WTO/GATS and new rules for Regulators

1. WTO/GATS and new rules for Regulators Egyptian Telecommunication Regulations ( ETRs)in context of WTO/BTA Dr. Sherif Guinena NTRA, EGYPT National Telecommunication Regulatory Authority, Egypt

2. References • General Agreement in Trade in Services. • Guidelines for the scheduling of specific commitments under GATS “”Adopted by the council for Trade In service on 23 March 2001 “”. • Egypt- Schedule of specific commitments Supplement 3 “” GATS/SC/30/SUPPL.3 5 June 2002””. • Understanding WTO - “” 3rd edition Previously published as “Trading into the Future - September 2003 “” • Telecommunication Reform- How to Succeed “Viewpoint – note no.130 October 1997””. • The Gats and new rule for regulators. “” Telecommunication policy, vol.21, no.9/19, 1997””. • Open Market Policy : IP3 training course – November 2003. • WTO : Rights & Obligations – ILI training course – December 2003. • www.wto.org

3. Topics to be covered • What is the WTO? And what is the objective of its establishment? • What are the benefits of the WTO trading system ? • What is the WTO’s structure ? • Does the WTO dictates policy? And are smaller countries forced to join the WTO ? • What are Egypt’s commitments in the basic telecommunication services? • How can the NTRA’s role towards its obligation within this international organization be arranged? • What is the GATS and ITO ? And how is it related to the WTO?

4. Agenda • Historical background • World Trade Organization ( WTO ) - Fact File. - Principles of the WTO trading system. - What about small countries ? -The WTO agreements structure. • General Agreement for Trade in Services ( GATS ) • Egyptian schedule for specific Commitments in Telecommunication. • NTRA’s Role – The Actual Plan. • Expectations The Next phase

5. Historical background • International Trade Organization (ITO) & General Agreement on Tariffs and Trade (GATT). - Great depression of 1930’s. - 50 countries negotiations. - Specialized agency of the United Nations. - ITO Charter was ambitious (Trade, rules on employment, commodity agreements, restrictive business, international investment , and services) - 23 of the 50 participants in 1946 to negotiate to reduce and bind customs tariffs (GATT). - It entered into force in January 1948, while the ITO Charter was still being negotiated. - Ratification in some national legislatures proved impossible. - Without US, the ITO was effectively dead. • Achievements of GATT. - Massive cut in tariff. • Weakness of GATT. - Economic recessions in the 1970s led governments to seek bilateral market-sharing arrangements. - Covered only trade in goods. - Weak dispute resolution. - These and other factors convinced GATT members that a new effort to reinforce and extend the multilateral system should be attempted. - That effort resulted in the Uruguay Round, the Marrakesh Declaration, and the creation of the WTO.

6. World Trade Organization WTO “”The WTO was born out of negotiations;everything the WTO does is the result of negotiations”” • Born in 1995, but not so young. • cause it is Result of Uruguay Round Negotiation 1986-1994 • the goal is to help producers of goods and services, exporters, and importers conduct their business, while allowing governments to meet social and environmental objectives.

7. Historical background The GATT trade rounds The WTO replaced GATT as an international organization, but the General Agreement still exists as the WTO’s umbrella treaty for trade in goods

8. Principles of the WTO trading system • Trade without discrimination. - Most-favoured-nation (MFN): This sounds like a contradiction. - This is what happens. Each member treats all the other members equally as “most-favoured” trading partners • National treatment: Treating foreigners and locals equally. • Freer trade: gradually, Lowering trade barriers through negotiation. • Predictability: through binding and transparency. • Promoting fair competition. • Encouraging development and economic reform

9. What about small countries ? • Reasons for restricting Trade - Weak domestic industries may not be able to compete. - security– needed in time of war (especially food). • Benefits of Trade • Economic Benefits: - Trade stimulates economic growth. - It provides more choice of products and qualities. - Consumer benefit from greater competition. - Trade raises incomes. • Political benefits: - Economic integration reduce likelihood of war (pearl harbor, EU, ..etc) - Governments are shielded from lobbying. - The system encourages good government. - Disputes are handled constructively. - Rules make life easier for all • Developing countries in WTO - For “developing countries” there is a degree of self-selection. - Longer transitional period. - developing countries can receive technical assistance.

