Liberalized Telecommunications Trade in the WTO: Implications for Universal Service Policy

By McLarty, Taunya L. | Federal Communications Law Journal, December 1998 | Go to article overview
Save to active project

Liberalized Telecommunications Trade in the WTO: Implications for Universal Service Policy


McLarty, Taunya L., Federal Communications Law Journal


I. TELECOMMUNICATIONS: A SERVICE SECTOR AND A BACKBONE FOR OTHER SECTORS

The telecommunications market is one of the largest markets in the world, second only to the financial services market. The International Telecommunication Union (ITU) estimated in the mid-1990s that the telecommunications market was worth about $513 billion.(1) Although telecommunications service providers acquire most of their revenue from domestic demand, they are increasingly seeking international returns.(2)

Telecommunications has a "dual role as a distinct sector of economic activity and as the underlying transport means for other ... activities."(3) In addition to financial institutions now transferring $2.3 trillion or more electronically every day, educators, researchers, politicians, and others use electronic means to exchange information.(4) The demand for telecommunications services that transmit voice and data electronically is rapidly escalating because of this interconnectedness.(5)

There has been a significant shift from domestic intrasufficiency to international interdependence in both the demand and supply sides of markets generally.(6) As consumers become more sophisticated in evaluating the world market, businesses have to maintain their comparative advantage in services by globalizing research, manufacturing products with multinational components, and targeting international markets.(7) The telecommunications industry illustrates this phenomenon.

All of these factors--the high demand for telecommunications services, the interconnectedness of telecommunications sector inputs and uses, and international dependence--created the need to avoid piecemeal and segmented telecommunications trade policy.

Some countries have responded unilaterally to the changes in telecommunications by privatizing and deregulating their domestic markets. Through privatization, the government transforms the telecommunications sector from a state owned and operated enterprise into a private enterprise, although the private enterprise can maintain a monopolistic position. Through liberalization, the government allows many enterprises to compete effectively for consumer demand.

However, the most profound impact on the global telecommunications markets will likely come from the concluded multilateral negotiations on basic telecommunications services in the World Trade Organization (WTO)(8) under the auspices of the General Agreement on Trade in Services (GATS).(9) The results of these negotiations could be the driving force behind a wave of countries liberalizing their trade laws to ease the harshness and complexity of providing telecommunications services over national borders.

The February 15, 1997 negotiations on basic telecommunications reached significant commitments. However, these commitments on basic telecommunications cannot be considered outside of the bigger framework of the GATS in the WTO. The conclusion of the GATS in 1994 set the stage for continued negotiations on various service sectors and subsectors. Thus, while the 1997 basic telecommunications commitments specifically addressed the problems faced by those wanting to offer such services, they were annexed to, and became an integral part of, GATS, which is the foundation for all trade in services.

This Article begins in Part II by discussing the significance of the basic telecommunications commitments on liberalization, specifically showing why sector negotiations on telecommunications and even subsector negotiations on basic telecommunications were necessary. Part III outlines a history of the basic telecommunications negotiations in light of the services negotiations under GATS that preceded them. In Part IV, the Article explains how the obligations underlying all WTO trade agreements, namely most-favored-nation (MFN) status, national treatment, market access, and transparency, apply to services, and more narrowly, to the telecommunications services within the negotiations' scope.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Liberalized Telecommunications Trade in the WTO: Implications for Universal Service Policy
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?