Levelling the Playing Field: Is the World Trade Organization Adequately Equipped to Prevent Anti-Competitive Practices in Telecommunications?

Abstract:     
This paper analyses whether, following the adoption of the Fourth Protocol to the General Agreement on Trade in Services (the so-called "agreement on basic-telecommunications"), the WTO is well equipped to prevent anti-competitive practices in telecommunications. The paper first analyses the respective advantages of general competition rules and of sector-specific rules to control market power in telecommunications. It then presents an overview of the rules that can be found in the WTO framework. WTO Members have so far failed to agree on general competition rules. By contrast, the vast majority of the Members that are part to the Agreement on Basic Telecommunications have also agreed to a set of sector-specific rules designed to provide safeguards against anti-competitive practices in the telecommunications sector that are contained in the so-called Reference Paper. The paper then analyses whether the Reference Paper is an adequate document and the extent to which it could be strengthened and addresses the question of whether, assuming that the Reference Paper could be strengthened, there would remain a need for general competition rules at the WTO level. In its conclusions, the paper makes some suggestions. First, it argues that, while the Reference Paper is a step in the right direction, it could, however, be strengthened to reach a better balance between three main objectives: precision, simplicity, and flexibility. In most cases, this would mean increasing the degree of precision of the provisions of the Reference Paper, as the current document tends to be very general. However, in order not to loose too much flexibility, increased precision may at times be obtained, not by specifying substantive provisions in great details, but by offering Members some choices between different, well defined solutions, or by strengthening procedural rather than substantive rules. Second, it argues that, even if the Reference Paper could be strengthened along the aforementioned lines, a case could still be made for adopting a WTO Agreement on Trade and Competition Policy. Such an agreement could be helpful to prohibit some anti-competitive behaviour that would still remain un-addressed in the Reference Paper and to protect operators against anti-competitive behaviours beyond the narrow scope of telecommunications activities. The paper argues, however, that if such additional competition provisions were to be adopted, they should focus on improving market access.

Keywords: Antitrust, WTO, regulation, telecommunications, competition

JEL Classifications: L50, L96, F02, F12

Working Paper Series