[Federal Register Volume 62, Number 168 (Friday, August 29, 1997)]
[Rules and Regulations]
[Pages 45758-45763]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-22936]
[[Page 45758]]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 63
[IB Docket No. 96-261, FCC 97-280]
International Settlement Rates
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: On August 7, 1997, the Federal Communications Commission
adopted a Report and Order that revises the Commission's international
settlement rate benchmarks. The revisions will move settlement rates
closer to the underlying costs of providing international termination
services. The Commission took this action in light of the significant
changes that have occurred in the global telecommunications market in
recent years. The decision represents one of the steps in an ongoing
effort by the Commission, many foreign governments, and multilateral
organizations such as the International Telecommunication Union
(``ITU'') and the Organization for Economic Cooperation and Development
(``OECD'') to lower international telephony costs by reforming the
international accounting rate system.
DATES: Effective: January 1, 1998. The new information collection
requirements adopted in this Order will become effective following OMB
approval. The Commission will publish a document at a later date
establishing the effective date. Written comments by the public and
other agencies on the proposed information collections are due October
28, 1997.
ADDRESSES: Federal Communications Commission, 1919 M Street, NW., Room
222, Washington, DC 20554. For filing comments on the proposed
information collections contained herein, in addition to filing
comments with the Secretary, a copy of any comments should be submitted
to Judy Boley, Federal Communications Commission, Room 234, 1919 M
Street, NW., Washington, DC 20554, or via the Internet to
jboley@fcc.gov.
FOR FURTHER INFORMATION CONTACT: Kathryn O'Brien, Attorney-Advisor, or
John Giusti, Attorney-Advisor, Policy and Facilities Branch,
Telecommunications Division, International Bureau, (202) 418-1470. For
additional information concerning the information collections contained
in this Order contact Judy Boley at 202-418-0214, or via the Internet
at jboley@fcc.gov.
SUPPLEMENTARY INFORMATION:
Summary of Report and Order
1. On December 19, 1996, the Commission released a Notice of
Proposed Rulemaking in the Matter of International Settlement Rates, IB
Docket No. 96-261, FCC 96-484 (61 FR 68702, December 30, 1996). In the
NPRM, the Commission proposed options for revising international
settlement rate benchmarks that would move settlement rates closer to
the underlying costs of providing international termination services.
The NPRM sought comment on several alternate methods for calculating
benchmark rates in the absence of reliable data on the costs foreign
carriers incur to terminate international traffic.
2. On August 7, 1997, the Commission adopted a Report and Order in
this proceeding that revised settlement rate benchmarks. The Commission
concluded that current settlement rates are in most cases substantially
above the cost that foreign carriers incur to terminate U.S.-originated
traffic. These inflated settlement rates contribute to high
international calling prices for U.S. consumers and create the
potential for distortions in the U.S. market for international
services.
3. The Commission adopted revised settlement rate benchmarks to
assist U.S. international carriers in negotiating settlement rates that
are more closely related to the costs incurred by foreign carriers. The
benchmarks are calculated using foreign carriers' tariffed prices and
information published by the International Telecommunication Union. The
Commission concluded that basing benchmarks on foreign carriers'
tariffed prices would more closely reflect the underlying costs of
providing international termination service than most current
settlement rates, although they still would result in benchmarks that
are substantially above cost-based settlement rate levels. The
Commission believes that basing benchmark settlement rates on the same
rates that foreign carriers charge their own customers would ensure
nondiscriminatory treatment for U.S. carriers. In addition, foreign
carriers will be permitted to recover more than their incremental cost
of terminating international service because the tariffed rates are for
retail services and include costs that would not be included in cost-
based settlement rates.
4. The Commission adopted four settlement rate benchmarks: $0.15
for upper income countries; $0.19 for upper-middle income countries and
lower-middle income countries; and $0.23 for lower income countries.
The Commission concluded that these settlement rate benchmarks will
continue to exceed, usually substantially, any reasonable estimate of
the level of foreign carriers' costs. Using the limited data available
to the FCC for calculating benchmarks, these benchmarks will
substantially reduce the above-cost excesses in current settlement
rates in a manner that is reasonable and treats foreign carriers
fairly. The Commission adopted its proposal in the NPRM to revise and
update the benchmarks periodically as necessary.
