overview of international frameworks impacting caricom

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Overview of International Overview of International Frameworks impacting CARICOM Frameworks impacting CARICOM

Telecoms PolicyTelecoms Policy

HIPCAR Project Trinidad and Tobago

October 2009

The views expressed in this presentation are those of the author and do not necessarily reflect the opinions of the ITU or its Membership.

2

ObjectiveObjective• This

presentation

considers

and

compares

the

provisions

in

key

extra‐regional

trade

agreements which

impact

Licensing

of

Telecoms

Networks

and

Services, Interconnection and Universality:‐– To review the conditions in these binding international

trade agreements that impact Telecoms Policy formulation

in the Region

– Provide

additional

context

to

the

HIPCAR

WG’s

thrust

to

harmonise

telecoms

regulatory

frameworks

within

the

rubric of regional economic development.

3

OverviewOverview• Countries

(and

Regions)

are

making

global

and

regional

commitments to open their telecommunications markets to:‐• harmonize local legislation with that of other countries in similar

geographic or economic situations;

• Encourage foreign investment in the sector;

• Leverage investment in downstream sectors relying on ICT (e.g.

banking, knowledge‐based services sector)

• Such commitments serve to accelerate regulatory reform, with

specific focus on:• facilitating global or regional best regulatory practices, and

• providing telecommunications investors with a level of certainty and

predictability

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Overview Overview ––

Regional imperativeRegional imperative

Intra‐regionally, through • The Revised Treaty of Chaguaramas

there

has

been

the

renewed

commitment

to

establish

a

single

economic space within CARICOM, the CSME with the

“harmonisation of standards and technical regulations, and transparency in

the development and promulgation”

(Article 67)

This

commitment

is

also

framed

in

the

context

of

the

trade

agreements of the WTO, and commitments made therein.

5

Overview Overview ––

extra regional contextextra regional context

• The

consequences

of

such

(binding)

commitments

vary

by

country

and

generally treat

with

the

country’s

political

and

economic

situation,

but

generally

impacts

the

level

of

development and competition in its sector markets

• CARICOM

and

its

member

states

must

remember

the

reference

frameworks

established

by

existing

multi‐lateral

international

treaties

and

agreements

which

will

guide

(or

constrain) telecoms policy development .

• These agreements include two major considerations today– WTO

Basic Telecoms Agreement (BTA) and Reference Paper, and

– the Sections related to Telecoms in the recent CARIFORUM/ EU EPA

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WTO and GATS WTO and GATS ––

what it is and why it is what it is and why it is importantimportant

• Created in 1994, the World Trade Organization (WTO) is a

global international trade organization that develops

international commerce rules and mediates trade disputes

among its members.

• Concluded in 1997, the Fourth Protocol to the General

Agreement on Trade in Services (GATS) facilitates

liberalization of trade in services. Two types of obligations

exist under GATS:– general obligations that apply to all members and all service sectors

covered under GATS regardless of whether or not specific

commitments have been made; and

– sector‐specific commitments regarding market access and national

treatment for sectors and activities that members agree to open to

international trade

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The WTO implementation frameworkThe WTO implementation framework

• WTO

members

make

commitments

on

market

access

and

national treatment based on one of the following four modes

of supply: • cross border supply• consumption abroad• commercial presence• presence of natural persons

• Requires

signatory

states

to

adjust

regulatory

frameworks

where

necessary

to

effect

market

entry

and

trade

in

accordance with agreed commitments

• Breach

of

said

requirements

has

been

known

to

lead

to

penalties applied to offending nations by the WTO

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WTO and GATS WTO and GATS ––

what it is and why it what it is and why it is importantis important

• WTO membership does not entail automatic submission to the BTA as

countries must expressly make commitments through their respective

schedule of commitments. These schedules may contain modifications or

derogations from the overall text.

