacommonly agreed approach assoonaspossible.
9. With respect totheorganization offuture work, theChairman recalled thatinJulythere was
interest expressed inholding ahigh-level meeting oftheGroup. After abrief discussion among
participants onpossible dates, theChairman proposed thatthemeeting oftheGroup scheduled for
Thursday14Novemberbeheldwiththeattendanceofhigh-levelofficialsandbeaccompaniedbybilateral
contacts inwhich suchofficials could alsoparticipate. Itwassoagreed.
10. Under otherbusiness, theChairman asked participants toconsider adraftreport totheSingapore
Ministerial Meeting inDecember onthenegotiations onbasictelecommunications. Following discussion
theChairman saidthatarevised version would becirculated forapproval attheGroup 'smeeting on
18October. Next, theChairman announced thatheunderstood thatanumber ofinternational satellite
consortia werehoping tohaveanopportunity inOctober toprovide information toGBTparticipants
ontheirservices andissues relating totheirability toprovide services. Once theplans wereinplace,
hesaid, theSecretariat would beinformed sothatitcould communicate thedetails toparticipants.
Finally, regarding thederestriction oftheSchedules andMFN Exemption Listsattached totheFourth
Protocol oftheGATS, therepresentative ofIndia expressed theview thatitwasnotclear thatthe
applicable procedures contained intheGeneral Council Decision (WT/L/160/Rev.1 of26July1996)
hadbeenfollowed withrespect totheproposal onderestriction made atthe19Julymeeting ofthe
Group, andsuggested thatanappropriate amendment should bemade tothedocument announcing
thederestriction (S/GBT/1). Itwassoagreed.