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3. Liberalisation and Regulation of International Trade in Telecommunications Services Through the WTO

verfasst von : Olga Batura

Erschienen in: Universal Service in WTO and EU law

Verlag: T.M.C. Asser Press

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Abstract

This chapter is the first step of the intended comparative analysis of the approaches to regulation of markets in social interest that exist at the international level. This chapter studies the origins and the process of liberalisation of trade in telecommunications services at the international level within the framework of the WTO. It identifies the reasons for the adoption of regulatory provisions and focuses in particular on the socio-political issue of universal service. In this regard, it analyses specific features of the current regulatory framework for universal service at the WTO level in the light of the recent jurisprudence of the Dispute Settlement Body. Additionally, the chapter investigates the relationship between the rules of different international organisations (WTO and ITU) relevant for universal service in telecommunications. It also undertakes three country studies in order to better understand the interplay between the WTO regulation and national regulation of universal service provision.

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Vorheriges Kapitel Liberalisation of Telecommunications Services: Social Embedding of the Liberalised Market as a Regulatory Challenge

Nächstes Kapitel Liberalisation of Telecommunications Services Markets and Regulation of Universal Service in the European Union

Pipe 1990, p. 109.

Tegge 1994, pp. 159–160.

Davies 1994, pp. 107–108.

Undertakings in many industry sectors availed themselves of this opportunity. They further developed their own networks with the progress of liberalisation in the telecommunications sector. Examples are big private (internal) networks belonging to the banks Bank of America, Citibank/Citicorp, Barclays Bank and Banque Nationale de Paris (BNP); undertakings in the textile industry such as Levy Strauss and Marks & Spencer; the car manufacturers General Motors and Ford of Europe—following the example of their Japanese rivals; and Boeing, McDonnell Douglas and other airlines and aircraft manufacturers. For more information see Davies 1994, pp. 117–144; Mansell 1994.

Grewlich 1997, pp. 67–69.

Mansell 1994, p. 217.

Langenfurth 2000, p. 130.

This statement and the rest of this section is based on the study by Drake 1993.

Drake and Nicolaïdis 1992, pp. 47–49.

Idem, p. 56.

Aronson and Cowhey 1988, pp. 19–27.

Idem, p. 37.

Sandholtz 1998, pp. 143–144.

Aronson and Cowhey 1988, pp. 36–37; Woodrow 1991, p. 326. In footnote 4 on page 53 Aronson and Cowhey 1988 name the main lobby groups: International Telecommunications User Group (INTUG), Association of Data Processing Services Organisation (ADAPSO) (in 1991 renamed in Information Technology Association of America (ITAA)), Business Roundtable and International Chamber of Commerce (ICC).

Aronson and Cowhey 1988, p. 34.

Idem, pp. 32, 34.

Frühbrodt 2002, p. 117.

Mathew 2003, p. 46.

Bronckers and Larouche 2008, p. 320.

Idem, p. 320.

Tegge 1994, pp. 63–70.

Frühbrodt 2002, pp. 114–130, 137.

Although in most countries the PTTs were the monopolistic providers, there were a few examples of the separation of administrative and operating functions. Thus, in Italy and Spain there were telecommunications administration and a cartel of 5 and 3 telecommunications providers respectively. See Noam 1992, pp. 239–257.

Woodrow 1991, p. 329; Pipe 1990, p. 109.

Idem, p. 329.

Idem, p. 330.

Idem, p. 333.

Drake and Nicolaïdis 1992, p. 83.

Behrens and Werle 2003, p. 15.

Frühbrodt 2002, p. 329.

The Free Trade Agreement between Canada and the USA (CUSFTA) was signed in 1988 and entered into force on 1 January 1989. Its negotiations were launched in 1986.

The North American Free Trade Agreement (NAFTA) between Canada, Mexico and the USA entered into force on 1 January 1994 and was based on CUSFTA.

Mosco 1993, pp. 193–194.

