By IPS Correspondents
PORT OF SPAIN, Feb 20 1997 (IPS)

The US Federal Communications Commission’s proposal to unilaterally impose new settlement rate benchmarks for telephone traffic out of its borders is causing quite a flurry in the Caribbean.

The controversial formula proposed by the FCC will see a drastic reduction in remittances to non-US telephone service providers whose services US callers have used to reach Caribbean destinations. Regional planners believe this can prove to be a setback to plans to move ahead with modernisation efforts.

The international system for dividing up revenue for telephone calls is known as the ‘international accounting rate.’

Each time someone makes a call to another country the originating telephone company must pay the destination country for completing the call. The US has been pressing for changes to the system for several years. Some 25 percent of all international calls are made from the United States.

The US move has already attracted fire from the Caribbean Association of National Telecommunications Organisations (CANTO) and the Caribbean Telecommunications Union (CTU).

Caribbean telecommunications officials rejected the proposal hands- down at their meeting in Guyana two weeks ago. The FCC has said it welcomes comment but plans to proceed with the move whatever the responses.

Under the current system, the United States says it paid five billion dollars to foreign operators in 1995 for completing telephone calls — four billion more than it received from foreign companies. In Trinidad and Tobago alone, remittances amounted to 34 million dollars.

Regional experts believe the matter should be dealt with at the multi-lateral level via the International Telecommunications Union (ITU), the United Nations body which fixes and oversees accounting rates.

The issue is the recurrent buzz at this week’s meeting in Port of Spain of the Organisation of American States (OAS)- administered Permanent Consultative Committee II (PCCII) and the Inter-American Telecommunications Commission (CITEL), but primary attention is being paid to the need to modernise hemispheric telecommunications systems.

This has been set against the context of the mandate to the OAS arising from the 1994 Summit of the Americas that it should serve as a principal facilitator of supporting mechanisms to usher in a Free Trade Area of the Americas by the year 2005.

PCCII chairman, Ralph Zeitoun, says developments in the area will have to be characterised by a mixture of “intelligence and speed.”

“Technology is exploding all around us and moving fast,” Zeitoun told the meeting which ends Friday. “No sooner than we become familiar with a new system it changes and we have to run to adjust.”

“This situation is creating many headaches for the regulators,” he says. “No more are they able to provide the timely regulations necessary for the orderly development of systems and new technologies.”

Zeitoun says it is important for hemispheric players to “exchange ideas to respond to new technologies. He feels it is important to aim at standardising regional systems though there would be obvious obstacles.

In that context he referred to the conversion of analog systems into digital operations which, he says, has been “a very tall order” for the region. Analog systems have been employed for the past 70 years and the newer digital systems have proven to be vastly superior and ultimately more economical.

Assistant secretary-general of the OAS, Christopher Thomas, says the modernisation national and regional telecommunications systems is ” an essential policy option of the Caribbean.”

“In this evolving system, and its deepening globalisation into trade financial and services sectors, telecommunication and its related technologies will, of necessity play an increasing role in providing these incentives,” he says.

Thomas says the role of the mass media to countries’ economic development has to be recognised and that regional governments are, in fact, discovering the value of “developing the availability and distribution of information on critical elements of economic growth”

“Given the strategic socioeconomic and even political significance of communications technology in redefining the job market, reducing deficiencies in health, education and related social services as well as in overall technological development we are beginning to see the institutionalisation of the relations between the structures of political power and technology,” Thomas says.

He however warns that the fast pace of change and the price tag associated with it could see the marginalisation of a majority of people for whom new technologies are not made available. He says that even at the national level, “a majority of countries will be unable to keep up because of the economic demands” of the situation.

In that regard, he says one of the principal functions of the planning process would be to help equip the “more vulnerable constituents” of the hemispheric drive to dove-tail technological development and economic aspirations.

As for the 14-member Caribbean Community (Caricom) grouping he says: “Neither individually nor collectively can Caricom members undertake the dimensions of telecommunications requirements to maintain successful engagements with the FTAA (Free Trade Area of the Americas).

Trinidad and Tobago’s prime minister, Basdeo Panday has noted the “convergence of technologies” saying it is clear that the world will see “the globalisation of telecommunications in coming years.”

He says such questions are “high priority” issues for the country and that he is looking towards the formulation of a “well-defined telecommunications policy for Trinidad and Tobago.”

He suggests that one strategy would be the “development of a competitive environment” in the telecommunications sector. This has been taken to euphemistically refer to the planned de- monopolisation of the country’s telecommunications sector dominated at the moment by a joint state-private sector operation.

The British telecommunications giant, Cable and Wireless, holds virtual monopoly positions throughout the Caribbean.

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