[Federal Register Volume 66, Number 6 (Tuesday, January 9, 2001)]
[Notices]
[Pages 1715-1718]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-555]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE


Request for Comments Concerning Compliance with 
Telecommunications Trade Agreements

AGENCY: Office of the United States Trade Representative.

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ACTION: Notice of request for public comment.

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SUMMARY: Pursuant to section 1377 of the Omnibus Trade and 
Competitiveness Act of 1988 (19 U.S.C. 3106) (``section 1377''), the 
Office of the United States Trade Representative (``USTR'') is 
reviewing, and requests comments on: the operation and effectiveness of 
and the implementation of and compliance with the World Trade 
Organization (``WTO'') Basic Telecommunications Agreement; other WTO 
agreements affecting market opportunities for telecommunications 
products and services of the United States; the telecommunications 
provisions of the North American Free Trade Agreement (``NAFTA''); and, 
other telecommunications trade agreements with the Asia Pacific 
Economic Cooperation (``APEC'') members, the European Union (``EU''), 
the Inter-American Telecommunications Commission (``CITEL''), Japan, 
Korea, Mexico and Taiwan. The USTR will conclude the review on March 
31, 2001.

DATES: Comments are due by noon on Friday, January 26, 2001.

ADDRESS: Comments must be submitted to Gloria Blue, Executive 
Secretary, Trade Policy Staff Committee, ATTN: Section 1377 Comments, 
Office of the United States Trade Representative, 600 17th Street, NW, 
Washington, DC 20508.

FOR FURTHER INFORMATION CONTACT: Harry Sullivan, Office of Industry 
(202) 395-9620; or Demetrios Marantis, Office of the General Counsel 
(202) 395-3150.

SUPPLEMENTARY INFORMATION: Section 1377 requires the USTR to review 
annually the operation and effectiveness of all U.S. trade agreements 
regarding telecommunications products and services of the United States 
that are in force with respect to the United States. The purpose of the 
review is to determine whether any act, policy, or practice of a 
country that has entered into a telecommunications trade agreement with 
the United States is inconsistent with the terms of such agreement, or 
otherwise denies to U.S. firms, within the context of the terms of such 
agreements, mutually advantageous market opportunities. For the current 
review, the USTR seeks comments on:
    (1) Whether any WTO member is acting in a manner that is 
inconsistent with its commitments under the WTO Basic 
Telecommunications Agreement or with other WTO obligations, e.g., the 
WTO General Agreement on Trade in Services (``GATS''), including the 
Annex on Telecommunications and the Reference Paper on Pro-Competitive 
Regulatory Principles, that affect market opportunities for U.S. 
telecommunications products and services;
    (2) What steps to take regarding out-of-cycle reviews initiated in 
2000 under Section 1377 regarding compliance by Germany, Mexico, South 
Africa, and the United Kingdom with telecommunications trade 
agreements;
    (3) Whether Canada or Mexico has failed to comply with their 
telecommunications commitments under NAFTA;
    (4) Whether APEC or CITEL members, the EU, Japan, Korea, Mexico or 
Taiwan have failed to comply with their commitments under additional 
telecommunications agreements with the United States.
    See 63 FR 1140 (January 8, 1998) for further information concerning 
the agreements listed below and USTR Press Releases 00-22 (March 30, 
2000), 00-25 (April 4, 2000), 00-46 (June 16, 2000), 00-55 (July 18, 
2000), 00-57 (July 28, 2000), 00-66 (October 2, 2000), 00-78 (November 
8, 2000), and 00-93 (December 21, 2000) available at www.ustr.gov, for 
the results of the 1999-2000 section 1377 review concerning these 
agreements.