Aronson and Cowhey 1988, p. 40.

Idem, p. 40.

Communication from the Commission to the Council. Telecommunications: Lines of Action, COM(83) 573 final of 29 September 1983, p. 10.

Communication by the Commission to the Council and the European Parliament. Towards a Dynamic European Economy—Green Paper on the Development of the Common Market for Telecommunications Services and Equipment. COM(87) 290 final of 30 June 1987, p. 150.

Idem, p. 151.

Frühbrodt 2002, pp. 314–316, 327–328.

Idem, pp. 316–319.

Drake and Nicolaïdis 1992, p. 91.

Holmes and Young 2002, p. 27.

Tuthill 1996, p. 91.

Frühbrodt 2002, p. 319.

McLarty 1999, pp. 16–17.

Frühbrodt 2002, p. 331.

WTO, Background Note of the WTO Negotiations on Basic Telecommunications, 22 February 1996. http://www.wto.org/english/news_e/pres96_e/ta3-tel.htm.

Frühbrodt 2002, p. 339.

Adopted on 15.04.1994. http://www.wto.org/english/docs_e/legal_e/50-dstel_e.htm.

Petrazzini 1996, p. 13.

Holmes and Young 2002, p. 28. See also the European Community and its Member States, Draft Offer on Basic Telecommunications, S/NGBT/W/12/Add.10 of 16.10.1995.

Behrens and Werle 2003, p. 25.

Frühbrodt 2002, p. 342.

For more information see Frühbrodt 2002, p. 343.

In detail on the accounting rates system see Ó Siochrú 1997.

Frühbrodt 2002, pp. 343–344; Ó Siochrú 1997, pp. 52–53; Mathew 2003, pp. 62–63.

Petrazzini 1996, pp. 8 et seq.; Aronson 1997, pp. 15–16; Behrens and Werle 2003, pp. 24–25.

Frühbrodt 2002, p. 342.

Behrens and Werle 2003, p. 25.

See the detailed, specified overview by country in Frühbrodt 2002, pp. 353–371; Langenfurth 2000, pp. 219–238.

Petrazzini 1996, p. 8.

Currently, there are 78 participants. See the Annex to this paper with the table of countries’ schedules. The EU-28 is in both cases counted as one member.

Currently, there are 67 participants. See the Annex to this paper with the table of countries’ schedules. The EU-28 is in both cases counted as one member.

MTN.GNS/23, para 10.

Idem, para 65.

Idem, para 69.

Idem, para 71.

Idem, para 72.

Currently, the WTO seems to prevail over the ITU as regards the regulation of the provision of telecommunications. The decision of the Panel in the Mexico Telecoms case allows for the conclusion that the application or implementation of the ITU Recommendations by nation states shall be carried out in compliance with the principles of the Reference Paper. The ITU Recommendations are instrumentalised by the WTO to achieve its market liberalisation objectives. See WTO, Mexico—Measures Affecting Telecommunications Services—Report of the Panel, WTO Doc. WT/DS204/R of 02.04.2004. For a critical assessment of the Panel’s decision see Neven and Mavroidis 2003, pp. 758–789.

Fourth Protocol to the General Agreement on Trade in Services, S/L/20 from 30 April 1996.

Note by the Chairman of NGBT for scheduling Basic Telecommunications Services, S/GBT/W/2/Rev.1 of 16 January 1997. http://www.wto.org/english/news_e/pres97_e/finalrep.htm.

Bronckers and Larouche 2008, p. 329.

The data are based on the author’s own research and analysis of the WTO Members’ schedules of commitments. See the Annex to this study with the table of countries’ schedules.

Brazil Trade Policy Review, WT/TPR/S/212/Rev.1, p. 117.

Note by the Chairman of NGBT for scheduling Basic Telecommunications Services, S/GBT/W/2/Rev.1 of 16 January 1997. http://www.wto.org/english/news_e/pres97_e/finalrep.htm.

