16th Meeting of the Summit Implementation Review Group, Santo Domingo, Dominican Republic, March 8 and 9, 1999

FOLLOW-UP TO THE TELECOMMUNICATIONS MANDATES OF THE SECOND SUMMIT OF THE AMERICAS

COORDINATING COUNTRY: CHILE

I. Introduction

In April 1998, countries of the hemisphere met in Santiago, Chile, for the Second Summit of the Americas. At that meeting, the Heads of State and Government, authorities and experts of the Americas reviewed the progress made since their previous meeting, and proposed a series of concrete and ambitious goals for various sectors.

With respect to telecommunications, the Santiago Plan of Action established a number of commitments for countries of the hemisphere, to be addressed in accordance with their national plans. Countries have worked both individually and collectively, through regional and subregional integration bodies in giving effect to these commitments. Among these international bodies, the Inter-American Telecommunications Commission (CITEL) was the natural forum for undertaking initiatives to achieve Summit objectives, and has provided funding, infrastructure support and expertise to this end. Similarly, the Inter-American Development Bank (IDB) and the World Bank have provided financial and organizational support.

II. Progress achieved

Progress to date under these various commitments can be summarized as follows:

1. Telecommunications development and universal access to services.

"Establish strategies to support the development and continuous updating of a regional telecommunications infrastructure plan, taking into account national plans, the need for universal access to basic telecommunications services throughout the Region and the evolution of the Global Information Society".

Argentina has established new obligations for companies licensed to provide basic service, aimed at meeting social goals and quality standards. Among these are the requirement to provide connections to all localities with more than 2,000 inhabitants and to ensure access to all of their central offices and subscribers.

Brazil has implemented a "General Plan of Goals for Universal Access to Fixed Switched Telephone Service". Concessionaires under the service must install a public telephone, according to a four-year timetable, in all localities that have between 100 and 1000 inhabitants. They must also meet individual demands for telephone service.

In Chile, a Telecommunications Development Fund has been instituted, which represents a demand subsidy provided directly from the national budget. The purpose of the fund is to encourage increased telephone service coverage in low-income rural and urban areas where telephone density is low. Special attention has been paid to be stipulations in the United Nations' uniform standards on equal opportunities for persons with disabilities, to the effect that states must develop strategies to ensure that information and documentation services are accessible to various groups of people with disabilities. In this regard, a commission has been established representing the Department of Telecommunications, the National Disabilities Fund, groups representing disabled persons, and telecommunications companies, with a view to incorporating and designing strategies to ensure access to telecommunications services for people with disabilities, by making appropriate changes to standards and regulations and the range of technologies authorized for use in the country.

Ecuador, in its reforms to the Special Telecommunications Law, has established special or differentiated tariffs for residential service in low-income and rural areas, the Galapagos Islands, and frontier areas. The tariffs set for this category imply a subsidy both for subscription fees and basic service charges.

Mexico has seen major growth in its telephone facilities in recent years, and the number of lines increased from 5.4 million in 1990 to 9 million in 1997. In the last six years, telephone density has risen at a rate of 6.6 percent annually, and now covers 20,694 population centers.

Paraguay has implemented a Universal Service Fund, which will help to provide basic telephone service in rural areas and other locations where the private sector finds it unprofitable to do so.

Peru has created a Telecommunications Investment Fund (Fitel), managed by Osiptel. Its objective is to finance services in rural areas and in places deemed to be of priority social interest that are not now being served by the Peruvian telephone company, Telefónica del Perú. Fitel is financed through a special charge on the operators of carrier services in general and public consumer services.

In the context of CITEL, the Permanent Advisory Commission I (PAC-1) has established a Working Group on Basic and Universal Telecommunications Services. Together with the ITU and AHCIET, the group is preparing a Universal Service Manual. This will define the concepts of service and universal access, and will address the current situation and prospects of rural telephone service and public service in the region.

2. Dissemination of new technologies

"Work together in close cooperation with the private sector to rapidly build out the telecommunications infrastructure in the Region, adopting strategies to make affordable access available to all for basic telephone service and the internet, such as implementing the Inter-American Telecommunications Commission guidelines on value added services and encouraging the development of community information service centers that provide access to basic telephone and value-added services, computers, the internet and multimedia services, bearing in mind the diverse needs of the countries of the Region and divergent levels of development"

Argentina defines value added services as those which, through the support of networks, linkages and/or telecommunications systems, offer facilities that distinguish them from basic service, by applying processes for making information available, working with such information, and permitting interaction with it by the subscriber. The services are provided under a system of free competition. Access to the Internet under conditions of social and geographical equality, at reasonable rates and modern quality standards applicable to multimedia, was declared by a 1997 decree to be in the national interest.

In Brazil, value added services are defined as any activities that increase telecommunications service and are freely available. Because they are not classified as telecommunications services, they are not subject to control by ANATEL, and this will encourage expansion and deregulation of the services, as stipulated in the Plan of Action.

