World Trade
Organization WT/DS204/3
18 February 2002 (02-0825) Original: English

MEXICO – MEASURES AFFECTING TELECOMMUNICATIONS SERVICES

Request for the Establishment of a Panel by the United States

The following communication, dated 13 February 2002, from the Permanent Mission of the United States to the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.
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The United States respectfully requests the Dispute Settlement Body (DSB) to establish a panel pursuant to Article 6 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) in the dispute Mexico  Measures Affecting Telecommunications Services (WT/DS204) to examine the matter described in this document.
2 require Mexico to ensure that Telmex provides interconnection: at any technically feasible point in the network; under nondiscriminatory terms, conditions, and rates; and on terms, conditions and costoriented rates that are transparent, reasonable, and sufficiently "unbundled" so that suppliers need not pay for network components or facilities they do not require.

For example, Mexico's "International Long Distance Rules", which the Secretariat of Communications and Transportation ("SCT") published in the Diario Oficial on 11 December 1996 ("ILD rules") give Telmex, alone among Mexican basic telecom service suppliers, the authority to negotiate the charge that foreign basic telecom suppliers must pay their Mexican counterparts to interconnect telephone calls originating abroad.
(2) Mexico's Measures Fail to Ensure US Basic Telecom Suppliers Reasonable and NonDiscriminatory Access to and Use of Public Telecom Networks and Services

Section 5(a) of the GATS Annex on Telecommunications (Annex) requires Mexico to ensure that service suppliers of other Members can access and use public telecommunications transport networks and services ("public networks and services") on reasonable and nondiscriminatory terms and conditions to provide a scheduled service.
The excessive, bundled interconnection rate that Mexican suppliers must include in their contracts are not reasonable terms and conditions for accessing and using public networks and services to provide crossborder facilitiesbased services.

(B) CrossBorder and Domestic Commercial Agency Services

Mexican basic telecom service suppliers also will not make private leased circuits available to US or other foreignowned suppliers who wish to provide domestic or crossborder basic telecom service as commercial agencies.
As previously described, the ILD rules – in combination with other measures – make it impossible for foreignowned commercial agencies located in the United States or Mexico to obtain private leased circuits or to connect those circuits to a foreign network.
Far from preventing Telmex from engaging in anticompetitive activities, Mexico's rules empower Telmex to engage in monopolistic practices with respect to interconnection rates for crossborder basic telecom services and to create an effective cartel dominated by Telmex to set rates for international interconnection.
In its Schedule, Mexico made market access and national treatment commitments for "commercial agencies," which it defined as "[a]gencies which, without owning transmission means, provide third parties with telecommunications services by using capacity leased from a public network concessionaire".
These include the Federal Telecommunications Law of 18 May 1995, the "Agreement of the SCT establishing the procedure to obtain concessions for the installation, operation or exploitation of interstate public telecommunications networks, pursuant to the Federal Telecommunications Law," published in the Diario Oficial on 4 September 1995, Rules for Long Distance Service, published by the SCT in the Diario Oficial on 21 June 1996.