10. The WTO agreements structure

11. General Agreement for Trade In Services (GATS) What is the GATS ? • Set of fundamental principle that sustain the multilateral trading system. • Ensuring fair treatment for all participant (non discrimination and transparency). • Structure of GATS: (32 Article , 8 Annexes) - General obligation and disciplines (17 Articles). - Specific commitments (3 Article : Market Access , National Treatment, and additional treatment). - Annexes elaborate further on certain sectors or obligations. (Ex. Annex on Telecommunications.) - Schedules contain commitments submitted by each WTO member (Ex. Egyptian schedule of specific commitments).

12. Egypt’s General Obligations • Most-Favored-Nation Treatment • Transparency • Regulations • Recognition • International Payment and Transfer • Progressive Liberalization

13. Egypt’s SpecificCommitments in Telecommunications • Egypt undertook specific commitments regarding: • Market Access : is defined mostly in terms of quantitativerestrictions (numbers of companies allowed in), but also includes some other forms of limitations such as limits on foreign ownership in an eligible company. ( Article XVI of GATS ) • National Treatment : means treating foreign and domestic companies (or services) equally (Article XVII).

14. Egyptian schedule for specific Commitments in Telecommunication. • Additional commitments relating to measures • Ex.: qualification, standards, licensing matter • Used to indicate positive undertaking, not the listing of additional limitations or restrictions. • Clear definition of the sector. • Countries are free for selecting the sectors. • 12 sectors: business, communication, construction, engineering, education, distribution, environment, financial, health, tourism, recreation, transport, and other • - Opportunity to provide services in the market: • - Access to public networks on reasonable and • discriminatory terms. • some measures are: • * Limitation on number of service providers. • * Limitations on total value of services, transactions or assets. • * Number of service operations • * Total QoS. • * Total number of persons that are employed in a particular sector. A member wishing to maintain any limitations on national treatment- that is any measures which result in less-favorable treatment of foreign services or service suppliers- must indicate these limitation in the third column of its schedule.

15. Egyptian schedule for specific Commitments in Telecommunication. 1 Continuation of ENT beyond 31/12/2005 shall be subject to consultations between Egypt and WTO Members, taking into consideration progress of the CTS discussions on ENT.

16. Egyptian schedule for specific Commitments in Telecommunication. [1] A license is required

17. Egyptian schedule for specific Commitments in Telecommunication. [1] A license is required

18. Egyptian schedule for specific Commitments in Telecommunication.Access Limitations. • Domestic voice: • Telecom Egypt maintains monopoly on facilities-based domestic fixed voice services until 31/12/2005 • Resale of TE’s domestic service allowed • Domestic data, private leased lines, internetservices: • Market access permitted • International voice: • Telecom Egypt maintains monopoly on facilities-based international voice and data services until 31/12/2005 • Resale of TE’s international voice and data services allowed [1] A license is required

19. Egyptian schedule for specific Commitments in Telecommunication.Access Limitations. • Digital Mobile Services • Duopoly until 30/11/2002 • Open for new entrants. • Market Access permitted for • Domestic Payphones • Domestic VSAT services • Domestic value-added services (PPCC, IVR, VP, SMS,…) • All licenses subject to economic needs test until 31/12/2005(Infrastructure Licenses, VAS Licenses ) [1] A license is required

20. Egyptian schedule for specific Commitments in Telecommunication.National Treatment. • No limit on foreign ownership , except TE can sell only 49% of its shares • All licensees must be companies registered in Egypt • All companies must train local human resources • All Licensees must participate in R&D activities (Actually Not National TreatmentbutNational Regulation) [1] A license is required

21. NTRA’s Role “”Regulatory authorities dealing with telecom reform now need to befully aware of the obligations their government has assumed in the GATS”” • Difficult Equation but…… There is a points of success • Be with the events • To be fully aware of our commitments and obligation. • Implementing our national telecommunication reforms programs. • Implementing an Integrated strategy.

