Abstract
In 1986, at the start of the Uruguay Round, there were few precedents and little discussion of liberalization in telecommunications. By way of illustration,1 the United States was in the aftermath of the AT&T break-up, and the EC had not taken any internal liberalization measures yet, and national telecommunications operators (“TOs”) were still firmly entrenched throughout the EU (with the exception of the UK). The European Commission did not publish its first policy paper on the telecommunications sector until 1987, with proposals for a partial liberalization.2 There is reason to ask then why telecommunications was included in the trade policy framework.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
SeeJill Hills, Deregulating Telecoms—Competition and Control in the United States, Japan and Britain (1986).
See European Commission, Green Paper on the Development of the Common Market for Telecommunication Services and Equipment, COM(87)290 final (Brussels, June 30, 1987).
SeeAndreas Tegge, Die Internationale Telekommunikations-Union: Organisation und Funktion einer Weltorganisation im Wandel 63–70 (1994) and Peter Holmes, Jeremy Kempton and Francis McGowan, International Competition Policy and Telecommunications—Lessons from the EU and prospects for the WTO, 20 Telecommunications Policy 755, 757–8 (1996).
SeeTegge, supra Andreas Tegge, Die Internationale Telekommunikations-Union: Organisation und Funktion einer Weltorganisation im Wandel (1994) note 3, at 54–59.
Dissatisfaction with traditional UN fora for international negotiations was not limited to the telecommunications sector. For similar reasons, the developed countries also insisted that intellectual property be included in the Uruguay Round. They were unhappy about the agenda pursued by developing countries in the World Intellectual Property Organisation (WIPO), and thought they could achieve more by linking different issues to trade. See Marco C.E.J. Bronckers, The Impact of TRIPS: Intellectual Property Protection in Developing Countries, 31 CMLRev 1245, 1246–1251 (1994). See also Chapter 22 of this book.
SeeBernard M. Hoekman and Michel M. Kostecki, The Political Economy of The World Trading System 249 (2d ed., 2001).
SeeTegge, supraAndreas Tegge, Die Internationale Telekommunikations-Union: Organisation und Funktion einer Weltorganisation Im Wandel (1994) note 3 at 148–9.
See generally Ben Petrazinni, Global Telecoms Talks: A Trillion Dollar Deal (1996) and on the history and outcome of the negotiations, Jonathan D. Aronson, Telecom Agreement Tops Expectations, in Unfinished Business: Telecommunications After the Uruguay Round 15 (Gary C. Hufbauer and Erika Wada eds. 1997).
See Holmes et al., supra Peter Holmes, Jeremy Kempton and Francis McGowan, International Competition Policy and Telecommunications—Lessons from the EU and prospects for the WTO, 20 Telecommunications Policy (1996) note 3, at 764.
For a general discussion of the GATS, see Chapter 19 of this book. For a practical introduction, available in English, French and Spanish, see European Commission, Guide to the Gats (1995).
The commitments of high-income countries covered about half of their service sectors; those of developing countries as a group (including Eastern European countries in transition) only eleven percent. See Bernard M. Hoekman, Tentative First Steps: An Assessment of the Uruguay Round Agreement on Services, in The Uruguay Round and the Developing Countries (Will Martin and L. Alan Winters eds. 1996).
Decision on Negotiations on Basic Telecommunications, ¶ 7.
According to U.S. calculations, over forty percent of world telecom revenues and over 34 percent of global international traffic were not covered by acceptable offers. The United States was particularly disappointed about the offers from ASEAN countries and India, about continuing foreign ownership restrictions in some EU countries and Canada, and the lack of improvement in Latin-American offers. See Statement of Ambassador Charlene Barshefsky on Basic Telecom Negotiations (USTR, April 30, 1996).
Decision on Commitments in Basic Telecommunications, WTO/S/L/19 (April 30, 1996).
These inquiries aimed at ascertaining the scope of FCC jurisdiction as regards then emerging telecommunications services which also relied on data processing (e.g., electronic mail). See Second Computer Inquiry, Docket 20828, Final Decision, FCC 80–189, 77 FCC 2d 384 (April 7, 1980) and subsequent modifications, Third Computer Inquiry, CC Docket 85–229, Report and Order, FCC 86–252, 104 FCC 2d 958 (May 15, 1986) and subsequent modifications.
Second Computer Inquiry, supra note 17, at ¶ 93.
Second Computer Inquiry, supra note 17, at ¶ 97.
The difficulties related to the application of the basic/enhanced services distinction led the FCC to examine alternative means of delineating its jurisdiction in the Third Computer Inquiry, supra note 17.
The historical evolution of the regulatory categories in the run-up to liberalization in the EC is described in Pierre Larouche, Competition Law and Regulation in European Telecommunications 1–30 (2000).
The sub-heading “Other” (2.C.o)) was used by some countries in their original GATS schedule, by others in their schedule to the Fourth Protocol, in order to cover services which they felt were not adequately addressed by other sub-headings. For instance, many countries have included “Mobile Services” under “Other” in their schedule to the Fourth Protocol, although mobile services are theoretically covered by commitments made under the other sub-headings under 2.C. Chairman’s Note for Scheduling Basic Telecom Services Commitments, S/GBT/W/2/Rev.1 (January 16, 1997), at ¶ 3.
