STATEMENT OF

THE UNITED STATES COUNCIL FOR INTERNATIONAL BUSINESS

ON

THE CONVERGENCE OF THE TELECOMMUNICATIONS, MEDIA AND INFORMATION TECHNOLOGY SECTORS, AND THE IMPLICATIONS FOR REGULATION

MAY 3, 1998

The United States Council for International Business (USCIB) appreciates the opportunity to provide to the European Commission our Statement on the Convergence of the Telecommunications, Media and Information Technology Sectors, and the Implications for Regulation.  The USCIB believes pro-competitive policies should drive the convergence of these sectors.

The USCIB, representing 300 global corporations, professional firms and business associations, advances the global interests of American business both in the United States and abroad.  It is the American affiliate of the International Chamber of Commerce, the Business and Industry Advisory Committee to the Organisation for Economic Cooperation and Development, and the International Organisation of Employers.  As such, it officially represents U.S. business positions both in the main intergovernmental bodies and vis-a-vis foreign business communities and their governments. 

The accelerating convergence of  telecommunications, media and information technologies is driven by dramatic advances in microelectronics, computing power, network transmission speeds and by the digitalization of communications and information.  The phenomenon of convergence, as noted in the European Commission's Green Paper, allows services traditionally provided over one medium to be provided over all forms of  transmission media.  Convergence will have far reaching economic and social benefits, including improvements in economic efficiency, greater user choice and lower prices for information services.  The importance of the debate regarding the regulatory implications of convergence cannot be underestimated.

The cornerstone of government policy toward convergence should be a maximum reliance on private initiatives acting freely in competitive markets. The dynamism of the information technology industry today demonstrates the advantages derived from a competitive marketplace operating with limited regulation.  A flexible, market-driven and industry-led approach to convergence will ensure continued growth, innovation and consumer benefit.

The development of pro-competitive policies will be best achieved through the application of general competition law, avoiding additional regulation wherever possible.  The application of general competition law will provide the necessary flexibility that characterizes the dynamic and constantly advancing information services industry.  In some instances minimal and targeted government regulation may be needed in order to ensure the ultimate achievement of a truly competitive marketplace.  Such government regulation should be limited to promoting competition, ensuring access to essential facilities, allocating scarce resources, and achieving limited and well-defined public interest objectives.  Any regulation applied should be the least burdensome possible, technology neutral and should not disrupt current business-to-business use of electronic commerce. It would be unwise to automatically apply traditional forms of  regulation to new and emerging services.

The USCIB also supports pro-competitive policies in the traditional telecommunications and broadcasting service industries.  The increase in competing services resulting from convergence will work toward that end.  The WTO Reference Paper, a set of pro-competitive regulatory principles, adopted by 57 countries, has put the telecommunications industry on the path toward greater competition.

In summary, the USCIB believes that pro-competitive policies should apply to both the new and emerging service industries and to traditional service industries.