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2009/SOM2/CTI/016
Agenda Item: 6
Progress Towards Adopting and Implementing WTO Reference Paper
Purpose: Information
Submitted by: TEL LSG Convenor
/ Third Committee on Trade and Investment MeetingSingapore
25-26 July 2009
TELECOMMUNICATIONS AND INFORMATIONWORKING GROUP
17July, 2009
Ms Mary Elizabeth Chelliah
Chair
APEC Committee on Trade and Investment (CTI)
Dear Ms Mary Elizabeth Chelliah,
As you are aware, in accordance with “Next ‘Steps” paper adopted by the Meeting of APEC Ministers Responsible for Trade in 2003, the APEC Telecommunications and Information Working Group (TEL) is tasked to examine and assess the progress that pathfinder economies are making to adopt and implement the WTO Basic Telecommunications Reference Paperand to report on its assessment annually to CTI.
With this in mind, on behalf of APEC TEL, I am pleased to send you as attached the report on progress towards adopting and implementing the WTO Reference Paper of 2009 for your kind reference.
Sincerely yours,
Liu Ziping
Chair, APEC TELWG
Enclosure: Progress towards Adopting and Implementing the WTO Reference Paper March 2009
1
APEC Telecommunications and Information Working Group
Progress towards Adopting and implementing the WTO Reference Paper
Introduction
In June 2003, APEC Ministers Responsible for Trade met in Khon Kaen, Thailand. Following their meeting, they approved a “Next Steps” paper with action items based on the Leader’s Los Cabos Pathfinder Statement to Implement APEC Policies on Trade and the Digital Economy. As an outcome of this meeting, the APEC Telecommunications and Information Working Group (TEL) was given the task of providing annual updates on Pathfinder economies’ progress towards adopting and implementing the WTO Basic Telecommunications Reference Paper.
According to the “Next Steps” paper:
WTO Basic Telecommunications Reference Paper. Pathfinder economies committed in the Leaders’ Statement to adopt and implement the WTO Basic Telecommunications Reference Paper. For pathfinder economies acceding to the WTO, the Leaders Statement encouraged them to adopt and implement the WTO Basic Telecommunications Reference Paper.
Action 4 (WTO Basic Telecommunications Reference Paper): Pathfinder economies (both WTO members and acceding economies) that have not adopted and implemented the WTO Basic Telecommunications Reference Paper will report on progress to do so.(Pathfinder economies that have not yet adopted and implemented the WTO Basic Telecommunications Reference Paper will report progress they have made to do so to in 2003 to CTI III and the Telecommunications Working Group (TEL) and annually thereafter to CTI II and the TEL.The TEL will examine and assess this information and report on its assessment to CTI III in 2003 and annually thereafter to CTI II the progress pathfinder economies are making to adopt and implement the WTO Basic Telecommunications Reference Paper.)
See:
At TEL 28, members of the TEL Liberalization Steering Group agreed to take up the task, noting several considerations:
- APEC TEL has undertaken studies and work on a range of related topics, including Principles of Interconnection and a series of capacity-building workshops on the WTO and telecommunications services. Members of APEC TEL agreed to consider outcomes from this work in developing the project.
- There is no “one-size fits-all” solution to the implementation of the Reference Paper. Information regarding the adoption of the WTO Reference Paper is available through the WTO website at:
- Each member economy that participated in this study undertook an assessment regarding whether and how elements of the Reference Paper have been implemented in their specific circumstances.
Members of an oversight committee include: Australia, Canada, Hong Kong China, Indonesia, Japan, Singapore, and the United States.
Finally, APEC TEL is continuing work on related projects in support of our trade facilitation objectives. For example, information from this effort has been used to support work within APEC TEL to develop a guide of Best Practices for implementing the WTO Reference Paper.
The 2005 edition of the reportwas approved by the APEC TEL Working Group inApril2005, at APEC TEL 31inBangkok, Thailand. The 2005 edition had been provided to the CTI in May 2005, and presented to Ministers at TELMIN 6. Member economies agreed that, if they have new information to share, they would work with Canada to update the document intersessionally. The following contains updates by Australia, Canada, Hong Kong China, Korea, Peru, Philippines, Chinese Taipei, and Thailandfor submission and approval by the members of the TEL Liberalization Steering Group at TEL 33.