New Round of Services Negotiations

• WTO members commit to progressively liberalize trade in services

through periodical rounds of negotiations. WTO members are expected

to address the following issues going forward:– reduction of national treatment exemptions and increase of market access on basic

telecommunications and value‐added services, and negotiation on the coverage of new

convergence services and technologies (i.e., VoIP and broadband);

– increasing the number of countries that adhere to the Reference Paper;

– reclassification of basic telecommunications and value‐added services; and

– recognizing the maturation of e‐commerce related to market access for

telecommunications‐related services that also form the basis for e‐businesses, as well as

those that use networks for this purpose

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The EPA The EPA ––


• Economic

Partnership

Agreements

are

a

form

of

trade

partnership,

required

by

the

Cotonou

Agreement,

which

covers

economic

relations

between

the

EU

and

African,

Caribbean and Pacific (ACP) States

• Goods

and

services

coming

from

ACP

countries

previously

enjoyed

preferential

access

to

the

EU

markets

under

the

Lomé

Agreement.

However,

with

increasing

opposition

from

WTO states, the ACP countries and the EU agreed to develop

new

WTO‐compatible

trading

arrangements,

progressively

removing

barriers

to

trade

between

them

and

enhancing

cooperation in all areas relevant to trade.

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The EPA The EPA ––


• For the CARIFORUM nations, signing the EPA ensures the

following, among others:

• Services and Investment– In general the liberalization of various service sectors should lead to increased

investment and greater efficiencies.

– The regional Services Sector stands to benefit from development assistance

from the EU to address a range of needs, including development of regulatory

regimes to build the capacity of regional services firms, market

intelligence,

etc., to facilitate greater interaction with EU firms.

– Regional investors can benefit from liberalization in almost all

sectors in the

EU with only some exclusions in a few sectors and limitations in

mainly the

new EU member states.

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The EPA implementation frameworkThe EPA implementation framework• Like WTO’s GATS,

– CARIFORUM members have made commitments on market

access and national treatment based on one of the following

four modes of supply: • cross border supply• consumption abroad• commercial presence• presence of natural persons

– countries must expressly make commitments through their

respective schedule of commitments. These schedules may

contain modifications or derogations from the overall text.

– CARIFORUM states may be required to adjust regulatory

framework to conform to obligations agreed to in the EPA

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Overview of Telecoms Related Overview of Telecoms Related aspects of Frameworksaspects of Frameworks

WTO Reference Framework CARIFORUM/EU EPA

Scope & Definitions Art. 94 Definitions & Scope

Competitive Safeguards Art. 95 Regulatory Authority

Interconnection Art. 96 Authorisation to Provide

Telecommunications Services

Universal Service Art. 97 Competitive Safeguards on

major suppliers

Public Availability of Licensing Criteria Art. 98 Interconnection

Independent Regulators Art. 99 Scarce Resources

Allocation and use of Scarce Resources Art. 100 Universal Service

Art. 101 Confidentiality of Information

Art. 102 Disputes between suppliers

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Comparison of Clauses Comparison of Clauses ––

Scope and definitionsScope and definitions

WTO Reference Framework CARIFORUM/EU EPA

basic telecommunications services

are public and

private telecommunications services that involve end‐

to‐end transmission of customer supplier information.

These include voice telephone services, packet‐

switched data transmission services, circuit‐switched

data transmission services, telex services, telegraph

services, facsimile services, and private leased circuit

services.

"telecommunications services" means all services

consisting of the transmission and reception of electro‐

magnetic signals and do not cover the economic

activity consisting of the provision of content which

requires telecommunications for its transport

Essential facilities

mean facilities of a public

telecommunications transport network or service that:

(a) are exclusively or predominantly provided by a

single or limited number of suppliers; and

(b) cannot feasibly be economically or technically

substituted in order to provide a service.

"essential telecommunications facilities" mean facilities

of a public telecommunications transport network and

service that:(i)

are exclusively or predominantly provided

by a single or limited number of suppliers; and(ii)

cannot feasibly be economically or

technically substituted in order to provide a service;

A major supplier

is a supplier which has the ability to

materially affect the terms of participation (having

regard to price and supply) in the relevant market for

basic telecommunications service as a result of:

(a) control over essential facilities; or (b) user of its position in the market.

a "major supplier" in the telecommunications sector is

a supplier which has the ability to materially affect the

terms of participation (having regard to price and

supply) in the relevant market for telecommunications

services as a result of control over essential facilities or

the use of its position in the market;

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Scope and definitionsScope and definitionsWTO Reference Framework CARIFORUM/EU EPA

Interconnection…

applies to the linking with suppliers

providing public telecommunications transport

networks or services in order to allow the users of one

supplier to communicated with users of another

supplier and to access services provided by another

supplier, where specific commitments are undertaken.

