Plenipotentiary Conference 1998 -- Minneapolis USA

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Briefing Notes 15 of 30 October
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Strategic Policy and Plans

Internet Governance
(see Briefing Notes N° 14, page 3, Briefing Notes N° 9, page 1 and Briefing Notes N° 8, page 2)

The Chairperson of the Working Group explained that, as agreed at the previous meeting, only editorial changes were included in the revised draft. On the first draft resolution on Internet protocol based networks (COM5/14), the amendments are found in the first operative paragraph where clarification was made on the facts that the resolution was referring to IP networking and that the international initiatives on which the ITU was to participate were those directly related to IP-based networks. The changes also oblige the ITU to take on this new role through a change from "should" to "shall". With these changes, the resolution was adopted.

On the second resolution on Management of the Internet Domain Names and Addresses (COM5/15), it was possible to win the support of the US on the new text of the resolution. The word "active" was reinstated, thus giving the ITU a pro-active role in the international discussions and initiatives on the management of the Internet domain names and addresses. But another amendment introduced in the latest round of consultations, fueled most of the discussions in the Committee.

The move was an attempt to state that management of Internet Domain Names and Addresses was to be "private-sector led". It was said that the proposed change was one of substance because it was pre-empting the conclusions on the discussions taking place in many areas of the world as to who should manage the Internet Domain Names and Addresses.

Although it is true that the management DNS is currently led by the private sector, it was argued that this Conference was not competent to decide whether it should be led by private sector The wording should therefore not give a seal of approval one approach or another. It was also argued that this wording was restrictive and would limit the capacity of the Union from participating in initiatives not led by the private sector. The word "currently private-sector led" was therefore found to be more appropriate, as it would indicate a statement of facts rather than a statement of policy or declaration of principle. The US, however, felt the text should be kept as drafted, because the wording was the object of a careful negotiation and that any change would re-open the debate.

In view of the very broad consensus to include a statement of facts only, and therefore use the words "currently private-sector led management of Internet Domain Names and Addresses", and of the strong US objection to this change, it was decided to approve the Resolution with the disputed text into square brackets (marking the lack of agreement on that part) and submit to Plenary for full debate and final decision.

Processing Charges for Satellite Network Filings
(See Briefing Notes N° 14 for details)

Tonga, Iran and Malaysia tabled a new document on this subject, requesting that the decision of the ITU Council to introduce cost recovery for satellite network filings be not implemented and that further studies be undertaken based on the general principles adopted by the Plenipotentiary Conference, following an amendment of the Financial Regulations of the ITU. Tonga, on behalf of the co-sponsors, stressed that Council decisions had flaws and a number of uncertainties and ambiguities such as the costing methodology which needed to be reviewed. The move was also not to apply cost recovery to satellites filings until a date as would be decided by Council, following adoption of a new resolution on the basis of the studies. It will be recalled that the three dates proposed by Council for the introduction of processing charges were ranging from 27 June 1997 at the earliest to 1 January 1999 at the latest. The effect of the proposal would be to eliminate processing charges on filings submitted between the original and new dates to be decided.

The US also opposed the introduction, at this time, of cost recovery, because several government systems would be affected and domestic consultations were therefore necessary. The same position was also expressed at Council when the matter was under discussion. The US delegate also said that although cost-recovery would have a positive impact in doing away with backlogs, he did not believe this was the only factor to consider and recalled that the Plenipotentiary Conference was also supposed to look into them, but had so far failed to do so. Finally, he stressed that the costing methodology had not been agreed by Council.

Several other countries, on the other hand, felt the matter had been thoroughly discussed by Council, and that there was sufficient time since the first decision of principle was taken, back in June 1997, to hold the consultations domestically and inform operators accordingly. They were therefore opposed to any proposal aimed at postponing the introduction of cost recovery in satellite network filings.

Given the lack of consensus and time to re-convene the ad hoc group, it was decided that informal discussions would be held under the coordination of India, and that the matter would be discussed in Plenary, hopefully on the basis of a compromise arising from these informal discussions between the two groups of proponents.

