§ Mr. Nigel EvansTo ask the President of the Board of Trade what are the results of his consideration of responses to his consultation document on the liberalisation of international telecommunications services. [32167]
§ Mr. Ian TaylorThe Government will be inviting applications from today for further licences to provide international service from the UK, on the same terms enjoyed up to now by only BT and Mercury—that is, on telecommunication facilities owned and controlled by the company providing the service. These companies will be able to offer services on any route they choose.
This is another step in ensuring the continued competitiveness of the United Kingdom, both as a hub for telecommunications traffic worldwide, and as a place where the increasing number of companies for whom telecommunications play a major role in their business will choose to base their operations.
I believe that this further liberalisation will benefit users by bringing down international rates more quickly, and benefit the UK economy by attracting new investment, both by telecommunications operators and user companies, to the UK.
In parallel, we will be continuing to press for improved access for UK operators, both within the EU through strict application of new Community liberalisation rules, and in other countries through the World Trade Organisation.
I am also pleased to announce that the UK will, on 1 July, be lifting the "equivalency" rules which at present limit international simple resale services to certain routes. We will allow the provision of telecommunications services over leased line capacity on any route. I stress, however, that while we wish to open the UK market to full competition, we will ensure that such competition is fair.
525WI believe that liberalisation in Europe and other major markets reduces this risk of abuse by overseas companies which enjoy a monopoly or are inadequately regulated in their home market. One-way bypass—where companies might continue to charge UK-based carriers above-cost accounting rates, while delivering their own traffic more cheaply here—is an example of such abuse. We will be taking steps to deter such behaviour in the licences we shall be issuing.
The licences will contain many of the provisions already in public telecommunications operator licences and in those for international simple resale. In particular, we will wish to give the Director-General of Telecommunications powers to prevent one-way bypass or discriminatory practices between affiliate companies.
Where there is no overseas competition, provisions will be applied immediately requiring "proportionate return" both for resale and international facilities-based traffic. This will avoid rapid traffic imbalances occurring as a result of one-way bypass. Operators on these routes will also have to charge the same accounting rates as each other.
However, on the six routes which have already been found equivalent, and for EU routes, these obligations will be only reserve powers, and will not be applied unless market developments dictate. As other routes become more competitive, we will waive these last two requirements for those routes.
The new licences will be public telecommunications operator licences, and we will undertake the usual public consultations, and address any further issues which arise in the course of these applications. I aim to be able to issue the first licences from July.