FCC Study Casts Doubt on Retaliation Options

Associated Press

After months of suggesting that it might use its equipment certification authority to retaliate against Japan for blocking telecommunications imports from the United States, the Federal Communications Commission has determined that it probably cannot.

"They're dealing with Uncle Sam, not Uncle Sucker," FCC Chairman Mark S. Fowler had said as the study of retaliation options began. But, winding up eight months of research, a new FCC report to Congress concludes that the commission has no clear authority to drag its feet on approving equipment made in countries whose markets are not open to U.S. suppliers.

"It is far from clear that the commission could lawfully amend its rules to withhold certification of foreign equipment on trade reciprocity grounds," the analysis said.

The study, by the FCC's common carrier bureau, was ordered by Fowler last winter as the U.S. government sought ways to pressure Japan to open its markets to telephone equipment made in the United States.

Maintains Barriers

Since the end of the American Telephone & Telegraph monopoly on telephone equipment sales, Japanese manufacturers have flooded the United States with low-priced phones and sophisticated switching equipment while Japan has maintained many barriers to the sale of U.S. equipment there.

In the first six months of 1985, 75% of the equipment registrations submitted to the FCC were for items manufactured overseas, and 95% of those were from Japan and other nations in the Pacific Basin.

The FCC study concluded that there was no way of creating what Fowler had called "a mirroring device" to make processing of foreign equipment certification as slow in the United States as it is in the exporting country.

Certification by the FCC has slowed from about 40 days at the beginning of the year to almost 50 days now, but U.S. and foreign applications are processed with the same speed.

The report, sent to the Senate Appropriations Committee earlier this week and made available to reporters Wednesday, noted that several proposed amendments to the law would give the FCC authority to consider trade reciprocity in deciding whether to defer action on a certification request from a foreign manufacturer.

Providing Expertise

The staff study recommended several options that would be possible under existing laws and regulations in the effort to assist U.S. suppliers seeking to sell telecommunications equipment overseas.

The commission said it has already begun assisting the office of the U.S. trade representative by providing expertise in telecommunications trade negotiations and pointed to some successes from that approach.

Although the FCC has absorbed the expenses for this effort by diverting staff time and travel funds from other projects, the analysis said more money may be needed if the commission's role is to be expanded.

The report said the FCC could develop a program to certify the laboratories in the United States that test equipment to see if they meet foreign standards to "satisfy foreign concerns about the integrity of test data."

"It would then be more difficult for foreign administrations to justify the continuation of restrictions on acceptance of test data," it reasoned.

But that, too, would cost money that the commission has no authority to spend.

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