Decision on Negotiations on Basic Telecommunications Services, ¶ 1.
The United States appears to be insisting on the distinction between basic and value-added services in its proposals for the next round of negotiations: Communication from the United States—Market Access in Telecommunications and Complementary Services, S/CSS/W/30 (December 18, 2000).
AT, ¶ 2.(a). See on the AT in general Lee Tuthill, Users’ Rights?: The Multilateral Rules on Access to Telecommunications, 20 Telecommunications Policy 88 (1996).
AT, ¶ 2.(c). This was confirmed in the Report of the WTO Panel, Mexico—Measures Affecting Telecommunications Services, WT/DS204/R (2004), ¶ 7.291, 7.293 (hereinafter cited as Telmex Report).
Tuthill, supra Lee Tuthill, Users’ Rights?: The Multilateral Rules on Access to Telecommunications, 20 Telecommunications Policy (1996) note 26, at 94.
Especially when compared to the “closed user group” notion used in the EC to delineate private and public voice telephony ahead of full liberalization: see the definition of “voice telephony” in Directive 90/388 of June 28, 1990 [1990] OJ L 192/10, as amended. This definition and the correlated notion of “closed user group” are explained in detail in European Commission, Communication on the status and implementation of Directive 90/388 on competition in the markets for telecommunications services [1995] OJ C 275/2 at 4–8. The definition of “intra-corporate communications” at paragraph 3.(d) of the AT in fact closely corresponds to the concept of “corporate networks” once defended by Germany as a correct implementation of Directive 90/388 and found by the Commission in this Communication at 7–8, 16 to be too narrow and unduly limitative of the scope of liberalized services.
See the testimony of Jeffrey M. Lang, the head of the U.S. delegation to the NGBT and GBT, before the U.S. Congress (May 9, 1996).
See also the analysis made by William J. Drake and Eli Noam, Assessing the WTO Agreement on Basic Telecommunications, in Unfinished Business: Telecommunications After the Uruguay Round 27, at 41–4 (Gary C. Hufbauer and Erika Wada eds. 1997). A few representative individual schedules are analysed by Isabelle Gavannon, International Telecommunications Trade: A Progressive LiberalizationInt’l Bus. L.J. 711 (1997).
Annex to the Statement of Ambassador Charlene Barshefsky on Basic Telecom Negotiations (February 15, 1997), available at <http://www.ustr.gov>.
Art. VI GATS. See Chairman’s Note on Market Access Limitations on Spectrum Availability, S/GBT/W/3 (February 3, 1997).
Rachel Frid, The Telecommunications Pact Under the GATS—Another Step Towards the Rule of Law, 24(2) Legal Issues of Economic Integration 67, 80 (1997).
See Lee Tuthill, The GATS and New Rules for Regulators, 21 Telecommunications Policy 783, 786 (1997).
For a fascinating overview of how a number of Asian countries, some without any developed system of competition law, have implemented the Reference Paper in varying ways, see Ted Ringrose, The Impact on Asian Telecommunications Markets, in Trade and Telecoms 103, 106–108 (Mark Clough ed. 2001).
The ECJ, for instance, in its judgment of 9 November 1983, Case 322/81, Michelin v. Commission [1983] ECR 3461 defined a dominant position as the possibility “to prevent effective competition from being maintained and behave to an appreciable extent independently of its competitors and customers and consumers.” In the Telmex Report, ¶ 7.153–7.155, the issue is left open, since in view of the fact that Telmex was legally required to negotiate the terms of termination of international calls into Mexico on behalf of all terminating carriers in Mexico, it “patently” had the ability to materially affect the terms of participation in the market.
For a discussion of the doctrine in the main jurisdictions where it has been used, see Sally Van Siclen, Background Note in Oecd, The Essential Facilities Concept, Competition Policy Roundtables No. 5, OCDE/GD(96)113, at 7–10. See also John Temple Lang, Defining Legitimate Competition: Companies’ Duties to Supply Competitors and Access to Essential Facilities, 18 Fordham Int’l L.J. 437 (1994) and Larouche, supra note 21, at 165–217.
See Van Siclen, supra Sally Van Siclen, Background Note in Oecd, The Essential Facilities Concept, Competition Policy Roundtables No. 5 note 50, at 12. For the EC, see ECJ, 26 November 1998, Case C-7/97, Oscar Bronner GmbH & Co KG v. Mediaprint Zeitungs-und Zeitschriftenverlag GmbH & Co KG [1998] ECR I-7791.
See Marco C.E.J. Bronckers, The WTO Reference Paper on Telecommunications: A Model for WTO Competition Law?, in New Directions in International Economic Law 371, 385–386 (Bronckers and Quick eds. 2000).
Giving rise to the same type of situation aswas considered by the ECJ, November 14, 1996, Case C-333/94, Tetra Pak v. Commission, [1996] ECR I-5951.
See Pierre Larouche, Relevant Market Definition in Network Industries, 1 Journal of Network Industries 407 (2000).
