Proposal for a Council Decision concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the results of the WTO negotiations on basic telecommunications services
Date: 1997-07-15
Institutions: European Commission
Subjects: World Trade Organisation, liberalisation of the market, protocol to an agreement, provision of services, telecommunications

COMMISSION OF THE EUROPEAN  COMMUNITIES 

Brussels,  15.07.1997 
COM(97)368  final 

97/0204  (CNS) 

ill 

Proposal for a 
COUNCIL DECISION 

concerning 
the conclusion on behalf of the European Community, 
as regards matters within its competence, 
of the results of the WTO negotiations 
on basic telecommunications services 

(presented  by the  Commission) 

im$ Ml] 

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Explanatory  Memorandum 

By its decision  of 22 December  19941, the  Council  of the European  Union  approved 
the  Final  Act  embodying  the  results  of  the  Uruguay  Round  of  multilateral  trade 
negotiations  concluded  at  the  end  of  December  1993. 
It  thereby  approved  the 
Marrakech  Agreement  establishing  the  World  Trade  Organisation  and  its  related 
agreements, among which the General Agreement  on Trade in Services, the Ministerial 
Declarations  and  Decisions,  -including  the  Ministerial  Decision  on  Negotiations  on 
Basic  Telecommunications-,  the  Annex  on  Telecommunications  and  the  Annex  on 
Negotiations on Basic Telecommunications. 

The  Ministerial  Decision  on  Basic  Telecommunications  Services  stated 
that 
negotiations  should be entered into on a voluntary basis with a view to the progressive 
liberalisation of trade in telecommunications transport  network  and  services within the 
framework  of  the  General  Agreement  on  Trade  in  Services  (GATS).  The  Decision 
indicated  that  the first negotiating  session was to  be  held  no  later  than  16 May  1994 
and the negotiations were to be finalised no later than 30 April 1996. 

On 30 April  1996, the Fourth Protocol to the General Agreement on Trade in Services 
and related Decision were adopted by the WTO Council on Trade in  Services.  Thirty-
four  schedules  of  commitments  representing  forty-eight  WTO  Member  governments 
and one list of Article II (MFN) exemption were attached to the Fourth Protocol.  The 
Decision  on  Commitments  in Basic  Telecommunications  provided  that  the  schedules 
and exemption lists attached to the Fourth Protocol may be supplemented  or  modified 
during  the  period  from  15 January  to  15 February  1997  and  established  a  Group  on 
Basic  Telecommunications  to  conduct  consultations  on  the  implementation  of  this 
provision. 

On  15 February  1997 the  Group  on Basic  Telecommunications  reported  to  the WTO 
Council on Trade in Services that the total number  of schedules had reached  fifty-five, 
-representing  sixty-nine  WTO  Members-,  and  that  nine  governments  had  submitted 
lists  of  Article  II  (MFN)  exemptions.  The  following  WTO  Members  confirmed  their 
commitments  on  basic  telecommunications  by  15  February  1997:  Antigua  and 
Barbuda, Argentina, Australia, Bangladesh, Belize, Bolivia, Brazil, Brunei Darussalam, 
Bulgaria,  Canada,  Chile,  Colombia,  Côte  d'Ivoire,  Czech  Republic,  Dominica, 
Dominican Republic, Ecuador,  El  Salvador  Ghana,  Grenada,  Guatemala,  Hong-Kong, 
Hungary, Iceland, India, Indonesia, Israel, Jamaica, Japan, Korea, Malaysia, Mauritius, 
Mexico,  Morocco,  New  Zealand,  Norway,  Pakistan,  Papua  New  Guinea,  Peru, 
Philippines, Poland, Romania,  Senegal,  Singapore,  Slovak Republic,  South Africa,  Sri 
Lanka,  Switzerland, Thailand, Trinidad and Tobago, Tunisia, Turkey, United  States of 
America  and  Venezuela.  MFN-exemption  lists  were  confirmed  by  Antigua  and 
Barbuda,  Argentina,  Bangladesh,  Brazil,  India,  Pakistan,  Sri  Lanka,  Turkey  and  the 
United States of America. These countries will be signatories to the Fourth Protocol to 
the  GATS,  the  legal  instrument  to  which  they  will  attach  their  new  schedules  and 
MFN-exemptions lists. 

1 

OJ n° 336 of 23rd December 1994, p. 1 

1 

The Council in its conclusions of 30 April 1996 authorised the Commission to approve 
the Decision of the Council on Trade in Services adopting the Fourth Protocol to the 
GATS  and  the  Decision  on  Commitments  on  Basic  Telecommunications.  On  14 
February 1997, the Council also authorised the Commission to submit to the WTO, on 
behalf  of  the  European  Community  and  its  Member  States,  the  final  schedule  of 
commitments, subject to definitive acceptance after finalization of internal procedures. 

Negotiations were therefore definitely concluded on 15 February 1997. 