5. The Commission also adopted a ``best practices'' rate that will
be enforced as a safeguard when it detects distortion in the U.S.
market for IMTS. The ``best practices'' rate is closer to a cost-based
level than the settlement rate benchmarks and can be applied to prevent
market distorting behavior. This rate will be applied only to the
extent carriers seek authorization to provide facilities-based service
from the United States to affiliated markets and to provide private
line resale service. In those cases, the rate will be enforced only if
the Commission detects market distortion on the route or routes in
question. The rate is based on the lowest, commercially viable,
settlement rate currently paid by U.S. carriers to an overseas carrier
from a competitive market. The Commission selected a rate of $.08,
which is the current settlement rate between the United States and
Sweden. The ``best practice'' rate will apply only in cases of
competitive distortion, and that if an affected carrier believes such a
requirement would prove unjustified it may follow established
procedures to request an individualized settlement rate prescription.
6. The Commission adopted a transition schedule for compliance with
the settlement rate benchmarks to balance the competing concerns of
providing time for carriers to make adjustments and expeditiously
reduce rates to a more cost-based level. The transition schedule is
based primarily on the categorization of countries used to calculate
the settlement rate benchmarks, the World Bank, and ITU's GNP per
capita classifications. The Commission believes that this
classification scheme provides a reasonable basis for determining a
country's ability to transition to a more-cost based system or
settlement rates without undue disruption to its telecommunications
network. The Commission also established a separate category for the
``least telecommunications developed'' countries based on level of
teledensity,
[[Page 45759]]
or lines per 100 people, rather than GNP per capita. The Commission
will require that U.S. carriers negotiate settlement rates at or below
the relevant benchmarks according to the following schedule:
Carriers in upper income countries--1 year from implementation of the
Order
Carriers in upper-middle income countries--2 years from implementation
of the Order
Carriers in lower-middle income countries--3 years from implementation
of the Order
Carriers in lower income countries--4 years from implementation of the
Order
Carriers in countries with teledensity (lines per 100) less than 1--5
years from implementation of the Order
7. The Commission declined to adopt the proposal to permit
additional flexibility in the application of the benchmarks beyond the
transition periods for U.S. carriers serving developing countries that
have committed to introducing competitive reforms. The Commission
believes that these transition periods adequately balance the
challenges faced by developing countries in moving to more cost-based
rates.
8. The Commission intends to take the appropriate enforcement
measures that may be necessary to ensure that U.S. international
carriers satisfy the benchmark requirements. Initially, the Commission
will identify foreign carriers that are reluctant to engage in
meaningful progress toward negotiating settlement rates at or below the
relevant benchmark. The Commission will take steps to work with the
foreign governments and carriers to achieve the goal of cost-based
rates. If these efforts are unsuccessful, U.S. international carriers
may file a petition with the FCC. The Commission can and will ensure
compliance with its settlement rate benchmarks. Rather than adopt a set
enforcement mechanism, the Commission will consider individual
circumstances surrounding each carrier-initiated petition to determine
the appropriate enforcement action to take. To protect smaller carriers
from reprisals, the Commission emphasized that it will continue to
safeguard U.S. carriers against discriminatory treatment by foreign
carriers by vigorously enforcing its international settlements policy.
9. The Commission will consider, on a case-by-case basis,
grandfathering settlement rate agreements that were negotiated prior to
the effective date of this Order. The agreement, however, must meet the
Commission's public interest standard of serving the same goals set
forth in this Order and achieving settlement rates at or below the
relevant benchmark within a reasonable period of time. The Commission
will reserve the right to consider alternative approaches to the
settlement rate benchmarks if, in the future, it finds that meaningful
progress is made in a multilateral forum to achieve its goals.
10. In the NPRM, the Commission identified two types of market
distortions that could be created by above-cost settlement rates--price
squeeze behavior and one-way bypass. In the Order, the Commission
describes how it will detect and address these distortions. Price
squeeze behavior potentially could distort competition in the U.S.
market for IMTS by affecting the ability of other carriers to compete.
