Discussion to Update Basic Telecom Agreement Emerging in WTO

The U.S. position in 1994 centered on opening the voice market and reducing voice traffic costs, said Abelson. He spent 23 years as a U.S. trade negotiator and seven years licensing international services and satellites as chief of the FCC International Bureau. But “we were sending out billions of U.S. dollars in payments and we weren’t getting that much back,” he said. In the Uruguay round that ended in 1996, nations made trade-opening commitments on value-added services and computer related services. The U.S. also made commitments on audio-visual services. Today’s connectivity and massive data and information flows weren’t foreseen in 1996, he said.

Mobile phones’ spread is the most amazing development since the telecom agreement, said Daniel Annerose, chief executive of Manobi, a mobile data services company based in Senegal. Mobile operators are finding ways to sell services and network access to customers at all income levels, he said. Regulation to liberalize telecom markets made that possible, Annerose said.

The regulatory landscape has changed dramatically in the past decade, said Jose Rizek, executive director of Indotel, the Dominican Republic’s telecom regulator. The torrent since then of foreign investment has transformed most developing countries’ economies, he said.

The basic telecom commitments “are so yesterday,” Abelson said. “They are so not with the current technology.” The commitments, made a decade ago in the WTO basic telecom agreement, “were based on concepts developed in the 1980s, agreed in the 1990s, which we're implementing today,” Abelson said. The basis of the telecom agreement is “completely out of date,” Abelson said.

New trade and telecom ideas are needed, Abelson said. Problems include interconnection, transparency, competition issues and connectivity, he said. The question is how to deal with antitrust, competition and dominance, he said. Connectivity is the main issue, Abelson said. “Because the network of the future deals with content, there are intellectual property issues,” he said. There are matters of free speech, hate speech, protection of minors, obscenity and pornography. Public safety issues must be addressed, he said, and “there are national security issues.” The issues may seem outside trade people’s competence, he said: “Not so.”

“I'm scared to death of the convergence aspect,” a trade official said. Telecom industry reforms put the correct political equation in place, but “could get messed up with all that emotional, politically sensitive content side,” said the official, saying the content side has “been a non-starter.” Governments bent on cultural exception and protectionism are rallying to protect local content, said the official: “Telecom has succeeded because it hasn’t had that.”

National security can be used as a bar to trade, but not in WTO, even if limited to the Internet, a telecom source said: “I do not think they have the right skills at the WTO for security… There is scope for WTO work, particularly on the issue of secondary trading of spectrum.”

Trade officials’ skill sets are a big concern. In 1998 telecom agreement, negotiators backed off spectrum management due to its complexity. When talks began on the basic telecom agreement in the early 1990s, “I had no idea what an e-mail was,” said former chief EU negotiator Karl Falkenberg, now the EC deputy director-general for trade. Telecom regulators are more in touch with the ITU than with the WTO, a source said. Some nations are more relaxed on ITU participation than the Department of State, which coordinates U.S. positions and involvement, a source said. The U.S. Trade Representative, under the Executive Office of the President, coordinates international trade negotiations at the WTO.

Regulatory issues are within the WTO’s authority, Abelson said. Internet issues, next-generation networks, “competition issues, telecom issues, speech issues, public safety, national security, all can be dealt with here,” he said. “If we don’t, we run the risk that regulators, government officials around the world, will put up their own rules and will block connectivity. It is our responsibility to… come up with acceptable terms for the trade in these future networks and systems. We have to look at what is happening next and come up with rules based on the future.”

Initially, liberalization mainly involved extending infrastructure to improve coverage, Annerose said: “We want to talk about access to service, which means content as well as infrastructure… This is where the challenge is and where we need some regulation… Building on existing agreements for further liberalization may benefit African consumers and businesses.”

How do “we transform what the world has discussed in the World Summit on the Information Society into reality?” Rizek asked. The goal of bridging the digital divide must shape agreements to build services, knowledge and intelligence, he said. “We need a second round of agreements to start preparing the world for this next decade,” Rizek said. Technology is changing how regulators and governments approach telecom, he said: “We need to build on what we have achieved so far.”

Telecom reform will be a bigger issue due to a clash emerging between telecom and broadcast policies, a source said. The content-neutral telecom industry is colliding with broadcast, the source said. A larger number of converged regulators have a broadcast programming for content historically highly regulated, the source said, and the national regulatory systems’ differences complicate liberalizing audio-visual services in the WTO.

The future will be based on the WTO agreements, Rizek said. The challenge the next ten years is to develop the market for the less wealthy, Annerose said.