See from an EC lawand economics perspective, e.g., Phedon Nicolaides, Effective Competition in Network Industries: An Assessment of Commission Decision 2001/354 imposing a fine on Deutsche Post for abusing its dominant position in parcel delivery, 22 Eur. Comp. L.Rev. 390 (2001); Mats A. Bergman, A prohibition against losses? The Commission’s Deutsche Post decision, 22 Eur. Comp. L.Rev. 351 (2001); Larouche, supra note 21 at 235–9; Leigh Hancher and José Buendia Sierra, Cross-subsidization in EC Law, 35 CMLRev. 901 (1998).
See the requirements imposed in Directive 97/33 (ONP-Interconnection) of June 30, 1997 [1997] OJ L 199/32, Art. 7(5) and Annex V (now replaced by Directive 2002/19 (Access Directive) of 7 March 2002 [2002] OJ L 108/7, Art. 13(3) and (4)). In a further step, in case of persistent problems, accounting or even structural (legal) separation might be required, as was done in the EC, under certain circumstances, for firms holding both telecommunications and cable TV networks in Directive 1999/64 of June 23, 1999 [1999] OJ L 175/39, amending Directive 90/388, supra note 39 (now Directive 2002/77 of September 16, 2002 [2002] OJ L 249/21, Art. 8). See also Frid, supra note 45, at 84–5.
The risks for competition associated with the movement of confidential information amongst divisions and subsidiaries was a major concern of the U.S. Department of Justice in U.S.v. MCI, Civil Action 94.1317, Consent Decree filed on June 15, 1994, and U.S.v. Sprint Corporation, Civil Action 95.1304, Consent Decree filed on July 13, 1995. In these two cases, stringent requirements were imposed in this respect.
In criticizing the panel report, Marsden makes much of the fact that the RP’s drafters did not mention cartels in the RP as an anti-competitive practice. From this omission, and the WTO membership’s general reluctance to include binding competition law commitments in the WTO, he deduces that the panel should have left cartels outside the scope of the RP: see Marsden, WTO Decides its First Competition Case, With Disappointing Results, 16 Competition Law Insight 3, 8 (No. 16, May 2004). We find Marsden’s a contrario reasoning unconvincing. In addition, the text of Mexico’s RP indicates that the three examples listed of anticompetitive practices are not exhaustive.
The panel did find, without much explanation, that Telmex and its competitors together formed a “major supplier”: ibid. ¶ 7.228. However, there is no indication in the report of a “collective dominant position” or anything similar, based on a study of the characteristics of the market. See for instance, CFI, 6 June 2002, Case T-342/99, Airtours v. Commission [2002] ECR II-2585 for an illustration of the intricacies involved in showing that a number of firms collectively hold a dominant position.
Interpretation given by the FCC to the interconnection obligation of the local exchange carriers (LEC) pursuant to the new Telecommunications Act of 1996, supra note 10, 47U.S.C. § 251(c)(2), in Implementation of the Local Competition Provisions in the Telecommunications Act of 1996, CC Docket No. 96–98, First Report and Order, FCC 96–325, 61 Fed. Reg. 45476 (August 8, 1996) at ¶ 47.
Directive 2002/19, supra note 59, Article 2(b). The Telmex panel relied on the EC definition to construe the RP: Telmex Report, ¶ 7.111
SeeMark Naftel and Lawrence J. Spivak, The Telecoms Trade War 111 (2000). It is interesting to note (See also Miriam Gonzalez Durantes, The European Perspective, in Trade and Telecoms 51, 66 (Mark Clough ed. 2001)) that the EC introduced a footnote to the Reference Paper in its commitments on this point, stating that “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”’. Another footnote just before goes in the same direction. These reservations echo the substance of Directive 97/33, supra note 59, Art. 7(3) (now superseded by Directive 2002/19, without any equivalent provision). For an analysis of the practical consequences of this apparently uncontroversial statement, SeeLarouche, supra note 21, at 76–85.
See the overview of costing issues in telecommunications in Larouche, supra Pierre Larouche, Competition Law and Regulation in European Telecommunications (2000) note 66, at 239–46.
Unless one decides to ignore or avoid common cost allocation difficulties and allow pricing at marginal cost or according to the Efficient Component Pricing Rule (“ECPR”). Pierre Larouche, Competition Law and Regulation in European Telecommunications (2000) Id.
Id. at 244. In other contexts, e.g., cross-subsidization within a firm, other standards, such as FDC, might appear more appropriate, potentially leading to contradictions: for instance, interconnection could be priced according to FDC internally in order to avoid cross-subsidization, but at FL-LRIC towards third parties in order to encourage entry on the market. In that case, there is a contradiction if the party giving interconnection is otherwise under a non-discrimination obligation as between its own subsidiary and third-party competitors of that subsidiary.
See James Ibbetson, World Trade Organization and Basic Telecommunications Services, in Trade and Telecoms 31, 48 (Mark Clough ed. 2001).
Telecommunications Act of 1996, supra note 10, 47 U.S.C. §251(c)(3).
