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international telecommunication transport means used to provide such services.
They also set the rules applicable to administrations and operators in respect of
international telecommunications. The structure of the organization is composed by
the General Secretariat and three Sectors: Radiocommunication, Standardization
and Development. Each Sector operates through a Bureau which is located at ITU
Headquarters, as is the General Secretariat. The role of the Radiocommunication
Sector is to ensure the rational, equitable, efficient and economical use of the radio
spectrum by all radiocommunication services, including those using the
geostationary satellite orbit, and to carry out studies without limit of frequency
range on the basis of which recommendations are adopted. The normative and
policy functions of the Radiocommunication Sector are performed by World and
Regional Radiocommunication Conferences and Radiocommunication Assemblies
supported by Study Groups. The duties of the Standardization Sector are to study
technical, operating, and tariff questions and to issue recommendations with a view
to standardizing telecommunications on a worldwide basis, including
recommendations on interconnection of radio systems in public telecommunication
networks. The functions of the Sector fall within the mandate of World
Telecommunication Standardization Conferences supported by Study Groups.
These Study Groups are groups of experts in which Administrations and
public/private sector entities participate. Their focus is on telecommunication
services, operation and maintenance of equipment, systems, tariffs principles and
accounting methods. Although they are not binding, the Sector recommendations
are generally complied with because they guarantee the interconnectivity of
networks and enable services to be provided on a worldwide scale. The role of the
Development Sector is to discarge the Union’s dual responsibility as a United
Nations specialized agency and executing agency for implementing projects under
the United Nations development system or other funding arrangements. The aim is
to facilitate and enhance telecommunications development by offering, organizing
and coordinating technical cooperation and assistance activities. In addition to
handling all the administrative and financial aspects of the Union’s activities, the
work of the General Secretariat essentially covers the preparation of reports on the
changes in the telecommunications environment, with proposals relating to the
Union’s future policies and strategies, and the publication of the official
documents. The contribution of ITU Member countries covers participation in all
Sectors and all activities except Regional Radio Conferences. The value of the
contributory unit is calculated by dividing the ordinary budget of the Union by the
number of units contributed by Members.
In the liberalized deregulated privatized international telecommunications
environment it has become highly profitable to provide service using the
geostationary orbit spectrum. Such use of a limited resource, requires ITU
registration of the satellite network by Administrations and that procedure involves
coordination with other such systems using the same orbital slots and frequency
3
locations. The underlying ITU principle of first come, first served encourages early
filings. The congestion of the geostationary orbit spectrum as reflected in a large
number of filings for a limited natural resource, is causing considerable
complication to the coordination procedure, and it has been proposed to reduce the
number of ITU filings by eliminating paper satellites, which are defined as those
setellites with little if any chance of ever being launched. There is no fee paid to the
ITU neither for the filing, nor for the use of the frequency spectrum, but there is the
expense of the procedure. The term “Due Diligence” is a convenient label for a
wide range of administrative and financial measures which could be applied to
ensure that the space networks included in the coordination process are those for
which there is a reasonable expectation that the network will be put into service.
The possible use of fees, financial deposits and financial penalties are one form of
Due Diligence and these financial mechanisms are the aim of the reform of the
Union. From the Additional Plenipotentiary Conference by 1992, there have been a
number of initiatives to reform the ITU. The membership is well aware of the
urgent requirement for fundamental change. However, the question remains as to
wheter ITU members have the will to enact that change. To this ends we entrust to
the RAP (Reform Advisory Panel).
Another relevant field stands for the increased relevance of international
regulations and agreements under the auspices of international organisations
concerned with general principles and rules dealing with international trade, foreign
investment and the protection of intellectual property rights. The huge legal
framework of the World Trade Organization (WTO) concentrates on the General
Agreement on Trade in Services (GATS) and the more recent agreement on the
sector of telecommunications services, but also point to other relevant topics as the
Agreement on Trade in Information Technology (ITA). As known, on 15 February
1997, some 69 countries signed the World Trade Organization Agreement on basic
telecommunications. As a consequence, the international trade environment will
shift from a framework which is based on bilateral relations to one which is
multilateral in nature, and from closed to open markets. In evidence the problem of
efforts to harmonise the legal relationships between WTO and the ITU, for which
no legal framework is yet in place, as well as possible future considerations may be
raised, also considering the competition issues involved. The growing international
liberalisation and competition among the private participants is an issue both of
substance and structure. The topic is a detailed examination of the present crisis in
the international system by which payments are made between countries for
international telecommunications services, known for short, as the accounting rate
problem. For the years to come, it must be examined the alternatives to the present
system as well as means by which the system may be adjusted to reflect current
realities. This is currently taking place vigorously in the communications sector.
