Report No. IN 99-6                     INTERNATIONAL ACTION           February 5, 1999
 
 TWIN ANNIVERSARY OF WTO AGREEMENT TO OPEN INTERNATIONAL TELECOM
 MARKET AND COMMISSION'S BENCHMARKS ORDER MARKED BY DECLINE IN
   INTERNATIONAL CALLLING RATES AND GREATER  SERVICE OPTIONS 
                                
     On the twin anniversaries of the entry into force of the historic World Trade Organization
(WTO) Agreement on Basic Telecommunications Services and the Commission's 1997
Benchmarks Order, international calling prices continue to fall significantly, reflecting a pass-
through to consumers of the decline in international settlement rates mandated by the
Commission's Benchmarks Order.    The WTO Agreement and the Benchmark Order, now both
one-year old, have had a profound effect on the global market for international services.  "The
WTO telecom agreement and the Commission's Benchmark policy are the one-two punch for
promoting competition and liberalization in the international telecommunications market," stated
FCC Chairman William E. Kennard.  "We're now at the end of the beginning of the war against
telephone monopolies, and consumers are already enjoying lower international calling rates."    

     In 1996, the average price of an international call originating from the United States was
88 cents per minute.  Although the 1998 figures are still incomplete, all indications are that the
average price to consumers of an international call is now close to 60 cents per minute, reflecting
a 30% decline in the past two years.  By 2003, when the Benchmarks Order will be fully
implemented, estimates are that the average price of an international call will be below 25 cents
per minute.  

     The WTO Basic Telecom Agreement entered into force on February 5, 1998.  The
Commission's Benchmarks Order, which a U.S. appeals court resoundingly affirmed last month,
was adopted in August 1997 and went into effect January 1, 1998.   Since the adoption of the
Benchmarks Order in August 1997, carriers from 24 countries have reduced their settlement rates
to  levels that are at or below their respective benchmark rates, and 14 more countries have
agreed to do so within the timeframe prescribed in the Benchmarks Order.   In the past year, the
average per-minute settlement payment, or the rate that U.S. carriers pay to terminate
international calls, has declined by 20 percent.  In 1998, competitive rates that consumers pay for
calls from the United States to the top 10 international destinations have fallen on average by 25
percent.  Moreover, consumers can make calls to liberalized markets such as the United Kingdom
and Sweden for as little as 12 cents per minute, a rate that is equivalent to the cost of domestic
long distance services.  
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     Foreign markets are also beginning to provide U.S. companies more opportunities to offer
innovative, affordable services than ever before.    In the period 1994-1997, over $600 billion
dollars (worldwide estimate) of private capital has been invested in the development of
telecommunication networks.  While wireline companies are investing heavily to develop a global
network,  satellite companies are offering additional choices for basic and advances services to
people and businesses in underserved areas across the globe -- from solar-powered satellite
telephones in Chile to Internet cafes in Zambia. 


                            - FCC - 

     News Media Contact:  Rosemary Kimball (202) 418-0500
     International Bureau Contact: Peter Pappas at (202) 418-0746.