Directive 2002/19, supra, note 59, at Art. 9(2), formerly in Directive 97/33, supra note 63, at Art. 7(4).
In the United States, this was done by the FCC in the Local Competition Order, supra note 62, at ¶ 97–409. However, in AT&T Corp. v. Iowa Utilities Board 525 U.S. 366 (1999), the Supreme Court found that the FCC was mistaken on that issue and had put the incumbents under too heavy an unbundling obligation. Later on, in a Third Report and Order in the Local Competition proceeding, FCC 99–238 (November 5, 1999), the FCC went back on its first order. Subsequently, the courts quashed that order again (United States Telecom Ass’n v. FCC, 290 F.3d 415 (D.C. Cir. 2002). A third attempt by the FCC (Report and Order and Order on Remand and Further Notice of Proposed Rulemaking, 18 FCC Rcd 16978 (2003)) was also quashed (United States Telecom Ass’n v. FCC, 359 F.3d 554 (D.C. Cir. 2004)) and the matter is now pending before the FCC once more.
SeeNafitel and Spivak, supra LAWRENCE J. SPIVAK, The Telecoms Trade War 111 (2000) note 66, at 112.
Regulation 2887/2000 of December 18, 2000 [2000] OJ L 336/4.
Telecommunications Act of 1996, supra note 10, 45 U.S.C. § 252(i).
Directive 2002/22 of March 7, 2002 [2002] OJL108/51, Art. 3—7, replacing Directive 98/10 of February 26, 1998 [1998] OJ L 101/24, Art. 5–8. These are access to the PSTN, directory services, public payphones and specific measures for disabled users.
Directive 2002/22, id, Art. 13.
Directive 2002/22, id., Art. 13(4).
See FCC, Federal-State Joint Board on Universal Service, CC Docket 96-45, Report and Order, FCC 97-157 (May 8, 1997). This order provides that the universal service program shall support, inter alia, schools and libraries as well as health care providers in addition to the traditional universal service target group (rural and low-income users).
See EC, Report on United States Barriers to trand and Investment 52 (2001), available at <http://www.europa.eu.int/comm/trade/bilateral/usa/usa.htm>. SeeNaftel and Spiwak, supra note 66, at 363–9.
Directive 2000/31 of 8 June 2000 on Electronic Commerce [2000] OJ L 178/1.
RP, ¶ 5. See Frid, supra Rachel Frid, The Telecommunications Pact Under the GATS—Another Step Towards the Rule of Law, 24(2) Legal Issues of Economic Integration, (1997) note 45, at 81–3.
Directive 2002/21 of March 7, 2002 [2002] OJ L 108/33, Art. 3(2), replacing Directive 90/387 (ONP—Framework Directive) of June 28, 1990 [1990] OJ L 192/1 (as amended), Art. 5(a)(2), second dash.
See Drake and Noam, supra William J. Drake and Eli Noam, Assessing the WTO Agreement on Basic Telecommunications, in Unfinished Business: Telecommunications After The Uruguay Round 27 note 41, at 44–5, as well as Naftel and Spivak, supra note 66, at 106–7.
See TRIPS, Art. 8, 31(c) and 40(2). These provisions are discussed in Daniel Gervais, The Trips Agreement: Drafting History And Analysis (2d ed., 2003). See also Chapter 22 of this book.
Of interest as well is the fact that WTO Members have agreed to review before January 1, 2000 whether the limited WTO agreement relating to investment ought to be complemented by provisions on competition policy, as part of a general review of this Agreement: See Agreement on Trade-Related Investment Measures, Art. 9. This review was not completed by the agreed deadline, nor were there any relevant developments to report by the fall of 2002.
See Bernard M. Hoekman and Petros C. Mavroidis, Competition, Competition Policy and the GATT, 17 World Economy 121, 137–139 (1994).
Thus, panels have defined markets more broadly in trade than in competition law. In their view, trade law addresses the “potentiality to compete”, whereas competition law is designed to protect “the actual mechanisms of competition”. Report of the WTO Panel, Korea—Taxes on Alcoholic Beverages, WT/DS75/R, WT/DS84/R (1998), at ¶ 10.81 (confirmed on appeal). See also Report of the WTO Panel, Chile—Taxes on Alcoholic Beverages, WT/DS/87/R, WT/DS/110/R (1999), at ¶ 7.87 (confirmed, and modified on other grounds, on appeal).
These points have been developed in Bronckers, supra Marco C.E.J. Bronckers, The WTO Reference Paper on Telecommunications: A Model for WTO Competition Law?, in New Directions In International Economic Law 371, 385–386 (Bronckers and Quick eds. 2000) note 52.
See also M. Fredebeul-Klein and A. Freytag, Telecommunications and WTO Discipline, 21 Telecommunications Policy 477, at 480–3, 489–60 (1997).
See Gonzalez Durantes, supra Miriam Gonzalez Durantes, The European Perspective, in Trade and Telecoms (Mark Clough ed. 2001) note 66, at 71–75 who presents this as the “European perspective” on the Fourth Protocol.
Id. at 72.