The individual schedules of commitments to be annexed to the Fourth Protocol to the 
General Agreement on Trade in Services were technically verified and approved by the 
WTO Council for Trade in Services in Geneva on 

1997. 

. 

The  Protocol  is  open  for  acceptance,  by  signature  or  otherwise,  by  Members 
concerned until 30th November 1997. 

*  *  * 

Negotiations were conducted in the light of the guidelines adopted by the Council  of 
14 June 1995. 

The  overall  level  of  commitments  both  on  market  access  and  national  treatment 
reached by the agreement on 30 April  1996 with the modifications  introduced  before 
15 February  1997 account for 93% of the world market on basic  telecommunications 
services.  WTO  Members  representing  all  continents  have  made  commitments  on  all 
basic  telecommunications  services  subsectors,  either  immediately  or  phased-in.  In 
addition, most schedules contain additional commitments on regulatory principles. The 
contribution  of  the  European  Community  and  its  Member  States  to  a  satisfactory 
conclusion  of  the  negotiations  on  basic  telecommunications  has  been  essential.  The 
agreement  allows  EU  telecommunications  industries  to  benefit  from  greater  legal 
certainty and predictability than previously available. It benefits European industries as 
a whole as well as European consumers and constitutes a real basis on which to build 
further market-opening measures in the future. 

The Commission therefore recommends that the Council of the European Union adopt 
the attached Decision concerning the conclusion of the results of the WTO/GATS 
negotiations on basic telecommunications services. 

Council Decision 

of 

concerning the conclusion on behalf of the European Community, as regards 
matters within its competence, of the results of the WTO negotiations on basic 
telecommunications services 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community,  and in particular 
Articles 57, 66, 90, 99, 100, 100A and 113, in conjunction with Article 228(2) and the 
first  sub-paragraph of Article 228(3) thereof, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament, 

Whereas the Marrakech Agreement establishing the World Trade Organisation and its 
related  agreements,  the  Ministerial  Decisions  and  Declarations  -including  the 
Ministerial  Decision  on Negotiations  on  Basic  Telecommunications-,  as well  as the 
Annex  on  Telecommunications  and 
the  Annex  on  Negotiations  on  Basic 
Telecommunications were approved by a Council decision of 22 December 19941 ; 

Whereas the overall commitments on basic telecommunications services negotiated by 
the  Commission,  on  behalf  of  the  European  Community  and  its  Member  States, 
constitutes a satisfactory and balanced outcome; 

Whereas  on  30  April  1996 the  Council  authorised  the  Commission  to  approve, on 
behalf  of  the  European  Community  and  its  Member  States,  the  Decision  of  the 
Negotiating Group on Basic Telecommunications  and the WTO Council on Trade in 
Services adopting the Fourth Protocol to the General Agreement on Trade in Services 
and  the  Decision  of  the  Council  on  Trade  in  Services  on  Commitments  on Basic 
Telecommunications; 

Whereas on 14 February 1997 the Council authorised the Commission to submit to the 
WTO the final schedule of commitments on behalf of the European Community and its 
Member States; 

Whereas the competence of the Community to conclude international agreements does 
not derive only from explicit  conferral  by the Treaty but may also derive from other 

1 

O.J. No. L 336, 23.12.1994, p. 1 

<• 

provisions  of  the  Treaty  and  from  acts  adopted  pursuant  to  those  provisions  by 
Community institutions, 

Whereas where Community  rules have been  adopted  in order to  achieve  the  aims  of 
the  Treaty,  Member  States  may  not,  outside  the  framework  of  the  common 
institutions, enter into commitments liable to affect those rules or alter their scope; 

Whereas  some  commitments  on  basic  telecommunications  services  fall  within  the 
competence of the Community under Article  113 of the Treaty; whereas, furthermore, 
other  commitments  on  basic  telecommunications  services  affect  Community  rules 
adopted on the basis of Articles 57, 66, 90, 99,  100 and 100A and may therefore only 
be entered into by the Community alone; 

Whereas  the  use  of  Article  100  of  the  Treaty  as  a  legal  base  for  this  Decision  is 
justified  also  by  the  fact  that  the  aforementioned  commitments  on  basic 
telecommunications  services  are likely to  affect  Council  Directive  90/434/EEC  of 23 
July 1990 on the common system of taxation applicable to mergers, divisions, transfers 
of assets and exchanges  of  shares concerning  companies of different  Member States2 
and Council Directive 90/43 5/EEC of 23 July 1990 on the common system of taxation 
applicable  in  the  case  of  parent  companies  and  subsidiaries  of  different  Member 
States3, which are based on Article 100 of the Treaty; 

Whereas, by its nature, the Agreement establishing the World Trade Organisation and 
the Protocols to the General Agreement  on Trade in Services,  are not  susceptible  to 
being directly invoked in Community or Member States courts; 

HAS DECIDED AS FOLLOWS : 

Article 1 

1. 

The Fourth Protocol to the General Agreement on Trade in Services concerning 
basic telecommunications  services is hereby approved on behalf of the European 
Community with regard to that portion of it which falls within the competence of 
the European Community. 