Chile defines value added services as supplementary services. It is not necessary to have a telecommunications service license to offer them, although those who provide additional services must comply with the technical standards established by the Department of Telecommunications, and must not make any changes to the basic technical characteristics of the networks.

In Mexico, value added services have been deregulated under the Federal Telecommunications Law and the North American Free Trade Agreement (NAFTA). In 1997, a number of service providers were registered, covering the provision of audio text services, remote database consultation, electronic mail and data transmission and Internet access, among others. Some 403,000 users were connected to the Internet in that year.

Nicaragua classifies as unregulated value added services those that, in light of their technical or economic characteristics, need only to be registered and can be offered on a competitive basis.

Paraguay has prepared regulations governing the awarding of licenses and the installation, operation, functioning and exploitation of Internet services. These are considered to be value-added services, and are offered on request, under a system of free competition.

Peru defines value added services as those that use the services of carriers (final or distribution) as supports, or that add features or facilities to the basic service. Currently, about 33% of companies registered to provide value-added services to Internet access services.

Within CITEL, a Working Group of PAC-1 has completed preparation of a draft Convention for the implementation of value-added services in the region. This has been submitted to the FTAA Working Group on Services for consideration.

3. Information on regulatory processes and the progress of negotiations

"Promote, in cooperation with the private sector, the exchange and distribution of information concerning regulatory matters such as universal access/service, interconnection and the establishment of independent regulatory bodies, taking into account the commitments made in the World Trade Organization’s Agreements on Trade in Basic Telecommunications Services (the GBT Agreement), developments in the Free Trade Area of the Americas process, and the Declaration and Plan of Action adopted by the 1996 Senior Telecommunications Officials Meeting held in Washington D.C. with a view to developing, wherever possible, and subject to national constraints, best practice guidelines and requesting when needed the assistance of CITEL, regional telecommunications organizations, the International Telecommunications Union (ITU), the Inter-American Development Bank (IDB) and others as appropriate."

Argentina liberalized its public telephone service in May, 1998, and issued new regulations for public telephone service, as well as a national plan for public telephone licenses. Local as well as domestic and international long distance services will be fully deregulated between October and November 1999. The Ministry of Communications is the body responsible for determining policy in this sector, and for issuing the relevant regulations. In 1990, the National Communications Commission was created, the functions of which include administrative and technical regulation, licensing and the control, supervision and inspection of telecommunications and postal facilities.

Brazil has introduced a new model, through the General Telecommunications Law. This calls for open competition and universal access to services, and assigns the state the role of regulating and supervising the market. The law guarantees interconnections in order to promote competition. In this context, ANATEL was created as a special autonomous agency under the Ministry of Communications.

Chile amended its General Telecommunications Law in 1985 to provide that concessions and permits may be granted without limit as regards the quantity and type of service or geographic location. The law guarantees interconnections among telecommunications service concessionaires. There is complete separation between the regulatory role of the state, represented by the Ministry of Transport and Telecommunications, through the Department of Telecommunications, and the business activities of the private sector, which are conducted under conditions of free competition.

In the United States, the sector is regulated by the Telecom Act of 1996. The transition from a regulated, monopolistic market to a free enterprise model has not been completed as yet, but the impact is already being felt across all sectors. A 1998, 61 million Americans had a cellular telephone, at twice the quality and half the price of ten years earlier. The fixed long distance telephone service has made similar gains, thanks to free competition. More than 22 million households have access to the Internet.

In Nicaragua, telecommunications services are subject to free competition, except for basic telephone service in its three modes, which is provided by a single authorized operator. TELCOR is the regulatory body for telecommunications and postal services. It is an autonomous and decentralized agency.

Paraguay established a new legal framework in 1995, opening the sector to competition, promoting and strengthening free market competition, and fostering the growth of private investment in the telecommunications sector. This new law created the National Telecommunications Commission (CONTEL), an autonomous body with its own legal structure that is responsible for telecommunications.

In Peru, the telecommunications market was opened to free competition on August 1, 1998, thereby consolidating the process of restructuring the telecommunications sector. By means of amendments to the general regulations of the Telecommunications Law, a number of major policies have been established such as that relating to concessions, which requires that the process must be transparent, objective and non-discriminatory, and must apply the principles of administrative simplification and streamlining in the granting of concessions. Carriers are obliged to provide interconnection, and regulations have established the guidelines for negotiating contracts between two companies. The regulations also require that rates be set at a level consistent with the cost of the interconnection service. The Ministry of Transport, Communications, Housing and Construction, through the Communications Subsector, is the entity responsible for the sector. The Supervisory Agency for Private Investment in Telecommunications (OSIPTEL) is the decentralized public body that regulates the telecommunications market.

In the context of modernizing the regulatory framework, the World Bank provided financing in 1998 to a telecommunications project for the Organization of Eastern Caribbean States (OECS), which covers the countries of Dominica, Grenada, St. Kitts & Nevis, St. Lucia and St. Vincent and the Grenadines.

