Telecommunications regulators are close to a global deal that will cut the price of international communications and head off a trade war that threatens to bring anarchy to the market. The worldwide communications market faces possible catastrophe if the current structure is not reformed by consensus, said Tarjanne at the Telecom Interactive 97 conference in Geneva. The settlement rate, also known as the accounting rate, is the table of charges telecom carriers levy on each other for handling incoming calls. The rate is set by complex multilateral negotiations involving telecom regulators from all over the world.
Some countries charge rates that are significantly above the cost of handling an incoming call.
A cut in the rate should see savings on many international calls and passed onto users in the form of lower prices. Last month, the Federal Communications Commission broke with the tradition of multilateral negotiations by announcing a unilateral cut in the settlement rate for U.S.-based carriers. The action was applauded by some users and analysts, but may threaten an internal legal dispute. These issues have to be dealt with by multilateral negotiation, he said. Everyone must share responsibility for agreeing the new rates.