2. 

The  text  of  the  Fourth  Protocol  is  attached  to  this  Decision,  as  are  also  the 
following: 

the  schedule  of  specific  commitments  of  the  Community  and  the 
Member  States, which is  part  of  the  overall  package  of  commitments 
reached at the WTO on 15 February 1997; 

the Decision of the Council for Trade in Services on Commitments on 
Telecommunications Services; and 

2 OJ N° L 225 of  20.8.1990, p. 1. 
3 OJ N° L 225 of  20.8.1990, p.6. 

the 15 February 97 Report of the Group on Basic Telecommunications 
to the Council for Trade in Services. 

3. 

The  President  of  the  Council  is  hereby  authorised  to  designate  the  person 
empowered to  sign the Fourth Protocol  to the General Agreement  on Trade in 
Services in order to bind the European Community with regard to that portion of 
the Protocol falling within its competence. 

Done at Brussels, 

For the Council 
The President 

L 

1 

FOURTH PROTOCOL TO THE 
GENERAL AGREEMENT ON TRADE IN SERVICES 

Members  of  the  World  Trade  Organization  (hereinafter  referred  to  as  the  "WTO")  whose 
Schedules of Specific Commitments and Lists of Exemptions from Article II of the General Agreement 
on Trade in Services concerning basic telecommunications  are annexed to this  Protocol  (hereinafter 
referred to as  "  Members concerned"), 

Having carried out negotiations under the terms of  the Ministerial  Decision  on  Negotiations 

on Basic Telecommunications  adopted at Marrakesh on  15 April  1994, 

Having regard to the Annex on Negotiations on Basic Telecommunications, 

Agree as follows: 

1. 
Upon the entry  into force of  this Protocol,  a Schedule  of  Specific  Commitments  and a List 
of Exemptions from Article II concerning basic telecommunications  annexed to this Protocol  relating 
to a Member shall, in accordance with the terms specified therein, supplement or modify  the Schedule 
of  Specific  Commitments  and the List of  Article II Exemptions  of that Member. 

This Protocol shall be open for acceptance, by signature or otherwise, by the Members concerned 

2. 
until  30  November  1997. 

3. 
The Protocol  shall  enter  into force  on  1 January  1998  provided  it has been  accepted  by  all 
Members  concerned.  If by  1 December  1997  the Protocol  has  not been  accepted  by  all  Members 
concerned, those Members which have accepted  it by that date may decide, prior to  1  January  1998, 
on  its entry into force. 

4. 
This Protocol shall be deposited with the Director-General of the WTO.  The Director-General 
of the WTO shall promptly  furnish to each Member of the WTO a certified  copy of this Protocol and 
notifications  of acceptances  thereof. 

This Protocol shall be registered in accordance with the provisions of Article 102 of the Charter 

5. 
of the United Nations. 

Done at Geneva this fifteenth  day of  April  one thousand  nine hundred  and  ninety-seven,  in 
a single copy in the English, French and Spanish languages, each text being authentic, except as otherwise 
provided for  in respect of the Schedules annexed hereto. 

EUROPEAN  COMMUNITIES  AND THEIR  MEMBER  STATES 

Schedule of  Specific  Commitments 

(This  is authentic  in English,  French  and Spanish) 

<? 

THE EUROPEAN  COMMUNITIES AND THEIR  MEMBER STATES - SCHEDULE OF SPECIFIC COMMITMENTS 

Modes of supply: 

1)  Cross-border supply 

2)  Consumption  abroad 

3)  Commercial  presence 

4)  Presence of natural  persons 

I»-c 

Sector or  subsector 

Limitations on  market  access 

Limitations on national  treatment 

Additional commitments 

2.C  Telecommunications 

services 

Telecommunications  services 
are the transport  of electro 
magnetic signals - sound,  data 
image and any  combinations 
thereof,  excluding 
broadcasting1.  Therefore, 
commitments in this  schedule 
do not cover the economic 
activity consisting of content 
provision which  require 
telecommunications  services 
for  its transport.  The provision 
of that content,  transported  via 
a  telecommunications  service, 
is subject  to the  specific 
commitments undertaken by 
the European  Communities 
and their Member  States in 
other relevant sectors. 

All  sub-sectors 

Co 

The European  Communities 
and their Member  States 
undertake  additional 
commitments as contained  in 
the attachment,  all parts of 
which are equally  binding. 

1 Broadcasting is defined as the uninterrupted chain of transmission required for the distribution of tv and radio programme signals to the general public, but does not cover contribution links between operators. 

Modes of supply: 

1)  Cross-border  supply 

2)  Consumption  abroad 

3)  Commercial  presence 

4)  Presence of natural  persons 

Sector or  subsector 

Limitations on market access 

Limitations on national treatment 

Additional  commitments 

B: Licensing conditions may 
address the need to guarantee 
universal service,  including 
through financing,  in a 
transparent, 
non-discriminatory and 
competitively  neutral manner 
and will not  be more 
burdensome than necessary. 

