As we went to press, the Federal Communications Commission was expected to approve two measures to pave the way for the opening up of the US telecommunications market to foreign suppliers, in line with World Trade Organization directives. The WTO agreement, reached in February of this year and set to go into effect from January 1 1998, is designed to open up 95% of the world’s $600m telecommunications market to new competition, a move which could cut international call costs by 80%. The first measure sees the new FCC commissioners, led by chairman William Kennard, clearing the way for the so-called Effective Competitive Opportunities test to be waived in the case of carriers from the 69 nations which have signed up to the World Trade Organization’s Basic Telecoms Accord, meaning that those companies can start operating services or investing in US firms with the minimum of regulatory scrutiny. It also permits wireless telecommunications licenses to be indirectly owned by foreign companies. The second measure enables a similar waiving of tests for satellite providers, and enables foreign run satellites to provide services in the US. But the FCC, along with the office of the US Trade Representative, the State Department and the Defense Department all retain powers to block the entry of a foreign carrier if they fear a company could stifle competition, or if its entry into the market raised trade, national security or other concerns. As well as a catch- all public interest stricture, extra tests may be applied to companies with market power in their home country if they might distort competition in the US market.