See DSU, Art. 3.2. See Marco C.E.J. Bronckers, Better Rules for a New Millennium: A Warning against Undemocratic Developments in the WTO, 2 J. Int’l Econ. L. 547 (1999); Joel Trachtman, The Domain of WTO Dispute Resolution, 40 Harvard Int’l L.J. 333 (1999).
Telmex Report, ¶ 7.4.
Cf. former WTO Director-General Mike Moore, “A World without Walls—Freedom, Development, Free Trade and Governance”, Cambridge, Cambridge University Press, 2003, P. 111 [footnote in original].
See Telmex Report, ¶ 7.331–7.332.
See also Drake and Noam, supra William J. Drake and Eli Noam, Assessing the WTO Agreement on Basic Telecommunications, in Unfinished Business: Telecommunications After the Uruguay Round 27, (Gary C. Hufbauer and Erika Wada eds. 1997) note 41, at 45–6.
GATS, Art. II. On transparency, See Frid, supra Rachel Frid, The Telecommunications Pact Under the GATS—Another Step Towards the Rule of Law,24(2) Legal Issues of Economic Integration (1997) note 45, at 83–4.
Although the precise significance of MFN for telecommunications is not yet well established: Holmes et al., supra Peter Holmes, Jeremy Kempton and Francis McGowan, International Competition Policy and Telecommunications—Lessons from the EU and prospects for the WTO, 20 Telecommunications Policy (1996) note 3, at 762. See also Tuthill, supra note 47, at 788–9.
See Annex on Negotiations on Basic Telecommunications, ¶ 1.
See GATS, Art. II:2, in conjunction with Annex on Article II Exemptions, ¶¶ 3 and 6. SeeHoekman and Kostecki, supra MICHEL M. KOSTECKI, The Political Economy of the World Trading System (2d ed., 2001) note 6, at 252.
GATS, Art. VI. See also Tuthill, supra Lee Tuthill, The GATS and New Rules for Regulators, 21 Telecommunications Policy (1997) note 47, at 789–92, and Chapter 19 of this book.
GATS, Art. III.3. Note that, as with notification obligations generally in the WTO, there is no immediate sanction foreseen in the event notification has been omitted. This is to be contrasted, for instance, with the rigorous case law of the European Court of Justice pursuant to which Member States having failed to notify technical regulations to the Commission, pursuant to Directive 94/34 of June 22, 1998 [1998] OJ L 204/37, are barred from enforcing those rules against individuals. See ECJ, 30 April 1996, Case C-194/94, CIA Security International v. Securitel [1996] ECR I-2201.
See e.g., Geza Feketekuty, Regulatory Reform and Trade Liberalization in Services, in GATS 2000: New Directions in Services Trade Liberalization 225, 237–238 (Pierre Sauvé and Robert M. Stern eds. 2000).
See GATS, Art. VI.4, opening paragraph and subclause (b). The EU and its Member States recently presented their views on this issue to the WTO Membership, with reference to their own experiences and case law. See European Communities—Domestic Regulation: Necessity and Transparency, S/WPDR/W/14 (May 1, 2001).
See generally, Axel Desmedt, Proportionality in WTO Law, 4 J. Int’l Econ. L. 441 (2001).
See GATS, Art. XIII. On the issues to be addressed in these negotiations see Patrick Low, Aaditya Mattoo and Arvind Subramanian, Government Procurement in Services, in Law and Policy in Public Purchasing—The WTO Agreement on Government Procurement 225 (Bernard M. Hoekman and Petros C. Mavroidis, eds. 1997).
See Marco C.E.J. Bronckers, Rehabilitating Antidumping and other Trade Remedies through Cost-Benefit Analyses, 30 Journal of World Trade 5–37 (1996). See also Chapter 11 of this book.
See Fifth Decision on Negotiations on Emergency Safeguard Measures, S/L/159 (March 17, 2004).
See GATS, Art. X.2. Although not explicitly stated, the reference to Art. XXI suggests that a WTO Member wishing to avail itself of this provision may have to pay compensation to other disaffected WTO Members. This constraint is not in line with current thinking on the effective operation of an escape clause. See WTO Safeguards Agreement, Art. 8(3).
See Gilles Gauthier, Erin O’Brien and Susan Spencer, Déjà Vu, or New Beginning for Safeguards and Subsidies Rules in Services Trade, in GATS 2000: New Directions in Services Trade Liberalization 165, 166–176 (Pierre Sauvé and Robert M. Stern eds. 2001). See Chapter 19 of this book.
This could amount to expropriation of, or at least far-reaching interference with an established business of foreign service providers. Note that similar, conceptual concerns were deemed insurmountable in the context of intellectual property, and have been put forward to explain the absence of an escape clause in the TRIPS agreement. See Bronckers, supra Marco C.E.J. Bronckers, The Impact of TRIPS: Intellectual Property Protection in Developing Countries, 31 CMLrev (1994) note 5, at 1260.
See Gonzalez Durantez, supra Miriam Gonzalez Durantes, The European Perspective, in Trade and Telecoms (Mark Clough ed. 2001) note 66, at 64–65.