FIN  : The general horizontal  requirements 
for legal entities in GATS/SC/33  shall not 
apply to the telecommunications sector 
except as : 

FIN  : The general  horizontal  requirements for 
legal entities in GATS/SC/33  shall not apply to 
the telecommunications sector.  Requirements 
concerning the Aland islands shall continue to 
apply. 

half of the founders,  half of the 
members of the board of directors and 
the managing director must have 
permanent residence in the European 
Economic Area.  If the founder is a 
legal person,  it must have residence in 
the EEA. 

1)  None except for: 

1)  None 

P: basic services can be supplied only by 
companies established  in Portugal. 

GR: access through S.A.  and the company 
must be exclusively engaged  in the supply 
of  telecommunication services. 

2)  None 

2)  None 

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Modes of supply: 

1)  Cross-border  supply 

2)  Consumption  abroad 

3)  Commercial presence 

4)  Presence of natural  persons 

Sector or subsector 

Limitations on  market  access 

Limitations on national  treatment 

Additional  commitments 

3)  None except  for(*)  : 

3)  None 

GR:  access  through  S.A.  and  the company 
must be exclusively  engaged  in  the supply 
of telecommunication  services. 

P  : The direct  or  indirect  participation  of 
natural  persons,  who are non-nationals of 
EC Member  States or  non-EC  companies 
or firms in the capital  of  companies 
supplying  basic  telecommunications 
services cannot  exceed 25%. 

F  : Indirect:  none.  Non-EC  natural  or 
juridical  persons  may not  hold  directly 
more than  20%  of  the shares or voting 
rights of  companies authorised  to establish 
and operate radio-based  infrastructure  for 
the provision  of  telecommunications 
services to  the general  public.  For  the 
application  of  this provision,  companies or 
firms  legally  established  according  to the 
laws of a Member  State of  the EC are 
considered  EC juridical  persons. 

4)  Unbound  except as indicated  in  the 

4)  Unbound  except  as indicated  in  the 

horizontal  section. 

horizontal  section. 

P:  The Government  of 
Portugal  has  the intention  of 
presenting  to the  Parliament 
draft  legislation  aiming at 
removing  partially  the present 
limitations on  foreign  equity 
participation  in  the capital of 
companies  supplying basic 
telecommunication  services no 
later than  in  1998. In case of 
approval,  the new  legislation 
will  be bound  no later than in 
1999. 

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(*)Footnote  for  clarification  purposes:  Some  EC  Member  States  maintain  public  participation  in  certain  telecommunication  operators.  EC  Member  States  reserve  their  rights  to  maintain  such  public  participation 
in  the  future.  This  is  not  a  market  access  limitation.  In  Belgium,  government  participation  and  voting  right*  in  Belgacom  are  freely  determined  under  legislative  power»  «•  is presently  Qt* «.*** unéer  thm law  uf^ 
21  March  1991  on  the  reform  of  government-owned  economic  enterprises. 

Modes of  supply: 

1)  Cross-ljorder  supply 

/.) 

VAMUkUuljfiiVMA  « un 

Sector or sub-sector 

Limitations  on  market  access 

Limitations on national treatment 

Additional commitments 

Domestic and  international 
Domestic and  international 
services provided  using any 
network  technology,  or?, a 
facilities  based or  resale basis, 
for public and non-public use, 
in the following  market 
segments (these correspond  to 
the following  CPC numbers: 
7521,  7522,  7523,  7524**, 
7525, 7526  and 7529**, 
broadcasting  is excluded): 

a.  Voice  telephone  services 

1)  None except  for:2 

1)  None 

b. 

Packet switched  data 
transmission  services 

c.  Circuit-switched  data 
transmissions  services 

^ 

d.  Telex  services 

e.  Telegraph  services 

f. 

Facsimile  services 

E: none,  except that  the liberalisation  calendar 
will be as  follows:  one additional  nation-wide 
licence in January  1998; full  liberalisation  as 
from30.n.l998\ 

IRL:  None except  for  public  voice telephony  and 
facilities-based  services  where none as of 
1 January  2000. 

P:  None,  except  for  public voice  telephony, 
telex and  telegraph  where none as from  1 
January  2000,  and  facihties-based  services where 
none as from  1 July  1999. 

GR:  None except  for  public-voice telephony and 
facilities-based  services where none as of 
1 January  2003. 

2  Luxembourg has requested a delayed date for the liberalisation of telecommunications until  1.1.2000.  The EC decision on this request is still pending. 

'Applications for further licences to be received as from  1 August 98. 

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Modes of  supply: 

1)  Cross-border  supply 

2)  Consumption  abroad 

3)  Commercial  presence 

4)  Presence of natural persons 

Sector or  sub-sector 

Limitations on  market  access 

Limitations on national treatment 

Additional commitments 

g. 