The GATS includes provisions at the heart of the agreement for the future, dealing
with progressive liberalisation, requiring successive negotiations. The process is a
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long term one which will started and completed in a few years after the WTO
agreement came into force. Essentially the GATS recognizes the growing
importance of trade in services for the development of the world economy and aims
to establish a multilateral framework of principles and rules, for trade in
telecommunication services with a view to the expansion of such trade, under
conditions of trasparency and progressive liberalization, and as a means of
promoting the economic growth of all trading partners and the development of
developing countries. To be achieved through successive rounds of multilateral
negotiations in order to meet national policy objectives. The general obligations
containing, inter alia, the most favoured nation clause and the transparency of rules
and procedures, to ensure equity in treatment of all service providers, and the
concept of national treatment, deals with discrimination against foreign countries.
Liberal rules agreed between any two signatories must be extended immediately to
all others. The part IV of the GATS is the heart of the agreement. Member states
are required to enter into successive rounds of negotiations, and further to set out in
a schedule the specific commitments they undertake with regard to specific
communications sectors in an autonomous and voluntary manner. The
telecommunications Annex finally requiring cooperation of the WTO with relevant
international bodies, such the ITU and the International Organization for
Standardization (ISO).
The European Community’s telecommunications regulatory package
provides a comprehensive framework covering and complying with all the WTO
commitments of the European Communities and its Member States. The EC
telecommunications legislation mainly takes the form of directives. Over the ten-
year period 1988-97, the Community enacted an extensive package of
telecommunications legislation designed to enable Europe to respond to the
challenges of rapidly evolving and converging technologies and the globalisation of
the information economy. Adoption of the package by the Council and European
Parliament implied a radical restructuring of telecommunications environment.
Therefore the Commission proposed in 1998 a Green Paper with the following
action plan: an Open Network Provision (ONP) seeks to ensure open access to
publicly available telecommunications networks and services, according to
harmonised conditions, liberalisation and harmonisation of usage conditions and
tariff principles. As a consequence of the Green Paper, several measures have been
taken in satellite communications. One aspect included the adoption of common
frequency bands to be allocated in each Member State to ensure pan-European
operation and important steps have been taken by the CEPT (European Radio
Communications Committee). Considering that decisions on the allocation of
frequencies are in first instance taken at World Radio Conferences, which are
organised under the auspices of the ITU, it is important that Europe ensures that the
positions to be taken comply with Community interests, concerning satellite
5
communications and satellite radio navigation that will be discussed at the
forthcoming world Conference.
If one looks at the present status of international cooperation in satellite
communications, it is profoundly evident that the role of private actors has
increased dramatically during the last ten years. International joint ventures among
private and public companies belonging to different countries are now offering both
enhanced telecommunications services and basic telephone services worldwide or
in large areas of the planet. One time the satellite communications environment was
completely dominated by intergovernmental organization, mainly among
monopolistic or dominant national carriers. The ITU enacted the technical
standards pertaining to space communications and assigned the frequencies of the
radio spectrum to the global and regional international satellite organisations, like
INTELSAT, INMARSAT, INTERSPUTNIK, EUTELSAT that projected, launched
and operated the telecommunications satellites in the geostationary or elliptic orbit.
In 1964, eleven nations decided to provide telecommunications services on a
universal non discriminatory basis. This resulted in the creation of INTELSAT as a
global commercial communications system. INMARSAT began in 1979 as the
International Maritime Satellite Organization, established under the auspices of the
Intergovernmental Maritime Consultative Organization, now the International
Maritime Organization (IMO) to provide the space segment for improving maritime
communications especially distress and safety services. Subsequently
INMARSAT’s competence has been expanded to include aeronautical and land
mobile communications. The European Telecommunications Satellite Organization
(EUTELSAT) was established on a permanent basis on 1985 to implement a
network in Europe for the provision of telecommunications services through its
space segment. It was not conceived as a global operator like INTELSAT and
INMARSAT but as a regional organization. The European Space Agency (ESA)
played an active role in the creation of EUTELSAT. At last INTERSPUTNIK was
founded in 1971 to establish and develop an international satellite communication
system. At its inception, it was composed of members of the Eastern block but its
membership has now been expanded to many other countries.
Nowadays INTELSAT’s member governments met and unanimously
decided that the organization shall privatize. The privatization would protect
lifeline users through a mechanism that we refer to as the Lifeline Connectivity
Obligation (LCO) but however, the most important factor was the desire to ensure
its continued commercial success. On November 1998 INTELSAT transferred one
quarter of its satellite fleet to “New Skies Satellites” a private company based in the
Netherlands. The new company is now in business, competing against INTELSAT
and everyone else. Spin off New Skies Satellites was the first step in the ongoing
process to restructure INTELSAT, including the possibility of complete
privatization. The major motivation behind INTELSAT’s privatization is to ensure
a future commercial viability and the need to be able to make decisions faster than
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its current intergovernmental status permits in a quickly changing marketplace. It
will also facilitate INTELSAT’s ability to obtain financing in a more conventional
manner. Many parallel efforts are on the table for consideration, but to create a
private INTELSAT, with a residual intergovernmental structure to ensure LCO
obligation, or create a private fully commercial company with the LCO preserved
in corporate commitments are the best options. The goal is establishing a private
INTELSAT by early April 2001.
