RESTRICTEDWORLD TRADE
ORGANIZATIONS/CSS/W/17
5 December 2000
(00-5276)
Council for Trade in Services
Special SessionOriginal:  English
COMMUNICATION FROM AUSTRALIA
Negotiating Proposal for Telecommunication Services
The following communication has been received from the delegation of Australia with the
request that it be circulated to the Members of the Council for Trade in Services.
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1. Australia proposes that Members agree to the following five points as the basis for future
liberalisation of telecommunication services. Australia has raised these issues consistently since the
1998 Information Exchange Program.
• All Members should adopt in full the provisions of the Reference Paper on Basic
Telecommunications; and the Reference Paper should be strengthened through
clarification.
• All international telecommunication services should be recognised as traded services,
and international settlements arising from such services should be subject to GATSprinciples.  The moratorium on accounting rates disputes should be recognised as
having expired with the onset of negotiations.
• Where there are dominant players or de facto  monopolies, Members must play a role
in promoting fair competition with rega rd to international Internet charging
arrangements.
• Limitations on market access should be removed.
• Rules on domestic regulation should be developed under Article VI.
I. All Members should Adopt in Full the Pr ovisions of the Reference Paper on Basic
Telecommunications.  The Reference Paper should be Strengthened through
Clarification, e.g., of its Provisions on Competitive Safeguards (Article 1);
Interconnection (Article 2); Transparency  (Articles 2 and 4); the Independence of
Regulators (Article 5); and the Allocation of Scarce Resources (Article 6).
2. The Reference Paper on Basic Telecommunications was a significant outcome of the 1998
Basic Telecommunications Agreement (BTA).  Australia wants to build on the Reference Paper to
ensure that all Members implement its principles on the basis of a common understanding, which
could be achieved by further discussion of the issues.  Our aim is to promote a more comprehensiveS/CSS/W/17
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and precise application of existing principles.  We do not consider it appropriate to renegotiate the
Reference Paper at this stage.
3. Stronger competition principles would facilitate the growth of telecommunication services.
There is a need for further clarification of the procompetitive principles  (Article 1) of the Reference
Paper in the manner indicated above.
4. The interconnection principles  (Article 2) of the Reference Paper should also be
strengthened through clarification.  Australia has provided detailed comments on interconnection
principles in S/C/W/110/Add.9.  Significant work ha s also been undertaken in the context of APEC to
develop the APEC Principles of Interconnection (Annex C to the Cancun Declaration of APEC
Telecommunications Ministers), agreed by all APEC members in May 2000.  The APEC Principles
on Interconnection are being used by APEC Members to clarify the application of interconnection
principles of the Reference Paper.
5. The independence of regulators  is essential for the effective implementation of all the
provisions of the Reference Paper.  Australia believes that the current text of Article 5 is unclear
regarding the key criteria necessary to ensure the in dependence of regulators, and that there is a need
for further clarification in the manner indicated above.
6. Many Members are not fully implementing transparency  obligations with respect to making
both interconnection arrangements (Article 2.4) and licensing requirements (Article 4) publicly
available.
7. Australia also seeks to promote the transparent and nondiscriminatory  allocation of scarce
resources . While Article 6 of the Reference Paper provides the basis for this approach, we consider
that market access could be improved if it were clearer how existing provisions applied to specificissues.  For example, the basic requirement for non-discrimination should be that foreign ownership
should not result in discriminatory treatment of a company that is appropriately licensed and subject
to domestic laws, with regard to that company’s access to spectrum.  Members should agree that any
company subject to domestic laws should be given national treatment, without regard to ownership.
Australia also considers that 'technology neutrality' in the provision of telecommunications servicesshould be upheld as far as possible.  Technical requirements or standards on the use of spectrum
should not be imposed beyond what is essential, and should be applied equally to all users of the same
category of spectrum resources.
II. All International Telecommunication Services should be Recognised as Traded Services,
and International Settlements Arising from such Services should be Subject to the
GATS Principles of Transparency and Non-Discrimination.  The Moratorium on
Accounting Rates Disputes should be Recognised as having Expired with the Onset ofNegotiations.
