RESTRICTED
WORLD TRADE S/GBT/M/4
2January 1997
ORGANIZATION(97-0006)
Group onBasic Telecommunications
REPORT OFTHE MEETING OF14NOVEMBER 1996
1. TheGroup onBasic Telecommunications helditsfourth meeting on14November 1996. The
agenda forthemeeting, contained inWTO/AIR/483 of31October 1996, consisted offiveitems:
exchange ofviews onbilateral negotiations; recent developments indomestic regulatory policies in
individual Members oftheWTO; discussion ofoutstanding issues; organisation offuture work; and
other business.
Exchange ofviews onprogress inbilateral negotiations
2. Several delegations registered thattheyhadhadveryfruitful bilateral discussions inthepast
fewdays. Some delegations noted thatitwasimportant atthispoint inthenegotiations tocreate
momentum, inorder toreach a"critical mass" ofoffers, which would allow thenegotiations tobe
brought toasuccessful conclusion. Therepresentatives oftheEuropean Union, theUnited States and
theSlovak Republic announced thattheyweretabling improved offers. These revisions represented
thefirstimprovements submitted sincetheresumption ofnegotiations inJuly. Several otherparticipants
announced thattheywerealsoworking onimproved offers. Several delegations welcomed theimproved
offers andurged other delegations tocome forward withimproved ornewoffers. Onedelegation said
thatthedeadlineofFebruary15couldnotbeextended,andencouragedparticipantstoshowthenecessary
flexibility inseeking acommonly acceptable outcome.
Recent developments intelecommunications policies
3. Under thesecond agenda itemtherepresentative ofSouth Africa announced therecent passage
oflegislation reforming thetelecommunications regime, andintroducing anindependent regulator.
Theregulator would beresponsible forspectrum allocation andforpolicing anti-competitive practices,
andwould beappointed byParliament inconjunction withthePresident. Thenewlegislation would
allow South Africa tomake anoffer.
Discussion ofoutstanding issues
4. TheChairman invited views oninternational services andsatellite-based services. Regarding
international services issues, therepresentative oftheUnited States indicated thattheFederal
Communications Commission would issue, before theendoftheyear, aNotice ofProposed Rule-
Making, setting outproposals toupdate benchmarks foraccounting rates. Thisinitiative wasgenerated
bytheFCC'songoing programme ofreform, andwasindependent oftheWTO process. TheNotice
ofProposed RuleMaking wasopentopublic comment, including byanygovernment. Theproposed
rules could bemodified inlightofsuchcomments. Theimportance ofthisproposal forthepresent
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negotiation wasthatitopened thewaytosome newalternatives fortheFCCindealing withpotential
competitive distortions intheU.S.market resulting from obligations created byaWTO agreement
onbasictelecommunications. Unlike previous benchmarks, thenewproposed benchmarks would likely
include atarget dateforachieving those benchmarks. TheFCCexpected topropose licence conditions
tiedtothenewbenchmarks andsetaceiling foraccounting ratespaidbyallcarriers ontheroutes
tobeserved bynewentrants totheU.S.market. Benchmarks would beusedasalicensing condition,
notasamarket entry barrier. They would constitute aceiling, asmarket conditions were expected
toproduce ratesbelow thebenchmarks. Thenewbenchmarks would operate asanex-post measure,
astheFCCwould grant licences toanyWTO Member 'scarrier uponapplication, butitwould impose
acondition onoperations subsequent tothegranting ofthelicence. Duetothetimeneeded for
procedural requirements, there would benofinalrules about benchmarks before 15February 1997.
However, iftheWTO negotiation succeeded, theFCCwould make surethatthefinalrulesconformed
toalloftheU.S.obligations under theWTO, andinparticular totheMFN principle andArticle VI
oftheGATS.
5. Participants welcomed theexplanation bytheUnited States concerning itsanticipated newrules
onlicensing andsaidthat,while theylooked forward tomore details, theideas appeared tobeinline
withGATS obligations andheldthepotential toremove theneedtonegotiate oncommonly agreed
additional language oncompetition safeguards. Onedelegation noted, asapreliminary observation,
thatartificial benchmark levels might create adisguised market entry barrier. Therepresentative of
theUnited States emphasized thataction byregulatory authorities toprevent competition frombeing
distorted neednotbeinconsistent withGATS.
6. Onsatellite services, adraftnotewascirculated bytheChairman containing several points
onhowschedule entries maybemade inrelation tothesupply ofsatellite-based services. Thenote
wasalsoofmoregeneralrelevancetothequestionofhowMembersmightwishtoschedulecommitments
relating tobasic telecommunications. TheChairman saidthat,while hetookresponsibility forthe
note, itwasanattempt toreflect participants 'views onhowtoeliminate anyambiguity regarding the
substance ofpossible future commitments. Hestressed thatthenotewasnotalegally binding document,
butratheraproposedguidetoscheduling.Thenotewasgenerallywellreceivedbyparticipants,although
some delegations suggested certain amendments andothers expressed thewishtostudy thenotefurther.
Following participants 'comments onthenote, theChairman undertook toissue anamended version
ofthenotetaking intoaccount thesuggestions made.
Organisation offuture work
7. Anumber ofparticipants hadexpressed aninterest intaking advantage ofthepresence ofhigh-
levelofficials attheSingapore Ministerial inDecember toholddiscussions onissues relevant tothe
telecom negotiation. Other delegations expressed theview thattheMinisterial Conference wasnot
anappropriate occasion toconvene aformal orinformal meeting oftheGroup onBasic
Telecommunications, which wasessentially atechnical negotiating body. Noting thatnoconsensus
existed astothedesirability ofholding aformal orinformal meeting oftheGBT atSingapore, the
Chairman stated thatthenextmeeting oftheGroup onBasic Telecommunications would beon
15January 1997. Healsosaidthatthose delegations wishing toholddiscussions inSingapore may
wishtoexplore thisideafurther.
Other business
8. Nomatters were raised under other business.