Leased  circuit  services 

2)  None 

3)  None except  for:4 

2)  None 

3)  None 

E:  none,  except  that  the  liberalisation 
calendar  will  be as  follows:  one additional 
nation wide licence in January  1998;  full 
liberalisation  as  from  30.11.19985. 

IRL:  None except  for  public  voice 
telephony  and  facilities-based  services 
where none as of  1  January  2000. 

P:  None,  except  for  public  voice 
telephony,  telex  and  telegraph  where none 
as from  1  January  2000 and  facilities-based 
services where none as  from  1 July  1999. 

GR:  None except  for  public  voice 
telephony  and  facilities-based  services 
where none as of  1 January  2003. 

O» 

4)  Unbound  except as indicated  in the 

4)  Unbound  except as indicated  in  the 

horizontal  section. 

horizontal  section. 

4  Luxembourg  has  requested  a delayed  date  for  the  liberalisation  of telecommunications  until  1.1.2000.  The EC decision on this request is still pending. 

5 Applications  for  further  licences  to  be  received  as  from  1  August  98. 

Modes of supply: 

1)  Cross-border  supply 

2)  Consumption abroad 

3)  Commercial  presence 

4)  Presence of natural persons 

Sector or  sub-sector 

Limitations on  market  access 

Limitations on national  treatment 

Additional commitments 

o.  Other services: 

Mobile and personal 
communications  services 
and systems 

1)  None except  for: 

1)  None 

IRL,  P:  international  interconnection  of 
mobile networks with  other  mobile or  fixed 
networks where none as of  1.1.1999. 

2)  None 

3)  None except  for: 

2)  None 

3)  None 

IRL,  P:  international  interconnection  of 
mobile networks with  other  mobile or  fixed 
networks where none as of  1.1.1999. 

4)  Unbound  except as indicated  in the 

4)  Unbound  except as  indicated  in  the 

horizontal  section. 

horizontal  section. 

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- . . . o ^ w*  USfcUll-O 

ADDITIONAL  COMMITMENT  BY THF  EUROPEAN  COMMUNITIES 
AND THEIR  MEMBER  STATES 

SCOPE: 

The following are definitions and principles on the regulatory framework for the basic telecommunications 
services underpinning the market access commitments by the European Communities and their Member 
States. 

DEFINITIONS: 

User mean  service  consumer  and  service suppliers. 

Essential facilities  mean  facilities  of a public telecommunications  transport  network  and service that 

a) 

b) 

are  exclusively  or  predominantly  provided  by  a single  or  limited  number  of  suppliers;  and 

cannot  feasibly  be economically  or  technically  substituted  in order  to  provide  a service. 

A major suppliers  a supplier which has the ability to materially affect the terms of participation (having 
regard  to  price  and  supply)  in the  relevant  market  for  basic  telecommunications  services  as a result 
of: 

a) 

b) 

1. 

control  over  essential  facilities;  or 

use of  its position  in the  market. 

COMPETITIVE  SAFEGUARDS: 

1.1. 

Prevention  of  anti-competitive  practices  in  telecommunications: 

Appropriate measures shall be maintained for the purpose of preventing suppliers who, alone or together, 
are  a major  supplier  from  engaging  in or  continuing  anti-competitive  practices. 

1.2. 

Safeguards: 

The  anti-competitive  practices  referred  to  above shall  include  in  particular: 

a) 

b) 

c) 

engaging  in  anti-competitive  cross-subsidization; 

using  information  obtained  from  competitors  with  anti-competitive  results;  and 

not making available to other services suppliers on a timely  basis technical  information  about 
essential facilities  and commercially relevant information  which are necessary for them to provide 
services. 

2. 

INTERCONNECTION: 

2.1. 
This section  applies to linking with suppliers providing  public telecommunications  transport 
networks or  services  in order to allow the users of one supplier to communicate with users of another 
supplier  and  to  access, services  provided  by  another  supplier. 

-rs 

European  Communities  and  Member  States 

2.2. 

Interconnection  to be  ensured: 

Within the  limits  of permitted  market  access,  interconnection  with  a major  supplier  will  be  ensured 
at any technically  feasible  point  in the  network.  Such  interconnection  is  provided6: 

a) 

b) 

c) 

under  non-discriminatory  terms, conditions (including technical standards and  specifications) 
and  rates  and  of  a quality  no  less  favourable  than  that  provided  for  its own  like  services  or 
for  like services  of  non-affiliated  service suppliers  or  for  its subsidiaries  or  other  affiliates7; 

in a timely fashion, on terms, conditions (including technical standards and specifications)  and 
cost-oriented  rates that are transparent, reasonable, having regard to economic feasibility,  and 
sufficiently  unbundled  so that the supplier  need  not pay for  network  components  or  facilities 
that  it does  not  require  for  the service to be provided;  and 

upon  request,  at  points  in addition to the network  termination  points offered  to  the  majority 
of users, subject to charges that reflect the cost of construction of necessary additional  facilities. 

2.3. 

Public  availability  of  the procedures  for  interconnection  negotiations  : 

The procedures  applicable  for  interconnection  to a major  supplier  will  be made publicly  available. 