The restructuring of INMARSAT was completed on April 1999, when the
satellite system was transferred to private sector based in England. However, the
intergovernmental organization continues under an amended Convention in order to
oversee and enforce the global distress and safety system and certain other
obligations under a public service agreement. The long restructuring process is
culminated in a multi-corporate Holding Company and an Operating Company
incorporated under English law. The former INMARSAT signatories received
ordinary shares in the Holding Company in a cash-free exchange for their previous
investment shares. They also have limited liability. Private space activities are
without further qualification equated, for the purpose of international responsibility,
to the activities of states. But no definition of the non governmental national
activities of a state, for which it is to be held responsible, has been put forward by
any space law document, and this absence de facto allows individual states, where
applicable, to interpret the term at their own discretion. In the INMARSAT’s case
the companies have no privileges and immunities, as any private competitor. The
fiduciary Board of Directors of the Holding Company will have up to 15 members,
including shareholder directors, independent directors, and three directors from
smaller shareholders or developing countries. An identical Board shall be adopted
in the Operating Company. Some INMARSAT’s Parties, especially those with
privatized telecommunications structures, aimed a substantially voluntary future
investment with limited liability.
In the context of the processes of liberalization and deregulation of the global
telecommunications market INTERSPUTNIK faced the necessity to radically
change its principles of activity as well as the strategy of its development in order
to obtain the maximum profit. These challenges were met by INTERSPUTNIK
entering into the “third-phase” of establishing an international satellite
communications system as stipulated by 1971 in the agreement on the
establishment of the organization. In 1993-96 an ad-hoc group of legal experts of
the Member countries of the organization elaborated and coordinated two new
constructive instruments of the organization: the Protocol on Amendments to the
Basic Agreement and the Operating Agreement. In 1996 the 25
th
INTERSPUTNIK
Board meeting was a historic one, marking the definition of new business strategy
that will carry the organization into the next millennium. During the meeting,
special attention was paid to the new strategy of development building upon the
organization’s general strategy, and suited to the changes in the operating
7
environment. The Board decided that one of the INTERSPUTNIK’s top priority
development goals would be the creation of strategic alliances with satellite
communications operators, spacecraft and launch vehicle manufacturers and
ground equipment manufacturers. On April 1997, a joint venture agreement
between the INTERSPUTNIK and Lockheed Martin Corporation was signed. The
document became a unique one as it was the first experience of formalizing such an
alliance between an intergovernmental organization and a transnational
corporation.
The influence of INMARSAT’s pioneering work in restructuring has already
been seen. For example EUTELSAT’s Assembly of Parties adopted a similar
decision on accelerated implementation on its restructuring amendments. In May
1998, the decision was taken in principle to transform the organization into a
national law company, under the umbrella of a significantly reduced
intergovernmental organization with very limited tasks. This decision was taken on
the basis of studies carried out over the optimum legal structure allowing it to
develop its services and business strategies to respond to the changing regulatory
environment. One year later EUTELSAT S.A. was born in France. The transfer of
EUTELSAT’s operational activities and their associated assets and responsibilities
to a limited liability company will take place not later than July 2001. The major
change in the purposes of the intergovernmental organization was from that of
space segment provider to that of supervising observance by EUTELSAT S.A. of
basic principles and of ensuring continuity regarding rights and obligations under
the ITU Radio Regulations for the use of frequency assignments to EUTELSAT’s
space stations. The transfer of operational activities include the deletion of the
Operating Agreement and hence all references to Signatoires and the Board of
Signatoires. The arrangement between EUTELSAT and EUTELSAT S.A. enable
the first to oversee and ensure the observance of universal service obligations, pan-
European coverage by the satellite system, non discriminatory services and fair
competition. There is no interference by remaining intergovernmental organization.
In these matters the research project jointly initiated in 1998, by the Institute of Air
and Space Law of the University of Cologne and the German Aerospace Center,
comprises five different Working Groups, where international experts from all parts
of the world and from private and public bodies have joined for exchange of
opinions and views with the final target to propose improvements in view of the
expansion of private space activities. The Working Group on Telecommunications
aims at the examination of the present provisions and in discussion whether these
regulations are sufficient for the already changed and still developing
telecommunication environment. By identifying the regulatory needs, the experts of
the Working Group will propose what kind of legal framework should be
developed on which level, national, regional or global, and in which forum, in
particular focussing on UNCOPUOS, ITU and WTO. The final report will be
addressed to the symposium which taking place in Cologne by 2001.