"interconnection" means linking with suppliers

providing public telecommunications transport

networks or services in order to allow the users of one

supplier to communicate with users of another supplier

and to access services provided by another supplier

"universal service" means the set of services of

specified quality that must be made available to all

users in the territory of the EC Party and of the

Signatory CARIFORUM States regardless of their

geographical location and at an affordable price; its

scope and implementation are decided by the EC Party

and by the Signatory CARIFORUM States.

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Implications of these definitionsImplications of these definitions• Definitions are very similar between these reference frameworks

• The definition of these key terms are of significance to the

definition of market structure,

and clarify which segments are

regulated and unregulated. These elements are critical to a

harmonised approach of sector regulation across the region.

• As examples:– These definitions do not distinguish between voice and data services in the

definition of “telecommunications”, and thus in rights, obligations, regulatory

oversight of such parties may not be expected to vary across these segments;

– The harmonised approach to “essential facilities”

and “major suppliers”

envisages a focus on elimination of abuse of competitive power of

participants – not necessarily the incumbent;

"public telecommunications network" means a public switched telecommunications network owned and operated by a carrier for the provision of telecommunications services to the public

Telecommunications Act , Chap 282B, Barbados

To note

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Implications of these definitionsImplications of these definitions• Other examples:

– The definition of “value added service”

is as follows:… services for which suppliers enhance the form or content of the customer’s information,

thereby

“adding

value”

to

the

customer’s

information,

and

include

electronic

mail,

voice

mail, on‐line

information

and

data

base

retrieval,

Electronic

Data

Interchange

(EDI),

enhanced/value‐added

facsimile

services,

including

store

and

forward,

and

store

and

retrieve,

code

and

protocol

conversion, on‐line

information

and/or

data

processing

(including transaction processing), and other services.

• In harmonising our approach to market regulation, these and other

key definitions should be revisited.

• It is a larger trade discussion on whether, as a region, similarity on

the segments of the sector which are open to market entry is also

pursued.

" value added service” means a service, other than a public telecommunications service that, using a telecommunications service, provides or modifies content and applications not associated with the telecommunications service

Telecommunications Act , Chap 47:31, Trinidad & Tobago

To note

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InterconnectionInterconnectionWTO Reference Framework CARIFORUM/EU EPA

Interconnection with a major supplier will be ensured at any

technically feasible point in the network. Such interconnection

is

provided(a) Under

non‐discriminatory

terms,

conditions

(including

technical

standards

and

specifications)

and

rated

and

of

a

quality

no

less

favourable

than

that

provided

for

its

own

like

services

or

for

like

services

or

non‐affiliated

service

suppliers

or

for

its

subsidiaries or other affiliates;

(b) In

a

timely

fashion

on

terms,

conditions

(including

technical

standards

and

specifications)

and

cost‐oriented

rates

that

are

transparent,

reasonable,

having

regard

to

economic

feasibility,

and

sufficiently

unbundled

so

that

the

supplier

need

not

pay

for

network

components

or

facilities

that

it

does

not

require for the service to be provided; and

(c) Upon

request,

at

points

in

addition

to

the

network

termination

points

offered

to

the

majority

of

users,

subject

to

changes

that

reflect

the

cost

of

construction

of

necessary

additional facilities.

3. Interconnection with a major supplier shall be ensured at any

technically feasible point in the network. Such interconnection

shall be provided:(a)

under

non‐discriminatory

terms,

conditions

(including

technical

standards

and

specifications)

and

rates

and

of

a

quality

no

less

favourable

than

that

provided

for

its

own

like

services

or

for

like

services

of

non‐affiliated

service

suppliers

or

for

its

subsidiaries or other affiliates;

(b)

in

a

timely

fashion,

on

terms,

conditions

(including

technical

standards

and

specifications)

and

rates that

are

transparent,

reasonable,

having

regard

to

economic

feasibility,

and

sufficiently

unbundled

so

that

the

supplier

need

not

pay

for

network

components

or

facilities

that

it

does

not

require

for

the

service to be provided; and

(c)

upon

request,

at

points

in

addition

to

the

network

termination

points

offered

to

the

majority

of

users,

subject

to

charges

that

reflect

the

cost

of

construction

of

necessary

additional facilities.