International Telecommunications Regulations

As requested by Committee 5, Australia amended the text of the draft resolution (COM5/16) on the revision of the International Telecommunication Regulations. The new text instructed the Secretary-General to identify any need for changes to the ITU Constitution and Convention as they affected the International Telecommunications Regulations. The review work is to be done in consultation with the Director of the Telecommunication Standardization Bureau and a balanced group of appropriate legal experts for report to Council no later than 2000. The Secretary-General is also to advise Council on the proposed action including the possible convening of a world conference on international telecommunications, to better reflect relations between Member States and operators. Following a hail of amendments, the Chairperson finally asked Australia to consult again with those that expressed views and revise the draft resolution once more to be presented to the Plenary meeting.

Satellite Networks Filing Procedures

As agreed at the previous meeting of Committee 5, a revised text of the draft resolution on the proposed on-going review of satellite networks filing procedures was tabled. The new text included language that makes clear that due diligence (administrative and financial) are not covered by this resolution, and that the intent is to continually review and update the regulatory process of filings to increase efficiency and decrease costs. In light of these amendments, the Resolution was approved.

Preparation of the Year 2000

A draft resolution on the problems of the Year 2000 was submitted by the US. The Year 2000 problem is often associated with large computer systems; however, the US feels it is also likely to affect personal computers, local area networks, telecommunications networks, electric power and systems and equipment that use embedded microprocessor technology, such as fire alarms, automobiles, heating and cooling systems and public works water and sewer control systems.

The US position is that if not addressed effectively by the private and public sectors in all countries, the Year 2000 (Y2K) problem could cause more than minor disruptions in data processing; it could jeopardize international operations in key economic sectors. They said that its potential impact is much greater than a mere technical glitch – it is a threat to the backbone of the world's interdependent economic stability.

The US delegation praised the work already undertaken by the ITU through its Y2K Task Force and its effort to bring telecommunication systems into Y2K compliance. He also referred to the World Bank InfoDev programme to help developing countries in this vital process, and to the 1998 Birmingham Summit where Year 2000 Coordinators from the G-8 nations agreed to work with business and international organizations to help other countries prepare for the millenium change.

The draft resolution calls for Member States to undertake and accelerate all actions needed to meet the Year 2000 challenge through a five-point programme:

  1. inventory and assess whether their systems and/or components should be reprogrammed to address the Y2K issue;
  2. reprogram and "fix" those systems and/or components which are not Year 2000 compliant;
  3. test systems and/or components to determine whether the Year 2000 problems have been satisfactorily remedied;
  4. test systems and/or components together in their operating environments;
  5. establish adequate contingency plans, throughout all of these phases

The resolution also instructs all ITU elected officials to encourage telecommunications operators, carriers, and manufacturers to take prompt, comprehensive, and effective action to address the Year 2000 problem and report to the ITU Council of 1999 on progress achieved and the work of the ITU Y2K Task Force.

The Committee adopted the Resolution and took note of the report tabled by Uganda on the steps taken by Uganda Telecom Ltd to comply with the Year 2000 requirements.

Improving ITU Efficiency

A number of proposals were tabled on how to improve ITU efficiency. Russia, supported by Kenya, Algeria and Japan , advocated establishing a High-Level Committee to review ITU’s mission and improve its overall efficiency. On the other hand, Europe felt several changes had already been made from 1989 when the first HLC was created, to the ITU 2000 whose conclusions were being examined at this Conference. They felt therefore that there was no need to rush in another overall review. It was best to see the impact and effectiveness of the wide range of measures adopted by this Plenipotentiary Conference and make the necessary changes or adjustments on the basis of that standing evaluation process.

A number of countries supported the European view that the reform had first to be tested to provide sufficient perspective on what to do next and that creating new structures at this point would only duplicate work already done by the Sector’s advisory groups (working methods) and the Council (structure). Canada, however, wanted to see a working group of the advisory body of the Telecommunication Standardization Sector address the new roles and responsibilities of the Members in the operations of the Sector for consideration by the World Telecommunication Assembly of 2000. Japan argued that the views expressed were addressing two categories of issues: one of a sectoral nature, the other of a more global nature. For its part, it was fostering an overall review, sectoral concerns being addressed by existing mechanisms within each Sector.

The Chairperson ruled that consultations would be held between Japan and European countries and report to the Plenary for a decision.

Accounting Rates

The debate on accounting rates continued with the presentation by the Chairperson of ITU-T Study Group 3 of the results of the consultations he coordinated (Briefing Notes N° 14, page 3).