Bronckers and Larouche 1997, p. 19.

Paragraph 1 Annex; Tuthill 1996, p. 91.

Tuthill 1996, p. 94.

Fredebeul-Krein and Freytag 1997, pp. 485–486; Tuthill 1997, p. 792.

See e.g. Tuthill 1996, p. 93; Gao 2008a, p. 703.

Compare in para 5(e) of the Annex: “no condition is imposed on access and use of public telecommunications transport networks and services other than necessary”; Tuthill 1996, p. 93.

WTO, Mexico—Measures Affecting Telecommunications Services—Report of the Panel, WTO Doc. WT/DS204/R of 02.04.2004, para 4.181.

Idem, para 7.311.

One of the arguments is that the exemplary list of para 5(f) of the Annex does not refer to pricing measures and does not contain any conditions which were similar to pricing measures. See WTO, Mexico—Measures Affecting Telecommunications Services—Report of the Panel, WTO Doc. WT/DS204/R of 02.04.2004, paras 7.324–7.327.

WTO, Mexico—Measures Affecting Telecommunications Services—Report of the Panel, WTO Doc. WT/DS204/R of 02.04.2004, para 7.328.

Idem, paras 7.337–7.338.

Idem, paras 7.341–7.342.

Idem, para 7.335. Questions of the cost-orientation of prices as well as of the inclusion of universal service cost in the prices will be dealt in more detail in Sect. 3.2.3.

WTO, Mexico—Measures Affecting Telecommunications Services—Report of the Panel, WTO Doc. WT/DS204/R of 02.04.2004, paras 4.368–4.369.

Idem, para 7.388.

Frühbrodt 2002, p. 336.

Idem, p. 336.

WTO, Mexico—Measures Affecting Telecommunications Services—Report of the Panel, WTO Doc. WT/DS204/R of 02.04.2004, paras 7.277–7.288.

Idem, paras 7.331–7.332.

Gao 2008a, p. 706.

Tuthill 1997, p. 786.

Cowhey and Aronson 2008, p. 406.

The competition principles of the Reference Paper are the first to be introduced in the WTO. For a detailed analysis see, for instance, Bronckers 2000; Tuthill 1997, pp. 792–794.

100

MTN.GNS/W/52 of 19 May 1989.

Idem, para 40.

Idem, para 40.

Idem, para 40.

MTN.GNS/23, para 9.

Idem, para 10.

Idem, para 65.

Idem, para 69.

Idem, para 71.

Idem, para 72.

Fredebeul-Krein and Freytag 1997, p. 482.

111

At this point it is very important to bear in mind that the incorporation of regulatory principles into an international framework for trade policy is per se a significant achievement. For decades, the telecommunications sector was regulated nationally with sovereignty as an overarching principle. See Drake and Noam 1997, p. 806.

112

Gao 2008b, p. 723.

113

Differentiation of telecommunications services into basic and value-added as well as the reasons for this, difficulties in the categorisation and current and future challenges have been dealt with in Sect. 2.1.2.4.

114

Note by the Secretariat “Services Sectoral classification list”, MTN.GNS/W/120 of 10.07.1991, p. 3. Eligibility of Voice over Internet Protocol service to become part of universal service is discussed in Commission Staff Working document, The treatment of Voice over Internet Protocol (VoIP) under the EU Regulatory Framework: An information and consultation document, 14 June 2004, Brussels; Forbes 2005; ERG, Report on “VoIP and Consumer Issues” prepared by End User Working Group, ERG(06) 39, 2006; Xavier 2008. The feasibility of including email in the universal service scope and its implications are discussed in Anderson et al. 1995.

115

For instance, Bronckers 2000; Bronckers and Larouche 2008; Guermazi 2004.

116

Gao 2008b, p. 742; Krajewski 2008.

117

Guermazi 2004.

118

See Article III GATS on transparency and Articles II and XVII GATS on non-discrimination.

