PART I

1 The ITU World Telecommunication Policy Forum (WTPF) was established by Resolution 2 of the Kyoto Plenipotentiary Conference to provide a Forum where ITU Member States and Sector Members can discuss and exchange views and information on emerging telecommunication policy and regulatory matters arising from the changing telecommunications environment. Although Forums are not to produce prescriptive regulatory outcomes or outputs with binding force, they may prepare reports and, where appropriate, opinions for consideration by Members and relevant ITU meetings.

2 By Decision 475, the 1997 session of the ITU Council decided to convene the second WTPF in Geneva from 16-18 March 1998, immediately before the World Telecommunication Development Conference, to discuss the theme "Trade in telecommunication services" with the following agenda:

the Decision states that "the Forum shall draw up a report and, if possible, opinions for consideration by ITU Members and relevant ITU meetings".

3 The Second Policy Forum was held at the Geneva International Conference Centre from 16-18 March 1998. It was attended by 593 delegates representing 119 Member States (including 31 of the Least Developed Countries) and 64 Sector Members. Mr. Neil McMillan CMG, Director, International Communications Policy, of the Department of Trade and Industry, United Kingdom was elected Chairman.

4 The draft agenda was approved as prepared. The Rules of Procedure adopted at the First Policy Forum, held 21-23 October 1996, were followed.

5 Dr. Pekka Tarjanne, Secretary-General of the ITU, presented his report on trade in telecommunication services. In accordance with Council Decision 475, this report incorporated contributions from the ITU membership and had been prepared to serve as the sole document of the Policy Forum. Earlier drafts had been circulated to the membership in September and December 1997. In addition, an Informal Group of Experts, chaired by Mr. Neil McMillan, held two meetings, on 2 December 1997 and 5-6 February 1998, to revise the draft report and to prepare the draft Opinions.

6 In presenting his report, the Secretary-General underlined the following points which had emerged from Members' contributions:

a) The telecommunications world has changed fundamentally as a result of the WTO basic telecommunications agreement and the General Agreement on Trade in Services (GATS) which preceded it. The telecommunications industry now operates, for all intents and purposes, under a trade regime.

b) The basic telecommunications agreement will affect all ITU Member States and Sector Members because the 72 countries which have made commitments collectively account for more than 93 per cent of global telecommunications revenue.

c) In the transition towards a market-oriented environment, it is important that all countries are able to benefit fully from the new opportunities that a liberalized and dynamic world telecommunications market will create, if they so wish.

d) Many developing countries currently rely upon the net settlement payments made under the accounting rate system for a share of their total telecommunications revenue and are consequently concerned that the transition to cost-oriented settlement rates might reduce these payments. He emphasized the need for gaining multilateral consensus on accounting rate reform.

He invited the Policy Forum to adopt opinions, if possible, on:

• the implications of the WTO Agreement on basic telecommunication services for the ITU membership;
• the implications of the WTO Agreement for developing countries and cooperative actions between ITU Member States and Sector Members to facilitate adaptation to the new telecommunication environment;
• the evolution of the international telecommunication environment, particularly the accounting and settlement system.

7 In addition to the presentation of the Secretary-General's report, the Policy Forum heard keynote addresses on the issues identified in Council Decision 475 from Mr. Renato Ruggiero, Director-General of the World Trade Organization, Mr. Theodore Irmer, Director of the ITU Telecommunication Standardization Bureau and Mr. Ahmed Laouyane, Director of the ITU Telecommunication Development Bureau, in addition to an address by Dr. Tarjanne himself.

8 Following these keynote presentations, the Policy Forum engaged in a general discussion of the Secretary-General's report on Trade in Telecommunication Services. While this report served as the sole working document for the Forum, participants were also provided with the results of nine case studies of the changing international telecommunications environment which covered the Bahamas, Colombia, India, Lesotho, Mauritania, Samoa, Senegal, Sri Lanka and Uganda, which had been commissioned specially for the Forum in-line with Council Decision 475.

9 During the meeting, there were a number of important announcements:

• Mr. Ahmed Laouyane, Director of the BDT, announced that, subject to approval at the World Telecommunication Development Conference (WTDC) in Valletta, the BDT would set aside some SFr 1 million to assist in financing follow-up work to the Policy Forum, notably the activities highlighted in Opinions B and C.
• Mr. Carlos Braga, Director of the InfoDev programme of the World Bank, announced that the sum of $US 250 000 had been set aside to assist in follow-up work to the Policy Forum, notably the organization of regional seminars. A further announcement would be made in Valletta.
• Mr. Yoshio Utsumi, Deputy Minister of Posts and Telecommunications, Japan, announced that it would be making a voluntary contribution of around SFr 100 000 to accelerate the work of ITU-T Study Group 3.
• Mr Alain Servantie, Head of International Aspects of Telecommunications at the European Commission, informed that four additional country case studies have recently been launched by the European Commission, covering Indonesia, Lebanon, Ukraine and Zimbabwe. They are expected to be concluded in time for the meeting of June 1998 of ITU-T Study Group 3.

10 The Policy Forum then considered the draft Opinions contained in the Secretary-General's report and adopted them, with modifications, as presented in Part II of this Report.