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Commission Proceeding to Review Rules and Policies on Foreign Participation

in the U.S. Telecommunications Market

June 4, 1997

In Buenos Aires three years ago, at the first International Telecommunications Union development conference, Vice President Gore challenged the nations of the world to build a network around the globe linking all human knowledge and creating global opportunities.

One year ago, Congress delivered a clear and compelling blueprint for competition that will build this network in the United States. And in February of this year, the United States, under the leadership of United States Trade Representative Ambassador Charlene Barshefsky, reached a historic agreement with 68 other countries to open markets for basic telecommunications services around the world.

Today, the Commission begins action to amend its rules in response to the landmark agreement on telecommunications negotiated under the auspices of the World Trade Organization (WTO). In the agreement, countries representing 95 percent of the global market for basic telecommunications services have pledged to open their markets to international competition.

By this agreement, the Telecommunications Act enacted a year ago by Congress has become the world's gold standard for pro-competitive deregulation, for sixty-five countries have bound themselves to the Reference Paper on Pro-Competitive Regulatory Principles. The Reference Paper is a binding, enforceable set of pro-competitive rules that closely follows the Congressional vision of free competition, fair rules, and effective enforcement enacted in the Telecommunications Act.

In light of the historic move by countries representing the overwhelming majority of the world telecommunications market to open their markets to foreign entry and investment and to bind themselves to the pro-competitive rules enshrined in the Reference Paper, we believe that we should similarly open our market to foreign investment and entry by foreign carriers. Such entry will attract increased investment capital and will introduce new sources of competition in the telecom market in the United States, which will produce lower prices and greater service choice and innovation for American consumers.

The Notice also proposes to implement safeguards to prevent foreign carriers with market power from distorting competition in the U.S. market. And, we will retain our undiluted authority to deny or condition such foreign carrier entry if the public interest so requires.

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