119

Gao 2008b, p. 742; Guermazi 2004, p. 12.

120

WTO, Mexico—Measures Affecting Telecommunications Services—Report of the Panel, WTO Doc. WT/DS204/R of 02.04.2004, paras 7.277–7.288.

121

Idem, paras 7.180.

122

Idem, paras 7.329–7.330.

123

Idem, paras 7.337 et seq.

Gao 2008b, p. 743.

Blouin 2000, p. 140.

Idem, pp. 139–140.

Idem, p. 141.

Idem, pp. 140–141.

Frühbrodt 2002, p. 350.

130

Fredebeul-Krein and Freytag 1999, p. 631.

131

Fredebeul-Krein and Freytag 1997, p. 482.

132

Fredebeul-Krein and Freytag 1999, p. 631.

133

See, for example, MTN.GNS/23, paras 43–44, 48, 49, 57; MTN.GNS/TEL/3, paras 83, 89.

134

Fredebeul-Krein and Freytag 1997, p. 490.

135

Mathew 2003, p. 177.

136

The relevant provisions of Article 1 RP “Competitive safeguards” are the following:

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) engaging in anti-competitive cross-subsidization; […].

137

Gao 2008b, pp. 732–733, 743.

138

WTO, Mexico—Measures Affecting Telecommunications Services—Report of the Panel, WTO Doc. WT/DS204/R of 02.04.2004, paras 3.1, 4.183–4.189.

Idem, para 4.177.

Idem, para 4.179.

Idem, para 4.180.

Idem, para 7.170.

Idem, paras 7.171, 7.173–7.174; for more details see Annex A and Annex F of ITU-T Recommendation D-140 (09/95) on Charging and Accounting in International Telecommunications Services: Accounting Rate Principles for International Telephone Service. http://www.itu.int/osg/spu/intset/itu-t/index.html.

144

WTO, Mexico—Measures Affecting Telecommunications Services—Report of the Panel, WTO Doc. WT/DS204/R of 02.04.2004, paras 7.168–7.177.

145

Idem, paras 7.179–7.184.

146

See Chung 2006; Neven and Mavroidis 2003; Sidak and Singer 2004; Wellenius et al. 2005.

147

Sidak and Singer 2004, p. 7.

148

WTO, Mexico—Measures Affecting Telecommunications Services—Report of the Panel, WTO Doc. WT/DS204/R of 02.04.2004, para 2.3.

149

Sidak and Singer 2004, pp. 15–16.

150

Idem, p. 16.

151

Idem, p. 16.

152

Neven and Mavroidis 2003, p. 781.

153

Idem, p. 782.

154

Sidak and Singer 2004, pp. 16–17.

155

Further details on the ITU’s role in Batura 2014.

156

Ó Siochrú 1997; Tarjanne1999.

157

Kelsey 2008, p. 165.

158

WTO, Mexico—Measures Affecting Telecommunications Services—Report of the Panel, WTO Doc. WT/DS204/R of 02.04.2004, para 4.198.

159

Idem, para 6.42.

160

See, for example, WTO, Mexico—Measures Affecting Telecommunications Services—Report of the Panel, WTO Doc. WT/DS204/R of 02.04.2004, paras 7.134, 7.170–7.172.

161

Howse 2012, p. 465.

162

Molinuevo 2008, pp. 451, 455.

163

All the calculations and observations are made on the basis of the author’s study of WTO schedules of commitments. A summary of this study can be found in the Annex to this paper containing a table of countries’ schedules. The EU-28 is counted as one member.

164

Kelsey 2008, p. 163. For example, the respective obligation was undertaken by China in the Bilateral Agreement between the Government of the People’s Republic of China and the Government of the United States of America on China’s Accession to the WTO of 15 November 1995. See Zhang 2001, pp. 461–462.

165

Philippines Schedule of Specific Commitments, GATS/SC/70/Suppl.2 of 11.04.1997.