This study is comprised of six sections:
- Definitions
- Competitive Safeguards
- Interconnection
- Universal Service
- Public Availability of Licensing Criteria
- Independent Regulators
G. Allocation and Use of Scarce Resources
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A. Definitions:
Definitions / How is “Major Supplier” defined in your economy? / How are “Essential Facilities” defined in your economy?Australia / Major Supplier is not defined in Australian legislation. However, within a trade context, Australia has adopted the Reference Paper definition of Major Supplier. Within the context of competition policy, a major supplier in Australia is defined as a carrier or carriage service supplier with a substantial degree of power in that market. / Essential Facilities is not defined in Australian legislation. However, within a trade context, Australia has adopted the Reference Paper definition of Essential Facilities.
Brunei Darussalam / It is not defined in Brunei Darussalam’s legislation, but Brunei Darussalam has adopted the definition as per the Reference Paper. / It is not defined in Brunei Darussalam’s legislation, but Brunei Darussalam has adopted the definition as per the Reference Paper.
Canada / “Major supplier” is not directly defined in Canadian legislation. ILEC’s are regulated by the telecommunications regulator (CRTC) though many services have been deregulated. The competition authority also has the authority to deal with issues of abuse of market power. / The CRTC concluded that, “to be essential, a facility, function, or service must meet all three of the following criteria: (1) it is monopoly controlled; (2) a CLEC requires it as an input to provide services; and (3) a CLEC cannot duplicate it economically or technically. Facilities that meet this definition shall be subject to mandatory unbundling and mandated pricing.” The definition of “Essential Facilities” is currently being reviewed by the CRTC under Telecom Publics Notice CRTC 2006-14. Details of the procedure are available at:
Chile / Major supplier is not defined in Chilean legislation.
However, the national antitrust agency it is obliged to fixed the tariffs to those operators “in case the conditions existing on the market are insufficient to guarantee a free rate-setting regime”. According with this, the agency has determined case by case the existence of a major operator but in general it has taken into consideration the market share (Number of lines) traffic, development of technological alternatives that allow competition and maturity of unbundling of the network. / Essential facilities are not defined in Chilean Legislation. However, as the General Law on Telecommunications establishes that interconnections is obligatory and that tariffs of these services are to be fixed by the authority. Essential facilities are defined case by case in the tariff decree of each company (Art. 24 bis y 25 bis LGT)
Among the criteria used :
a)in case it is monopoly controlled
b) can be reasonably duplicated or substituted;
c)the existence of technical alternatives;
d)whether the facility is critical to the supply of service by the licensees;
China / The definition is indicated in the Regulation on Telecommunications of P. R. China, which refer to telecommunications business providers that control the necessary basic telecommunications facilities and account for a large proportion of the market, and are thus able to influence substantially the market of other business providers. / Not defined.
Definitions / How is “Major Supplier” defined in your economy? / How are “Essential Facilities” defined in your economy?
Hong Kong, China / In Hong Kong, China, there is the concept of “dominant position”. A telecommunications licensee is in a dominant position when, in the opinion of the Telecommunications Authority, it is able to act without significant competitive restraint from its competitors and customers. In considering whether a licensee is dominant, the following matters are taken into account:
-the market share of the licensee;
-the licensee’s power to make pricing and other decisions;
-any barriers to entry to competitors into the relevant telecommunications market;
-the degree of product differentiation and sales promotion; and
-any other relevant matters as may be stipulated by the TelecommunicationsAuthority in guidelines on the test of dominance
A dominant licensee is, under the Telecommunications Ordinance, prohibited from abusing its position. / Under section 36AA of the Telecommunications Ordinance, the Telecommunications Authority may in the public interest direct a licensee to coordinate and cooperate with another licensee to share the use of any facility owned or used by it. For this purpose, “facility” is defined to include:
a) a cable, wire, telecommunications line, duct, pit, tunnel and manhole;
b) a tower, mast, pole and antenna;
c) land, buildings and ancillary equipment at sites on which radiocommunications facilities have been established;
d) reasonable space within a carrier licensee's exchange buildings or other sites to locate equipment of another licensee required to establish interconnection between the licensee's and that other licensee's network at the exchange or sites;
e) other installations, including but not limited to in-building risers, cable trays and cable entry points into buildings, reasonably necessary for the efficient provision of a telecommunications network; and
f) services incidental to the building, place and premises in which the facility is situated that are reasonably necessary or incidental to the efficient operation by all parties to the sharing of the facility.
