ITU World Policy Forum Closes with Consensus on New Way Forward

Geneva, 18 March 1998 — The International Telecommunication Union’s second World Telecommunication Policy Forum closed this afternoon, with delegates from 119 countries approving three Opinions aimed at streamlining the move to a more liberal global trading environment for telecommunications services.

Around 700 policy makers, regulators, government delegates and representatives from international organizations attended the three day conference at the Geneva International Conference Centre, which focused on the implications of the World Trade Organization agreement on trade in telecommunications services.

The three Opinions will provide a framework for governments, regulators and operators to move to new trading arrangements and a competitive operating environment. The substance of the Opinions as they were accepted at the close of the Forum is as follows:

Opinion A – acknowledges that the WTO agreement will affect both signatories and non-signatories alike throughout the developed and developing worlds. It reaffirms the importance of low-cost, high quality telecommunications services for economic activity, and recommends that the ITU work with the WTO to prepare, as a matter of urgency, a draft cooperation agreement between the secretariats of the two organizations with the aim of fostering countries’ adaptation to the changing environment.

Opinion B – considers the impact the WTO agreement could have on international operators and service providers, and the role the ITU and other telecommunications organizations might play in mitigating any negative impact on countries, especially those in the developing world. The World Bank has already announced the availability of an initial sum of US$250,000 to fund training in regulatory matters and human resource development, with additional funding promised in the future. In addition, the ITU’s Telecommunication Development Bureau (BDT) announced it will sponsor seminars and training programmes to the tune of one million Swiss francs in 1998, with the aim of helping countries acquire the regulatory and commercial skills needed to cope with liberalized trading environment.

Opinion C – notes that developing countries may experience hardship from a reduction in international settlement payments and will require a period of transition towards cost-based accounting rates. It therefore urges ITU-T Study Group 3 to develop transitional arrangements which will take the special concerns of developing nations into account. Opinion C also recommends that operators introduce systems to determine the real cost of delivering their international traffic, and calls for the establishment of a special Focus Group on accounting rate reform. This group, which would include representatives from the developing world, particularly the Least Developed Countries, via a fellowship programme, would study the particular problems of developing countries with a view to these being incorporated in future ITU Recommendation on international accounting rates. Such a Focus Group would allow for on-going discussion on reform and should help speed up the work of Study Group 3, which to date has been constrained by only being able to meet once every six months.

At a press conference held just before the close of the conference on Wednesday afternoon, Forum Chairman, Neil McMillan, CMG, said the overwhelming message which had emerged from the meeting was that the telecommunications environment is changing, and that operators in non-competitive markets would not be able to sustain current payment systems. "Ultimately, whatever government and regulators decide, it will be the market that will take the measure it needs and determine the rate for future international interconnection payments," he said.

Speaking to journalists at the press conference, ITU Secretary-General Dr Pekka Tarjanne said it was now generally accepted by all participants that accounting rate reform was urgent, and reiterated his wish that the conference conclude with a tangible programme for proceeding towards this goal. Dr Tarjanne predicted "chaos and anarchy" if new arrangements could not be agreed on in the coming few months. "Without transitional arrangements to a new system of international settlement, many people in developing countries will suffer tremendously, but customers in developed countries will suffer too. What we are looking for is balanced development in a fair, equitable fashion."

Mr McMillan said there was a danger that a lack of agreement at this year’s Forum would lead to a ‘free-for-all’ international telecommunication payments between carriers, and speculated that competitive operators might even withhold payments for international connection if prices were considered too high. He added that this would almost certainly be to the detriment of smaller countries and operators.

McMillan admitted that the problem of determining the actual cost of delivering international calls has been a persistent one in an industry which, until recently, has been based on monopoly provision where tariffs were negotiated bilaterally, often quite independently from actual costs. "It is clear that certain carriers are charging up to 100 times more for international calls than for domestic traffic, even though the operation is much the same. This kind of situation cannot continue," he said.

Asked about the ITU’s attitude to the FCC’s proposed accounting rate benchmarks, Dr Tarjanne said all delegations, including the United States, had shown a "very constructive spirit" during the three days of talks. "The US itself has indicated its support for a multilateral solution," said Dr Tarjanne. "I think if we can show that we are making real progress, then the US would be happy to go down that road."

The Forum wound up at 5:30pm Wednesday, 18 March. In his closing remarks Mr McMillan said delegates had reason to be proud of the work they had accomplished over the last three days, and said he hoped the results of the WTPF would help to better equip vulnerable nations for the new telecommunications environment, and assist all countries to develop larger, better and more efficient telecommunications networks.

Further work on developing transitional arrangements to aid developing countries will be on the agenda of the ITU’s second World Telecommunication Development, which begins in Valletta, Malta, on 23 March.

This 10-day conference is expected to attract more than 1,000 delegates from the world’s telecommunications organizations, governments and international funding agencies, and will focus on strategies to promote telecommunications development throughout the world’s under-served communities.

Additional information on the Forum, such as technical backgrounders, feature articles, the Report of the Secretary-General, keynote addresses and other speeches, the text of the Opinions, summaries of the Case Studies, and a Forum agenda, can be found on the WTPF website at: www.itu.int/wtpf/newsroom.

For other media enquiries, please contact the ITU Press Office on tel: +41 22 730 6303: fax: +41 22 730 5939.