22. NTRA’s Regulatory Framework “”Regulatory authorities dealing with telecom reform now need to befully aware of the obligations their government has assumed in the GATS”” • Legislation • Licenses • Regulatory Statements • Regulatory Directives • Interconnection Issues

23. NTRA’s Regulatory Framework “”Regulatory authorities dealing with telecom reform now need to befully aware of the obligations their government has assumed in the GATS”” • Legislation • Laws: • 19/1998 Transform ARENTO into TE. • 10/2003 Telecom regulation Act. • Decrees: • 165/2003 Conformity to the Law • 258/2003 Wireless devices and frequencies assignments • 259/2003 Wireless Institutes. • Directives: Importing & Manufacturing comm. devices

24. NTRA’s Regulatory Framework “”Regulatory authorities dealing with telecom reform now need to befully aware of the obligations their government has assumed in the GATS”” • Licenses • Fixed • Mobile • Wireless • VAS • Data & Internet • VSAT & GMPCS

25. NTRA’s Regulatory Framework “”Regulatory authorities dealing with telecom reform now need to befully aware of the obligations their government has assumed in the GATS”” • Regulatory statement • Authorization • Registration • Notification- • Regulatory directives or codes.

26. NTRA’s Regulatory Framework “”Regulatory authorities dealing with telecom reform now need to befully aware of the obligations their government has assumed in the GATS”” • Interconnection • ROI • Dispute Resolution

27. NTRA’s Regulatory Framework Petitions Complaints New Regulation International & National Commitments Market survey Preliminary acceptance Denial Regulation Scheme Market Survey Economic Technical Studies Regulatory Procedures & Recommendations Approval Implementation & Follow-up “”Regulatory authorities dealing with telecom reform now need to befully aware of the obligations their government has assumed in the GATS”” The Rule Making Process

28. NTRA’s Regulatory Framework “”Regulatory authorities dealing with telecom reform now need to befully aware of the obligations their government has assumed in the GATS”” Regulation thenDeregulation

29. NTRA’s Role – The bligations “”Regulatory authorities dealing with telecom reform now need to befully aware of the obligations their government has assumed in the GATS”” • NTRA’s Obligations: (From Telecom. Annex, Schedule of specific commitment, Reference paper on communications) are: • Competitive safeguards • Interconnection. • Universal service. • Allocation and use of scarce resources. • Transparency (Public availability of licensing criteria). • Independent Regulator

30. NTRA’s Role – Actual Plan Q4 05 Dec 04 Q1 05 Q2 05 Q3 05 “”Regulatory authorities dealing with telecom reform now need to befully aware of the obligations their government has assumed in the GATS”” • Actual Plan • based on : • Integrated strategy • National telecommunication reforms programs. • Licensing program notification • US: obligation , analysis • US: Tenders • US: Implementation & USF • Comments on licensing • Finalize the licensing program. • Competition : Merger & Acquisition rules Interconnection: RIO negotiation • Rule Making: • Notification • Spectrum Management • Frequency Pricing • Numbering • US data collection • Rule Making: • Implementation • Competition & Interconnection: Market Definition & SMP

31. Licensing • Transparent licensing process and criteria • Deregulation plan towards 2005 • Mobile • Towards tariff structuring for existing networks • Preparation for 3rd Mobile Operator • Internet • Free Internet licensing • Refinement of the overall Internet licensing environment • Broad band • Fixed Network • Unbundling of the Local Loop • Payphones • TE Licensing • Opening new services for competition • PP Calling Cards • WiFi- WIMAX • CDMA • Trunked Digital Public Mobile Radio Service (TEREA)

32. Licensed Services • PSTN 1 • Pay Phone 3 • PPCC 4 • Mobile 2 • Data Gateway 3 • PDN 7 • Internet (ISP) 170 • GMPCS 2 • VSAT 2 • Frequencies 4230 • Tetra 1

33. The Radio Spectrum Allocation Plan ofEGYPT

34. Universal Service • Expenditures of the USF are utilized by virtue of Act no.10 of 2003 on the following aspects: • Infrastructure projects • Reallocation of frequency spectrum • Projects of the Telecom National Plans (CIT) • Compensating Telecom operators for price deficiencies • The US Fund is established and is ready for implementation.

35. Expectations The Next Phase • Interactive exercises on schedules of telecom commitments. • Examples of regional regulatory initiatives. • WTO dispute settlement processes. • Interconnection Dispute Resolution alternatives (case studies). • Interconnection agreements in the era of converged services. • Other WTO agreements and issues relevant to the telecommunication and ICT (technical barriers to trade TBT, Information Technology, Government procurement.) • Contact with MCIT for more cooperation during negotiation and consultation between Egypt and WTO members.

36. Thank you