US faces trade barriers from India, China in telecom: Report

The US is facing a number of trade barriers in the telecommunication sector from India and China, a top Obama administration official said.

"Barriers to trade in telecommunications-related goods and services disproportionately affect US suppliers, given our strong competitive position in these sectors," US trade representative Mike Froman said yesterday after release of the annual 1377 review report.

The Congressional mandated report details the operation and effectiveness of telecommunications trade agreements.

"We have made important progress this year in advancing market liberalisation in this sector, though we continue to see the emergence of new barriers data flows and other localisation requirements," he said.

The report among other things mentions ongoing restrictions on the provision of voice-over the Internet (VOIP) services in China and India.

It expresses concerns about undue restrictions on the ability of US satellite service suppliers to provide satellite transmission capacity to customers in both China and India.

It also mentions progress in US telecommunications suppliers’ ability to obtain competitive access to facilities in India where submarine cables connect to the Indian terrestrial network.

Noting the emergence of troubling new and potential barriers to trade, the report said the government of Pakistan has not fully addressed efforts by local participants to create a cartel for the provision of international calls, limiting opportunities for US telecommunication companies to provide this service in Pakistan.

The European Union has proposed to create an Europe-only cloud computing network; and Turkey has blocked numerous Internet-enabled services, affecting legitimate US businesses, the report said.

"India currently only allows VoIP to be used in closed user groups (CUGs), which is a communications network between branches of a single company", it said.

"Furthermore, the CUGs can only link to each other using an Internet Protocol trunk and VoIP, but cannot supplement such links with connectivity to the PSTN", it said.

"This causes companies to incur higher establishment and operational costs by maintaining separate systems for internal and external communications," the report said.

USTR will continue to encourage India to adopt such an "open skies" satellite policy to allow consumers the flexibility to select the satellite capacity provider that best suits their business requirements, the report said.

According to the report, last year, USTR commended TRAI, the national regulator, for taking positive steps to reduce access and collocation charges at India’s submarine cable landing stations.

"Subsequently, however, Tata Telecommunications Ltd and Bharti Airtel Ltd, which own the majority of cable landing stations in India, appealed this decision in the Madras High Court. The Madras High Court stayed the implementation of the TRAI decision," the report said.

"We look forward to an immediate and expeditious resolution of this matter in the broader interest of the growth of affordable broadband and data services in India," it said.

Noting that license amendments have affected importation of telecommunications equipment, the report said USTR will continue to engage India to seek ways to ensure that US telecommunications companies can continue to participate meaningfully in the Indian market, while also respecting security concerns of the Indian Government.