RESTRICTED
WORLD TRADE S/GBT/M/3
13November 1996
ORGANIZATION(96-4834)
Group onBasic Telecommunications
REPORT OFTHE MEETING OF18OCTOBER 1996
1. TheGrouponBasicTelecommunicationshelditsthirdmeetingon18October1996.Theagenda
forthemeeting wascontained inWTO/AIR/446 of4October 1996.
2. Underthefirstagendaitemonexchangeofviewsonprogressinbilateralnegotiationsparticipants
noted thatthere appeared tobepossibilities forprogress butthatthese were evolving slowly. They
observed thatthepolitical momentum andtheflexibility necessary forthenegotiations tosucceed was
notyetmanifested. Thehope wasexpressed thatthehighlevelcontacts oftheGroup inNovember
andtheSingapore Ministerial would helpprovide theneeded political momentum. Itwasalsorecalled
thatparticipants wereaiming toseemovement toimprove offers bytheSingapore meeting sothatthe
outline ofthetheemerging dealcould become moreclear. Oneparticipant reported thatrecent meetings
inSeattle among theQuad countries hadsucceeded inreconfirming thecommitment onthepartof
thesefourparticipants toconclude thenegotiations inFebruary. They hadalsoagreed thattheyshould
make bestefforts toimprove theiroffers before theSingapore Ministerial andtwooftheparticipants,
theUSandEU,hadannounced anintention totableimproved offers inadvance oftheMinisterial.
Thiseffort would bemade inthehope thatitwould helpothers bring forth higher quality offers.
However, some participants noted thatprogress onachieving acritical massofnewandimproved offers
would alsorequire progress ontheotheroutstanding issues. Participants alsourged thatfurther progress
beachieved bytheMinisterial onresolving theoutstanding issues related tointernational services and
satellite services andstressed thatresolution ofthese issues wasessential tothesuccessful conclusion
ofthenegotiations. Itwasnoted thatintensive bilateral negotiating efforts wereunder wayandwould
continue.
3. Under thesecond agenda item, theexchange ofinformation ondevelopments in
telecommunications policies, therepresentative ofHong Kong, recalling thatitsoffer included
commitments onvirtual private networks, reported thatHong Kong wasalready proceding toliberalize
these services: hesaidtheGovernment hadrecently called forapplications, without limitations on
thenumber, fortheprovision ofvirtual private network services.
4. Regarding discussion ofoutstanding issues related tointernational services andsatellite-based
services, theChairman firstinvited views onthesatellite issues. Hedrew attention totwoinformal
notes prepared bytheSecretariat, onedealing withGATS provisions possibly relevant tointer-
governmental satellite organizations andonerelating toscheduling techniques, thatwereintended to
helpfacilitatediscussion.Healsonotedthataninformalpaperonsatelliteschedulingissues,highlighting
differentapproachesusedintheoffersandlistingquestionsraisedbysuchdifferenceswasmadeavailable
bytheUnited States delegation. Many participants reported favourable impressions ofthepresentations
madetodelegationsthepreviousafternoonbyrepresentativeofsatelliteservicescompanies.Delegations
commended, inparticular, theindustry representatives 'expression ofclear andunified views asto
theirsupport forthework being undertaken andforthesuccess ofthenegotiations andtheirsupport
fortheelements ofthereference paper onregulatory principles andtheirsense ofitsimportance for
theirindustry. Participants saidtheysawgrounds foroptimism inthatindustry concerns werefocused
onissues thatitshould bepossible fortheGroup toaddress. Itwasalsonoted thatindustry
representatives would belooking totheGroup toresolve theoutstanding technical issues related to
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satellite-basedservices.Onedelegationrecalledthatderestrictionofofferswasimportanthelpingsatellite
companies, aswellasothers, tounderstand andsupport theefforts oftheGroup. Regarding scheduling-
related concerns, participants confirmed thatthereappeared tobeaneedforfurther clarity inschedules
asillustrated intheU.S.paper. They noted thattheSecretariat noteonscheduling mayhelptofocus
suggestions onways toachieve greater precision. Itwassuggested thatwhile theGroup would need
acommon understanding ofhowtoclearly articulate commitments related tosatellite services, some
differences inlanguage maynevertheless bejustified. Itwasnoted thatitwasimportant tobeable
tolistservices commitments inschedules inatechnology-neutral manner, butthatwhere there were
limitations relating tocertain types oftechnology aclearly understood wayshould befound tomake
schedules specific andclear.
5. Oninternational services issues, participants emphasized thatnotenough progress hadbeen
made andthatsubstantial further work wasnecessary. Onerepresentative suggested thatthere was
nowaneedtofocus moreclosely onsolutions fortheproblems identified. Others noted aneedtoexplore
possible options ingreater detail andtoembark soononwhatmaybeexpected tobeadifficult drafting
exercise. Itwasstressed thattheinformation thathadbeenshared concerning theimportance ofthe
problem hadconfirmed thatinternational services werecrucial tothenegotiations andthattheissues
raised deserve asolution. However, thesolutions found should notcreate market access barriers, apply
inanextra-territorial manner, orimpart undue discretionary powers toregulatory authorities. Itwas
alsosuggested thatanysafeguards would needtobebothtransitory andproportional totheproblem
aswellasconsistent withGATS disciplines, including MFN treatment. Theviewwasexpressed that
GATS provisions neither endorse norcondemn ex-post orex-ante licensing approaches andthatmany
validreasons mayexistfornational differences inusing theseapproaches. Onerepresentative observed
thatthree types ofoptions hadbegun toemerge from discussions: one,tointroduce afairtrade
commitment permitting regulatory authorities toretain thepower toimpose licensing conditions to
protect competition, usually ex-post; asecond concerning licensing based onequivalent competition
considerations, implemented onanex-ante basis, restraining monopoly suppliers fromnon-liberalizing
regimes from entering liberalized markets asameans toreduce therisksofdistortion, andthethird
involving anauto-discipline commitment bynon-liberalizing Members torestrain theirmonopoly
providers from engaging inunfair practices ininternational services. Heconcluded thathedidnot
seetheoptions asmutually exclusive. Forexample, theauto-discipline approach could becombined
withthefirstapproach onthemaintenance ofreserve powers byregulators, thuscreating amechanism
forensuring thatbothendsofacircuit would besubject tocontrol andallowing regulators towork
inconcert. Another representative expressed thebelief thattheproblems involved weresolvable once
theywerefullydefined andunderstood. Hesawtheproblem asrelating tobothinbound andoutbound
traffic, voice anddata, andtraffic related tocountries withmonopolies aswelltocountries thatare
notyetfullycompetitive. Heobserved thatitwasnotyetclearthatparticipants hadreached acommon
view onthedefinition oftheproblem. Healsoasserted theview thatalicensing regime based on
equivalence ofcompetitive opportunities would notbeconsistent withtheMFN obligation oftheGATS.
Regarding theproposal relating to"auto discipline" commitments, itwasnoted thatthere hadbeen
exploration ofthisapproach inbilateral sessions todetermine whether those whomaintain monopolies
maybewilling toundertake suchacommitment.
6. Withrespect totheorganization offuture work, theChairman recalled thatitwasagreed that
high-level officials would beinvited toparticipate intheactivities oftheGroup during theweek of
11-15November.
7. Under other business, theChairman asked participants tofinalize theirviews onthecontents
oftheGroup 'sreport toCouncil forTrade inServices fortheSingapore Ministerial meeting in
December. After presenting comments onthedraftreport, participants agreed tothechanges tobe
incorporated andadopted thereport.