World Trade
Organization RESTRICTED S/C/W/87
9 December 1998 (98-4846) Council for Trade in Services Original: English

COMMUNICATION FROM THE EUROPEAN COMMUNITIES AND
THEIR MEMBER STATES

Work Programme on Electronic Commerce

Scope and Classification Issues

The following communication has been received from the delegation of the European Communities and their Member States with the request that it be circulated to the Members of the Council for Trade in Services.
_______________

The WTO programme on electronic commerce adopted by the WTO General Council on 24 September 1998 envisaged discussions on a series of services issues within the context of the Council for Trade in Services.
This happens, for example, when the internet is used for providing internet phone, electronic mail or transfers of data-bases;

(ii) electronic transmissions are increasingly used for ordering goods over the internet which are subsequently delivered physically (e.
The position in Members’ schedules on services relating to access to the internet is not uniformly clear: some delegations have not made any mention on the ground that telecommunications commitments are technologically neutral, while others have referred to ‘integrated telecommunications services’ as defined in CPC 75260; and a third group have explicitly referred to ‘internet services’ in their schedules.
Despite in principle this may seem trade in goods (and therefore outside the scope of the GATS) it is worth noting that there are three services elements in these transmissions that will fall under the GATS: the internet access services (see above under 2); a telecoms service (see above under 3) and the distribution service consisting in selling merchandise to retailers (wholesale) or selling merchandise for personal or household consumption (retail).
_______________

In conclusion, the GATS applies to various elements of electronic commerce transmissions: internet access services (covered by the GATS Annex on Telecommunications and WTO Members commitments on basic telecommunications); telecommunications services (covered by the various telecommunications’ services subsectors), distribution services involved in the ordering of physical goods (covered under the distribution services sector); and services ordered and delivered on-line (covered under the different services sectors and/or subsectors applicable to the same services when provided in a traditional manner).
This communication is without prejudice to further notes on other aspects of the WTO work programme that the European Communities and their Member States may present in the future.

JOB/SERV/73 4 May 2011

Committee on Specific Commitments



TELECOMMUNICATION SERVICES OVERVIEW OF Classification issues

Informal Note by the Secretariat


This Note provides an overview, primarily in question format, of classification issues relevant to telecommunication services that have been raised in relevant Secretariat Background Notes (S/C/W/299, 10 June 2009 and S/C/W/74, 8 December 1998).
It is also worth recalling that
the informal Note on Computer and Related Services
(CRS) (
JOB/SERV/39)
addressed a number of issues concerning possible overlap between telecommunications and CRS classifications.
Tables in the Appendix provide details on some of the current classification schemes for the sector.
This Note raises questions for consideration with respect to the telecom classifications in the Services Sectoral Classification List (W/120), the Provisional CPC, the scope and application of the Chairman's Note on the scheduling basic telecom commitments (C

In the realm of services trade, electronic commerce can be defined as comprising three different types of transaction, all of which require consideration:
(a) the provision of Internet access services themselves – meaning the provision of access to the net for businesses and consumers;
(b) the electronic delivery of services, meaning transactions in which services products are delivered to the customer in the form of digitised information flows;
(c) the use of the Internet as a channel for distribution services, by which goods and services are purchased over the net but delivered to the consumer subsequently in nonelectronic form.
As is the case throughout the WTO system, the legal regime which governs a given transaction is determined by the nature of the product which is traded, not by the technique of production or delivery: in the same way, if it were agreed that some category of electronically delivered products, hitherto unclassified, should be classified and treated as goods,
This means that when a Member has scheduled a commitment on a given service, it may not impose a charge on the import of that service, whether done electronically or otherwise, if that would impair the level of access guaranteed in its national schedule.

Because of the way in which it can render the distance between supplier and consumer virtually irrelevant, it is perhaps natural to think of electronic commerce essentially in terms of crossborder trade  GATS modes 1 (crossborder supply) and 2 (consumption abroad).