2.4. 

Transparency  of  interconnection  arrangements: 

It is ensured  that a major  supplier  will  make publicly  available either  its  interconnection  agreements 
or a reference  interconnection  offer. 

2.5. 

Interconnection  : dispute  settlement: 

A service  supplier  requesting  interconnection  with  a major  supplier  will  have  recourse,  either  : 

a) 

b) 

l 

at  any  time  or 

after  a  reasonable  period  of  time  which  has  been  made  publicly  known  to  an  independent 
domestic body, which may be a regulatory body as referred to in paragraph 5 below, to resolve 
disputes regarding appropriate terms, conditions and rates for interconnection within a reasonable 
period  of time,  to the extent  that  these have not been established  previously. 

Suppliers of  services or networks not generally available  to the public, such as closed user groups, have guaranteed  rights to connect 
with the public telecommunications  transport network or services on terms, conditions and rates which are non-discriminatory,  transparent 
and cost-oriented.  Such terms, conditions and rates may, however, vary from  the terms, conditions and rates applicable to  interconnection 
between public  telecommunications  networks  or  services. 

'Different  terms,  conditions  and  rates  may  be  set  in  the  Community  for  operators  in  different  market  segments,  on  the  basis  of 
non-discriminatory  and transparent national licensing  provisions, where such differences  can be objectively justified  because these  services 
are  not considered  "like  services". 

fe 

European  Communities  and  Member  States 

3. 

UNIVERSAL  SERVICE: 

Any  Member  has  the  right  to  define  the  kind  of  universal  service  obligation  it  wishes  to  maintain. 
Such  obligations  will  not  be  regarded  as  anti-competitive per  se,  provided  they  are  administered  in 
a transparent,  non-discriminatory  and competitively  neutral manner and are not more burdensome than 
necessary  for  the  kind  of  universal  service  defined  by  the  Member. 

4. 

PUBLIC  AVAILABILITY  OF  LICENSING  CRITERIA: 

Where  a  licence  is  required,  the  following  will  be  made publicly  available: 

a) 

all the licensing criteria and the period of time normally required to reach a decision concerning 
an  application  for  a licence  and 

b) 

the terms  and  conditions  of  individual  licences. 

The  reasons  for  the denial  of  a licence  will  be  made  known  to  the  applicant  upon  request. 

5. 

INDEPENDENT REGULATORS: 

The regulatory body is separate from, and not accountable to, any supplier of basic telecommunications 
services.  The  decisions  of  and  the  procedures  used  by  regulators  shall  be  impartial  with  respect  to 
all  market  participants. 

6. 

ALLOCATION  AND  USE  OF  SCARCE  RESOURCES: 

Any  procedures  for  the  allocation  and  use  of  scarce  resources,  including  frequencies,  numbers  and 
rights of way,  will  be carried out in an objective,  timely,  transparent and non-discriminatory  manner. 
The current state of allocated frequency bands will be made publicly available, but detailed  identification 
of  frequencies  allocated  for  specific  government  uses  is  not  required. 

Vr 

DECISION  ON  COMMITMENTS  IN BASIC  TELECOMMUNICATIONS 

The Council for  Trade in  Services, 

Having  regard  to  the  Annex on  Negotiations  on Basic  Telecommunications, 

Having regard  to the resuhs of the negotiations conducted under the terms of the Decision on 

Negotiations on  Basic Telecommunications  adopted  at Marrakesh  on  15 April  1994, 

Acting  upon  the final  Report  of ihe Negotiating  Group on Basic  Telecommunications, 

Decides  as  follows: 

-* 

L 
To  adopt  the text  of  the  "Fourth  Protocol  to the General  Agreement  on Trade  in  Services" 
(hereinafter  referred  to as the  Protocol) and to take note of the Schedules of Cornmitments  and Lists 
af  Exemptions  from  Article  II listed  in the Attachment  to the final Repoit  of  the Negotiating  Group 
on  Basic  Telecommunications. 

2. 
Commencing  immediately  and  continuing  until  the date  of  entry  into  force  of  the  Protocol 
Members concerned shall, to the fullest  extent consistent with their existing legislation and regulations, 
not take measures which would be inconsistent with their undertakings resulting from these negotiations. 

3. 
During  the  period  from  15 January  to  15 February  1997.  a  Member  which  has  a  Schedule 
of  Commitments  annexed  to  the  Protocol,  may  supplement  or  modify  such  Schedule  or  its  List  of 
Article  II Exemptions.  Any such Member  which has not annexed  to the Protocol  a List of Article IT 
Exemptions  may  submit  such  a list  during  the same period. 

A Group on basic telecommunications reporting to the Council for Trade in Services shall conduct 
4. 
consultations on the implementation  of paragraph 3 above commencing  its work no later than 90 days 
from  the adoption  of  the  Decision. 