He stressed how difficult it was, whether here in Minneapolis or back in Geneva in the framework of the regular work of his Study Group, to try to achieve the right balance between the needs of the developing countries and the competitive pressures of liberalized markets. He recalled that 3 new remuneration systems departing from the traditional 50:50 accounting rates had already been agreed (in Recommendations ITU-T D.150 and D.155) when both parties agreed that cost-orientated accounting rates had been achieved. In his opinion, therefore, the spirit of Resolution 22 of the Kyoto Plenipotentiary Conference had been fulfilled. The difficult remaining part was to find acceptable transitional arrangements to take account of the economic situation of developing nations which, in many cases, rely heavily on the foreign income from international settlements to develop their telecommunication infrastructure.

The text of the draft resolution (COM 5/18) is therefore stressing 1) the importance of a multilateral framework in accounting rate reform, 2) the need to take account of the possible decrease of investment in telecommunication infrastructure development in developing countries in the absence of alternative sources of financing, 3) the need for Study Group 3 to expedite its work in completing the additional alternative procedures for the international settlement of accounts and 4) the need to agree on transitional arrangements that would take account of the particular situation of developing countries.

A group of administrations from Latin America also submitted a draft resolution combining the accounting rates and call-back issues. The text stresses that the transition from a monopoly to a market economy is one to be phasing over time and that the transition from today’s accounting rates system to one based on cost-orientated is also to be made in steps. On the call-back front, the resolution recalls that 86 of the 188 ITU Member States prohibits the practice in their national legislation, and that the sovereign right of each nation is to be respected by all others.

A long discussion followed where support for both documents was expressed. Those in support of the draft resolution negotiated under the SG3 Chairperson said it was a better approach as it took account of the disparate views expressed so far on the subject and was not making any judgment on the issues. It was in line with what a Plenipotentiary Conference was to do, i.e. state a general policy. It was up to tariffs experts, in the framework of the existing mechanisms, to deal with the substance of the issues. On the other hand, the Latin America countries supporting the resolution were of the view that their text was addressing principles and that this was precisely what a Plenipotentiary Conference was called to do. Some suggested that, as a way forward, some of the good points raised in the resolution could be integrated in the text of resolution COM 5/18.

Considering the general willingness of the participants to come to an agreement, but given the number of amendments being proposed and the lack of time to continue the discussions, Committee 5 Chairperson tasked Study Group 3 Chairperson to hold another series of consultations to attempt to reconcile the views expressed (on principles and on language) and report to the Plenary in the hope that this would give the matter a last chance. For the sake of efficiency, the Chairperson requested delegates not to table individual proposals in Plenary on the subject, but rather to focus on the two documents before the Committee. He also expressed that a converged position would emerge through consultation.

Economic-related spectrum issues

Russia proposed modifying a provision of the Convention (Article 11) to broaden the scope of the studies undertaken by the Radiocommunication Sector on spectrum management. The current language of that provision restricts consideration of economic aspects of spectrum management to cases where technical alternatives are being made. However, the programme of work approved the 1995-1997 Radiocommunication Assembly already provides for examination of economic-related aspects of spectrum management such as the economic value of radio frequency spectrum (licensing, spectrum sale, etc). Russia argued that its proposal only recognizes current practice in today’s deregulated, liberalized and privatized radiocommunication environment.

The US preferred to keep the text of the Convention as it was and include the essence of the Russian proposal as a new objective of the Radio Sector in the Strategic Plan. Canada agreed that the Study Group was addressing these issues, but expressed concerns on the language, particularly if it related to economic evaluation and pricing of equipment manufacturers. It therefore also advocated a status quo.

However, the Netherlands, the United Kingdom, New Zealand and China supported the proposal on the ground that the existing language was indeed too restrictive.

Given a majority view expressed in favour of the Russian proposal, the Chairperson decided to approve it and invited those delegations that could not agree to the change to voice their concerns in Plenary.

