Paper in Harvard International Law Journal by Jeffrey Rohlfs of Strategic Policy Research and American Enterprise Institute Fellow Gregory Sidak questions propriety of U.S. Trade Representative (USTR) promoting U.S. telecom policy in Japan. U.S. govt. took position in 1997 that World Trade Organization (WTO) telecom agreement required its signatory nations to follow FCC policy on telecom regulation, paper said. USTR since then “has sought to influence, under the implicit threat of trade sanctions, Japan’s domestic regulatory policy on the pricing of mandatory competitor access to the local network belonging to the operating companies of... NTT,” paper said: “We question the propriety of using the USTR to influence the domestic regulatory policy of another country on a topic as complex as the efficient pricing of mandatory access to unbundled network elements.” There are “substantive difficulties [in] engrafting the FCC’s interconnection policy onto the telecommunications marketplace of another nation,” paper said. Adopting U.S. telecom policy requires detailed economic expertise and significant resources and has led to many controversies, paper said: “The USTR cannot credibly make the interconnection pricing policies of another nation a legitimate concern of U.S. trade policy.” -- http://papers.ssrn.com/author=206474.
House Commerce Committee leaders are worried that international trade agreements designed to open foreign markets to U.S. telecom companies could constrain FCC from making domestic regulatory changes. In Commerce Trade Subcommittee hearing Wed. on telecom trade promotion, House Commerce Committee Chmn. Tauzin (R-La.) said in written statement that trade agreements shouldn’t lock in current FCC regulatory regime. “Market access commitments that apply to telecommunications services should be broad enough to enable the FCC to change the current rules,” he said. “The worst outcome I could imagine would involve the FCC finally getting around to changing the rules, but for the U.S. Trade Representative (USTR) to have already bound the U.S. to a regulatory framework that discourages facilities-based investment.”
FCC should consider revoking all of WorldCom’s wireless licenses and Sec. 214 authorizations for lack of “good character and candor,” American Enterprise Institute fellow Gregory Sidak said in speech Oct. 1 at Royal Society of Arts in London that was made available in U.S. Mon. WorldCom’s accounting fraud “poses a serious question for telecommunications regulators,” said Sidak, former attorney at FCC. “By statute, wireless licensees must have ‘character’ as a basic qualification” and company doesn’t have to engage in criminal behavior to be deemed lacking in character, he said. In addition, “WorldCom’s accounting fraud also destroys the company’s credibility in proceedings before regulatory commissions and courts,” Sidak said. Therefore, FCC and other govt. bodies -- state regulatory commissions, federal courts, Justice Dept. Antitrust Div. and U.S. Trade Representative -- also should issue notices “to show cause why pleadings or comments filed by WorldCom should not be stricken,” Sidak said. If FCC stripped WorldCom of its licenses and certifications, company probably would be forced into Chapter 7 liquidation but regulators should resist temptation to give company another chance, he said: “In WorldCom’s case, a second chance holds little promise. Its brand name is probably worthless because of the taint of fraud and its most capable managers probably already jumped ship... Keeping WorldCom on life support would worsen the tragedy.” -- http://papers.ssrn.com/sol3/delivery.cfm/SSRN_ID335180_code02 1001500.pdf?abstractid=335180.
Office of U.S. Trade Representative (USTR) called for comments on impact of tariff reductions and nontariff barriers to trade in goods and services, including in telecom sector, between World Trade Organization (WTO) members as part of Doha, Qatar, Development Agenda negotiations. USTR released U.S. proposals in July for negotiations, including recommendations that WTO members remove discriminatory trade restrictions in telecom and IT sectors (CD July 3 p6). New multilateral trade negotiations were begun in Nov. at 4th Ministerial Conference in Doha, where WTO members signed on to program to liberalize trade across several areas, including services. Next deadline for submitting formal negotiating offers to respond to recent round of proposals is March 31. Besides comment period opened by USTR, interagency Trade Policy Staff Committee (TPSC) will hold public hearing on market access issues starting Nov. 6 and extending into other days if necessary. Communications services in Doha negotiations include telecom and audiovisual. TPSC is seeking comment and testimony on economic benefits and costs faced by U.S. on proposed reductions in tariffs or nontariff trade challenges between U.S. and other WTO members and on economic impact of removing existing nontariff barriers to trade.