The Council  for Trade  in Services shall monitor the acceptance  of the Protocol  by Members 
5. 
concerned and shall, at the request of a Member, examine any concerns raised regarding the application 
of paragraph  2 above. 

Members of the World Trade Organization which have not annexed to the Protocol  Schedules 
6. 
of  Commitments  or  Lists  of  Exemptions  from  Article  II may  submit,  for  approval  by  the  Council, 
Schedules of Commitments and Lists of Exemptions from Article  II relating to basic telecommunications 
prior  to  1 January  1998. 

i* 

WORLD  TRADE 

ORGANIZATION 

Group  on  Basic Telecommunications 

15 Febnury  1997 

(97-0615) 

REPORT  OF THE GROUP  ON  BASIC  TELECOMMUNICATIONS 

1. 
This report is made in accordance with paragraph 4 of the Decision on Cornmitments  in Basic 
Telecommunications,  adopted by the Council  for  Trade in  Services on 30 April  1996 (S/L/19).  In 
paragraph  1 of this Decision,  the Council also adopted the text of the Fourth Protocol  to the General 
Agreement on Trade in Services and took note of the Schedules of Ccrnimitmertts and Lists of Exemptions 
from  Article  II  listed  in  the  Attachment  to  the  final  Report  of  the  Negotiating  Group  on  Basic 
Telecommunications  (S/NGBT/18). 

2. 
The Decision on C^rximitments on Basic Telecommunications established  the Group on Basic 
Telecommunications to "conduct consultations on the implementation of paragraph 3 of the Decision". 
Paragraph  3  states that  "during  the period  from  15 January  to  15 February  1997, a Member  which 
has a Schedule  of Commitments  annexed  to the Protocol, may  supplement  or modify  such  Schedule 
or its List of Article II Exemptions" and that "any such Member which has not annexed to the Protocol 
a  List  of  Article II Exemptions  may  submit  such a list during  the same period**. 

3. 
At the Group's first meeting in July  1996, participants suggested that the principal issues before 
the GBT included the desirability of improving the quantity and quality of Schedules offered,  and the 
need  to  address  certain  issues  which  had  been  left  unresolved  in  April.  Subsequently,  the  Group 
sponsored  frequent  rounds  of  bilateral  negotiations  on offers  and  regularly  included  discussion  of 
outstanding  issues  in  its  meetings.  In November  participants  began  submitting  revised  draft  offers 
of commitments  on basic telecommunications  for consideration.  The Group's  Report  to the Council 
on  Trade  in  Services  (S/GBT/2).  which  formed  pan  of  the  Report  to  the  Singapore  Ministerial 
Conference,  recommended  that Ministers  "stress their commitment  to bring the negotiations  on basic 
telecommunications  to a successful  conclusion by  15 February  1997, urge all WTO Members to strive 
for significant,  balanced and  rwrHdiscrirainaîory liberalization œrrimitrnenîs on basic telecommiirucations 
by  that  date  and  recognize  the  importance  of  resolving  the  principal  issues  before  the  GBT".  The 
Declaration adopted by Ministers in Singapore (WT/M1N(96)/DEC) contained a commitment toJ*achieve 
a successful  conclusion to the negotiations on basic telecommunications  in February  1997".  Ministers 
also stated  "We are determined  to obtain a progressively  higher  level  of liberalization  in services on 
a mutually advantageous basis with appropriate flexibility  for individual developing country members, 
as envisaged  in  (he agreement,  in the  continuing  negotiations  and  those scheduled  to begin  no  later 
than  1  January  2000.  In this context,  we  look  forward  to full  MFN  agreements  based  on  improved 
market  access  commitments  and  national  treatment". 

4. 
In  its  discussions  on outstanding  issues,  the Group  considered  the  following  matters:  ways 
to ensure  accurate  scheduling  of commitments  - particularly  with  respect  to supply  of  services  over 
satellites  and  to the management  of radio  spectrum,  potential  anti-competitive  distortion  of  trade  in 
the  status  of  intergovernmental  satellite  organizations  in  relation  to  GATS 
international  services; 
provisions;  and the extent to which basic telecommunications  commitments  include transpon of video 
and/or  broadcast  signals  within  their scope. 

'9 

5. 
The Chairman  issued  notes reflecting  his understanding of the position  reached  in discussion 
of the scheduling  of commitments  and  management  of  radio spectrum.  The first  such  Note set  out a 
number  of  assumptions  applicable  to  the  scheduling  of  conimitrnerits  and  was  intended  to  assist  in 
ensuring  the  transparency  of  commitments  (S/GBT/W/2/Rev. 1 of  16 January  1997).  The  second 
addressed the allocation of radio spectrum. suggesting that the inclusion of references to the availability 
of  spectrum  in  schedules  was  unnecessary  and  that  such  references  should  be  deleted  (S/GBTAW3 
of  3 February  1997).  These  Notes  are  attached  to this  Report. 

6. 
By  15 February  1997  the  total  number  of  schedules submitted  had  reached  55  (counting  as 
one the offer of the European Communities and theii Member States).  Nine governments had submitted 
lists of Article H Exemptions. 