In the Dominican Republic, the World Bank has also financed a project to strengthen the telecommunications regulatory body by introducing legal, economic and technical regulations. It will also improve rural access to telecommunications services by promoting private investment in those areas, through the creation of a telecommunications development fund. The objective of the project was to introduce reforms into the telecommunications sector, with a view to promoting competition and increasing the supply of computerized information in the five member countries of the OECS. Specifically, an independent regional regulatory authority will be established, and each country will adopt new legislation for the sector.

4. Promoting the social function of telecommunications

"Foster, together with the private sector, the development of applications over electronic networks, such as the internet, broadcast television and radio that, taking into account different socio-economic conditions and languages, will support education, health, agriculture and sustainable rural development, electronic commerce and other applications assisting small savers, Micro-enterprises and Small and Medium-size Enterprises (SMEs) and modernization of the State"

Argentina has introduced a program called "INTERNET 2", aimed at improving the educational quality of scientific and cultural services as part of the Information Society. This is closely related to the introduction of modern tools that make use of information and communication technology. This program is intended to develop a high-speed data transmission network to be known as "Internet 2 Argentina", for education and scientific purposes, aimed at developing and making use of advanced applications in the areas of scientific and technological research, academic activity, telemedicine and digital multimedia libraries.

Argentina's Ministry of Communications has created the Telemedicine program, with a view to helping to decentralize health services in the country, and to optimize the links between existing infrastructure and medical resources.

Brazil will create a National Information Infrastructure Committee, which will have the task of identifying actions in the telecommunications area that can serve as a basis for developing a national network in support of projects in education, health, agriculture and electronic commerce.

In Chile, the "Red Enlace" is one of the components of the Ministry of Education’s Program for the Improvement of Quality and Equity in Education (MECE), which involves the massive introduction of the latest-generation computers, networks, the Internet, multimedia and educational software into the schools, and is intended to extend computer technologies to the great majority of the country’s teaching establishments, creating thereby a broad-based national educational community.

Mexico is working on a project to link up a network of medical units in the interior of the country with regional hospitals and the 20 de Noviembre National Medical Center, so as to allow interactive communication via videoconferencing. The objective is to optimize the provision of specialized medical care in remote units, to reduce the high rate of patient transfers, and to carry out distance medical education programs on a standing basis.

Peru is currently proceeding to globalize communications, to modernize and develop its communications networks, which constitute a fundamental factor for the country's economic and social development, and thereby to facilitate the country's entry into the so-called information society.

Under this heading, CITEL is working jointly with the IDB and the ITU regional office for the Americas to prepare pilot projects on telemedicine and tele-education. The intention is to measure the social, economic and cultural impact of providing access to these facilities and services. The first pilot project in tele-education is being conducted in Argentina.

5. Promoting the standardization of telecommunications infrastructure

"Encourage CITEL to address, with some urgency, studies of the standards coordination aspects of the telecommunications infrastructure, including the areas of the Telecommunications Management Network (TMN) and Intelligent Networks (IN) so that the network can evolve to meet the interconnection requirements and to support the implementation of new applications in the regional context"

In the context of the Ad-Hoc Working Group to Study the Global Information Infrastructure, CITEL is analyzing the challenges presented by network interconnectivity, which in turn requires the cooperation of all participants, including manufacturers, network designers and telecommunications operators.

6. Facilitating trade in telecommunications equipment

"Continue to examine ways to develop consistent regulatory approaches among member countries leading to the promotion of greater commonality in the certification processes for telecommunications equipment, and to the establishment of a framework and to move toward the negotiation and implementation of a Mutual Recognition Agreement (MRA) for telecommunications equipment encompassing all the countries of the Region."

Within CITEL, a working group is preparing a Framework Agreement on Mutual Recognition. Some of the issues now under consideration are: the types of approval required and the existing regimes, geographic coverage, existing regulatory requirements, ways of harmonizing national/regional standards and the feasibility of doing so, and identifying procedures for ensuring conformity among existing legal regimes. This framework agreement is expected to be finalized and submitted to member states for consideration by the end of 1999.

III. Conclusions: the challenges remaining

The countries that participated in the Santiago Summit of April 1998 have made impressive progress in the area of telecommunications. They have made advances in ensuring universal access to telecommunications services, with the integration of low-income urban areas and rural communities that have hitherto been isolated. They have begun to develop and implement programs in distance education and health services, to the benefit of their citizens.

In many countries, this progress has been accompanied by better regulation of the market, including in some cases the introduction of free competition to the sector.

Within this forward-looking framework, a number of challenges stand out for the coming years. Many countries of the region will undoubtedly be seeking to expand access to the Internet for greater segments of their population, together with the regulation of electronic commerce. The prospect of progress towards mutual recognition of telecommunication equipment certification could make a substantial contribution to hemispheric trade in these products.

CITEL will undoubtedly continue to play a fundamental role in coordinating the efforts described above. The contributions of the ITU, the IDB and World Bank will also be essential in this undertaking. We may expect telecommunications to be an important factor for the integration and development of the Americas as we move into the new millennium.

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