In considering issuing a direction to a licensee in the public interests to share a facility, section 36AA of the Telecommunications Ordinance stipulates the Telecommunications Authority shall take into account relevant matters including, but not limited to:
a) whether the facility is a bottleneck facility;b) whether the facility can be reasonably duplicated or substituted;
c) the existence of technical alternatives;
d) whether the facility is critical to the supply of service by the licensees;
e) whether the facility has available capacity having regard to the current and reasonable future needs of the licensee or person to whom the facility belongs;
f) whether joint use of the facility encourages the effective and efficient use of telecommunications infrastructure;
g) the costs, time, penalties and inconvenience to the licensees and the public of the alternatives to shared provision and use of the facility.
Indonesia / In the current Indonesian regulation KM 33 year 2004, Major supplier is applied to local fixed services, fixed long-distance services (STD), fixed international services (IDD) operators whose business activities control the majority of market share and revenue.
In the preparation for the new cost – based interconnection regime, major supplier will be defined not only for fixed network and services but also for other segment of services such as cellular mobile. / In the supporting regulation for interconnection, Essential Facilities will be defined as facilities required for interconnection, which the interconnection seeker doesn’t have option rather then to use the facilities offered by the interconnection supplier.
Japan / In the Japanese regulatory framework, telecommunication carriers which install “Category I designated telecommunications facilities” are regarded as dominant telecommunications carriers. NTT East and NTT West belong to this category. “Category I designated telecommunications facilities” shall be regional networks facilities that own fixed subscriber lines on a considerable scale (more than 50% of lines in a specified area). / The word “Essential Facilities” is not defined in the Japanese regulatory framework. The Telecommunications Business Law in Japan (TBL) designates the regional network facilities that own fixed subscriber lines on a considerable scale (more than 50% of lines in a specified area) as the telecommunications facilities which interconnection with the telecommunications facilities of other telecommunications carriers is essential for the enhancement of the users' benefit and the comprehensive and rational development of telecommunications.
Definitions / How is “Major Supplier” defined in your economy? / How are “Essential Facilities” defined in your economy?
Korea / Korea does not have specific definition for the term 'Major Supplier'. However, the facilities-based service suppliers that fall under the criteria set forth below are obliged to provide facilities, interconnection and information:
-whose previous year revenue from the respective facilities-based services exceeds the amount determined by the Minister of Information and Communication Korea Communications Commission and,
-whose previous year market share exceeds 50% of the total domestic revenue in the respective service areas.
-The facilities-based service suppliers that fall under the following criteria are obliged to get approval from the Minister of Information and Communication Korea Communications Commission for the terms and conditions and the price of the respective facilities-based services they supply:
-whose market share of the total domestic revenue from the respective services is the highest and,
-whose previous year revenue from the respective services exceeds the amount determined by the Minister of Information / Telecom-related Acts do not specifically define the term 'Essential Facilities'.
However, the Telecommunications Business Act provides that the service suppliers with essential facilities shall providefacilities, interconnection, and information.
Malaysia / No specific equivalent except a classification for dominance
The primary characteristic of a firm in a dominant position in a market is its ability to undertake conduct to a significant extent independently of its competitive rivals and its customers (whether consumers or intermediate industry participants), and the pressures they would exert on the firm in a competitive market. This independence generally manifests itself as the ability to independently fix prices, although it extends to the ability to fix levels of output or the quality of output with similar disregard for the responses of rivals and customers in the market. / The term essential facility is not defined in Malaysia. Instead, the term bottleneck is generally used. Bottleneck is used for facilities that cannot be easily duplicated. If a facility or service has bottleneck characteristics or it is in line with long term interest of the end users, the facility or service is included in the Malaysian Communications and Multimedia Commission’s (MCMC) Access List (Commission Determination on Access List, Determination No. 1 of 2005) (registered on 13 June 2005), which ensures that all network facilities providers, network service providers, applications service providers and content applications service providers can gain access to the listed facilities and services on reasonable terms and conditions. This is to encourage downstream activities to flourish, thus creating a more robust market environment, one that is able to offer consumers more choice and value-for-money services.
Access List
- Fixed Network Origination Service
- Equal Access (Fixed Network) Service
- Fixed Network Termination Service
- Mobile Network Origination Service
- Mobile Network Termination Service
- Interconnect Link Service
- Private Circuit Completion Service
- Domestic Network Transmission Service
- Internet Access Call Origination Service
- 3G-2G Domestic Inter-Operator Roaming Service
- Inter-Operator Mobile Number Portability Support Services
- Infrastructure Sharing
- Domestic Connectivity to International Services
- Network Co-Location Service
- Network Signaling Service
- Full Access Service
- Line Sharing Service
- Bitstream Services
- Sub-loop Service
- Digital Subscriber Line Resale Service
- Internet InterconnectionService
- Broadcasting Transmission Service
- Digital Terrestrial Broadcasting Multiplexing Service
Definitions / How is “Major Supplier” defined in your economy? / How are “Essential Facilities” defined in your economy?
