Washington, DC, Nov 26, 1997 /Capitol NewsWire -
Washington, DC Bureau -Business Correspondent

U.S. Votes to open its market to foreign telecom providers

The Federal Communications Commission (FCC) has voted to give foreign companies from World Trade Organization (WTO) member countries nearly unrestricted access to the U.S. telecommunications and satellite markets.

The November 25 action was taken just five weeks before the United States and 19 other countries must implement the market opening provisions of the Basic Telecom Agreement negotiated under the auspices of the WTO last February. Another 50 countries will phase in their market access commitments over five years.

The United States is the first country to implement the WTO agreement, which FCC Chairman William E. Kennard predicted will sharply cut telecommunications costs -- up to 70 percent in international calling rates -- and provide much-needed investment capital into the $600,000 million global market for basic telecommunications services.

Previously, the FCC would apply an "effective competitive opportunities" (ECO) test to all foreign companies seeking access into the U.S. telecommunications market. If the company's home markets offered effective competitive opportunities to U.S. telecommunications companies, than the company's application would be considered.

The FCC also lifted a restriction that had limited foreign investors to owning no more than 25 percent of U.S. telecommunications companies. Now all 132 WTO member countries can have 100 percent indirect ownership of U.S. telecommunication companies. What this means is that the licensee has to be a U.S. corporation though that
corporation may be wholly owned by a foreign corporation.

Also, a foreign investor will be able to own up to 49 percent of a U.S. telecommunications company without undergoing the traditional rigorous merger analysis the FCC has previously applied to foreign investments as low as 25 percent.

The FCC also eased restrictions for foreign-owned satellite companies in WTO countries to provide service to U.S. customers.

Restrictions would still apply on non-member WTO countries and the FCC would retain the right to put in safeguards to prevent foreign companies from using practices that would distort competition in the United States.

"In the event of anticompetitive conduct, it (FCC) may issue fines, require additional conditions on a grant of authority, and, if necessary, revoke an authorization," the FCC said.

"American companies are going to be the prime beneficiaries because as competition spreads internationally they are in the best position to take advantage of these opportunities," Kennard said.

Currently, U.S. companies can compete for less than 20 percent of the top 20 telephone markets in the world. Once the WTO agreement is fully implemented, that access will increase to more than 90 percent, the FCC said.

San Francisco, California, Sept 19, 1997 /Capitol NewsWire -
San Francisco Bureau - State Dept Correspondent

TALBOTT OUTLINES U.S. VIEWS ON "GLOBAL INTERDEPENDENCE"

Deputy Secretary of State Strobe Talbott explained the Clinton administration's approach to "global interdependence" in a speech delivered September 18 to the World Affairs Council of Northern California in San Francisco.

Global interdependence refers to "a simple fact of life of the era in which we live: what happens there matters here," Talbott said. "There" can be anywhere, from the Taiwan Strait to the Strait of Hormuz, to the stock exchange in Singapore, to an ozone hole high over Patagonia.

Talbott emphasized that global interdependence is neither inherently good nor inherently bad, but it "has created new threats as well as new opportunities. Just as diplomats and venture capitalists have access to the airlines, the airwaves, and the fiber-optic cables, so do terrorists, drug-traffickers and smugglers of lethal materials."

He discussed America's challenge in "joining forces with other countries to promote common values and common interests, and to combat common enemies," citing efforts in Latin America, Europe, and Asia.

The North American Free Trade Agreement (NAFTA), he said, is just "one of several building blocks in a larger, more ambitious construction project -- the consolidation of the entire Western hemisphere into a peaceful, democratic, and prosperous community of nations." Among other building blocks are the Organization for American States (OAS), MERCOSUR (Southern Cone Common Market), and efforts to create a Free Trade Area of the Americas.

In Europe as in the Americas, Talbott said, "our leaders are constructing a complex of overlapping, mutually reinforcing international associations." He cited the Organization for Security and Cooperation in Europe (OSCE), the European Union, and NATO (North Atlantic Treaty Organization), stressing that "NATO is not just a military organization -- it is also a political one; it is a catalyst for strengthening the values and institutions that the Allies have in common." It also has a mechanism for cooperation with Russia, he noted, in the form of the NATO-Russia Permanent Joint Council, which will meet later in September to "plan further cooperation in areas like peacekeeping, defense conversion, and disaster relief."

Looking to Asia, Talbott noted that while there is no collective defense pact, both the ASEAN Regional Forum and APEC "have the potential to address security concerns. Though they are not military in function nor are they intended to supplant our bilateral security alliances, they can still encourage patterns of cooperation and promote what is called 'transparency' and 'confidence-building' among the states in the region." The United States is active in both.

He stressed that "the right kind of regional integration should foster transregional integration" and that states individually and collectively should look to other parts of the world "for partners in the common causes of peace and commerce.... Regional cooperation is a positive force if and only if it enhances the positive aspects of global interdependence, and combats the negative ones."

The United States, Talbott said, "will be vigilant in discerning, and active in opposing, trends toward the wrong kind of integration -- the inward-looking and protectionist kind -- and in opposing the wrong kind of regional cohesion, which could spawn the worst kind of inter-regional conflict."

It is important "to make sure that cooperation within regions reinforces cooperation among regions," he said.