For a European Community law perspective, see Naboth van den Broek, Legal Persuasion, Political Realism and Legitimacy: The European Court’s Recent Treatment of the Effect of WTO Agreements in the EC Legal Order, 4 J. Int’l Econ. L. 411 (2001).
See e.g., in the EC, Regulation 3286/94 of December 22, 1994 [1994] OJ L 349/71, discussed in Marco C.E.J. Bronckers and Natalie McNelis, The EU Trade Barriers Regulation Comes of Age, 35 J. World Trade 427–482 (No.4, 2001). See also Chapter 33 of this book.
See in this Chapter, pp. 998, 999, 1001–1009, 1015, 1032–1033, 1036; see also in Chapter 19 of this book.
See U.S. Trade Representative, Annual Review of Telecommunications Trade Agreements Highlights High Interconnection Rates in Japan, Press release 00-22 (March 30, 2000), available at <http://www.ustr.gov>.
See David Molony, U.S. Poised to Take German Interconnect Row to WTO, Communications Week International (March 15, 1999).
Pursuant to the Omnibus Trade and Competitiveness Act of 1988, section 1377, 19 U.S.C. § 3107, The reports can be found at <http://www.ustr.gov>.
See e.g., Ringrose, supra Ted Ringrose, The Impact on Asian Telecommunications Markets, in Trade and Telecoms 103, 106–108 (Mark Clough ed. 2001) note 48. The situation in the APEC countries is also surveyed in Shin Cho and Myeongho Lee, Competition and Deregulation: An APEC Perspective and Erika Wada and Tomohiko Asano, Telecommunications Services in the Asia Pacific Countries, both in Unfinished Business: Telecommunications After the Uruguay Round 155 and 181 respectively (Gary C. Hufbauer and Erika Wada, eds. 1997). See also Toshiaki Tarigawa, The Impact of the WTO Telecommunications Agreement on U.S. and Japanese Telecommunications Regulations 32 J. World Trade 33 (1998).
It eventually entered into force on February 5, 1998.
See Directive 90/388, supra note 39, Art. 2(2), as amended by Directive 96/19 of March 13, 1996 [1996] OJ L 74/13.
SeeLarouche, supraPierre Larouche, Competition Law and Regulation in European Telecommunications 1–30 (2000) note 21, at 19–23. The date of January 1, 1998 already appeared much earlier, in a Council Resolution of July 22, 1993 [1993] OJ C 213/1, as the date for completing the liberalization of all telecommunications services (with the liberalization of voice telephony). Agreement on the date of January 1, 1998 for the opening up of infrastructure, however,was only reached 18 months later, as evidenced by Council Resolution of December 22, 1994 [1994] OJ C 379/4.
Within the EC, the deadline for full liberalization had been extended for some Member States (Spain, Greece, Ireland, Portugal and Luxembourg), pursuant to Directive 96/2 of January 16, 1996 [1996] OJ L 20/59, Art. 4 and Directive 96/19, supra note 167, Art. 1(2), replacing Directive 90/388, supra note 39, Art. 2. See Decision 97/114 of November 27, 1996 (Ireland) [1997] OJ L 41/8, Decision 97/310 of February 12, 1997 (Portugal) [1997] OJ L 133/19, Decision 97/568 of May 14, 1997 (Luxembourg) [1997] OJ L 234/7, Decision 97/603 of June 10, 1997 (Spain) [1997] OJ L 243/48 and Decision 97/607 of June 18, 1997 (Greece) [1997] OJ L 245/6. To the extent applicable, the extensions granted in those decisions were reflected in the EC schedule to the Fourth Protocol. They now have all lapsed.
SeeNaftel and Spivak, supra LAWRENCE J. SPIVAK, The Telecoms Trade War 111 (2000) note 66, who also note, however, that U.S. negotiators thought that the U.S. Telecommunications Act of 1996, supra note 10, provided the “gold standard” for the WTO.
For an explanation of how the EC regulatory framework in place for 1998 implements the commitments made in the WTO, see EC, Implementation of Telecommunication Legislation in the European Community, S/C/W/110/Add.5 (June 21, 1999), available at http://www.wto.org.See also Gonzalez Durantez, supra note 66, at 51–70.
See e.g., for the EC itself, Decision 97/838 of November 28, 1997 [1997] OJ L 347/45; for France, Act 97–1098 of November 28, 1997, JO, November 29, 1997, 17284; for Germany, the Act of November 20, 1997, BGBl.II.1990.
Directive 95/46 of October 24, 1995 [1995] OJ L 281/31.
See Decision 2000/520 of July 26, 2000 [2000] OJ L 215/7.
Directive 90/387, supra note 91, Art. 8; Directive 97/33, supra note 59, Art. 22(2); Directive 98/10, supra note 80, Art. 31; Directive 97/13 of April 10, 1997 [1997] OJ L 117/15, Art. 23.
Towards a new framework for electronic communications infrastructure and associated services—The 1999 Communications Review, COM (1999) 539 (November 10, 1999).
The main elements are Directive 2002/19, supra note 59; Directive 2002/20 of March 7, 2002 (“Authorization Directive”) [2002] OJ L 108/21; Directive 2002/21, supra note 91; Directive 2002/22, supra note 80; Directive 2002/58, supra note 175 and Directive 2002/77 of September 16, 2002 [2002] OJ L 249/21.