WTO Agreements

    The GATS contains general obligations that apply to all WTO members 
and services, and specific obligations that apply only to services 
listed in a WTO member's schedule of commitments. As part of the GATS, 
WTO members have made both basic and value-added telecommunications 
commitments. Specifically, the Fourth Protocol to the GATS--generally 
referred to as the WTO Basic Telecommunications Agreement--is the legal 
instrument embodying seventy WTO members' basic telecommunications 
services commitments under the GATS. The agreement entered into force 
on February 6, 1998, and since that time, an additional nine WTO 
members have made telecommunications services commitments, some upon 
their accession to the WTO. Many members also took separate commitments 
in the area of value-added telecommunications services as part of the 
GATS, which entered into force on January 1, 1995. A description of 
each member's specific commitments is available on the Internet at 
www.wto.org.
    Under the WTO Basic Telecommunications Agreement, members have made 
full or qualified commitments in three specific areas: market access, 
national treatment, and pro-competitive regulatory principles. Members 
that have made full market access commitments have agreed to permit 
local, long-distance and international service through any means of 
network technology, either on a facilities basis or through resale of 
existing network capacity. Members making full national treatment 
commitments have agreed to ensure treatment no less favorable to U.S. 
services or service suppliers than that accorded to their own services 
or service suppliers. And many members have also adopted pro-
competitive regulatory principles--set forth in a Reference Paper and 
incorporated in the members' schedules--which commit members to 
establish independent regulatory bodies, ensure interconnection with 
networks in foreign countries at cost-oriented rates, maintain 
appropriate measures to prevent anti-competitive practices such as 
cross-subsidization, and ensure transparency of government regulations 
and licensing.
    The USTR seeks comment on whether any WTO member that has 
undertaken telecommunications services commitments under the GATS has 
failed to make the necessary legislative or regulatory changes to 
implement its commitments, or permits acts, policies, or practices in 
its markets that run counter to that member's commitments. In addition, 
the USTR seeks comments on whether any WTO member permits acts, 
policies, or practices that are inconsistent with other WTO obligations 
and that affect market opportunities for telecommunications products 
and services of the United States.

Out of Cycle Reviews Regarding Germany, Mexico, South Africa, and 
the United Kingdom

    The USTR seeks comments on what steps to take regarding out-of-
cycle reviews initiated under Section 1377 in 2000 regarding compliance 
by Germany, Mexico, South Africa, and the United Kingdom with 
telecommunications trade.
    Germany--out-of-cycle review: On June 16, 2000, USTR announced the 
extension of an out-of-cycle review under section 1377 of Germany's 
compliance with its WTO telecommunications commitments, notably its 
Reference Paper commitments to ensure interconnection under non-
discriminatory terms and conditions that are transparent and 
reasonable. The review, initiated on March 30, 2000, focused on: (1) 
Continued excessive delays by Deutsche Telekom (``DT'') in providing 
interconnection to competing carriers;

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(2) excessive license fees charged by the German government, ranging 
from $1.4 to $6.0 million; (3) non-transparent DT cost data filed with 
the German regulator to support DT's position on interconnection fees 
and other matters; and (4) refusal by DT to perform billing and 
collection services for new entrants absent a regulatory mandate that 
DT continue to perform this function. Germany has taken positive steps 
on most of these issues, pledging to reduce license fees and 
interconnection backlogs. It has also required DT to bill competitors' 
customers for long distance service. The USTR seeks comments on whether 
Germany continues to address these issues in a meaningful fashion.
    Mexico--out-of-cycle review: On November 8, 2000, USTR announced 
that the United States will request the establishment of a WTO dispute 
settlement panel to examine Mexico's compliance its telecommunications 
commitments. The U.S. panel request outlines the specific measures 
which the United States believes are inconsistent with Mexico's WTO 
commitments, including Mexico's failure to ensure (1) timely, non-
discriminatory interconnection for local competitors, which remain 
unable to interconnect with Telmex at the local level; (2) cost-
oriented interconnection for all calls into and within Mexico, 
including for calls to remote regions where competitive suppliers lack 
facilities; and (3) competitive alternatives for terminating 
international calls into Mexico, currently set at a rate of 19 cents 
per minute, or up to 15 cents per minute higher than cost. The United 
States has also requested WTO consultations on measures adopted after 
the initial U.S. consultation request concerning newly issued rules to 
(1) regulate the anti-competitive practices of Telmex (Mexico's major 
telecommunications supplier) and (2) establish long-distance 
interconnection rates for 2001.
    South Africa--out-of-cycle review: On June 16, 2000, USTR announced 
the extension of an out-of-cycle review under Section 1377 of South 
Africa's compliance with its WTO telecommunications commitments. 
Specifically, the United States is concerned that South Africa is 
failing to ensure--consistent with the GATS Annex on 
Telecommunications--that its dominant telecommunications supplier 
(``Telkom'') provide access to and use of the private lines needed for 
the competitive supply of value-added network services (``VANS''). The 
newly-created regulator, the Independent Communications Authority of 
South Africa (``ICASA''), has mandated that Telkom provide private 
lines to Telkom's competitors, but Telkom has contested these decisions 
in South African courts. ICASA is currently holding public consultation 
procedures to determine the definition of VANS and Virtual Private 
Networks (``VPNs''). The USTR seeks comments on whether South Africa is 
addressing these issues satisfactorily.
    United Kingdom--out-of-cycle review: On December 21, 2000, USTR 
announced the extension of an out-of-cycle review under Section 1377 of 
the United Kingdom's compliance with its WTO Reference Paper 
commitments to provide ensure interconnection on terms, conditions, and 
cost-oriented rates that are sufficiently unbundled. The UK 
telecommunications regulator (``OFTEL'') is currently carrying out a 
regulatory proceeding to determine the price at which competitors can 
gain access to the telephone infrastructure of British Telecom (``BT'') 
to provide advanced data services (unbundling of the local loop). On 
August 8, OFTEL announced the new license conditions for BT, which 
require BT to provide unbundled local loops to other telecom operators. 
On November 23, OFTEL found in favor of competitors' complaints that 
BT's proposed contract for local loop access ``was not reasonable'' and 
published its own terms and conditions for such a contract. USTR 
requests comments concerning whether UK is properly implementing its 
WTO Reference Paper obligations.