166

Malaysia Schedule of Specific Commitments, GATS/SC/52/Suppl.2 of 11.04.1997.

167

Tunisia Schedule of Specific Commitments, GATS/SC/87/Suppl.1 of 11.04.1997.

168

Zhao 2007, pp. 111–114.

169

See the list of seminars conducted by the ITU Telecommunications Development Sector: http://www.itu.int/ITU-D/treg/Events/Seminars/index.html and the web-based educational tool for regulators ICT Regulation Toolkit, produced by the ITU and the World Bank: http://www.ictregulationtoolkit.org/en/Index.html.

170

Zhao 2007, pp. 111–112.

171

Idem, pp. 114, 117.

172

By 2005 China had managed to successfully accomplish the Village Access project which aimed at achieving a 95 % telephone penetration rate in villages. This project concerned connecting telephone lines (fixed or mobile) to all 732,700 administrative villages. In May 2007 a new project was started with the intention of connecting all 5 million natural villages. At the moment, there is no objective of providing a telephone connection to every household. For more information see Shi 2008, pp. 117, 122–123. Statistics showing the digital divide in China can be found in Xia and Lu 2005, pp. 5–6; Zhang et al. 2007, p. 7.

173

Zhao 2007, pp. 117–118; Shi 2008, pp. 135–139.

174

Trade Policy Review of China, WT/TPR/S/230, 26 April 2010, p. 89.

175

This law, providing an overall legislative framework for telecommunications, has remained unchanged since its adoption. A draft Telecommunication Law of 2006 is pending in the State Council legislative Office. Trade Policy Review of China, WT/TPR/S/230, 26 April 2010, p. 89.

176

Shi 2008, pp. 125–126; Trade Policy Review of China, WT/TPR/S/230, 26 April 2010, p. 91.

177

Zhao 2007, pp. 115–116; Shi 2008, p. 126.

178

Zhao 2007, p. 116.

179

Xia and Lu 2008, pp. 687, 690.

180

These ten are Bangladesh, Cambodia, Democratic Republic of Congo, Djibouti, Gambia, Lesotho, Nepal, Papua New Guinea, Senegal and Uganda. Author’s calculations on the basis of the data from the WTO schedules of commitments data bank. For more information see the Annex to this study with the table of countries’ schedules. For the UN list of least developed countries see the official webpage of the UN Department for Economic and Social Affairs: http://www.un.org/en/development/desa/policy/cdp/ldc2/ldc_countries.shtml. For the list of least developed countries—WTO Members see the official WTO webpage: http://www.wto.org/english/thewto_e/whatis_e/tif_e/org7_e.htm.

181

Shirley et al. 2002, p. 3.

182

Teledensity in Uganda rose from 0.28 % in 1998 up to 22 % in 2008. Wakabi 2009, p. 19; Shirley et al. 2002, pp. 65–66.

183

Intelecon Report (2005) Universal Access and Universal Service Funds: insights and experiences of international best practices, pp. 2, 5. http://www.inteleconresearch.com/pdf/050713%20-%20universal%20access%20and%20universal%20service%20funds%20v3.pdf.

184

Tusubira 2006, p. 59.

185

Idem, p. 61.

186

Idem, p. 62; Intelecon Report (2005) Universal Access and Universal Service Funds: insights and experiences of international best practices, p. 5. http://www.inteleconresearch.com/pdf/050713%20-%20universal%20access%20and%20universal%20service%20funds%20v3.pdf.

187

Published in Statutory Instruments 2005 No. 26, Supplement No. 10 to The Uganda Gazette No. 14 Vol. XCVIII of 11 March 2005. http://www.ucc.co.ug/files/downloads/universalServiceRegulations.pdf.

188

Haman and Zongo 2005, p. 21.

189

Tusubira 2006, pp. 63–64.

190

See Wakabi 2009, particularly on pp. 19–27.