Telecom industry is generally pleased with existing framework set out by 1998 Basic Telecom Agreement negotiated after World Trade Organization (WTO) Uruguay Round, said Scott Shefferman, WorldCom assoc. counsel-international regulatory affairs. However, only some 80 of 144 WTO members have made commitments to open their markets to voice/data and long distance services and to ensure access to underlying telecom facilities other providers needed, he said at Services 2002 conference on WTO negotiations in services. Conference was sponsored by Dept. of Commerce, U.S. Trade Representative (USTR) and Coalition of Service Industries. Coming out of upcoming talks in Doha, Qatar, Shefferman said, his industry would like to see full market access and national treatment commitments from all WTO members. Audiovisual services industry’s goal for Doha Round is to secure open market commitments, not necessarily liberalization of those markets, said Bonnie Richardson, MPAA vp-trade & federal affairs. Virtually every country trades in audiovisual goods and services, she said, and many have imposed measures to boost their domestic production. Some of those rules don’t have “trade-distorting” effects, Richardson said. Even if they do, she said, audiovisual sector is willing to tolerate “psychological crutches” in order to convince other countries that trade commitments won’t hurt their local cultures. It’s “crucially important” that countries commit to open markets for e-commerce at next round of WTO talks in Doha, AOL Time Warner Vp-International Public Policy Laura Lane said. Despite ups and downs of stock market and high-tech businesses, “e-commerce is alive and well” and nations that have embraced open markets are experiencing tremendous growth, Lane said.
USTA Pres. Walter McCormick urged U.S. Trade Representative (USTR) not to export U.S. telecom regulations to other countries. McCormick made statement in USTR hearing on negotiations on Free Trade Area of the Americas (FTAA). “The telecommunications sector of our economy is in a tailspin and the policies that have put telecommunications in critical condition are the policies that USTR wants to export to America’s trading partners,” McCormick said. “The policies that USTR is promoting are deflationary, they stifle investment and have led to massive job loss. USTR must avoid advocating regulatory obligations imposed by trade agreements that would undermine foreign investment incentives.” McCormick recommended that USTR promote broad principles, including transparency, nondiscrimination, establishment of independent regulatory agencies, fair allocation of scare resources. He said FTAA shouldn’t force U.S. trading partners to accept “highly prescriptive regulations.” “We urge the Administration to avoid exporting U.S. telecommunications policies that are ill-suited for the advent of digital and broadband communications, or that would inadvertently discourage greatly needed investment in telecommunications markets worldwide.”
Roger Keating, AOL, moves to affiliated Time Warner Cable as pres. of national div… Matthew Desch named CEO of Telcordia Technologies, replacing Richard Smith who moves to vice chmn… Rick Blangiardi, ex-Telemundo Group, named vp- gen. mgr., Emmis Communications Corp… Brian Gunderson, ex- chief of staff to House Majority Leader Dick Armey (R-Tex.), named chief of staff, USTR, replacing M.B. Oglesby… Kathleen Lawlor, ex-Quantel and Chyron, appointed regional sales mgr.-Midwest, ParkerVision… James Landis, ex-SAP, named senior mgr.-media & entertainment-N. America, Cap Gemini Ernst & Young… Promotions at Phoenix Gold America: Keith Lehman to senior vp, Dan Petersen to vp-sales operations… Shelly Sumpter advanced to vp-talent, Nickelodeon and Nick Records.
