U.S.-Korea Free Trade Agreement: Potential Economy-wide ... - USITC
U.S.-Korea Free Trade Agreement: Potential Economy-wide ... - USITC
U.S.-Korea Free Trade Agreement: Potential Economy-wide ... - USITC
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
Summary of Provisions<br />
The provisions of Chapter 14 would require each party to ensure that enterprises of the other<br />
party have access to and use of any public telecommunication service offered in its territory<br />
and/or across its borders on reasonable and nondiscriminatory terms and conditions.<br />
Specifically, the chapter would obligate suppliers of public telecommunications services to<br />
provide network interconnection, number portability, and dialing parity to<br />
telecommunication service providers of the other party on reasonable and nondiscriminatory<br />
terms and conditions. In addition, major suppliers of one party would be required to offer<br />
telecommunication services to suppliers of the other party on terms and conditions no less<br />
favorable than those accorded to their own subsidiaries, affiliates, and nonaffiliated service<br />
suppliers, particularly regarding the availability, provisioning, rates, and quality of such<br />
services. Major suppliers would also be subject to specific additional obligations related to<br />
competitive safeguards, services resale, network unbundling, interconnection, leased circuits,<br />
colocation, 67 and access to rights-of-way and submarine cable systems.<br />
Chapter 14 would commit the governments of the United States and <strong>Korea</strong> to ensure the<br />
independence of their respective telecommunications regulatory bodies and bestow such<br />
entities with the authority to enforce compliance with FTA obligations. The parties to the<br />
agreement also would be required to maintain transparent and nondiscriminatory procedures<br />
related to licensing, allocation and use of scarce resources, and dispute resolution. A variety<br />
of exclusions for mobile services providers, nonfacilities-based providers, and rural<br />
telecommunication services are contained in Annex 14-A and Annex 14-B, while Annex 1<br />
to the FTA would establish several restrictions on foreign investment in <strong>Korea</strong>’s<br />
telecommunications sector. 68<br />
Views of Interested Parties<br />
Overall, U.S. industry representatives expressed support for the commitments detailed in the<br />
telecommunications chapter. The Information and Communications Technologies, Services<br />
and Electronic Commerce (ITAC 8) report, for example, stated that the U.S.-<strong>Korea</strong> FTA<br />
would foster a more open and liberalized telecommunications market in <strong>Korea</strong>. In particular,<br />
the ITAC 8 report expresses support for the removal of foreign investment restrictions 2<br />
years after the FTA enters into force, although it notes that an investment ceiling remains in<br />
place for <strong>Korea</strong>’s incumbent telecommunication services providers, KT and SK Telecom.<br />
The ITAC 8 report also supports commitments pertaining to submarine cable landing<br />
stations, stating that commitments on international circuits, backhaul facilities, 69 colocation,<br />
67 Colocation is defined as physical access to space in order to install, maintain, and repair equipment at<br />
premises owned, controlled, or used by a supplier of public telecommunications services.<br />
68 Annex 1 to the FTA states that foreign ownership may not exceed 49 percent of the total voting shares<br />
of facilities-based suppliers of public telecommunications established in <strong>Korea</strong>. Similarly, a license for<br />
facilities-based telecommunication services will not be granted to entities in which foreign owners control<br />
more than 49 percent of total voting shares. In addition, foreign owners may not be the largest shareholder in<br />
<strong>Korea</strong> Telecom, unless foreign owners hold less than 5 percent of total voting shares. Two years after the<br />
FTA enters into force, <strong>Korea</strong> shall permit foreign ownership of 100 percent of the total voting shares of a<br />
facilities-based supplier of public telecommunication services (except for KT and SK Telecom), which in<br />
turn may hold a license for facilities-based public telecommunication services.<br />
69 Backhaul facilities are defined as transmission links between a submarine cable landing station and a<br />
point of access to the public telecommunications network.<br />
4-14