See Directive 2002/21, id., Rec. 29, Directive 2002/19, id., Rec. 13 and Art. 8(3) and Directive 2002/22, id., Rec. 3.
For more information concerning the new framework, see Pierre Larouche, A Closer Look at Some Assumptions Underlying EC Regulation of Electronic Communications 3 Journal of Network Industries 129 (2002), and Ceps, European Communications at the Crossroads, Report of A Ceps Working Party (Martin Cave and Pierre Larouche, rapporteurs, 2001).
That proposition has been widely aired in the course of the legislative process: See the 1999 Communications Review, supra note 181, at 49 and the EP Resolution of June 13, 2000 [2001] OJ C 67/53. It has been taken over in a weakened form in the final texts: see e.g., Framework Directive, supra note 183, Rec. 27 and Access Directive, supra note 183, Rec. 12. For a similar argument at the international level, See Petros C. Mavroidis and Damien Neven, The WTO Agreement on Telecommunications: It’s Never Too Late, in The Liberalization of Statemonopolies in the European Union and Beyond 307 (Damien Geradin, ed. 2000), with a reply by Pierre Larouche at 319.
See e.g., Framework Directive, supra note 183, Rec. 25 and Access Directive, supra note 183, Rec. 12.
Framework Directive, Art. 13(2).
As discussed supra notes 49–54 and accompanying text. See contra Ibbetson, supra James Ibbetson, World Trade Organization and Basic Telecommunications Services, in Trade and Telecoms (Mark Clough ed. 2001) note 70, at 46.
Access Directive, supra note 183, Art. 8(3).
See Art. 2.2(b) RP. Firstly, Directive 2002/19, supra note 59, does not provide for the automatic imposition of pricing obligations on SMP operators as regards interconnection. Secondly, even if the national authority would impose a pricing obligation in such a case, it does not need to be cost-orientation: Directive 2002/19, Art. 13.
On the U.S. implementation of its WTO telecommunications commitments, See also Kelly Cameron, The WTO Basic Telecommunications Agreement—Effect on the U.S. Market, in Trade and Telecoms 77 (Mark Clough ed. 2001).
Market Entry and Regulation of Foreign-affiliated Entities, IB Docket 95-22, Report and Order, FCC 95-475 (November 28, 1995). The U.S. policy prior to the Fourth Protocol is discussed critically in Naftel and Spivak, supra note 66, at 123–46.
See Sprint Corporation, ISP 95-002, Declaratory Ruling and Order, FCC 95-498 (December 15, 1995).
Rules and Policies on Foreign Participation in the U.S. Telecommunications Market, IB Docket No. 97-142, Report and Order, FCC 97-398 (November 26, 1997). See for a critical appraisal Naftel and Spivak, supra note 66, at 156–64.
Id. at ¶ 50.
Id. at ¶ 51–4.
Id. at ¶ 61–6.
Id. at ¶¶ 144–6.
Defined as special terms concerning operating agreements for basic services, interconnection agreements, disclosure of information or the joint handling of traffic. Id. at ¶ 164.
Dominance being presumptively defined as a share of more than fifty percent of the relevant market. Id. at ¶¶ 157–161.
Id. at ¶¶ 221–3, 225.
Id. at ¶¶ 240 ff.
See Regulatory Policies to AllowNon-U.S. Licensed Space Stations to Provide Domestic and International Satellite Service in the United States (DISCO II), IB Docket 96-111, Report and Order, FCC 97-399 (November 26, 1997). See also Cameron, supra note 193 at 94–8.
See Stefan M. Meisner, Global Telecommunications Competition a Reality: United States Complies with WTO Pact 13 Am. U. Int’l L. Rev. 1345 (1998).
Foreign Participation Order, supra note 197, at ¶ 237.
See FCC, VoiceStream/Powertel/DT, IB Docket 00-187, Memorandum Opinion and Order, FCC 01-142 (April 27, 2001).
Id. at ¶¶ 62-5.
Id. at ¶¶ 89-92. The opposing parties even went as far as to suggest that the fact that both DT and VoiceStream used the GSM standard (and planned to use the same 3G standard, namely WCDMA) would give them an unfair competitive advantage.
In thewords of Senator Hollings, “you cannot compete with government”: See T. Foley, Congress Accused of Telecoms Protectionism, Communications Week International (August 14, 2000).
See the European Commission’s yearly Report on U.S. Barriers to Trade and Investment, available at <http://www.europa.eu.int/comm/trade/bilateral/usa/usa.htm> at 60 (2000) and at 50 (2001).
See I Want My Pound of Flesh..., Public Network Europe 33 (September 1996) and At this Rate, You’re Going Nowhere... Public Network Europe 31 (October 1996).
In International Settlement Rates, IB Docket 96-261, NPRM, FCC 96-484 (December 19, 1996), the FCC mentions as an example the balance of traffic between the United States and Hong Kong, which in the 18 months to October 1996 went from 1:1 to 7:1 in favour of traffic originating from the United States, as the use of call-back services became more widespread.
