Date: 2000-03-09
Speaker: KENNETH GROSS (democrat)
Chamber: H

President and Chief Operating Officer. Columbia Communications. Bethesda. MD: DEAR MR. GROSS: I am writing in reply to a letter of January 31. 1997. from your legal counsel. regarding the negotiations on basic telecommunications services at the World Trade Organization. The U.S. goal in these negotiations is to strengthen the ability of the U.S. satellite services industry to compete globally. and on a level playing field. with the intergovernmental satellite services organizations and with satellite service providers of other countries. The United States has taken a number of steps to make certain that our key trade partners provide market access for satellitebased delivery of basic telecom services. Based on a note issued by the chairman of H904 com the negotiations in November. 1996. which c has become part of the formal record of the proceedings. we have clarified the scheduling approach with regard to satellites. As a result. close to forty countries have made offers that would provide full market access for satellitebased delivery of all scheduled services on an immediate or phasedin basis. WTO members that make specific commitments on satellites will be subject to allocating and assigning frequencies in accordance with the principles of mostfavorednation and national treatment. as well as in accordance with the requirement for domestic regulations in the General Agreement on Trade in Service. Almost all of the countries making full satellite commitments have also adopted the reference paper on procompetitive regulatory commitments. As a result. they will be obligated to provide additional regulatory safeguards with respect to allocation and use of radio frequencies. A successful agreement on basic telecom services would also obligate those countries which have not made satellite commitments to provide treatment no less favorable to satellite service providers of the United States than the treatment provided to service suppliers of other countries. This -would apply. for. example. to how WTO members reach decisions regarding new market access arrangements involving service suppliers of other countries. I share your deep concern regarding the possible distortive impact on competition in the U:S. satellite services market of certain proposals for restructuring INTELSAT.. The United States has proposed a restructuring of INTELSAT that woald lead to the creation of an independent commercial affiliate. INTELSAT New Corporation (INC). If made independent. the United States believes that the creation of INC will enhance competition and help ensure the continuation of INTELSATs mission of global connectivity for core services. As you are aware. however. many INTELSAT members are resisting the idea of independence for INC and we believe that a failure to achieve independence could adversely affect competition in the U.S. satellite services market. In the WITO negotia-. tions we have taken pains to preserve our ability to protect competition in the U.S. market. Our legal conclusion. for which there is a consensus among participants in the WITO negotiations. is that the ISOs do not derive any benefits from a GBT agreement because of their status as treatybased organizations. The status of ISOs was discussed in detail in the GBT multilateral sessions. No delegation in the GBT negotiations -has contested this conclusion. We have also concluded that the United States cannot be forced to grant a license to a privatized ISO (should the ISO change its treaty status and incorporate in a country) or to a future privatized affiliate. subsidiary or other form of spinoff from the ISO. Existing U.S. communications and antitrust law. regulation. policy and practice will continue to apply to license applicants if a GBT deal goes into effect. Both Department of Justice and FCC precedent evidence longstanding concerns about competition in the U.S. market and actions to protect that competition. We have made it clear to all our negotiating partners in the WTO that the United States will not grant market access to a future privatized affiliate. subsidiary or other form of spinoff from the ISOs. that would likely lead to anticompetitive results. It has always been U.S. practice to defend vigorously any challenge in the WTO to allegations that U.S. measures are inconsistent with our WTO obligations. There is no question that we would do the same for any FCC decision to deny or condition a license to ac-