market for telecommunications is expanding rapidly. It is not a question of “demand
pull” or “supply push”. Both are happening. The interaction of these two
forces has made telecommunications one of the leading growth sectors in the
world economy. It has also made telecommunications one of the most important
components of social, cultural and political activity.
||On the demand side, growth is pulled by an
increasing reliance on telecommunications and information
technology in every area of human life – in all sectors of
economic and social activity; in government, in the provision of
public services, and in the management of public
infrastructures; in the pursuit of knowledge and the expression
of culture; in the control of the environment; and in response
to emergencies, whether natural or man-made.
||On the supply side, growth is pushed by rapid
technological developments which continuously improve the
efficiency of existing products, systems and services, and
provide the foundation for a continuing stream of innovations in
each of these areas. Particularly noteworthy is the convergence
of telecommunication, information, broadcasting and publishing
technologies, which has greatly enriched the communication
choices available to consumers.
effect of the fundamental forces driving demand and supply has been amplified by
the worldwide trend to liberalize markets for telecommunication and information
technology goods and services. As a result of this trend, the majority of
telecommunication networks are now privately owned and operated. Significant
developments have also taken place to introduce competition at the national,
regional and international levels. Of particular importance is the World Trade
Organization (WTO) agreement to liberalize trade in basic telecommunication
services which was concluded in February 1997 by 69 countries which together
account for more than 90% of global telecommunication revenues. The agreement
entered into force on 5 February 1998.
new framework developed by WTO to govern trade and regulation of
telecommunication services will facilitate further globalization of the
telecommunication equipment and services industries, as well as the
closely-related information technology industry.
||In the 1995-1999 planning period,
"globalization" was more a slogan than a reality,
since it referred mainly to alliances between major operators to
provide end-to-end services to multinational enterprises. Public
networks and residential customers were relatively unaffected by
this kind of globalization, although various forms of
"alternative calling procedures" provided consumers in
countries which allowed such practices a "poor-man's
version" of the benefits enjoyed by big business users.
||In the 1999-2003 planning period, globalization is
likely to become much more of a reality. The WTO agreement will
make it possible for foreign operators to have direct access
through interconnection and interoperability to public networks
in most of the world's major telecommunication markets, as well
as to make direct investments in the development of those
years ago, few would have predicted that the Internet would emerge so rapidly as
a serious competitive force in telecommunications. However, today's Internet is
only a precursor to the new competitive forces that are likely to emerge in the
next five to ten years in the new "communications and information
sector" which will result from technological convergence.
essential lesson to be learned from the Internet phenomenon is that competition
is no longer a public policy tool which can be introduced in a completely
controlled fashion and regulated within the confines of the traditional
telecommunication sector. Competition in telecommunications is rapidly becoming
a true market force whose evolution cannot be planned by policy-makers, a force
which increasingly is seen as best regulated on the basis of principles that are
not specific to telecommunications, but derived from a broader economic, social
and cultural perspective.
far from universally accepted, the sweeping changes in telecommunications
described above have broad support among many countries, including a number of
developing countries who see it as the best way forward in developing their
telecommunication networks and services to the benefit of their overall economic
and social development.
liberalization of telecommunications does not mean an end to regulation – but
it has changed both the role of government and the nature of telecommunication
||In the past, most administrations of ITU Member
States tended to be "all-purpose" creatures —
policy-makers and operators which both provided and regulated
telecommunications on the basis of a "public utility"
||The liberalization of telecommunications has been
accompanied by a separation of these functions. The trend now is
for administrations of ITU Member States to be policy-makers,
nested within a general department of government (e.g. industry
and trade); for telecommunications to be operated by
corporations — whether public, private or mixed; and for
"the public interest" in telecommunications to be
protected by an independent regulatory authority.
||In countries that have introduced partial or full
competition, the model for regulating telecommunications is
changing. Principles derived from competition law are taking
their place alongside the classical precepts of public utility
regulation. In some jurisdictions, sector-specific
telecommunication regulation has been abandoned.
||Again, the WTO agreement will amplify these
regulatory trends. More than 60 signatories accounting for
more than 90% of global telecommunication revenues have made
commitments to apply in whole or in part a set of regulatory
principles including interconnection, transparency and
anti-competitive safeguards. These regulatory commitments, and
indeed all other commitments, are subject to the WTO dispute
resolution mechanism. They are therefore more than a voluntary
code of conduct. They are binding commitments which are
enforceable under the WTO dispute resolution mechanism.