Policy Statement on International Accounting Rate Reform, FCC 96-37 (January 31, 1996), at ¶ 8. See also the long-standing FCC proceeding on the Regulation of International Accounting Rates, CC Docket 90-337: Phase I Report and Order, FCC 91-157, 6 FCCR 3552 (May 9, 1991), Phase II First Report and Order, FCC 91-401, 7 FCCR 559 (December 12, 1991), Phase II Second Report and Order, FCC 92-496, 7 FCCR 8040 (November 5, 1992), Phase II Third Report and Order, FCC 96-160 (April 9, 1996), Phase II Fourth Report and Order, FCC 96-459 (November 26, 1996).
Regulation of International Accounting Rates, Phase II Fourth Report and Order, id.
Report of the Group on Basic Telecommunications, S/GBT/4 (February 15, 1997) at para. 7.
Telmex Report, ¶ 7.124-7.138.
See International Settlement Rates, supra note 215, at ¶ 76, 82, 88–89. For a critical appraisal, SeeNaftel and Spivak, supra note 66, at 147-56.
Cable & Wireless v. FCC, 166 F. 3d 1224 (D.C. Cir. 1999). That decision is reviewed and strongly criticized by NAFTEL AND SPIVAK, supra note 66, at 173-96.
See the latest version of ITU-T Recommendation D.140 on accounting rate principles for the international telephone service (October 2000) and Accounting Rate Reform undertaken by ITU-T Study Group 3 (2000), available at http://www.itu.int. The FCC and ITU approaches are compared by Kenneth B. Stanley, Toward International Settlement Rate Reform: FCC Benchmarks Versus ITU Rates 24 Telecommunications Policy 843 (2000). In the Telmex Report, these reforms were acknowledged and used as evidence by the panel: ¶ 7.170-7.175.
See Pekka Tarjanne (former ITU Secretary-General), Preparing for the Next Revolution in Telecommunications: Implementing the WTO Agreement 23 Telecommunications Policy 51 at 54-5, 58–60 (1999), and Peter A. Stern and Tim Kelly, Liberalization and Reform of International Telecommunication Settlement Arrangements, available at http://www.itu.int for a thorough review of reform options for, as well as alternatives to, the accounting rate system.
Telmex Report, ¶ 7.96-7.117.
See Pekka Tarjanne (at the time ITU Secretary-General), Trade in Telecommunications Services: The WTO Agreement and the Role of the ITU, available at http://www.itu.int and Tarjanne, supra note 226, at 60-2.
See the Final Acts of the ITU Plenipotentiary Conference (Minneapolis, 1998), available at http://www.itu.int, especially Resolutions 71 and 79.
See e.g., the new Alternative Approval Process (ITU-T Recommendation A.8), approved in Resolution 37 of the World Telecommunications Standards Assembly (Montreal, 2000), available at http://www.itu.int.
See Global Symposium for Regulators an Unqualified Success: ITU to Develop Guidelines and Benchmarks for Effective Regulation, ITU Press Release 2001-30 (December 7, 2001).
Witness the debates surrounding the choice of standards for third-generation mobile networks (3G): See Larouche, supra, Pierre Larouche, Competition Law and Regulation in European Telecommunications (2000) note 21, at 388–93. See also Paul A. David and W. Edward Steinmueller, Standards, Trade and Competition in the Emerging Global Information Infrastructure Environment, 20 Telecommunications Policy 817 (1996), and Tuthill, supra note 47, at 784.
S/C/9/Rev.1 (June 15, 2000) at http://www.wto.org.
See Communication from the EC and their Member States—GATS 2000: Telecommunications, S/CSS/W/35 (December 22, 2000).
See Communication from the United States—Market Access in Telecommunications and Complementary Services, supra note 24.
SeeD. Geradin and D. Luff, ed., The WTO and Global Convergence in Telecommunications and Audio-Visual Services (2004), in particular P. Larouche, Dealing with Convergence at the International Level at 390.
See Communication from the United States—Audiovisual and Related Services, S/CSS/W/21 (December 18, 2000).
See the Work Program on Electronic Commerce adopted by the General Council, WT/L/274 (September 30, 1998). See also Chapter 56 of this book.
SeeLarouche, supraPierre Larouche, Competition Law and Regulation in European Telecommunications (2000) note 21, at 322–403. For a different perspective, see Mavroidis and Neven, supra note 185.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2005 Springer Science+Business Media, Inc.
About this chapter
Cite this chapter
Bronckers, M., Larouche, P. (2005). Telecommunications Services. In: Macrory, P.F.J., Appleton, A.E., Plummer, M.G. (eds) The World Trade Organization: Legal, Economic and Political Analysis. Springer, Boston, MA. https://doi.org/10.1007/0-387-22688-5_21
Download citation
DOI: https://doi.org/10.1007/0-387-22688-5_21
Publisher Name: Springer, Boston, MA
Print ISBN: 978-0-387-22685-9
Online ISBN: 978-0-387-22688-0
eBook Packages: Humanities, Social Sciences and LawLaw and Criminology (R0)