8. Australia considers that the termination of a telephone call or similar service that originates in
another Member is an exported service.  As telephone call completions and other telecommunication
termination services can be imported and exported, we believe that international termination services
are traded services.  We do not consider that there is anything special or unique abouttelecommunications services that justifies different treatment from other services under the GATS.
Australia has provided detailed comments on termination services and the moratorium on disputes
relating to accounting rates in S/C/W/153.
9. The February 1997 Report of the Group on Basic Telecommunications (S/GBT/4) states that
the application of MFN-inconsistent measures with respect to accounting rates would not give rise toaction by Members under dispute settlement under the WTO.  The Report contains a clear sunsetS/CSS/W/17
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clause, however, indicating that this understanding would be 'reviewed' no later than 1 January 2000.
Australia considers that the understanding not to initiate dispute settlement action expired on 1
January 2000.  The purpose of the review should be to determine whether a new understanding on
dispute settlement action should be agreed.  It is therefore incumbent upon those Members who seek
to reach a new understanding on dispute settlement action to explain why such an understanding isnecessary.
10. The ITU has made some progress in reforming the accounting rates system.  Australia
considers that further WTO agreement is needed towards achieving nondiscriminatory trading
arrangements, building on the progress made in the ITU.
III. Australia Proposes that where there are Dominant Players or de facto  Monopolies,
WTO Members must Play a Role in Promoting Fair Competition with Regard to
International Internet Charging Arrangements.
11. Small and medium-sized enterprises, including in developing countries, may have the
potential to secure the greatest improvements in global market access through the use of electronic
commerce (e-commerce).  E-commerce will deliver the expected trade benefits only with widespread,
equitable, cost-effective access to the infrastructure supporting electronic transactions.
12. Australia proposes that Members recognise that Internet delivery  services are a basic
telecommunication service ('packet-switched data transmission services') and that the Basic
Telecommunications Reference Paper should apply to Internet delivery services.
13. Australia believes that Members need not intervene in private business agreements on
international charging agreements for Internet se rvices achieved in a competitive environment, but
where there are dominant players or de facto  monopolies, Members must play a role in promoting fair
competition.  Internet charging arrangements be tween providers of network services should be
commercially negotiated and, among other issues, reflect: (a) the contribution of each network to the
communication; (b) the use by each party of the interconnected network resources; and (c) the end to
end costs of international transport link capacity.  This formulation was adopted in the Asia-Pacific
Economic Cooperation (APEC) 'Principles on Intern ational Charging Arrangements for Internet
Services' (Annex B to the Cancun Declaration of AP EC Telecommunications Ministers), agreed by all
APEC economies in May 2000.
IV. Limitations on Market Access, such as thos e which Restrict the Legal Form Commercial
Presence may take or which Privilege some Satellite Operators, should be Removed.
14. A large number of Members have scheduled limitations on the legal form which commercial
presence may take, for example, requiring joint ventures with local partners.  In Australia’s
experience, such limitations on market access inhibit the development of an efficienttelecommunications industry.  Australia proposes that these limitations be removed from schedules of
commitments.
15. As a separate market access issue, many Members impose restrictions on the type of
technology used to provide telecommunications services, including the delivery of services via
satellite. Australia opposes limitations being placed on satellite operators in a competitive market.For example, Australia does not support measures which provide privileged access for particular
satellite companies.  Australia seeks the removal of these limitations on market access from Members’
schedules of commitments.S/CSS/W/17
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V. Rules should be Developed on Domestic Regu lation such as Licensing Requirements and
Technical Standards Affecting Trade in Telecommunication Services.
16. Australia considers that technical standards and licensing requirements can constitute a
significant barrier to the provision of telecommunication services.  We are exploring how to ensure
that domestic regulation of telecommunications services is the most transparent and least trade-restrictive possible.  This is part of Australia's integrated approach to domestic regulation, set out in
S/WPDR/W/8, in which we have proposed the creation of the 'necessity test' mandated in Article VI,
and the adoption of more effective transparency provisions.  Work on disciplines for domestic
regulation regarding licensing requirements could also draw upon the Reference Paper provisions on
the public availability of licensing criteria (Article 4).
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