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Cities, Wireless Telecommunications, and the GATS

The United States has made a number of market access commitments on telecom-munications as part of its GATS schedule.  In 1999, the WTO released a text clarifying the interpretation of rules and definitions for telecommunication services:

"Regulatory disciplines specific to telecommunications services are primarily found in the GATS Annex on Telecommunications…, which applies to all WTO Members, and in the 'Reference Paper' on regulatory principles….The Reference Paper…contains provisions regarding competitive safeguards, interconnection arrangements, universal service obligations, licensing criteria, regulatory independence and the allocation of scarce resources.”  

Telecommunications has also been the subject of a GATS dispute, in a case between the United States and Mexico dealing with local phone service in Mexico.  That case should be analyzed in relation to local broadband services and GATS commitments.

Consequently there are a set of urgent questions that should be raised about local rule-setting for wireless and fixed-wire communication technologies in relation to GATS disciplines found in the Annex and Reference Paper.   As these technologies play an increasingly important part in local economic development strategies, there is also a need for oversight on (and where possible participation by city officials in) negotiations at the various GATS rule-making bodies. 

1.  Competitive Safeguards.  Philadelphia’s access provisions came under attack by a market actor with tremendous existing investments in cable and telephone infrastructure.  Other market actors do not have this same investment.  If a local government adopted provisions that dramatically undercut a current private supplier’s prices, would this conflict with competitive safeguard provisions?  What is the permissible role for city governments in promoting adoption of particular technologies for reasons of infrastructure maintenance, contracting of billing/metering services, and other services found in the Annex on Telecommunications?  Can a city cite economic development objectives as a reason for mandating particular technical standards at the local level?

2.  Interconnection and Universal Service Obligations.  Many cities are promoting universal access as a basic goal of a regulated Wi-Fi utility. For example, Hermosa Beach (CA) uses city funds to offer free services to residents who would otherwise have to pay a cable or DSL company for access.  How will GATS disciplines on subsidizing interconnection to reach service coverage goals impact on cities ability to provide internet access for low-income residents?  How does the US-Mexico Telecomm dispute decision impact on the ability of localities to mandate service extensions?  What will constitute an “interconnection” if Wi-Fi, telephone, video, and other data services are bundled together? 

3.  Licensing criteria.  Will cities have the right to adopt particular Wi-Fi frequencies for public services such as emergency, public access cable, and teleconferencing?  Can cities mandate both privacy rules and minimum staffing provisions as part of their utility regulation of Wi-Fi services? 
4. Regulatory independence.  How will “quality of the service” be defined?  Will it include decisions regarding the physical siting of infrastructure?  What will be the impact of any new Domestic Regulation transparency requirements negotiated as part of the current round of GATS talks?  Will cities that include Wi-Fi services as part of a local public-sector monopoly be able to cite the GATS Government Authority exclusion?  Will USTR and Congress confirm that it will use Section 332(c)(7) of the Communications Act for purposes of interpreting the extent of GATS commitments and communicate that to WTO members with interests in U.S. telecommunication services? 

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