NAFTA and Other Trade Agreements

    The USTR seeks comments on the operation and effectiveness of 
certain trade agreements regarding telecommunications products and 
services, including the NAFTA. Chapter 13 of the NAFTA includes market 
access and national treatment commitments for value-added 
telecommunications services; and, it includes a national treatment 
commitment for conformity assessment in relation to telecommunications 
equipment standards.
    Bilateral agreements include, on a country-by-country basis:
    Japan: The 1999 Nippon Telegraph and Telephone (NTT) agreement; the 
1994 U.S.-Japan Public Sector Procurement Agreement on 
Telecommunications Products and Services; and, additional 
telecommunications trade agreements with Japan, including a series of 
agreements on: international value-added network services (IVANS) 
(1990-91); open government procurement of all satellites, except for 
government research and development satellites (1990); network channel 
terminating equipment (NCTE) (1990); and cellular and third-party radio 
systems (1989) and cellular radio systems (1994).
    Korea: Agreements regarding protection of intellectual property 
rights (``IPR'')(1996), type approval of telecommunications equipment 
(1992/1996), transparent standard-setting processes, (1992/1997) and 
non-discriminatory access to Korea Telecommunications' procurement of 
telecommunications products. (1992/1996)
    Mexico: The 1997 understanding regarding test data acceptance 
agreements between product safety testing laboratories.
    Mutual Recognition Agreements For Conformity Assessment of 
Telecommunications Equipment: Mutual Recognition Agreements (``MRAs'') 
regarding telecommunications equipment trade with the European Union 
(1997), APEC countries (1998), and CITEL countries (1999).
    Taiwan: The February 1998 agreement on interconnection pricing for 
provision of wireless services in Taiwan; and, the July 1996 agreement 
on the licensing and provision of wireless services through the 
establishment of a competitive, transparent and fair wireless market in 
Taiwan. USTR also seeks comments on telecommunications commitments made 
by Taiwan to the United States in October 1999 and February 1998 as 
part of its accession to the WTO.

Public Comment: Requirements for Submissions

    USTR requests comments on: the operation and effectiveness of--
including implementation of and compliance with--the WTO Basic 
Telecommunications Agreement; other WTO agreements affecting market 
opportunities for telecommunications products and services of the 
United States; the NAFTA; and other telecommunications trade agreements 
with APEC members, CITEL members, the EU, Japan, Korea, Mexico and 
Taiwan. All comments must be in English, identify on the first page of 
the comments the telecommunications trade agreement(s) discussed 
therein, be addressed to Gloria Blue, Executive Secretary, TPSC, ATTN: 
Section 1377 Comments, Office of the U.S. Trade Representative, and be 
submitted in 15 copies by noon on Friday, January 26, 2001.
    All comments will be placed in the USTR Reading Room for inspection 
shortly after the filing deadline, except

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business confidential information exempt from public inspection in 
accordance with 15 CFR 2003.6. Confidential information submitted in 
accordance with 15 CFR 2003.6, must be clearly marked ``BUSINESS 
CONFIDENTIAL'' in a contrasting color ink at the top of each page on 
each of 15 copies, and must be accompanied by 15 copies of a 
nonconfidential summary of the confidential information. The 
nonconfidential summary will be placed in the USTR Public Reading Room.
    An appointment to review the comments may be made by calling Brenda 
Webb at (202) 395-6186. The USTR Reading Room is open to the public 
from 9:30 a.m. to 12 noon, and from 1 p.m. to 4 p.m., Monday through 
Friday, and is located in Room 101.

Carmen Suro-Bredie,
Chairman, Trade Policy Staff Committee.
[FR Doc. 01-555 Filed 1-8-01; 8:45 am]
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