The extremely long and complex Telefonos de Mexico, S.A. de C.V. (Telmex) case (U.S. v. Mexico) is of potential importance for developing countries. It is the first WTO Panel decision dealing solely with trade in services under the GATS and it is also the first Panel decision that deals with telecommunications services and the associated competition commitments contained in the WTO Telecommunications Reference Paper. This issue of Trade Hot Topics proceeds first by providing a brief legal background to the dispute by examining the competition concerns in the WTO telecommunications regime, followed by an examination of the findings of the Panel in the Telmex case, and concludes with a brief discussion on its implications for developing countries.