CompTel lauded negotiating requests submitted by office of U.S. Trade Representative (USTR) on World Trade Organization (WTO) services negotiations (CD July 3 p6). USTR proposals cover telecom and IT sectors and call for WTO members to remove “discriminatory trade restrictions” in those and other areas. “This round of trade talks is especially important to the U.S. economy in light of the difficult market conditions currently faced by telecommunications providers in the U.S.,” CompTel Exec. Vp- Gen. Counsel Carol Ann Bischoff said: “CompTel hopes that international recognition of problems exacerbated by closed telecommunications markets will spur negotiators and regulators in the WTO member countries to expand or live up to their market-opening obligations and create an environment were competition can succeed.” Grant Seiffert, vp-external affairs & global policy for TIA, also said his membership supported competition in services in WTO, particularly in countries in which it bolsters competition against govt.- owned services. “A more open and transparent process for our companies to sell into these new markets is critical,” he said. Industry source said USTR proposal apparently backed full telecom liberalization in WTO member countries, including lifting restrictions on foreign ownership. Among countries in which those restrictions are cited by USTR is Canada, which limits foreign ownership to 20% of voting capitol of telecom and broadcast operations and 33.3% of capital of holding companies.
U.S. Trade Representative (USTR) Robert Zoellick released American proposals this week for World Trade Organization (WTO) services negotiations, including recommendations for WTO members to remove “discriminatory trade restrictions” in telecom and IT sectors. Proposals for liberalizing trade in services lacked details such as specific requests that USTR is making of other WTO members. USTR spokesman said deadline for hard bargaining in WTO services negotiations wasn’t until next March and USTR would outline more details as that date drew nearer. “We are still very early in the process,” he said, with U.S. still receiving requests from other WTO members. In part, U.S. is seeking: (1) In telecom services, full privatization of incumbent telcos in WTO member countries that haven’t yet taken that step and commitments on cable network services. (2) In area of IT, increased access for data processing services, as well as software and hardware-related services.
U.S. Trade Representative’s (USTR) office urged FCC to approve proposed U.S.-Mexico settlement rates only for 2002 for now. USTR said Commission should consider deferring approval of 2003 rates “until it becomes clear whether and when the Mexican government intends to reform its long distance rules.” USTR submitted comments June 17 on requests for waivers by WorldCom and AT&T on Commission’s international settlements policy to change accounting rate for services with Telmex. Telmex, WorldCom and AT&T reached agreements to change settlement rates for 2001 through 2003. Agreements introduce 3 new rates for 2002 and 2003 based on final destination of call, with weighted average of 8-9 cents per min. “These rates appear a positive step,” USTR said. “However, the new average rate still appears to be at least double the actual cost of terminating these calls in Mexico and differs only marginally from the single 10 cent rate proposed for 2003 in the WorldCom-Telmex agreement that was filed with the Commission last year.” In March, WorldCom petitioned FCC for waiver to lower accounting rate for international traffic it exchanged with Telmex. That would lower average 19-cent rate now in effect with Telmex. It would provide rate of 15 cents in each direction for 2001 and 13.5 cents in each direction for 2002. For 2003, different rates would apply based on whether traffic was northbound or southbound and, in some cases, in which cities it terminated. WorldCom argued that deal would be in public interest because it would move settlement rates “much closer” to cost-based levels on U.S.-Mexico route and would shift it to levels “far below” 19 cents benchmark rate set by FCC. AT&T petitioned FCC in April to implement similar rates. “While AT&T would like to obtain greater reductions, Mexico’s restrictions on competition continue to prevent the negotiation of competitive, cost-based rates on the U.S.-Mexico route,” AT&T said. USTR told FCC it was “particularly disappointing” that pacts don’t consider even deeper reductions for 2003. “Thus, while the rate reductions proposed in the petitions for waiver are a step forward, the proposed rates are still far above cost -- reflecting the power Mexico’s international long distance rules give to Telmex to negotiate these rates,” USTR said. It said Mexico needed to reform those rules to let competing suppliers negotiate rates and to promote “the public interest of achieving cost-based settlement rates.” Telmex in March filing asked Mexican regulator Cofetel to repeal critical provisions of what U.S. had termed anticompetitive international long distance rules. USTR said: “With this filing, the principal Mexican and U.S. telecom providers are now actively seeking to open the cross- border basic telecommunications market to competition.” But it said Mexican govt. hadn’t yet moved to reform rules and create competitive international telecom market. By approving only proposed rates for 2002, FCC could wait until it was easier to evaluate whether additional reductions for 2003 and beyond were likely, USTR said.