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Groups ask US Trade Representative to open ''dispute settlement'' talks with China and Germany

WASHINGTON, DC – 01/07/08 – US-based telecom providers “still face significant trade barriers abroad, despite progress opening some markets,” according to several major US-based trade and telecommunications industry groups.

Comptel, the national industry association representing communications service providers and their supplier partners, recently issued a statement addressed to US Trade Representative Susan Schwab (USTR) as part of its annual comments on foreign compliance with US telecommunications trade agreements.

The group described progress in opening markets including Japan, which was dropped this year from the trade association's list of trade violators, along with Spain, France, Australia, and Italy.

"We are also pleased to report that Colombia has repealed its excessive license fee for international long distance service," said the group, which represents competitive telecom providers,” the group said, adding “that can't be said for China and Germany, which are marked by "absolutely no improvement.”

The organization urged the USTR to open "dispute settlement" talks, which are often seen as a prelude to a formal complaint, with regulators in the two countries.

"CompTel members are not able to enter the Chinese market at all" and, despite improvements in Germany, "CompTel members are still denied effective market access" there, the group said.

Competitive German carriers, it said, “share the concerns, especially about delays in switching copper loops from the incumbent Deutsche Telekom to a competitor, while more than 100,000 German customers are on a waiting list" for competitive service because of the delays.”

Three barriers – above-cost fixed-to-mobile termination rates, excessive pricing and discriminatory provisioning of local access leased lines, and access to and use of unbundled high speed network elements – are the most common barriers, CompTel said.

The Coalition of Service Industries (CSI) cited "market access barriers in China and discriminatory universal service programs in India and Jamaica" as its biggest concerns.

China is doing better but barriers remain, such as "China's narrow interpretation of valued added services, high capitalization requirements for basic telecommunications services, and lack of an independent regulator," the Washington, DC-headquartered trade policy group said.

Jamaica, the CSI said, imposes a universal service fee of 3 cents a minute for fixed calls and 2 cents for mobile calls from abroad, a "discriminatory and unreasonably burdensome" practice.

The CSI also urged the USTR to encourage countries to allow "full market access for all services" and to allow services with as much as 100% foreign capital investment and control.

"A significant concern is the need to... address constraints on foreign investment in telecommunications that continue to limit competition, investment and growth in many countries," it said.

The US Council for International Business (USCIB) went on the record criticizing Canadian foreign ownership restrictions in telecommunications as preventing "open competition."

German regulators face "inappropriate political pressure" and their operations lack "transparency," it said, with the council questioning China's "overly narrow definition of value-added services," which excludes "most commercially important services such as international IP-virtual private networks" from licensing.

The group has also condemned an "unreasonably high capitalization requirement" for U.S. carriers to operate in China. It also said India "imposes strict limitations on the provision of VoIP services by non-Indian companies."

The VON Coalition said IP-based services face market barriers "around the globe" that stifle competition, "prevent US troops and business travelers from calling home and limit investment in new markets."

Some countries, it said, are preparing to "legalize" VoIP but examples of discrimination abound, such as "extraordinarily high license fees" required of VoIP providers in India and a "strict licensing system" in China that delays market entry.

"There are reports that VoIP providers have been harassed, raided, and subject to physical assaults" in Kuwait, and that the United Arab Emirates has been "blocking access to a variety of VoIP services," the VON Coalition said.

The Information Technology Industry Council said many countries use "conformity assessment procedures such as mandatory in-country testing and unique labeling requirements" to bar foreign equipment.

The USTR should seek development of "one standard, one test and a supplier's declaration of conformity" to determine if products or services can be used in a country.

Its concerns include "unnecessarily burdensome" conformity assessment programs for telecom equipment in Mexico and "unnecessary, additional and redundant testing" to get equipment certification in China.

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