CoCom eases telecom reins to ex-Soviets

Electronic News, June 8, 1992 by Robert Lineback, Andrew Collier

PARIS--Controls on export of fiber optic and microwave communications systems to East Europe and the former Soviet Union will be substantially eased by July 1 following a compromise reached here last week during a meeting of high-level representatives to the Coordinating Committee for Multilateral Export Controls (CoCom).

The agreement, reached at an early morning meeting, broke a year-long deadlock over fiber optic technology exports to the region, but leaves unanswered a host of questions that must be hammered out in technical discussions over the next few months.

Along with the creation of a CoCom Cooperative Forum with the former Soviet republics, the compromise is now expected to open a huge potential market for Western telecom suppliers as well as nurture free enterprise in the region by strengthening its business infrastructure.

"It's a pretty major improvement for domestic phone links," commented Chris Padilla, manager of government affairs with AT&T. "For the first time we can make extensive use of fiber optics domestically in the former Soviet Union."

Under the old guidelines, western countries had been prohibited from selling fiber optic transmission equipment faster than 45 megabits per second. The new accord boosts the speed to 623Mbps for international links into key cities of the Commonwealth of Independent States (CIS), and 156Mbps for domestic calls, using fiber operating at wavelengths of 1,550 nanometers.

Also now permitted is common-channel signaling, which vastly improves network management and speeds the introduction of new features.

Other key changes in export controls on telecom technologies involve microwave radio systems. The new export limits are at higher technical levels, such as quadrature amplitude modulation. Microwave transmission data rates are also being raised to 156Mbps from 45Mbps.

The Paris meeting also approved a proposal to immediately allow shipment of equipment upgrading existing coaxial cable links to 156Mbps transmission rates.

All the new guidelines will apply the same controls to both East Europe and the CIS, a U.S. State Department spokesman explained.

The first CoCom Cooperative Forum meeting is being planned for the fall. CoCom hopes it will help developing nations to establish their own export controls, preventing newly available technology from being diverted to other countries for military applications.

Mr. Padilla said new controls will permit AT&T to install higher speed fiber optic lines and related equipment, such as multiplexers, in the region, boosting equipment sales and lowering transmission costs for its service agreements. Among the projects likely to benefit is an AT&T joint venture with the prime equipment supplier, DALS, to the Russian telephone system.

Despite looser constraints on technology, however, future projects will depend heavily on the CIS devising ways to pay for imports. AT&T has been pressing for new funding arrangements, including U.S. government loans, repayment for equipment through service revenues, barter or equity interest agreements (as in an AT&T deal for a 39 percent stake in a Ukrainian telephone company in exchange for 13 central office switches).

Since early 1991, a group of CoCom members--including Australia, Canada, Great Britain and the U.S.--have fought to increase controls on advanced communications systems. Other members, such as Germany, have sought fewer controls on exports to the former Soviet bloc.

The new technology export limits are still set substantially below transmission capabilities found inside Western countries, which between cities in the U.S. can reach the gigabit range, while 2.4 Gb systems are being readied for commercial use in Europe.

One of the largest proposed ventures in the region, a Trans-Siberian Line to link Asia with the CIS, proposed by a consortium of telecom companies headed by U S West, is still up in the air, with State Department officials far more doubtful than U S West about the project's future.