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InterconnectionInterconnectionWTO Reference Framework CARIFORUM/EU EPA

The procedures applicable for interconnection to a major supplier

will be made publicly available.4. The procedures applicable for interconnection to a major

supplier shall be made publicly available.

It is ensured that a major supplier will make publicly available

either its interconnection agreements or reference interconnection

offer.

5. Major suppliers shall make publicly available either their

interconnection agreements or their reference interconnection

offers. Such rates are cost‐oriented rates in the EC Party, and

cost‐based rates in Signatory CARIFORUM States.

A service supplier requesting interconnection with a major supplier

will have recourse wither:(a) At any time; or(b) After a reasonable period of time which has been made

publicly known to an independent domestic body, which may be a

regulatory body referred to in paragraph 5 below, to resolve

disputes regarding appropriate terms, conditions and rates for

interconnection within a reasonable period of time, to the extent

that these have not been established previously.

6. A service supplier requesting interconnection with a major

supplier shall have recourse, either at any time or after a

reasonable period of time which has been made publicly known, to

an independent domestic body, which may be a regulatory body as

referred to in Article 95, to resolve disputes regarding appropriate

terms, conditions and rates for interconnection.

1. Any supplier authorised to provide telecommunications services

shall have the right to negotiate interconnection with other

providers of publicly available telecommunications networks and

services. Interconnection should in principle be agreed on the basis

of commercial negotiation between the companies concerned.

2. Regulatory authorities shall ensure that suppliers that acquire

information from another undertaking during the process of

negotiating interconnection arrangements use that information

solely for the purpose for which it was supplied and respect at all

times the confidentiality of information transmitted or stored.

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Implications of these conditionsImplications of these conditions• There are no material variations between the Reference

Frameworks with respect to the obligations with regard to the

general conditions through which interconnection is to be

facilitated

• Accordingly, as long as these principles enshrined in the WTO

BTA and Reference Paper were adhered to in the

liberalisation effort, not much adaptation may be required to

ensure adherence to EPA obligations

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Universal ServiceUniversal ServiceWTO Reference Framework CARIFORUM/EU EPA

Any Member has the right to define the kind of universal

service obligation it wishes to maintain. Such obligations will

not be regarded as anti‐competitive per se, provided they are

administered in a transparent, non‐discriminatory and

competitively neutral manner and are not more burdensome

that necessary for the kind of universal service defined by the

Member

1. The EC Party or any Signatory CARIFORUM State has the

right to define the kind of universal service obligations they

wish to maintain.

2. Such obligations will not be regarded as anti‐competitive

per se, provided they are administered in a transparent,

objective and non‐discriminatory way. The administration of

such obligations shall also be neutral with respect to

competition and not more burdensome than necessary for the

kind of universal service defined by the EC Party and by the

Signatory CARIFORUM States.

3. All suppliers should be eligible to ensure universal service.

The designation shall be made through an efficient,

transparent and non‐discriminatory mechanism. Where

necessary, the EC Party and the Signatory CARIFORUM States

shall assess whether the provision of universal service

represents an unfair burden on organisations(s) designated to

provide universal service. Where justified on the basis of such

calculation, and taking into account the market benefit, if any,

which accrues to an organisation that offers universal service,

national regulatory authorities shall determine whether a

mechanism is required to compensate the supplier(s)

concerned or to share the net cost of universal serviceobligations.

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Universal ServiceUniversal ServiceWTO Reference Framework CARIFORUM/EU EPA

4. The EC Party and the Signatory CARIFORUM States

shall ensure that:

(a) directories of all subscribers are available to

users in a form approved by the national regulatory

authority, whether printed or electronic, or both, and

are updated on a regular basis, and at least once a

year;

(b) organisations that provide the services

referred to in subparagraph (a) apply the principle of

non‐discrimination to the treatment of information

that has been provided to them by other organisations.

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Implications of these conditionsImplications of these conditions

• Here the EPA is more prescriptive that the prevailing WTO Commitment in that for assenting CARIFORUM members:‐

– It defines a “reasonable test”

to be applied to the

imposition of Universal Service obligations on the

telecommunications provider;

– It specifically identifies and includes value‐added (content‐ based) services to which entrant telecommunications

providers are obliged to interface with from incumbents.

