Global competition nears U.S. shores >BY SANDRA GUY, News Editor

After two years of haggling, United States trade and carrier representatives are clinging to their stance that a "critical mass" of countries must follow America's lead and open their telecom markets to competition. Negotiators hope to conclude a World Trade Organization agreement governing telecommunications this week.

The U.S. Trade Representative's Office is seeking the same market access overseas as it gives carriers here so that American-based carriers can compete for new markets and customers abroad, an office spokeswoman said. The U.S. extended the talks in April 1996, arguing that too few countries were offering too little market access.

One sticking point is Canada's proposal to limit foreign ownership of a Canadian carrier to 46.7%. Canada requires no licenses for resellers and has no foreign ownership limitations. "The market is quite open," said a spokesman for Teleglobe Canada. He could not say whether Canada would soften its proposal during the talks in Geneva. Teleglobe Canada operates an American subsidiary, Teleglobe U.S.A.

Another concern is a possible conflict between the world trade agreement and Federal Communications Commission rules, which meant to balance the rates that U.S. carriers pay to terminate international calls with the rates paid by foreign carriers to terminate calls in the U.S.

The FCC's benchmark settlements proposal attempts to resolve that issue. In competitive markets, Chairman Reed Hundt has said that traffic would be exchanged at cost-based rates. But foreign carriers that dominate their markets and set up shop in the U.S. would be barred from carrying traffic back to their home markets until their rates were lowered enough to prevent a market distortion.

American carriers, which have telecom interests throughout the world, are watching the talks closely.

WorldCom, which has no objections to foreign companies entering the U.S. market, would welcome the agreement because it would commit foreign countries to opening their markets, said Robert Koppel, vice president of international regulatory affairs.

Nynex also is encouraging as many countries as possible to liberalize their markets, to seek little or no foreign investment restrictions and to set up an independent regulator, separate from the government, to establish fair rules, said Cathy Slesinger, vice president of international affairs for Nynex.