The Commission will condition authorizations to provide international
facilities-based switched or private line service from the United
States to an affiliated market in order to restrain the ability of
foreign-affiliated carriers to engage in anticompetitive price squeeze
behavior in the U.S. market. The Commission adopted a rebuttable
presumption that a carrier's service offering has distorted market
performance if any of the carrier's tariffed collection rates on the
affiliated route are less than the carrier's average variable costs on
that route. In order to prevent one-way bypass of the accounting rate
system, the Commission will condition the Section 214 authorizations of
carriers to provide switched basic services over international
facilities-based or resold private lines. The Commission also adopted a
rebuttable presumption that one-way bypass is occurring if the
percentage of outbound traffic relative to inbound traffic increases
more than 10% in two successive quarterly measurement periods and it
reserves the right to investigate other shifts in the inbound/outbound
ratio to determine whether one-way bypass is occurring.
11. To assist in detecting market distortion, the Commission will
amend Sec. 43.61 of its rules to require certain carriers to file
quarterly traffic reports pursuant to filing criteria adopted in the
Order. In addition, the Commission intends to monitor closely U.S.
carriers' collection rates to ensure that they reflect fully all net
settlement savings. U.S. carriers with more than five percent of the
outbound IMTS traffic on a route will be required to file a report
every six months.
12. In the Notice, the Commission proposed a condition to carriers'
applications that would balance its desire to encourage international
resale services and at the same time limit the potential for one-way
bypass. In the Order, the Commission modified the proposed condition.
The first modification to the condition will authorize carriers to
provide switched services over resold international private lines
between the United States and foreign destination countries on the
condition that settlement rates for at least 50 percent of the settled
U.S.-billed traffic on the route or routes are at or below the
appropriate benchmark. In the event that competitive distortions result
on the route in question, i.e., carriers are engaging in one-way
bypass, the Commission will take enforcement action. Such enforcement
action may include a requirement prohibiting carriers from using their
authorizations to provide switched services over private lines on that
route until settlement rates for at least 50 percent of the settled
U.S.-billed traffic on the route are at or below the level of the best
practice rate of $0.08, or revocation of a carrier's authorization.
13. The second modification the Commission made to the proposed
condition would apply it to U.S. facilities-based carriers' use of
their authorized private lines for the provision of switched, basic
services. Carriers will be permitted to use their authorized
facilities-based private lines to originate or terminate U.S. switched
traffic on the condition that settlement rates for at least 50 percent
of the settled U.S. billed traffic on the route or routes in question
are at or below the appropriate benchmark. If market distortion occurs
on the route, i.e., carriers are using their authorized private lines
to engage in one-way bypass of the accounting rate system, the
Commission will take enforcement action.
14. Final Regulatory Flexibility Analysis. Pursuant to the
Regulatory Flexibility Act of 1990, 5 U.S.C. 601-612, the Commission's
Final Regulatory Flexibility Analysis with respect to the Order is as
follows:
Reason for action: The Commission issues this Report and Order
adopting changes in the benchmark settlement rates for international
message telephone service between U.S. facilities-based carriers and
foreign carriers and related issues. The Commission believes that its
benchmark rates should be revised to reflect recent technological
improvements, their associated cost reductions, and the market
structure changes occurring in the global telecommunications market. We
also believe these revisions, and
[[Page 45760]]
related actions taken here, are necessary to move settlement rates
closer to the actual costs of providing international termination
services.
Objectives: The objective of this proceeding is to attain reform in
the international accounting rate system and thereby help ensure lower
international calling prices for consumers and protect competition in
the U.S. IMTS market. The Commission will achieve this objective by
revising its benchmark settlement rates so that they more closely
resemble the underlying costs of providing international termination
services.
Legal basis: The Report and Order is adopted pursuant to sections
1, 2, 4(i), 201, 205, 214 and 303(r) of the Communications Act of 1934,
as amended, 47 U.S.C. 151, 152, 154(i), 201, 205, 214, 303(r).
