U.S.-Korea Free Trade Agreement: Potential Economy-wide ... - USITC

and cross-connect links 70 are more comprehensive than in previous agreements. The ITAC
8 report also approves of the expanded technological choice section in the FTA, noting that
it goes beyond other agreements by limiting the conditions under which both parties can
specify technology to suppliers of public telecommunication services. By contrast, the ITAC
8 report points out that many of the provisions of the FTA do not apply to nonfacilities-based
providers of telecommunications services. 71
Similarly, the Telecommunications Industry Association (TIA) supports the
telecommunications services provisions contained in the U.S.-Korea FTA. Overall, TIA
states that U.S. firms would benefit from the commitments in the FTA, including, inter alia,
commitments on access to and use of public telecommunications networks, interconnection,
number portability, resale of services, network unbundling, and submarine cable landing
stations. TIA also notes that many of the provisions expand upon commitments contained
in the WTO’s Agreement on Basic Telecommunications, citing provisions on number
portability and dialing parity, as well as expanded language related to the independence of
the telecommunications regulator.
Similar to the ITAC 8 report, the TIA singled out the FTA’s provisions related to
technological neutrality, noting that the FTA’s strong language goes beyond other trade
agreements by limiting conditions under which parties can specify the use of certain
technologies. The TIA also expressed approval for FTA commitments that eliminate the
49 percent foreign investment ceiling after 2 years, although it notes that investment ceilings
would still apply to KT and SK Telecom. 72
The Coalition of Services Industries (CSI) also supports the telecommunication
commitments contained in the U.S.-Korea FTA, stating that such commitments would foster
a more open and liberalized telecommunications market and ensure that U.S. companies have
improved access to the Korean telecommunications market. In general, CSI approves of the
FTA’s commitments related to network access, cost-oriented interconnection, dialing parity,
competitive safeguards, services resale, and technology choice. CSI also supports FTA
provisions that allow U.S. companies to own 100 percent of the total voting shares in a
Korean telecommunications operator within 2 years of implementation. Given CSI’s past
concern over the independence of Korea’s telecommunications regulator, 73 it also approves
of FTA commitments that ensure that the regulatory body is separate from, and not
accountable to, any supplier of public telecommunication service. 74
70 Cross-connect links are used in a submarine cable landing station to connect submarine capacity to the
transmission, switching, and routing equipment of telecommunication companies located within the cable
station.
71 ITAC (8) for Information and Communications Technologies, Services and Electronic Commerce,
Report, April 27, 2007, 9–10. ITAC 8 represents the interests of approximately 26 telecommunication and
advanced technology firms.
72 Seiffert, TIA, written submission to the USITC, June 27, 2007.
73 CSI asserts that Korea’s telecommunications regulator, the Korea Communications Commission
(KCC), is not a fully independent regulator because the MIC retains most of the regulatory responsibilities
and, as such, is largely responsible for decisions regarding market entry, pricing, and service quality. CSI
also objects to the KCC’s physical location with the MIC headquarters. As a result, the CSI recommends that
a fully independent regulatory body should be established and vested with the power to issue impartial and
binding decisions and regulations. CSI, “Written Testimony on the Free Trade Agreement Between the
United States and Korea for the Trade Policy Staff Committee, Office of the USTR,” March 14, 2006.
74 Goyer, testimony before the USITC, June 20, 2007.
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