Policies and Regulatory Issues

On a motion from a group of Arab States, a proposal was tabled concerning the creation of a Study Group to deal with telecommunications policies and regulatory issues. The co-sponsors said discussions of such issues were concentrated in Study Group 3 of the ITU-T (tariffs and accounting rates issues) and in the Study Group I of ITU-D, while specific aspects were the subject of the World Telecommunication Policy Forum and regulatory colloquia. The proposal, taking the form of a resolution, therefore suggests that a special study group be set up to help establish a global path towards the harmonization of international policies and regulations, taking the view that:

  1. the need for signatories of the WTO reference paper to set up independent regulators
  2. the need for impartial guidance and advice on the process of national policy by developing and least developed countries
  3. the need to create conditions for competitive markets and private sector requirements for flexible market rules

The text provided for the Sectors Advisory Groups, with the Director of the TSB, to decide on the terms of reference.

Several countries indicated that, although acknowledging that a dialogue on the regulatory process best practices was lacking, one had to make sure the scope of application did not include national considerations, and that this would duplicate work already carried out. The proposal was therefore not retained.

Role of Notifying Administration when submitting an application on behalf of a group of administrations in satellite network filing

European countries put forward a proposal aimed at filling the gap between the "perceived" role of a notifying administration when filing a satellite network on behalf of a group of countries, and that of the ITU. The ITU legal instruments provide for the notifying administration to impose the observance of the Constitution, Convention and Administration regulations (i.e. texts having a treaty-level status) on its operators. However, in the case of a group filing, the notifying administration often sees its role as a mail box, whereas t he ITU considers that it assumes responsibility over the notified network. Cases where one administration notifies a network on behalf of a group of administrations include Intelsat, Eutelsat, Inmarsat, Arabsat, etc.

The resolution adopted by Committee 5 in this respect requests that the next World Radiocommunication Conference address the issue of the role and requirements of a notifying administration when filing a satellite systems on behalf of a Group.

Management of the Union

Financial Plan for 2000 -2003

The draft Financial Plan submitted to the Conference had been prepared on the basis of discussions and decisions made by the ITU Council at its last session (June 1998). It included several options together with the financial implications for each, so as to facilitate the discussions of the Plenipotentiaries. Instead, Committee 7 requested on Thursday night (29 October) that the Financial Plan be presented in a consolidated document, without any options or alternatives, but showing clearly the key priorities of the General Secretariat and each of the three sectors of the ITU, and that the plan include the decisions likely to be taken by this Plenipotentiary Conference that would have financial implications on the Union's budget.

Based on these conclusions, the Union’s top management submitted a revised draft Financial Plan to Committee 7 on Saturday morning (31 October 1998). But what had been greeted with praise on Thursday night was greeted with some opposition today.

On Thursday, the original draft Financial Plan (without the options) presented to the delegates carried a negative nominal growth, both in the contributory units and in the level of expenditure. However, when adding the costs to be incurred as a result of the inclusions of the options and the likely decisions of the Conference, the level of the contributory unit quickly went up by 5.12 %. In budgetary terms, the provisional amount of the contributory unit would be CHF 344 800, as compared with the current level of CHF 328 000 for the 1998-99 budget. These items include:

  1. gradual lifting of limitations on the use of official languages of the Union (CHF 30 000 000)
  2. processing charges of satellite network filings (CHF 30 000 000)
  3. strengthened regional presence (CHF 7 900 000) and increase in Headquarters human resources of the Telecommunication Development Bureau (CHF 2 683 000)
  4. increase in expenditure for development conferences (CHF 1 483 000)
  5. post-WRC 97 and intersessional work between WRC 97 and WRC 00 (CHF 2 100 000 and CHF 6 059 000 respectively).
  6. proposed increase in the composition of the Radio Regulations Board from 9 members to 12 (CHF 874 000).
  7. additional resources to accelerate the processing of ITU-T recommendations (CHF 8 608 000)
  8. increase in the frequency of Study Group meetings from one every 10 months to one every 6 months (CHF 6 357 000) so as to keep the pace expected by the industry to meet market demands
  9. reinforcement of the information system databases in the Telecommunication Standardization Bureau CHF 957 000
  10. special programme for the least developed countries (CHF 4 100 000)

A number of delegations stressed the need for the General Secretariat and the Sectors to highlight their priorities in their respective budgets, which should also form an integral part of the final consolidated Financial Plan.

Committee 7 has requested the Coordination Committee to re-submit a revised consolidated Financial Plan on Monday, 2 November 1998.

New elected team to take office in 1999

The Conference decided that the newly elected leadership of the ITU would take office on 1 February 1999.n

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