the 1999-2003 planning period, it is likely that the trends noted above with
respect to liberalization, competition and globalization will begin to combine
in new ways that may ultimately change the way the telecommunication industry
sees itself and is seen by its regulator(s) and customers.
||Countries that began permitting competition in
telecommunications 10 or 20 years ago generally introduced
it in a planned and orderly manner: first in terminal equipment;
then in value-added services; then in the long-distance service;
and finally in local and international services. In addition,
competition was generally permitted among different service
providers using the same infrastructure before being allowed
between different infrastructure providers. Even today, most
countries that permit competition do so on a highly regulated
||In this environment, the regulator must implement
competitive safeguards, nurture competition, ensure
interconnection/interoperability and ensure broad and affordable
access to necessary services
||As a result of technological progress, convergence
and market liberalization, countries only now beginning to
introduce competition are less likely to be in a position to
plan an evolution of this kind
||Even in those countries that have experience with
competition, service providers and regulators that have based
their respective plans on an orderly evolution of this kind are
finding that the "rules of the game" are suddenly
changing, that competition is coming from unforeseen directions,
and that it cannot be regulated as it was in the past
||More than any other phenomenon, the Internet
symbolizes the changing nature of telecommunications. It is
based on different technologies, network architectures,
standardization and addressing schemes. Its economic foundations
and charging principles are diametrically opposed to those of
public telecommunication operators. It has experienced
phenomenal growth and it has largely been outside government
regulation. Yet it is emerging as a serious alternative to the
traditional services provided by the telecommunication industry
in every market segment, from intra-corporate communications to
one point of view, encouraging progress has been made in the 1995-1999 period in
certain countries and some regions in forging the "missing link"
identified by the Maitland Commission. Overall, the gap between developed and
developing countries in access to basic telecommunication services is closing.
However, from other points of view, new gaps are beginning to appear:
||In general, the majority of the least developed
countries (LDCs) have made little progress in the past five
years in closing the gap in access to basic telecommunication
services. In some cases, teledensity (the number of telephone
lines per 100 people) has fallen, as population growth has
outstripped telecommunication growth. New technologies such as
global mobile personal communications by satellite (GMPCS) may
help close the "telecommunication gap". This will only
be possible, however, if their services are affordable to
inhabitants of the LDCs.
||There is currently an enormous gap between developed
and developing countries in access to the Internet. Even as the
telecommunication gap which has preoccupied the Union for so
many years is beginning to close, an "information gap"
of even greater proportions is opening up.
||A difference in regulatory practices is emerging
between countries which have decided to liberalize their
telecommunication markets under the WTO agreements, and those
that have not. If competition brings the first group of
countries the anticipated benefits in terms of investment,
technology transfer, innovative services and lower prices, these
regulatory differences may become a new development gap. In this
regard, it is important to recall that although the 119 ITU
Member States that are not yet part of the WTO basic
telecommunications agreement generate less than 10% of global
telecommunication revenues, they include more than 45% of the
On the eve of the 21st century, the Union thus finds itself in a dynamic
situation. On the one hand, the goal established by the Maitland Commission of
achieving universal access to basic telecommunications will be technically
achieved, and the overall gap between developed and developing countries is
steadily narrowing. However, at the same time, new differences are developing,
for example within the developing world, between the LDCs and other developing
countries, between liberalized and non-liberalized countries which may be either
developed or developing, and between countries that are moving rapidly towards
competition and those moving at a slower pace.
This raises important questions in relation to the vision of the global
information society (GIS). This vision was the subject of considerable
discussion during the 1995 — 1999 period, initially in the G-7 group
of advanced industrial economies, then in the broader international community.
Today, the basic ideas behind the concept of the GIS have been broadly accepted
and indeed endorsed. In this vision, all forms of economic, social, cultural and
political activity will increasingly depend on access to the telecommunication
and information services provided by the global information infrastructure (GII).
The rapid development of electronic commerce on the Internet is one tangible
example of how the GIS is becoming a reality. The challenge facing the
international community is to find ways to ensure that the GIS is truly global,
and that people everywhere are able to share in its benefits.