Mexico / Federal legislation defines a carrier with a “substantial power in the market”. See
article 63 of the Federal Law of Telecommunications (FLT) and article 13 of the
Federal Economic Competition Law.
In accordance with Article 11 of the Interconnection Plan, the Commission, according with the available information, will identify dealers who operate the largest number of fixed access or mobile access in the coverage areas of their concessions.
In addition, it can be said that Mexico has adopted the WTO Reference Paper definition of Major Supplier, since Mexico has subscribed such instrument. / Interconnection plan denotes Essential Facilities in its article 2.
-Traffic conduction
-Transmission links
-Access ports
-Signaling
-Transit
-Collocation
-Sharing of infrastructure
-Ancillary services
-Access to services
New Zealand / “Major Supplier” is not defined per se. / “Essential facilities” is not defined per se.
Papua New Guinea / TBC / TBC
Peru / Our legal framework mentions that “Major Supplier” will be defined according to the WTO agreements. The Tariff Regulation (Art. 35°) defines major supplier as an operator that has the ability to affect the terms of participation (having regard to price and supply) in certain market for basic telecommunications service as a result of: (i) control over essential facilities; or (ii) use of its position in the market. / “Essential facility” is the service or any part of a network that (i) is exclusively or predominantly provided by one or a limited number of operators; and (ii) whose substitution in order to provide a service, is not economically or technically feasible. (Interconnection Regulation, Art. 6° and Tariff Regulation, Art. 35°)
Philippines / Major supplier is defined as a carrier with a system of nationwide inter-exchange facilities critically capable of carrying huge traffic volumes throughout the country. / Essential facilities can be defined in the context of facilities critical to the provision of a service wherein access from one point to a certain distant point outside its network can be carried except through other networks.
Russian Federation / TBC / TBC
Singapore / “Major Supplier” is defined as Dominant Licensee in Singapore.
Under Singapore’s Telecom Competition Code (Section 2 – Classification of Facilities-Based Licensees), IDA will classify a Facilities-based Licensee as either (a) Non-dominant Licensee; or (b) Dominant Licensee. A Licensee will be classified as dominant if it controls facilities that provide a direct connection to end users within Singapore, regardless of the technology used, and:
a)exercise operational control over telecoms service facilities that are sufficiently costly or difficult to replicate; or
b)has the ability to exercise significant market power in the provision of telecoms services in Singapore. / “Essential facilities” are defined as Essential Support Facilities (ESF) in Singapore.
Under Singapore’sTelecom Competition Code (Appendix 2 Section 4 – Essential Support Facilities (ESF)), ESF are defined as those passive support structures, for which no practical or viable alternatives exist, that enable the deployment of telecommunication infrastructure. These would include
a)Co-Location facilities;
b)Lead-in ducts, lead-in manholes and cable chambers; and
c)Space within cable risers in commercial and residential buildings
Chinese Taipei / Article 10 of the Administrative Regulations Governing Tariffs of Type I Telecommunications Enterprises stipulates that the dominant market player ( the major supplier) of Type I telecommunications enterprises refers to Type I telecommunications enterprises bulletined by the National Communications Commission (NCC) under the following circumstances:
- Those who control key telecommunications facilities.
- Those who have dominant power over the market price.
- Those whose subscriber amount or sales volume is over 25% of each service market.
Thailand / The definition of “Major Supplier” is defined in the Draft Notification of the National Telecommunications Commission regarding Measures to Prevent Anti-Competition Practices in Telecommunication market which is being submitted for consideration. / “Essential Facilities” means facilities, operations, Processes, or services provided by a licensee with their own telecommunications network which are necessary for telecommunications network access or interconnection. It is defined in the Notification of the National Telecommunications Commission regarding Telecommunications Network Access and Interconnection B.E. 2549 (2006).
United States / In the U.S., the parallel to the concept is the dominant carrier, or ILECs (incumbent local exchange carriers). / While “essential facilities” is not a term used in the U.S., the U.S.Telecommunications Act of 1996 established competitive checklists (see section 251 (a-c)) among other things to provide nondiscriminatory access to unbundled network elements.
Vietnam / TBC / TBC
B. Competitive safeguards