Commission highlights US trade barriers

Date: 03/08/00

By Simon Taylor

EU COMPANIES working in the communications sector are increasingly finding their access to lucrative US markets barred by discriminatory laws, according to a new report by the European Commission.

The Union executive's annual analysis of US barriers to trade, published this week, warns that European and foreign-owned firms in the communications industry "still face considerable barriers" when trying to gain access to the US market, with those providing satellite and mobile telephone services facing the most problems.

"This situation is not line with the market access policy advocated by the US and provides a competitive advantage to the significant number of US companies that already have access to the European market in these fields," states the report.

It also warns that a number of US laws and policies relating to the Internet and electronic commerce could "impact negatively on the business of European companies", citing rules on Internet domain names, cybersquatting and encryption as particular problem areas.

The report's findings will heighten increasing tensions between the EU and US over how to regulate technological innovation following the arguments over the move by Congress to block the take-over of US VoiceStream by German giant Deutsche Telekom. Congress objects to the fact that a US firm could be taken over by a company which is more than 50% owned by the German government.

Highlighting specific obstacles encountered by EU firms, the Commission said companies providing satellite services had encountered "serious problems". Its report claims that the US telecoms regulator, the Federal Communications Commission, failed to allocate spectrum and licences in an "objective, transparent, timely and non-discriminatory manner", and questions whether its actions were compatible with World Trade Organisation rules.

The Commission also warns that it might complain to the WTO if laws governing the privatisation of Intelsat, Inmarsat and spin-off entities are used against EU operators.

In the field of mobile communications, the Commission argues that access for third-generation systems to the US market could be restricted because of a shortage of available frequencies in the US. It is therefore seeking clarification from Washington as to how frequencies will be made available to ensure the American market is open to foreign-owned operators.

The report also stresses the Commission's support for a uniform global system for allocating Internet domain names and expresses concern about the impact of the US Anticybersquatting Consumer Protection Act.