Description, potential impact, and number of small entities
affected: The Commission has not developed a definition of small
entities applicable to international common carriers. We therefore have
used as the applicable definition of small entity the definition under
the Small Business Administration (SBA) rules applicable to
Communications Services, Not Elsewhere Classified. This definition
provides that a small entity is expressed as one with $11.0 million or
less in annual receipts. Based on preliminary 1995 data, at present
there are 29 international facilities-based common carriers that
qualify as small entities pursuant to the SBA's definition. The number
of small international facilities-based common carriers has been
growing significantly, and by the end of 1996 that number could
increase to approximately 50. The revised benchmark rates will apply to
all international facilities-based common carriers, including small
entities, that enter into an operating agreement with a foreign carrier
that provides for the payment of settlement rates. We note that the
revised benchmark rates should result in lower settlement rates for
carriers. This Report and Order also requires that a foreign carrier's
settlement rates be at or below the relevant benchmark as a condition
of Section 214 authorization for that carrier, or an affiliate, to
provide U.S. international facilities-based services between the United
States and the affiliated destination country. This condition will
apply to all U.S. international facilities-based carriers, including
small entities, that are affiliated with foreign carriers. The
Commission has concluded that this condition is necessary to prevent
potential anticompetitive distortions in the IMTS market.
The Order also imposes an additional requirement on carriers that
seek to provide switched services using resold or facilities-based
private lines. Carriers must demonstrate that settlement rates for 50
percent of the settled traffic between the United States and the
country at the foreign end of the private line are at or below the
relevant benchmark for that country. The Commission believes that at
most 635 small international carriers, both facilities-based and resale
carriers, could be affected by this requirement. The Commission has
concluded this requirement is necessary to prevent potential
anticompetitive distortions in the IMTS market. We base our estimate of
the number of small entities potentially affected on the number of toll
carriers filing Telecommunications Relay Service Fund (TRS) worksheets.
In 1995, 445 toll carriers filed TRS fund worksheets. We believe that
between 50 and 200 carriers failed to file TRS fund worksheets. We also
believe that fewer than 10 toll carriers were not small entities (based
on the SBA's definition of small entity as one with fewer than 1,500
employees). Thus, at most 635 international carriers would be
classified as small entities. The Secretary shall send a copy of this
Report and Order to the Chief Counsel for Advocacy of the Small
Business Administration in accordance with section 603(a) of the
Regulatory Flexibility Act, Pub. L. 96-354, 94 Stat. 1164, 5 U.S.C.
601, et seq. (1981).
Reporting, recordkeeping and other compliance requirements: In its
Initial Regulatory Flexibility Analysis the Commission did not propose
any reporting requirements. The Notice, however, raised the issues of
possible anticompetitive behavior and market distortions, and sought
comment on how the Commission's reporting system could be modified in
order to make monitoring and enforcement more effective. To address the
concerns of commenters, the Report and Order contains certain
mechanisms to detect potential market distortions. In this regard, the
Commission amends its rules to impose an additional reporting
requirement. Section 43.61 of the Commission's rules currently requires
that carriers file annual reports that include actual traffic and
revenue data. Common carriers subject to the existing Sec. 43.61
requirements will be required to file traffic reports for each quarter
in which their traffic meets any of the following thresholds: (i) Their
aggregate U.S.-billed minutes of switched telephone traffic exceeds 1%
of the total of such minutes of international traffic for all U.S.
carriers (as published in the most recent Sec. 43.61 traffic data
report); (ii) their aggregate foreign-billed minutes of switched
telephone traffic exceeds 1% of the total of such minutes of
international traffic for all U.S. carriers; (iii) their aggregate
U.S.-billed minutes of switched telephone traffic for any country
exceeds 2.5% of the total of such minutes for that country for all U.S.
carriers; or (iv) their aggregate foreign-billed minutes of switched
telephone traffic for any foreign country exceeds 2.5% of the total of
such minutes for that country for all U.S. carriers. Limiting the
quarterly filing requirement to carriers that meet these criteria will
reduce the burden on small carriers, while enabling us to identify
distortions in the balance of payments. The Report and Order only
imposes an increase in the frequency with which the report must be
filed. It will contain the same data that must be included in the
current required annual report. Thus, the reporting requirement should
not impose a significant economic burden, and no additional outside
professional skills should be required in complying with this
requirement.
Federal rules which overlap, duplicate or conflict with the
Commission's proposal: None.
Any significant alternatives minimizing impact on small entities
and consistent with stated objectives: The Notice solicited comments on
a variety of alternative methodologies for calculating benchmark
settlement rates, but these have no impact on small entities. The
Notice also solicited comments on enforcement mechanisms that may be
necessary to support U.S. carriers, including small entities, in their
negotiations with foreign carriers and in their provision of
international service. We did not receive any comments on the impact of
these alternatives on small entities.
