MEXICO – MEASURES AFFECTING TELECOMMUNICATIONS SERVICES
Document: Request for Consultations by the United States
Date: 29 August 2000
Document codes: WT/DS204/1; S/L/88
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 Consultations by the United States
The following communication, dated 17 August 2000, from the Permanent Mission of the
United States to the Permanent Mission of Mexico and to the Chairman of the Dispute Settlement
Body, is circulated in accordance with Article 4.4 of the DSU.
My authorities have instructed me to request consultations with the Government of Mexico
pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of
Disputes and Article XXIII of the General Agreement on Trade in Services (GATS) regarding
Mexico's commitments and obligations under the GATS with respect to basic and value-added
telecommunications services.
Among other things, Mexico's GATS commitments and obligations require Mexico to:
(1) provide market access and national treatment for basic and value-added
telecommunications services (GATS Articles XVI and XVII and Mexico's Schedule
of Specific Commitments annexed to the GATS);
(2) maintain appropriate measures for the purpose of preventing a major supplier of basic
telecommunications services from engaging in or continuing anti-competitive
practices, such as anti-competitive cross-subsidization (Section 1 of the Reference
Paper on Pro-Competitive Regulatory Principles (the Reference Paper), which
Mexico has inscribed in its Schedule of Specific Commitments as "additional
commitments" pursuant to GATS Article XVIII);
(3) ensure interconnection with a major supplier at any technically feasible point in the
network; under non-discriminatory terms, conditions and rates; in a timely fashion;
and at cost-oriented rates that are transparent, reasonable, and sufficiently unbundled;
and to provide recourse to an independent domestic body to resolve interconnection
disputes within a reasonable period of time (Section 2 of the Reference Paper);
(4) administer any universal service obligation in a transparent, non-discriminatory, and
competitively neutral manner that is not more burdensome than necessary for the kind
of universal service defined by Mexico (Section 3 of the Reference Paper);
(5) ensure that its regulatory body is not accountable to any supplier of basic
telecommunications services and that the regulator's decisions and procedures are
impartial with respect to all market participants (Section 5 of the Reference Paper);

(6) administer in a reasonable, objective, and impartial manner its laws, rules,
regulations, and other measures of general application affecting trade in basic and
value-added telecommunications services (GATS Article VI:1); and
(7) ensure access to and use of public telecommunications transport networks and
services on reasonable and non-discriminatory terms and conditions for the supply of
basic and value-added telecommunications services and ensure that relevant
information on conditions affecting access to and use of public telecommunications
transport networks and services is publicly available (GATS Annex on
Telecommunications, Sections 4 and 5).
Since the entry into force of the GATS, the Government of Mexico has adopted or maintained
anti-competitive and discriminatory regulatory measures, tolerated certain privately-established
market access barriers, and failed to take needed regulatory action in Mexico's basic and value-added
telecommunications sectors. These acts and failures to act raise serious questions regarding whether
Mexico is in compliance with its GATS commitments in these sectors. For example, Mexico has:
(1) enacted and maintained laws, regulations, rules, and other measures that deny or limit
market access, national treatment, and additional commitments for service suppliers
seeking to provide basic and value-added telecommunications services into and
within Mexico;
(2) failed to issue and enact regulations, permits, or other measures to ensure
implementation of Mexico's market access, national treatment, and additional
commitments for service suppliers seeking to provide basic and value-added
telecommunications services into and within Mexico;
(3) failed to enforce regulations and other measures to ensure compliance with Mexico's
market access, national treatment, and additional commitments for service suppliers
seeking to provide basic and value-added telecommunications services into and
within Mexico;
(4) failed to regulate, control and prevent its major supplier, Teléfonos de México
(Telmex), from engaging in activity that denies or limits Mexico's market access,
national treatment, and additional commitm ents for service suppliers seeking to
provide basic and value-added telecommunications services into and within Mexico;
and
(5) failed to administer measures of general application governing basic and value-added
telecommunications services in a reasonable, objective, and impartial manner, ensure
that decisions and procedures used by Mexico's telecommunications regulator are
impartial with respect to all market participants, and ensure access to and use of
public telecommunications transport networks and services on reasonable and
non-discriminatory terms and conditions for the supply of basic and value-added
telecommunications services.
A list of specific actions and failures to act by the Government of Mexico of the sort described above
is set forth in Annex 1.
The United States considers that the action and inaction described above and specified in
Annex 1 may be inconsistent with Mexico's GATS commitments and obligations, including
Articles VI, XVI, and XVII; Mexico's additional commitments under Article XVIII as set forth in the

Reference Paper inscribed in Mexico's Schedule of Specific Commitments, including Sections 1, 2, 3
and 5; and the GATS Annex on Telecommunications, including Sections 4 and 5.
We look forward to receiving your reply to this request and to fixing a mutually convenient
date for consultations.