191

Wakabi 2009, pp. 17–18.

192

See the official web-page of FITEL, available at http://www.fitel.gob.pe/.

193

See, for example, Intelecon Report (2005) Universal Access and Universal Service Funds: insights and experiences of international best practices. http://www.inteleconresearch.com/pdf/050713%20-%20universal%20access%20and%20universal%20service%20funds%20v3.pdf; Pascó-Font and Torero 2001; Wallsten 2008.

194

Peru: Rethinking Private Sector Participation in Infrastructure, World Bank Report No. 32674-PE, 2006, p. 9.

195

Pascó-Font and Torero 2001, p. 15.

196

Intven and Tétrault 2000, p. 33.

197

Aprueban Texto Único Ordenado del Reglamento General de la Ley de Telecomunicaciones, Decreto Supremo No 020-2007-MTC. The text of the respective law can be retrieved from www.bvindecopi.gob.pe/regtec/ds20-2007-mtc.pdf.

198

Pascó-Font and Torero 2001, p. 17.

199

Information according to the ITU Universal Service country profile, Peru, 2010. http://www.itu.int/ITU-D/icteye/Reporting/ShowReportFrame.aspx?ReportName=/TREG/UniversalServiceProfile&ReportFormat=HTML4.0&RP_intCountryID=193&RP_intLanguageID=1.

200

Intven and Tétrault 2000, p. 33.

201

The OSIPTEL was established by Legislative Decree (Decreto Legislativo) No. 702 of 11 July 1991, Chap. 15. The document can be retrieved from: http://www.peru.gob.pe/docs/PLANES/7/PLAN_7_Legislaci%C3%B3n%20en%20Telecomunicaciones_2011.pdf. For more information on the principles of the work, objectives and functions of the OSIPTEL see its official webpage: http://www.osiptel.gob.pe.

202

For a description of the village selection process and criteria see Beuermann 2011, pp. 5–6.

203

Pascó-Font and Torero 2001, p. 19.

204

Intven and Tétrault 2000, p. 34.

205

For a more detailed description of beauty contests see Sect. 4.2.5.1.

206

Pascó-Font and Torero 2001, p. 19.

207

Idem, pp. 20–21.

208

Idem, pp. 20–21.

209

Stern and Townsend 2006, p. 11.

210

Pascó-Font and Torero 2001, p. 23.

211

For a detailed account see Peru: Rethinking Private Sector Participation in Infrastructure, World Bank Report No. 32674-PE, 2006, p. 10.

212

WTO, Trade Policy Review of Peru, WT/TPR/S/189/Rev.1 of 12 September 2007, p. 81.

213

Beuermann 2011.

214

On the interplay between liberalisation and regulation, also in a comparative perspective to the EU, see Batura and Krajewski 2013, esp. at pp. 174–175, 199–202.

215

The Panel’s (absence of) argumentation on Mexico’s application of the LRAIC methodology: WTO, Mexico—Measures Affecting Telecommunications Services—Report of the Panel, WTO Doc. WT/DS204/R of 02.04.2004, paras 7.175–7.177.

216

WTO, Mexico—Measures Affecting Telecommunications Services—Report of the Panel, WTO Doc. WT/DS204/R of 02.04.2004, paras 7.160–7.185; Sidak and Singer 2004, pp. 17–19.

217

Kelsey 2008, p. 165.

218

Paragraph 3.1. of the Annex to Resolution 71 (Rev. Guadalajara 2010) containing the Strategic Plan for the Union for 2012–2015.

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Titel: Liberalisation and Regulation of International Trade in Telecommunications Services Through the WTO
verfasst von: Olga Batura
Verlag: T.M.C. Asser Press
Buch: Universal Service in WTO and EU law
Print ISBN: 978-94-6265-080-0

Electronic ISBN: 978-94-6265-081-7

Copyright-Jahr: 2016
DOI: https://doi.org/10.1007/978-94-6265-081-7_3

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