Comments solicited: Written comments were requested on the Initial
Regulatory Flexibility Analysis in accordance with the same filing
deadlines set for comments on the other issues in the Notice, but we
did not receive any comments.
15. Paperwork Reduction Act. This Report and Order contains either
a proposed or modified information collection. The Commission, as part
of its continuing effort to reduce paperwork burdens, invites the
general public and the Office of Management and Budget (OMB) to comment
on the information collections contained in this order, as required by
the Paperwork Reduction Act of 1995, Pub. L. 104-13. Public and agency
comments are due 60
[[Page 45761]]
days from the date of publication of this decision in the Federal
Register. Comments should address: (a) whether the proposed collection
of information is necessary for the proper performance of the functions
of the Commission, including whether the information shall have
practical utility; (b) the accuracy of the Commission's burden
estimates; (c) ways to enhance the quality, utility, and clarity of the
information collected; and (d) ways to minimize the burden of the
collection of information on the respondents, including the use of
automated collection techniques or other forms of information
technology.
OMB Approval Number: 3060-0106.
Title: Section 43.61--Reports of Overseas Telecommunications
Traffic.
Form No.: None.
Type of Review: Revision of existing collection.
Respondents: U.S. common carriers providing international
telecommunications services.
Number of Respondents: We estimate the number of respondents to be
5. Although the number of respondents is less than 10, the Commission
is unable to identify specific respondents because the respondents will
vary depending on whether they carry specified levels of U.S.
international traffic during any quarterly reporting period. Only those
carriers that meet the reporting criteria established in the Order will
be subject to the proposed information collection.
Estimated Time Per Response: 160 hours.
Total Annual Burden: 800 hours.
Estimated costs per respondent: None. Respondents already maintain
this data as part of their normal business practices.
Needs and Uses: Section 43.61 requires each common carrier that
provides international facilities-based switched service between the
United States and any foreign country to file an annual traffic and
revenue report. The annual report includes actual traffic and revenue
data for each service provided by a common carrier, divided among
service billed in the United States, service billed outside the United
States, and service transiting the United States. In this Order we are
increasing the filing frequency in order to detect market distortion
that may occur from the routing of U.S. international switched, basic
traffic over private lines. Common carriers subject to the existing
Sec. 43.51 requirement will be required to file the quarterly reports,
in addition to annual reports for each quarter reporting period in
which their minutes of switched telephone traffic meet certain
thresholds established by the Commission. However, we will require that
carriers file their traffic and revenue data only for switched
facilities-based telephone services and switched facilities resale
telephone services--not for their other international services.
We note that this decision imposes an additional requirement on
carriers that seek to provide switched services using resold or
facilities-based private lines. Carriers must demonstrate that
settlement rates for at least 50 percent of the settled traffic between
the United States and the country at the foreign end of the private
line are at or below the relevant benchmark for that country. We do not
anticipate that this requirement will impose any additional burden on
carriers as any paperwork burden associated with this requirement is
sufficiently covered under the currently approved information
collection (OMB Control No. 3060-0686).
Ordering Clauses
16. Accordingly, it is ordered that, pursuant to sections 1, 2,
4(i), 201, 205, 214 and 303(r) of the Communications Act of 1934, as
amended, 47 U.S.C. 151, 152, 154(i), 201, 205, 214, 303(r), the rules,
requirements and policies discussed in this Order are adopted and parts
43 and 63 of the Commission's rules, 47 CFR parts 43 and 63, are
amended.
17. It is further ordered that the rules, requirements and policies
established in this decision shall take effect on January 1, 1998. The
new information collection requirements adopted in this Order will
become effective following OMB approval. The Commission will publish a
document at a later date establishing the effective date.
List of Subjects in 47 CFR Parts 43 and 63
Communications common carriers, Reporting and recordkeeping
requirements.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
Rule Changes
Parts 43 and 63 of Title 47 of the Code of Federal Regulations are
amended as follows:
PART 43--REPORTS OF COMMUNICATION COMMON CARRIERS AND CERTAIN
AFFILIATES
1. The authority citation for part 43 continues to read as follows:
Authority: Sec. 4 of the Communications Act of 1934, as amended,
47 U.S.C. 154.
2. In Sec. 43.61, paragraphs (b) through (d) are redesignated as
paragraphs (a)(1) through (a)(3) and new paragraph (b) is added to read
as follows:
Sec. 43.61 Reports of international telecommunications traffic.