7. 
The Group noted that five countries had taken Article II exemptions in respect of the application 
of differential  accounting  rates  to services  and  service suppliers  of  other  Members.  In the  light  of 
the  fact  that  the  accounting  rate  system  established  under  the  International  Tdecorrimunications 
Regulations is the usual method of terminating international traffic and by its nature involves differential 
rates, and  in order to avoid  the submission  of further  such exemptions, it is the understanding  of the 
Group  that: 

the application of such accounting rates would not give rise to action by Members under 
dispute settlement  under  the  WTO;  and 

that this understanding will be reviewed not later than the commencement  of the further 
Round of negotiations on Services Cornmitments due to begin not later than  1  January 
2000. 

8. 
The Group also recalled paragraph  6 of the Decision of 30 April, which stated thai Members 
of the World Trade Organization which have not annexed to the Protocol Schedules  of Commitments 
or  Lists  of  Exemptions  from  Article  II  may  submit,  for  approval  by  the  Council,  Schedules  of 
Commitments  and  Lists of  Exemptions  from  Article  II relating to basic telecommunications  prior  to 
1 January  1998. 

9. 
At its meeting  of  15 February  1997. the Group adopted this report  and the attached  list of the 
Schedules of Commitments  and Lists of Article II Exemptions, which, in accordance with paragraph  3 
of the Decision on Commitments  in Basic Telecommunications, will be attached to the Fourth  Protocol 
to the General  Agreement  on  Trade  in  Services  in replacement  of those attached  on 30  April  1996 

2*> 

WORLD  TRADE 

ORGANIZATION 

Group  on  Basic  Telecommunications 

S/GBT/4 
Page 3 

16 January  1997 

(97-0173) 

Note bv the  Chairman 

Revision 

It has been suggested by a number of délégations that it might be helpful to produce  a brief 
and  simple note on assumptions applicable to the scheduling of commitments in basic télécoms.  The 
purpose  of the attached note is to assist delegations in ensuring the transparency of their cornmitments 
and  to promote  a better understanding of the meaning of commitments.  This note is not  intended to 
have  or  acquire any  binding legal status. 

NOTES  FOR  SCHEDULING  BASIC TELECOM  SERVICES  COMMITMENTS 

Unless  otherwise noted  in  the sector  column,  any  basic  telecom  service  listed  in  the  sector 

1. 
column: 

(a) 

encompasses local, long distance and international services for public and non-public 
use; 

(b) 

may  be provided  on a facilities-basis  or  by  resale;  and 

(c) 

may  be provided through any means of technology  (e.g., cable1,  wireless, satellites). 

2. 
Subsector  (g) -private leased circuit services — involves the ability of service suppliers to sell 
or lease any type of network capacity for the supply of services listed in any other basic telecom service 
subsector unless otherwise noted in the sector column.  This would include capacity via cable, satellite 
and  wireless  network. 

3. 
In view of points  I and  2 above, it should  not  be necessary to list cellular  or  mobile  services 
as a separate subsector.  However,  a number  of Members  have done so, and a number  of offers  have 
commirmenis  only  in these subsectors.  Therefore,  in order  to avoid extensive changes  in schedules, 
it  would  seem  appropriate  for  Members  to maintain  separate  entries  for  these  subsectors. 

'Including  all types of cable. 

WORLD  TRADE 

ORGANIZATION 

3 February  1997 

(97-0415) 

Group on  Basic  Télécommunications 

Original:  English 

CHAIRMAN'S  NOTE 

Market Access Limitations  on Spectrum Availability 

Many  Members have entries in the market access column of their schedules  indicating  thai 
commitments  are  "subject to availability of spectrurn/frcquency" or similar wording.  In light of the 
physical nature of spectrum and the constraints inherent in its use, it is understandable that Members 
may have sought to rely on these words to adequately protect legitimate spectrum management policies. 
There is, however, doubt that words such as "subject to availability of spectrum/frequency"  as listed 
in the market access column of many Members* schedules achieve that objective. 

Spectrum/frequency  management  is  not, per  se,  a measure  which  needs  to  be  listed  under 
Article  XVI.  Furthermore under the GATS each Member has the right to exercise spectrum/frequency 
management, which may affect the number of service suppliers, provided that this is done in accordance 
with Article VI and other relevant provisions of the GATS.  This includes the ability to allocate  frequency 
bands taking  into account  existing  and future  needs.  Also,  Members  which  have  made  additional 
commitment  in line with the Reference  Paper on regulatory principles are bound by its paragraph 6 

Therefore, words such as "subject to availability of spearum/frequency"* are unnecessary and 

should be deleted  from  Members' schedules. 

2X 

ISSN 0254-1475 

COM(97) 368 final 

DOCUMENTS 

EN 

15  08  11 

Catalogue number  : CB-CO-97-356-EN-C 

ISBN 92-78-22664-5 

Office  for Official  Publications of the European Communities 

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