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Communication and Social Policy, Vol. 4 - 1997, No. 4
The ITU, the WTO And Universal Service: Limited Prospects For Ldcs
The multi-lateral system of the ITU has been losing out steadily to a trade paradigm in telecommunication, culminating with the WTO agreement in February 1997. Against this background, this paper looks at the issue of the accounting rate system, how liberalisation is further undermining a main pillar of ITU activities, and the impact and options for less developed countries. The US has seen its international call settlement deficit grow to over 5 billion dollars in 1996, providing an essential net revenue for a number of less developed countries. The US is now threatening to greatly reduce payments, unilaterally overriding the current ITU bartered system. Analysis reveals that the growth in deficit is caused mainly by the call-back and refilling activities of US carriers. It is also likely that the introduction of loopholes by the US into the recent WTO agreement is at least partly motivated by a co-ordinated strategy at the WTO and ITU. Other developed countries, however, strongly oppose the US move, and are pursuing legal action to prevent the US implementing its threat. Yet in the long term, the accounting rate system is anyhow in decline, yielding to a number of trends. It will most likely be replaced by a trade based system, with a minimal multilateral element. From the point of view of less developed countries currently benefiting, the future thus looks bleak. The decline of multi-lateral determination of accounting rates, and its replacement by unilaterally or trade determined levels, will inevitably lead to significant loss of revenues. Their bargaining position in relation to ensuring that any new system will continue some transfer from wealthier to poorer countries is weak, and they have had little real support from UN organisations.