* * * * *
(b) Quarterly Traffic Reports. (1) Each common carrier engaged in
providing international telecommunications service between the area
comprising the continental United States, Alaska, Hawaii, and off-shore
U.S. points and any country or point outside that area shall file with
the Commission, in addition to the report required by paragraph (a) of
this section, actual traffic and revenue data for each calendar quarter
in which the carrier's quarterly minutes exceed the corresponding
minutes for all carriers by one or more of the following tests:
(i) The carrier's aggregate minutes of facilities-based or
facilities resale switched telephone traffic for service billed in the
United States are greater than 1.0 percent of the total of such minutes
of international traffic for all U.S. carriers published in the
Commission's most recent Sec. 43.61 annual report of international
telecommunications traffic;
(ii) The carrier's aggregate minutes of facilities-based or
facilities resale switched telephone traffic for service billed outside
the United States are greater than 1.0 percent of the total of such
minutes of international traffic for all U.S. carriers published in the
Commission's most recent Sec. 43.61 annual report of international
telecommunications traffic;
(iii) The carrier's aggregate minutes of facilities-based or
facilities resale switched telephone traffic for service billed in the
United States for any foreign country are greater than 2.5 percent of
the total of such minutes of international traffic for that country for
all U.S. carriers published in the Commission's most recent Sec. 43.61
annual report of international telecommunications traffic; or
(iv) The carrier's aggregate minutes of facilities-based or
facilities resale switched telephone traffic for service billed outside
the United States for any foreign country are greater than 2.5 percent
of the total of such minutes of international traffic for that country
for all U.S. carriers published in the Commission's most recent
Sec. 43.61 annual report of international telecommunications traffic.
(2) Except as provided in this paragraph, the quarterly reports
required by paragraph (b)(1) of this section shall be filed in the same
format as, and in conformance with, the filing
[[Page 45762]]
procedures for the annual reports required by paragraph (a) of this
section.
(i) Carriers filing quarterly reports shall include in those
reports only their provision of switched, facilities-based telephone
service and switched, facilities resale telephone service.
(ii) The quarterly reports required by paragraph (b)(1) of this
section shall be filed with the Commission no later than April 30 for
the prior January through March quarter; no later than July 31 for the
prior April through June quarter; no later than October 31 for the
prior July through September quarter; and no later than January 31 for
the prior October through December period.
PART 63--EXTENSION OF LINES AND DISCONTINUANCE, REDUCTION, OUTAGE
AND IMPAIRMENT OF SERVICE BY COMMON CARRIERS; AND GRANTS OF
RECOGNIZED PRIVATE OPERATING AGENCY STATUS
1. The authority citation for Part 63 continues to read as follows:
Authority: Sections 1, 4(i), 4(j), 201-205, 218 and 403 of the
Communications Act of 1934, as amended, and Section 613 of the Cable
Communications Policy Act of 1984, 47 U.S.C. secs. 151, 154(i),
154(j), 201-205, 218, 403 and 533 unless otherwise noted.
2. Section 63.18 is amended by revising paragraphs (e)(2)(ii)(B)
through (e)(2)(ii)(C), (e)(3) introductory text, and (e)(4) to read as
follows:
Sec. 63.18 Contents of applications for international common carriers.
* * * * *
(e) * * *
(2) * * *
(ii) * * *
(B) The applicant may resell private line services for the
provision of international switched basic services only in
circumstances where the Commission has found that the country at the
foreign end of the private line provides equivalent resale
opportunities and that settlement rates for at least 50 percent of the
settled U.S.-billed traffic between the United States and that country
are at or below the benchmark settlement rate adopted for that country
in IB Docket No. 96-261. The Commission will provide public notice of
its equivalency and settlement rate determinations. The applicant,
however, shall not initiate such service on a particular route absent a
grant of specific authority under paragraph (e)(6) of this section in
circumstances where the applicant is affiliated with a facilities-based
carrier in the country at the foreign end of the private line and the
Commission has not determined that the foreign carrier does not possess
market power in that country.
