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GATS & Telecom: Reasonable Regulation & Right to Regulate Members

This article explores the concept of "reasonable regulation" in the context of GATS and telecom. It emphasizes the right of members to regulate and introduces new regulations to meet national policy objectives. The article also discusses non-discrimination and the importance of MFN treatment in telecom.

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GATS & Telecom: Reasonable Regulation & Right to Regulate Members

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  1. GATS &Telecom Reasonable regulation

  2. Right to Regulate Members, ... Recognizing the right of Members to regulate, and to introduce new regulations, ... in order to meet national policy objectives and given asymmetries existing with respect to the degree of development of services regulations in different countries, the particular need of developing countries to exercise this right ... Agree as follows ... GATS Preamble

  3. Reasonable Regulation

  4. What is “reasonable”? • Transparent • Non-discriminatory • Objective • Impartial • Timely • Least burdensome • Necessary • Least (trade) restrictive

  5. Non-discrimination

  6. Non-discrimination Most-favoured-nation Treatment MFN is critical - it makes WTO truly multilateral “… each Member shall accord immediately and unconditionally to services and service suppliers of any other Member treatment no less favourable than that it accords to like services and service suppliers of any other country” GATS Art. II:1

  7. Non-discrimination MFN Treatment No discrimination among the foreign services or service suppliers of Members Moreover...MFN applies whether or not a commitments has made on telecom in its schedule ! In telecom, MFN is particularly important in privatization, licensing or tendering GATS Art. II

  8. Non-discrimination National Treatment Each Member shall accord to foreign services and services suppliers treatment no less favorable than that it accords to its own like services and service suppliers GATS Art. XVII

  9. Non-discrimination National Treatment • no discrimination against foreign services or service suppliers compared with domestic ones • applies to any degree of discrimination in all types of measures • no discrimination on a de jure or de facto basis In Schedules, “limitations” can allow preferences to domestic services or suppliers but, national treatment departures are not common in telecom commitments GATS Art. XVII

  10. Non-discriminationIn telecom ... Access and use ensure that any service supplier ... is accorded access to and use of [PTTNS] on reasonable and non-discriminatory* terms and conditions, for the supply of a service in its Schedule *"non-discriminatory" is understood to refer tomost-favoured-nation and national treatment ... as well as ... sector-specific usage ... "terms and conditions no less favourable than those accorded to any other user of like [PTTNS] under like circumstances" Annex on Telecoms, Sec. 5(a)

  11. Non-discriminationIn telecom ... Interconnection with a major supplier will be ensured ... • under non-discriminatoryterms, conditions ... and rates • and of a quality no less favourable than that provided for its own like services or for like services of non-affiliated service suppliers or for its subsidiaries or other affiliates;... Reference Paper, Para. 2.2(a)

  12. Non-discriminationIn telecom ... Universal service Such obligations will not be regarded as anti-competitive per se, provided they are administered in a transparent, non-discriminatory and competitively neutral manner and are not more burdensome than necessary... Reference Paper, Para. 3

  13. Non-discriminationIn telecom ... Allocation & use of scarce resources Procedures for the allocation and use of scarce resources, including frequencies, numbers and rights of way, will be carried out in an objective, timely, transparent and non-discriminatory manner. Reference Paper Para. 6

  14. Reasonableness

  15. Core obligation Ensure that all measures of general application affecting trade in services are administered in a reasonable, objective and impartial manner Reasonableness GATS Art. VI:1

  16. ReasonablenessIn telecom Access and use ensure that any service supplier ... is accorded access to and use of [PTTNS] on reasonable and non-discriminatoryterms and conditions, for the supply of a service included in its Schedule Annex on Telecoms, Sec. 5(a)

  17. ReasonablenessIn telecom Ensureinterconnection is provided ... ... in a timely fashion, onterms, conditions (including technical standards & specifications) and cost-orientedratesthat aretransparent, reasonable, having regard to economic feasibility, ... Reference paper, Para. 2.2(b)

  18. ReasonablenessIn telecom Interconnection Dispute Settlement A service supplier ... will have recourse, either: • at any time or • after a reasonable period of time ... to an independent domestic body... to resolve disputes regarding appropriate terms, conditions and rates for interconnection within a reasonable period of time ... Reference paper, Para. 2.5

  19. Ensure that all measures of general application affecting trade in services are administered in a reasonable, objective and impartial manner Define it? GATS Art. VI:1

  20. “measures”? "measure" means any measure by a Member, . . . a law, regulation, rule, procedure, decision, administrative action, or any other form GATS Art. XXVIII(a)

  21. Ensure that all measures of general applicationaffecting trade in servicesare administered in a reasonable, objective and impartial manner Define it? GATS Art. VI:1

  22. “affecting trade in services”? Includes measures related to • purchase, payment or use of a service • access to and use of, in connection with the supply of a service, services required to be offered to the public generally • the presence, including commercial presence, of persons of a Member for the supply of a service in the territory of another Member GATS Art. XXVIII(c)

  23. “supply of a service” includes • production • distribution • marketing • sale • delivery GATS Art. XXVIII(b)

  24. Ensure that all measures of general application affecting trade in services are administered in a reasonable, objective and impartial manner Define it? GATS Art. VI:1

  25. “administer”? • to manage or supervise the execution of • carry out, govern, render Merriam-Webster Online

  26. The core obligation concerns the manner in which measures are administered or implemented... but not the nature or content of the measures themselves ... other obligations may apply in this respect “administer”?

