Administration Unveils Telecom Portions of TPP

The Obama administration released the full text of the telecom chapter of the Trans-Pacific Partnership, spurring reactions Thursday from many stakeholders. Some such as AT&T have strongly backed the trade deal during negotiations. The 22 pages of chapter text were posted on the U.S. Trade Representative website Thursday, alongside a summary document and some other chapters. One such chapter deals with e-commerce. The administration was compelled to release the document 90 days ahead of President Barack Obama’s signature as part of the Trade Promotion Authority arrangement, before congressional consideration.

“This [telecom] framework ensures that competition can take root and that anticompetitive conduct is discouraged,” the USTR summary for the telecom chapter said. “It also encourages innovative market-based solutions, to promote experimenting with new technologies and allow market forces to deliver services more quickly, more effectively, and more economically. And it extends pro-competitive principles to mobile services -- the fastest-growing sector of the industry, which will be the major point of access to Internet and other services for most of the world’s people in coming years.”

The chapter summary outlined sections on reasonable access to networks and other suppliers, fair access to government-controlled resources, rulemaking transparency, suppliers’ freedom to innovate, principles of market-based approach to regulation and cooperation of international mobile roaming. The trade deal is technology neutral, it said. “For the first time in a Free Trade Agreement,” USTR said, “TPP extends pro-competitive network access rules to mobile suppliers. While not directly applicable to the United States because of the competitive nature of our mobile market, this step closes a loophole that has prevented the use of trade disciplines in markets where a dominant mobile operator has been able to thwart competition. Given the interest among U.S. suppliers in entering this subsector in foreign markets and the interest of consumers in accessing innovative products at competitive rates, we expect this to be an important innovation.” Stakeholders also came together to establish “greater cooperation in helping bring competitive forces to bear on such rates, which are the bane of tourist and business travelers alike, and are often a disincentive to using telecommunications services,” it said.

The e-commerce sections include provisions and commitments to ensure companies and consumers can access and move data freely, “which will help ensure free flow of the global information and data that drive the Internet and the digital economy,” said the section summary. Cross-border data transfer has been a recent topic of discussion among policymakers, and was the subject of a House subcommittee hearing Tuesday (see 1511030043).

Article 14.4 of the agreement said that “no party shall accord less favourable treatment to digital products created, produced, published, contracted for, commissioned or first made available on commercial terms in the territory of another party,” or to digital products of which the creator or holder is of another party, “than it accords to other like digital products.” The agreement prohibits a nation from imposing customs duties on digital products, and prevents TPP countries from “favoring national producers or suppliers of such products” through discriminatory measures. TPP also includes commitments by participating nations to adopt and maintain consumer protection laws related to fraudulent and deceptive commercial activities online.

"I do not see chapter 13 of TPP as representing any significant change in U.S. broadband policy," Information Technology and Innovation Foundation telecom policy analyst Doug Brake told us. "The agreement specifically spells out the approaches to regulation, all of which are consistent with current U.S. policy. While the definition of 'public telecommunications service' generally follows our definition of 'telecommunications service' under the Communications Act, which may lead to confusion after reclassification, the agreement also recognizes a party to the agreement may forbear from applying any regulations to any service that a party may have classified as a public telecommunications service. So no real change there. Furthermore, it’s worth noting the TPP makes a clear distinction between 'public telecommunications services' and 'advanced networks' which it specifies to include broadband. Like many of the trade agreements of the past, this agreement is focused on using established regulatory tools to open up legacy monopoly telephone networks abroad, not some radical change in policy."

Multiple members of Congress said they will dig into the TPP text and examine it thoroughly throughout the 90-day review period. Sen. Ron Wyden, D-Ore., said he will talk to “innovators” to "learn about what this agreement will do for them.” Congress eventually would have to vote on the agreement after the presidential signature, a process that’s fast-tracked as part of TPA signed into law earlier this year. Obama sent letters to the House speaker and Senate president Thursday notifying them of his intention to enter into the TPP agreement.

“This is the first trade agreement to take on the digital economy, ensuring that individual and businesses in America and around the world will benefit from the expanding opportunities offered by a free and open Internet,” USTR Michael Froman said Thursday.

“At the Department of Commerce, part of our job is to help individuals and businesses across the country understand the real benefits of the agreement, using data to demonstrate the potential impact of TPP on individual states and industry sectors,” said Commerce Secretary Penny Pritzker. She touted the “first-of-its kind provisions to promote innovation and strengthen the digital economy.”

The Electronic Frontier Foundation criticized aspects of the telecom chapter. “Article 13.4 of the Telecommunications Chapter effectively establishes a hierarchy of interests between unfettered trade in telecommunications services (which is prioritized first, in paragraph 3) and measures to protect the security and confidentiality of messages and to protect the privacy of personal data of end-users (which is placed second, in paragraph 4),” said EFF’s Jeremy Malcolm and Maira Sutton in a blog post. “The subordination of security and privacy interests of users to the commercial interests of business is established by the fact that the former are only allowed to be taken into account if it can be established that they are not 'a means of arbitrary or unjustifiable discrimination or a disguised restriction on trade in services.'” EFF sees this arrangement as “completely backward,” Malcolm and Sutton said: “There is no value in having telecommunications services if they do not protect the privacy and security of end users; in fact, such services can be positively harmful, causing serious human rights infringements of users.” EFF will protest TPP in rallies later this month in Washington.

“It’s finally time to learn whether the TPP is in fact nothing more than the latest in a long line of trade agreements negotiated by and for the 1 percent,” said Communications Workers of America President Chris Shelton. “Even a cursory review demonstrates how this trade deal fails working families.”

MPAA Chairman Chris Dodd said that “enacting a high-standard TPP with strong copyright protections is an economic priority for the American motion picture and television industry, which registered nearly $16 billion in exports in 2013 and supports nearly two million jobs throughout all fifty states. ... The TPP reaffirms what we have long understood -- that strengthening copyright is integral to America’s creative community and to facilitating legitimate international commerce.”

TechNet CEO Linda Moore called the text’s release “a major milestone in the effort to expand free trade along the Pacific Rim.” She and TechNet companies will review it and work with the administration and Congress, she said: “An effective agreement could dramatically expand cross-border data flows and help ensure American technology leadership around the globe, helping to create jobs here at home.”