In the context of the negotiations on Basic Telecommunications, the Chairman proposed in January 1997 an interpretative note, which was adopted by the Group on Basic Telecommunications and attached to its report to the Services Council and which confirmed the principle that commitments undertaken were technology-neutral: in the absence of an indication to the contrary, any commitment would be assumed to cover local, long distance and international services for public and non-public use, on a facilities or resale basis, and using any technological means of supply (cable, radio, satellite, Internet, etc.
It is impossible to quantify the value of services sold in this way because, in addition to the well known inadequacies of services statistics, most transactions carried out over the Internet go unrecorded: but the vast scale of electronic delivery of services can be appreciated from the mere fact that currency and securities trading is overwhelmingly done electronically.
It is important to distinguish from this a second form of electronic commerce in which goods, and services which cannot be delivered electronically, are ordered and paid for online but are delivered to the customer in tangible form.
In the same way, a fully liberal commitment on basic telecommunications confers rights to supply telecommunications services; it is not a commitment to allow the supply of any service – banking services for example – which can be provided by telephone.
Like other such exceptions provisions, Article XIV is subject to a safeguard against abuse in that measures taken under it may be challenged by other Members on the ground that they are not necessary, or are more restrictive than necessary, to achieve the stated objective.
While this note mainly deals with issues concerning trade on electronic communications networks, it should be noted that intellectual property plays an important role also in promoting the development of the infrastructure of such networks, i.
Electronic copyright management systems may make individual licensing and distribution of revenue feasible in areas where the vast numbers of works, right holders and users have until now made collective arrangements necessary.
While the following discussion is limited to copyright and related rights, and trademarks, it should be borne in mind that these problems reflect a more general legal question that relates to the "borderless" nature of the Internet, and to the difficulty of determining the applicability of territorially based laws and regulations to activities carried out on a global network.
Copyright owners will be reluctant to put their protected materials on the net as long as they fear that the Internet may lead to uncontrolled dissemination and copying of phonograms, films, computer programs and other protected materials, which will seriously undermine copyright industries.
As regards digital technology, it confirms that computer programs, whether in source or object code, must be protected as literary works, and clarifies that databases and other compilations of data or other material must be protected as such under copyright even where the databases include data that as such are not protected under copyright.
For consumers who buy products and services at a distance, it may be increasingly necessary to rely on the reputation attached to trademarks and other distinctive signs, as they do not have an opportunity to establish a personal contact with the seller of those products, or to inspect the products and services before buying them.
The owner of a registered trademark has an exclusive right to prevent others from using in the course of trade identical or similar signs for goods or services which are identical or similar to those in respect of which the trademark is registered, if such use would result in a likelihood of confusion.
Some of the problems stem from the fact that under each top-level domain name there can be only one of each particular second-level domain name, which are usually allocated on a first-come, first-served basis within each top-level domain name.
Some have yet to begin implementation; some others have, in whole or in part, adopted information technology, in particular the Internet, for publishing notices on procurement opportunities; some have gone further in also enabling tender documents to be ordered and maybe delivered through such electronic means; and some have already initiated pilot projects by which as much of the procurement process as possible, including all communications between purchasing entities and tenderers, is conducted electronically.
Working Group on Transparency in Government Procurement
The Working Group on Transparency in Government Procurement was established by the Singapore Ministerial Conference in 1996 "to conduct a study on transparency in government procurement practices, taking into account national policies, and, based on this study, to develop elements for inclusion in an appropriate agreement".
the tape or diskette containing data, is imported, and provides Members with two options: it allows them to levy duties on the basis, either of the value of the carrier medium (which is negligible), or of the value of the carrier medium and the value of the software (which is usually high).
Information-technology-based management of data which is received, manipulated and sent electronically by traders, government authorities, and other participants in the trade transaction process, bears considerable potential for savings in costs and time, both for governments and for importers and exporters, and may enable many small and medium-sized companies to engage for the first time in international transactions.
Two important new treaties on copyright matters were adopted under the auspices of the World Intellectual Property Organization (WIPO) in December 1996, namely the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT).
The treaties require contracting parties to provide adequate and effective legal remedies against any person, who, without authority, removes or alters such information or distributes copies of protected material knowing that such information has been removed or altered without authority, and knows or, with respect to civil remedies, has reasonable grounds to know that it will induce, enable, facilitate or conceal an infringement of any right covered by the treaties (Article 12 of the WCT and Article 19 of the WPPT).
The relationship between Internet domain names and trademarks has been addressed in two recent initiatives to develop the Internet domain name system, namely a Memorandum of Understanding on the Generic Top-Level Domain Name Space of the Internet Domain Name System, signed in Geneva on 1 May 1997, and a Statement of Policy on "Management of Internet Names and Addresses", published by the United States Department of Commerce on 5 June 1998.
Draft Article 3 of the Basic Proposal for the Substantive Provisions of the Treaty on Certain Questions concerning the Protection of Literary and Artistic Works to be considered by the Diplomatic Conference (WIPO document CRNR/DC/4) contained a clarification in this respect, but the provision was not included in the final text of the WIPO Copyright Treaty.

WT/GC/W/306