Archived — Notice No. DGTP-008-96

Industry Canada

Telecommunications Act and Radiocommunication Act

Notice No. DGTP-008-96—Review of Canadian Telecommunications Policy in the Context of Global Trade Developments

The purpose of this notice is to solicit public comment, advice and recommendations on various issues related to the current negotiations on basic telecommunications services which are taking place in the World Trade Organization. Key issues in the negotiations include liberalization in the provision of all services, the development of regulatory principles, and the removal of foreign investment limits. Public comment on these issues and those set out below is solicited, as are comments on any other issues which are believed to be of relevance to the negotiations.

1. Background

As part of the General Agreement on Trade in Services (or "GATS"), produced at the conclusion of the GATT Uruguay Round of negotiations in December 1993, Canada and many other countries made market access commitments for "enhanced" or value-added telecommunications services. Following the end of the Round, several countries, including Canada, agreed to continue negotiating an agreement on basic telecommunications services for a two year period ending in April 1996. However, on April 30, 1996, there was an agreement to freeze the existing offers and again continue negotiations with an opportunity to adjust offers in the period January 15, 1997, until February 15, 1997. It is proposed that the overall agreement be scheduled to come into effect on January 1, 1998.

Canada's objectives in these negotiations are to ensure that we remain leaders in the development and provision of telecommunications services, to ensure that Canadian users continue to have timely access to the full range of services they require at competitive prices, and to create a climate of economic growth and job development in this sector and those that rely on telecommunications. A further objective is to create market access opportunities in other countries. Equally important is ensuring that all commitments are fully implemented, and that Canadian firms are not disadvantaged by discriminatory licensing regimes, or failure to implement appropriate regulatory safeguards.

The offers now on the table would, if implemented, represent significant advances in each of the three areas being negotiated. The three areas are: expanding competition; ensuring that appropriate regulatory safeguards are in place; and, expanding opportunities for foreign investment.

There is now a broad consensus in developed countries that competition will be permitted in the provision of essentially all telecommunications services. This consensus has also been adopted by a very substantial number of developing countries, including a majority of the key emerging economies. One of the major accomplishments of the negotiations to date has been agreement on a reference paper containing a set of regulatory principles which are essential to ensure the fairness and efficacy of competition. Most of the 51 participating countries have indicated their intention to commit to these principles in whole or in part.

2. Discussion of Issues

Several key issues remain in the negotiations. Most important is the removal of the remaining limitations in the existing offers and encouraging developing countries to table offers. Foreign investment rules, a central element from the beginning, continue to be an area of focus. Designing a framework, consistent with GATS principles, which liberalizes the provision of international services, while simultaneously minimizing the potential for monopoly or exclusive suppliers to abuse their position, is another area where substantial work remains to be done. Satellite facilities and services are receiving special attention since traditional trading rules are not easily applied to these new technologies and advanced services.

Canada's current offer is to bind (i.e., to not make more restrictive) the present Canadian regulatory and investment regime for telecommunications services, subject to obtaining an acceptable balance of benefits from other countries. Canada has also offered to phase out the remaining monopolies.

A number of Canadian restrictions have been identified as trade barriers by some other participants in the negotiations. These are: the limits on foreign ownership; the timetable for phasing out our remaining monopolies; and our traffic routing or "bypass" policy which encourages the use of the Canadian infrastructure for domestic and international traffic. While it is difficult to compare the wide range of national regimes and degrees of market openness in this sector, the United States and the European Union are proposing to eliminate such restrictions. We are seeking your views with respect to these demands from our trading partners.

Conversely, of particular importance to Canada is the elimination of regulatory barriers for Canadian service providers operating abroad. It is essential to ensure that, as more and more countries begin to open up their former telecommunications monopolies to foreign participation, some basic rules are in place and apply to all. This will help protect medium-sized players, such as Canadian carriers, from unfair competition from global carriers. We welcome your views on these key demands and on the potential for an agreement that is mutually advantageous to Canada and our trading partners.

3. Invitation to Comment

The Government has benefited from industry advice in the earlier phase of these negotiations. It is now critical that we have the benefit of the views of individuals and organizations on specifically what existing barriers in foreign markets you would like to see removed and, more generally, what gains you feel should flow from an agreement.

As the Government is subject to the federal Access to Information Act, which does contain certain exemptions for commercially sensitive information, we would request that you identify any such information contained in your submission.

Submissions in response to this Canada Gazette notice should be addressed to the Director General of the Telecommunications Policy Branch, Industry Canada, at the addresses below and should be received on or before September 30, 1996, to receive full consideration. All representations should cite the Canada Gazette, Part I, notice publication date, title, and reference number. The mailing address is:

Larry Shaw, Director
General Telecommunications Policy
Department of Industry
300 Slater Street
Ottawa, Ontario
K1A 0C8
613-998-4241 (Telephone)
613-952-0567 (Facsimile) (Internet).

Copies of this notice are also available from the:

Communications Branch
Industry Canada
235 Queen Street
Ottawa, Ontario
K1A 0H5

and from the offices of Industry Canada at Moncton, Montréal, Toronto, Winnipeg and Vancouver.

August 15, 1996

Larry Shaw

Director General Telecommunications Policy Branch

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