ANNEX 1
LIST OF MEASURES
(1) The International Long Distance Rules published by the Secretariat of Communications and
Transportation in the Diario Oficial on 11 December 1996 ("Reglas para prestar el servicio de
larga distancia internacional que deberán aplicar los concesionarios de redes públicas de
Long Distance Rules"), which, among other things, prevent service suppliers of the
United States from supplying cross-border te lecommunications services and from obtaining
competitive rates for the termination of inte rnational traffic consistent with Mexico's
commitments and obligations under the GATS.
(2) The Agreement of the Secretariat of Communications and Transportation establishing the
procedure to obtain concessions for the installation, operation, or exploitation of inter-state
public telecommunications networks, pursuant to the Federal Telecommunications Law,
published by the Secretariat of Communications and Transportation in the Diario Oficial on
para la instalación, operación o explotación de redes públicas de telecomunicaciones
interestatales, al amparo de la Ley Federal de Telecomunicaciones"), which, among other
things, prevents service suppliers of the United States from exercising effective control over
concessionaires authorized to provide telecommunications services in Mexico consistent with
Mexico's commitments and obligations under the GATS.
(3) Failure by the Government of Mexico to permit the cross-border supply of basic
telecommunications services over leased line s consistent with Mexico's commitments and
obligations under the GATS.
(4) Failure by the Government of Mexico to issue regulations and permits for the supply of basic
telecommunications services by locally-established commercial agencies over leased lines
consistent with Mexico's commitments and obligations under the GATS.
(5) Failure by the Government of Mexico to maintain appropriate measures (such as dominant
carrier regulations) to prevent Telmex from engaging in or continuing anti-competitive
practices consistent with Mexico's commitments and obligations under the GATS, including
but not limited to:
(a) anti-competitive cross-subsidization;
(b) anti-competitive pricing practices;
(c) discriminatory application of tariffs to calls to regions where competitive suppliers do
not have facilities;
(d) the use of unregistered tariff and discount plans;
(e) requiring competitive carriers to lease unnecessary private lines;
(f) discriminatory billing and collection practices;
(g) use of information obtained from competit ors with anti-competitive results, such as
the improper use of presubscription information;

(h) failure to make available to other service suppliers on a timely basis technical
information about essential facilities and other commercially relevant information
which are necessary to provide telecommunications services;
(i) refusal to provide private lines and circuits to competitive carriers on a timely basis;
(j) denial of private lines and circuits to certain Internet service providers (ISPs); and
(k) discriminatory treatment for calls to ISPs by Telmex.
(6) Failure by the Government of Mexico to ensure – consistent with its commitments and
obligations under the GATS – local, long-distance, and international interconnection with
Telmex at any technically feasible point in the network; under non-discriminatory terms,
conditions and rates; in a timely fashion; and at cost-oriented rates that are transparent,
reasonable, and sufficiently unbundled, including for calls terminating in cities in which
competitive suppliers lack facilities, through, for example:
(a) the Secretariat of Communications and Transportation Resolution Concerning
Interconnection Plans for Public Long Distance Networks, dated 17 June 1994
Distancia");
(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
servicios de interconexción de redes públicas de telecomunicaciones, autorizadas para
prestar servicios de larga distancia");
(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
y Transportes, a través de la Comisión Federal de Telecomunicaciones, determina los
costos de los proyectos de interconexión en materia de señalización, presuscripci ón y
numeración que deberán ser recuperados por Teléfonos de México, S.A. de C.V., y
Teléfonos del Noroeste , S.A. de C.V., en su operación de servicio local");
(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
Teléfonos de México, S.A. de C.V., y Teléfonos del Noroeste , S.A. de C.V. con
Alestra, S. de R.L. de C.V"); and

(f) the August 1990 amendment by the Secretariat of Communications and
Transportation to the concession title of Telmex ("Modificación al título de concesión
de Teléfonos de México, S.A. de C.V.").
(7) Failure by the Government of Mexico to resolve interconnection disputes within a reasonable
period of time consistent with its commitments and obligations under the GATS.
(8) Failure by the Government of Mexico to ensure that Telmex provides private lines and
circuits to competitive carriers and other competitors consistent with its commitments and
obligations under the GATS.
(9) Failure by the Government of Mexico to enforce tariff registration requirements against
Telmex and to ensure that relevant information on conditions affecting access to and use of
public telecommunications transport networks and services is publicly available consistent
with its commitments and obligations under the GATS.
(10) Failure by the Government of Mexico to address on a timely basis complaints by competitive
carriers regarding the quality of interconnection consistent with its commitments and
obligations under the GATS.
(11) Failure by the Government of Mexico to administer a universal service obligation in a
transparent, non-discriminatory, and competitively neutral manner that is not more
burdensome than necessary for the kind of universal service defined by Mexico consistent
with its commitments and obligations under the GATS.
(12) Failure by the Government of Mexico to ensure that its regulatory body is not accountable to
any supplier of basic telecommunications services and that its decisions and procedures are
impartial with respect to all market participants consistent with its commitments and
obligations under the GATS.
(13) Failure by the Government of Mexico to apply in a reasonable, objective, and impartial
manner its laws, rules, regulations, and other measures, including measures of general
application, affecting trade in basic and value added telecommunications services consistent
with its commitments and obligations under the GATS, including but not limited to the
measures listed above, and:
(a) Federal Law on Telecommunications, dated 18 May 1995 ("Ley Federal de
Telecomunicaciones");
(b) Rules for Long Distance Service, published by the Secretariat of Communications
and Transportation in the Diario Oficial on 21 June 1996 ("Reglas del Servicio de
Large Distancia");
(c) Local Service Rules, dated 23 October 1997 ("Reglas del Servicio Local");
(d) Agreement by which the procedures for the registration of the telecommunications
service rates are set forth pursuant to the Federal Telecommunications Law, dated
registro de tarifas de los servicios de telecommunicaciones, al amparo de la Ley
Federal de Telecomunicaciones");
(e) Federal Telecommunications Commission Resolution that sets forth the methodology
for accounting separation according to which Teléfonos de México, S.A. de C.V. and

Teléfonos del Noroeste, S.A. de C.V. must deliver the accounting information
referred to in Condition 7-5 of the modifications to the respective concession titles,
published by the Federal Telecommunications Commission in the Diario Oficial on
por servicio bajo la cual Teléfonos de México, S.A. de C.V., y Teléfonos del
concesión); and
(f) the 1990 Telecommunications Regulation published by the Secretariat of
Communications and Transportation on 29 October 1990 ("Reglamento de
Telecomunicaciones").
(14) Failure of the Government of Mexico 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 consistent with its commitments and obligations under the
GATS.