WASHINGTON – US
Trade Representative Rob Portman today announced the results of its 2006 annual
review of the operation and effectiveness of telecommunications trade
agreements, the "Section 1377 Review." The report identifies barriers facing
U.S. telecommunications services and equipment providers, evaluates progress
towards resolving ongoing problems, and lays out the specific
telecommunications-related issues on which USTR will focus its efforts this
"Barriers in foreign telecommunications markets negatively impact U.S.
telecommunications manufacturers and operators, as well as US consumers and any
US company that does business abroad," said Ambassador Portman. "They also hurt
our trading partners’ ability to reap the benefits of competition, integrate
into efficient global networks, and promote economic growth and development. The
1377 review identifies practices that interfere with these goals that we will
focus on over the coming year to modify or eliminate."
"One issue that is particularly troubling to us is the emergence of new
regulations around the world that are being billed as universal-service related,
that may, in fact, limit competition or create barriers for foreign telecom
operators," added Portman. "USTR will continue to monitor these programs to
ensure that they conform, where applicable, to WTO commitments on universal
The main problems identified in this year’s review include existing practices
or prospective concerns relating to: 1) excessively high mobile termination
rates in Germany, Japan, Mexico and Switzerland; 2) restrictions on access to
and use of leased lines in Germany, India, and Singapore; and 3) concerns
associated with universal service related programs in Jamaica and Japan.
Countries requiring particular attention this year include : China which has
yet to address the long-standing problem of excessive capitalization
requirements ($240 million) for a license in the basic telecom sector (typically
less than $1 million in other markets) despite US engagement with China in the
JCCT); and Jamaica, which has instituted a universal-service related program
that lacks transparency and places the burden of funding the program entirely on
foreign operators; and Mexico, where an unresolved interconnection dispute has
the potential to result in the imposition of high mobile termination rates on
U.S. operators to the detriment of U.S. consumers, businesses, and operators.
In addition, USTR will pay particular attention to developments in two
additional markets. In Egypt, USTR will closely monitor whether all U.S.
operators are offered the opportunity to interconnect with Egypt’s dominant
carrier and whether Egypt is prepared to take additional steps if further
progress is not evident. Further, USTR will seek to work with India to find a
reasonable solution to international operators' concerns regarding India’s new
international and long-distance licensing conditions.
In addition to the problems identified in this year’s 1377 Review, USTR also
marked significant progress on issues identified in past years in several key
markets, including Peru’s resolution to lower rates for access to its mobile
market and Japan’s decision to open its mobile market to new entrants.
USTR will continue its efforts to open markets and expand trade opportunities
in telecommunications through a range of activities including: engaging
bilaterally and multilaterally with trading partners to ensure they fully
implement their existing commitments; negotiating and adopting strong
disciplines to eliminate or prevent the emergence of trade distorting barriers;
and where warranted, initiating dispute settlement action.
WTO rules provide pro-competitive guidelines for regulators to follow in
ensuring reasonable access to networks and impartiality of regulatory processes.
To bolster WTO disciplines in these areas, USTR has negotiated strong provisions
in U.S. Free Trade Agreements (FTAs). All recent FTAs concluded by the United
States, including with Singapore, Chile, Australia, Bahrain, Morocco, Oman, and
several Central American and Andean countries, contain specific prohibitions
against the use of exclusionary standards in the telecommunications sector,
ensure reasonable and non-discriminatory access to public networks and
interconnection among public network operators, and provide strong provisions on
independent regulators, including powers to enforce rules in a transparent and
meaningful way. To the extent that these agreements are in force, USTR will
continue to use them to assist in opening markets to give U.S. companies the
ability to supply new and innovative services abroad.
The full results of the 2006 Section 1377 Review, click here.