MEXICO – MEASURES AFFECTING TELECOMMUNICATIONS SERVICES
Document: Request for the Establishment of a Panel by the United States
Date: 16 November 2000
Document codes: WT/DS204/2
Complainant: U.S.
Respondent: Mexico
Third parties: Australia, Brazil, Canada, Cuba, EU, Guatemala, Honduras, India, Japan, Nicaragua
Dispute stage: Panel
Agreements cited: Art. VI:1, VI:5, XVI:1, XVI:2, XVII:1, XVII:2, XVII:3, XVIII  Services (GATS)

MEXICO – MEASURES AFFECTING TELECOMMUNICATIONS SERVICES
Request for the Establishment of a Panel by the United States
The following communication, dated 10 November 2000, from the Permanent Mission of the
United States to the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of
the DSU.
The United States considers that certain measures of the Government of Mexico are
inconsistent with Mexico's commitments and obligations under the General Agreement on Trade in
Services (GATS) with respect to trade in basic and value-added telecommunications services. In
particular:
(1) The International Long Distance Rules published by the Secretariat of Communications and
Transportation in the Diario Oficial on 11 December 1996 (1996 International Long Distance
Rules), which require and administer uniform settlement rate and proportionate return
systems, prohibit the use of alternative cross-border traffic arrangements and limit the
competitive negotiation of cross-border traffic arrangements. These Rules prevent service
suppliers from supplying telecommunications services on which Mexico has made
commitments under the GATS and therefore appear to be inconsistent with Mexico's
commitments under the GATS, including Article VI:1, Article VI:5, Article XVI:1,
Article XVI:2, Article XVII:1, Article XVII:2, Article XVII:3, Section 5 of the Reference
Paper (which Mexico has inscribed in its Schedule of Commitments as additional
commitments pursuant to GATS Article XVIII) and Section 5 of the Annex on
Telecommunications. These Rules also prevent service suppliers from obtaining competitive
rates and conditions for the termination of international traffic and therefore appear to be
inconsistent with Mexico's commitments under Sections 1.1, 1.2, 2.1, 2.2, 2.4, 2.5 and 5 of
the Reference Paper, and Section 5 of the GATS Annex on Telecommunications.
(2) The Government of Mexico appears to have failed to permit the cross-border supply of basic
telecommunications services over leased lines as required by Mexico's commitments and
obligations under the GATS, including Arti cle VI:1, Article VI:5, Article XVI:1,
Article XVI:2, Article XVII:1, Article XVII:2, Article XVII:3, Section 5 of the Reference
Paper, and Section 5 of the Annex on Telecommunications.
(3) The Government of Mexico appears to have failed to permit the supply of basic
telecommunications services over leased lines by locally established commercial agencies as
required by Mexico's commitments and obligations under the GATS including Article VI:1,
Article VI:5, Article XVI:1, Article XVI:2, Article XVII:1, Article XVII:2, Article XVII:3,
Section 5 of the Reference Paper, and Section 5 of the Annex on Telecommunications.

(4) The Agreement of the Secretariat of Communications and Transportation establishing the
procedure to obtain concessions for the installation, operation or exploitation of interstate
public telecommunications networks, pursuant to the Federal Telecommunications Law,
published by the Secretariat of Communications and Transportation in the Diario Oficial on
4 September 1995, prevents service suppliers of the United States from exercising effective
control over concessionaires authorized to provide telecommunications services in Mexico.
This measure appears to be inconsistent with Mexico's commitments and obligations under
the GATS, including Article XVI:1, Article XVI:2, Article XVII:1, Article XVII:2 and
Article XVII:3.
(5) The Government of Mexico appears to have failed to ensure and indeed appears to have
prevented local, long distance and international interconnection with Mexico's major supplier
of telecommunications services (Teléfonos de México S.A. de C.V., or "Telmex" and
Teléfonos del Noroeste, S.A. de C.V., or "Telnor") – including for calls terminating in cities
in which competitive suppliers lack facilities – as required by Mexico's commitments and
obligations under the GATS, including Sections 2.1, 2.2, 2.4, 2.5 and 5 of the Reference
Paper, through the following measures:
(a) the Secretariat of Communications and Transportation Resolution Concerning
Interconnection Plans for Public Long Distance Networks, dated 17 June 1994;
(b) the 1996 International Long Distance Rules;
(c) the Administrative Resolution by which the Secretariat of Communications and
Transportation determines the tariff regulations applicable to the interconnection
services of public telecommunications networks authorized to provide long distance
services, dated 26 April 1996;
(d) the Administrative Resolution by which the Secretariat of Communications and
Transportation, through the Federal Telecommunications Commission, establishes the
costs of the interconnection projects with regard to the signalling, presubscription and
numbering that shall be recovered by Teléfonos de México, S.A. de C.V. and
Teléfonos del Noroeste, S.A. de C.V. in their local service operations, dated
28 May 1997;
(e) Resolution No. P/271198/0281 of the Federal Telecommunications Commission
setting forth rates and other conditions applicable to the interconnection between
Teléfonos de México, S.A. de C.V., and Teléfonos del Noroeste, S.A. de C.V. with
Alestra, S. de R.L. de C.V., dated 27 November 1998; and
(f) the August 1990 amendment by the Secretariat of Communications and
Transportation to the concession title of Telmex.
(6) The Government of Mexico appears to have failed to resolve interconnection disputes within
a reasonable period of time as required by Mexico's commitments and obligations under the
GATS, including under Article VI:1 and Sections 2.2, 2.5 and 5 of the Reference Paper.
(7) The Government of Mexico appears to have failed to ensure access to and use of public
telecommunications transport networks and services, including private lines and circuits, on
reasonable and non-discriminatory terms and conditions for the supply of basic and
value-added telecommunications services as required by Mexico's commitments and
obligations under the GATS, including Article VI:1, Section 5 of the Annex on
Telecommunications, and Section 5 of the Reference Paper.

On 17 August 2000, the United States Government requested consultations with the
Government of Mexico pursuant to Article 4 of the Understanding on Rules and Procedures
Governing the Settlement of Disputes (DSU) and Article XXIII of the GATS regarding measures
affecting telecommunications services. The United States and Mexico held such consultations on
10 October 2000. These consultations provided some helpful clarifications but unfortunately did not
resolve the dispute. Accordingly, the United States respectfully requests the Dispute Settlement Body
to establish a panel pursuant to Article 6 of the DSU to examine this matter with the standard terms of
reference as set out in Article 7.1 of the DSU.