U.S. Claims Nations Impede Competition

WASHINGTON (04/20/2000) - International telecommunications prices may be falling, but the U.S. government is not satisfied that all its trading partners are doing all they can to spur voice and data competition.

In a report to Congress earlier this month, U.S. Trade Representative Charlene Barshefsky cited nine countries for failing to implement at least one part of the landmark 1998 World Trade Organization (WTO) telecom agreement.

Barshefsky's report included some surprising names, such as both of the U.S.'s NAFTA partners - Canada and Mexico - plus large Western European countries such as Germany and Great Britain.

Getting included in the report didn't mean that the U.S. saw the target country as doing everything wrong, only that it was lacking in at least one area. For example, regarding Great Britain, Barshefsky's report said only that her office was unhappy that British regulators have given British Telecommunications PLC an effective monopoly over digital subscriber lines until July 2001.

And in Canada, Barshefsky said, a universal service program could provide "unfair subsidies" to certain carriers.

Barshefsky's office identified much more serious problems in other countries.

In Mexico, the report charged that the dominant carrier, Teléfonos de México SA de CV (Telmex), simply denies the use of interconnection trunks to competitors and added that the government has failed to fix the rules. In Japan, Barshefsky's office said dominant carrier Nippon Telegraph and Telephone Corp.'s interconnection rates are two to five times higher than in comparable markets.

Among other countries, the U.S. charged that Germany's licensing fees for competitors are too high; that Taiwan's licenses include unfair exclusivity clauses; that South Africa's dominant carrier began denying circuits to competitors last year; that Peru's dominant carrier has not been charging fair interconnection rates; and that Israel has been charging excessive access fees on calls to and from the U.S. and Canada.

The report laid out deadlines to address the problems. Barshefsky has the option of filing a formal complaint with the WTO if the problems aren't resolved by those deadlines.

MCI WorldCom Inc. in particular has urged Barshefsky to consider filing a World Trade Organization complaint against Mexico because MCI WorldCom claims its Mexican joint venture, called Avantel, has foundered due to Telmex's intransigence.

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