  27. Ensure that all measures of general application affecting trade in services are administered in a reasonable, objective and impartial manner Define it? GATS Art. VI:1

  28. not extreme or excessive having a rational ground or motive logical, sensible, sound “Reasonable” Merriam-Webster Online

  29. Precedent: Panel Reports appropriate or suitable to the circumstances or purpose Flexibility and balance are also part of the notion of "reasonable" “Reasonable” Report of the Panel, Mexico – Measures affecting Telecommunications Services

  30. Precedent: Panel Reports The word 'reasonable' implies a degree of flexibility that involves consideration of all of the circumstances of a particular case. What is 'reasonable' in one set of circumstances may prove to be less than 'reasonable' in different circumstances. ... In sum, a "reasonable period" must be interpreted consistently with the notions of flexibility and balance that are inherent in the concept of "reasonableness", and in a manner that allows for account to be taken of the particular circumstances of each case. “Reasonable” Appellate Body Report, US – Hot-Rolled Steel

  31. Objective Impartial Timely

  32. Ensure that all measures of general application affecting trade in services are administered in a reasonable, objective and impartial manner Define it? GATS Art. VI:1

  33. expressing or dealing with facts or conditions as perceived without distortion reducing subjective factors to a minimum fair, equitable, impartial, nondiscriminatory, unbiased, “Objective” Merriam-Webster Online

  34. treating or affecting all equally fair, equal, equitable, just nondiscriminatory, objective, unbiased “Impartial” Merriam-Webster Online

  35. Administrative appeals maintain or institute procedures for the prompt review of, and where justified, appropriate remedies for, administrative decisions Where such procedures are not independent of the agency entrusted with the decision concerned ...ensure that the procedures in fact provide for anobjective and impartialreview Objective & impartial GATS Art. VI:2(a)

  36. The decisions of and procedures used by regulators shall be impartialwith respect to all market participants Impartiality in Telecom ... Reference Paper, Para. 5

  37. Timely? • Each Member shall publish promptlyand, except in emergency situations, at the latest by the time of their entry into force, all relevant measures of general application... (Art III:1) • Where authorization is required ... within a reasonable period of time ... inform the applicant of the decision ... (Art VI:3) • At the request of the applicant, ... without undue delay, information concerning the status of the application. (Art VI:3) GATS Articles

  38. Timely? Ensureinterconnection is provided ... ... in a timely fashion, onterms, conditions ... and cost-orientedratesthat aretransparent, reasonable ... Reference Paper ---

  39. Timely? Interconnection Dispute Settlement A service supplier ... will have recourse, either: • at any time or • after a reasonable period of time ... to an independent domestic body... to resolve disputes regarding appropriate terms, conditions and rates for interconnection within a reasonable period of time ... Reference paper, Para. 2.5

  40. Domestic Regulation Work Program

  41. A GATS Work Program is underway to ensure that Qualifications, technical standards, & licensing do not constitute unnecessary barriers to trade GATS Art. VI:4

  42. Three principlesguiding the work program Such requirements should be ... based on objective & transparent criteria not more burdensome than necessary and that licensing procedures, not in themselves a restriction on the supply of the service Domestic Regulation:Principles GATS Art. VI:4

  43. A “standstill” Qualifications - technical standards - licensing • Pending results of the work program, Members cannot apply requirements that nullify or impair commitments in a manner which could not reasonably have been expected when commitments were made • This means: NEW requirements and related laws and regulations must comply with principles of the work program • When was the last time you revised your telecom laws or regulations? GATS Art. VI:5

  44. Qualifications - technical standards – licensing based on objective & transparent criteriae.g. standards & criteria relate to competence and ability to supply the service not more burdensome than necessarye.g. standards and criteria relate ensuring the quality of the service licensing procedures not a restriction on the supply of the servicee.g. streamlined or simplified procedures The 3 principles GATS Art. VI:4

  45. Qualifications - technical standards – licensing based on objective & transparent criteria... QUALITATIVE not more burdensome than necessary ... QUALITATIVE ... LEAST BURDENSOME ... PROPORTIONATE TO THE OBJECTIVE licensing procedures not a restriction on the supply of the servicee.g. ... LEAST TRADE RESTRICTIVE In a nutshell ... GATS Art. VI:4

  46. Necessary

  47. Necessity? • not constitute unnecessarybarriers to trade (VI:4) • not more burdensome than necessary(VI:4(b)) • necessary to protect public morals or to maintain public order; ... to protect human, animal or plant life or health; ... to secure compliance with laws or regulations (XIV) GATS Articles

  48. Necessity? ...ensure that no condition is imposed on access to and use of public telecommunications transport networks and services other than asnecessary ... Annex on Telecoms, Sec. 5(e)

  49. Necessity? Universal service Such obligations will not be regarded as anti-competitive per se, provided they are administered in a transparent, non-discriminatory and competitively neutral manner and are not more burdensome than necessary... Reference Paper Sec. 3

  50. Necessity “test”? ... may import absolute physical necessity or inevitability, or ... that which is only convenient, useful, appropriate, suitable, proper, or conducive to the end sought ...can refer to a range of degrees of necessity, depending on the context, and the object and purpose of the provision in which it is used ... can be understood to mean "indispensable" to achieving a policy goal; [or] ... taken to mean simply "making a contribution to" a policy goal [*] Report of the Panel, Mexico – Measures affecting Telecommunications Services *Appellate Body Report, Korea –Various Measures on Beef

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