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AuthorisationAuthorisation

WTO Reference Framework CARIFORUM/EU EPAGATSGeneral Obligations and Disciplines

Most Favoured Nation (BFN) Treatment (GATS Article II) – A

licensing regime must grant market access to operators from a

WTO member country on terms “no less favourable”

that the

terms applicable to operators from “any other country”

Transparency (GATS Article III) – All laws and rules affecting

trade in services must be published. ‐

the Telecommunications

Annex specifically requires publication of, among other things,

all notification, registration or licensing requirements, if any

as

well as any other forms of recognition and approval needed

before foreign service suppliers can do business lawfully in a

member country

Barriers to GATS (GATS Article VI) – Licensing requirements must

not “constitute unnecessary barriers to trade.”

Authorisation to provide telecommunications services

1. Provision of services shall, as much as possible, be authorised

following mere notification.

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AuthorisationAuthorisationWTO Reference Framework CARIFORUM/EU EPA

Where a license is required, the following shall be made publicly

available:(a) All the licensing criteria and the period of time

normally required to reach a decision concerning an application

for a licence, and

(b) The terms and conditions of individual licences

The reasons for the denial of a licence will be made available to

the applicant upon request

3. Where a licence is required:(a) all the licensing criteria and a reasonable period of time

normally required to reach a decision concerning an application

for a licence shall be made publicly available;

(b) the reasons for the denial of a licence shall be made known

in writing to the applicant upon request;

(c) the applicant of a licence shall be able to seek recourse

before an appeal body in case a licence is unduly denied;

(d) licence fees required by the EC Party or by the Signatory

CARIFORUM States for granting a licence shall not exceed the

administrative costs normally incurred in the management,

control and enforcement of the applicable licences.

Any procedures for the allocation and use of scarce resources,

including frequencies, numbers and rights of way, will be carried

out in an objective, timely, transparent and non‐discriminatory

manner. The current state of allocated frequency bands will be

made publicly available, but detailed identification of

frequencies allocated for specific government uses in snot

required.

2. A licence can be required to address issues of attributions of

numbers and frequencies. The terms and conditions for such

licences shall be made publicly available.

25

Implications of these conditionsImplications of these conditions• Note that here again, the provisions of the EPA seem substantially

more prescriptive than the WTO Reference Framework:‐– For assenting parties this may mean a revision of the requirement to issue

an

authentication by the Minister before

operation can begin. The latter being a prominent

model in CARICOM.

– Does such belie a progressive drive to encouraging the prominence of competition law in

the regulation of the sector?

• The provisions regarding the licensing of telecommunications

resources are consistent between the frameworks – requiring

transparency and timeliness in administration.

– The EPA does attempt to define the determination of the economic

rent of the resources.

4 (2) In furtherance of his powers and duties under subsection (1),the Minister shall(d) issue licences in respect of the provision of telecommunications services

Telecommunications Act , Chap 282B, Barbados

To note

21. (1) No person shall operate a public telecommunications network, provide a public telecommunications service or broadcasting service, without a concession granted by the Minister.

Telecommunications Act , Chap 47:31, Trinidad & Tobago

To note

6. (1) The Minister may grant----(a) an individual licence; (b) a class licence; (c) a frequency authorization in respect of a licence; or (d) a special licence

Telecommunications Act , 2000, Grenada

To note

26

ConclusionConclusion

• The rationalisation of Telecoms Policy is an intrinsic part of

the economic development agenda of the region as per the

revised Treaty of Chaguaramas

• The WTO BTA and Reference Paper have provided a

foundation of best practice with regard to Telecoms Sector

liberalisation

• The EPA

includes articles which are, in some instances more

prescriptive than the WTO with regard to (i) Universal Service

and (ii) Authorisation/ Licensing

• The harmonisation of Telecoms Policy and regulations must

consider these frameworks going forward.

27

THANK YOUTHANK YOUKwesi PRESCODPrescod Associates & Co.PO Box 3228Petit Valley TRINIDAD & TOBAGOCARICOM Region Subject Matter Expert, HIPCAR Project

Website: www.prescodassociates.com

e‐mail: [email protected]

Tel:

+1 868 633 2951

Mobile: +1 868 688 4380

Fax: +1 868 692 3606

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