(C) The authority granted under this paragraph shall be subject to
all Commission rules and regulations, including the limitation in
Sec. 63.21 on the use of private lines for the provision of switched
services, and any conditions stated in the Commission's public notice
or order that serves as the applicant's Section 214 certificate. See
Sections 63.12, 63.21.
(3) If applying for authority to provide international switched
basic services over resold private lines between the United States and
a country for which the Commission has not made the settlement rate and
equivalency determinations specified in paragraph (e)(2)(ii)(B) of this
section, applicant shall demonstrate that settlement rates for at least
50 percent of the settled U.S.-billed traffic between the United States
and the country at the foreign end of the private line are at or below
the benchmark settlement rate adopted for that country in IB Docket No.
96-261 and that the country affords resale opportunities equivalent to
those available under U.S. law. In this regard, applicants shall:
* * * * *
(ii) The procedures set forth in paragraph (e)(3) of this section
are subject to Commission policies on resale of international private
lines in CC Docket No. 90-337 as amended in IB Docket Nos. 95-22 and
96-261.
(4) Any carrier authorized under this section to acquire and
operate international private line facilities other than through resale
may use those private lines to provide switched basic services only in
circumstances where the Commission has found that the country at the
foreign end of the private line provides equivalent resale
opportunities and that settlement rates for at least 50 percent of the
settled U.S.-billed traffic between the United States and that country
are at or below the benchmark settlement rate adopted for that country
in IB Docket No. 96-261. The Commission will provide public notice of
its equivalency and settlement rate determinations. This provision is
subject to the following exceptions and conditions:
(i) The applicant shall not initiate such service on a particular
route absent a grant of specific authority under paragraph (e)(6) of
this section in circumstances where the applicant is affiliated with a
facilities-based carrier in the country at the foreign end of the
private line and the Commission has not determined that the foreign
carrier does not possess market power in that country.
(ii) The applicant is subject to all applicable Commission rules
and regulations, including the limitation in Sec. 63.21 on the use of
private lines for the provision of switched services, and any
conditions stated in the Commission's public notice or order that
serves as the applicant's Section 214 certificate. See Secs. 63.12,
63.21.
(A) Except as provided in paragraph (e)(4)(ii)(B) of this section,
any carrier that seeks to provide international switched basic services
over its authorized private line facilities between the United States
and a country for which the Commission has not made the settlement rate
and equivalency determinations specified in paragraph (e)(2)(ii)(B) of
this section shall demonstrate that settlement rates for at least 50
percent of the settled U.S.-billed traffic between the United States
and the country at the foreign end of the private line are at or below
the benchmark settlement rate adopted for that country in IB Docket No.
96-261 and that the country affords resale opportunities equivalent to
those available under U.S. law. In this regard, applicant shall include
the information required by paragraph (e)(3) of this section.
(B) No formal application is required under paragraph (e)(4) of
this section in circumstances where the carrier's previously authorized
private line facility is interconnected to the public switched network
only on one end--either the U.S. or the foreign end--and where the
carrier is not operating the facility in correspondence with a carrier
that directly or indirectly owns the private line facility in the
foreign country at the other end of the private line.
3. Section 63.21(a) is revised to read as follows:
Sec. 63.21 Conditions applicable to international Section 214
authorizations.
* * * * *
(a) Carriers may not use their authorized facilities-based or
resold international private lines for the provision of switched basic
services unless and until the Commission has determined that the
country at the foreign end of the private line provides equivalent
resale opportunities and that settlement rates for 50 percent of the
settled U.S.-billed traffic between the United States and that country
are at or below the benchmark settlement rate adopted for that country
in IB Docket No. 96-261. See Sec. 63.18 (e)(3) through (e)(4). If at
any time the Commission finds, after an initial determination of
compliance for a particular country, that the country no longer
provides
[[Page 45763]]
equivalent resale opportunities or that market distortion has occurred
in the routing of traffic between the United States and that country,
carriers shall comply with enforcement actions taken by the Commission.
This condition shall not apply to a carrier's use of its authorized
facilities-based private lines to provide service as described in
Sec. 63.18 (e)(4)(ii)(B).
[FR Doc. 97-22936 Filed 8-28-97; 8:45 am]
BILLING CODE 6712-01-P
