[Federal Register Volume 63, Number 142 (Friday, July 24, 1998)]
[Proposed Rules]
[Pages 39793-39800]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-19638]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 1, 43, and 63
[IB Docket No. 98-118, FCC 98-149]
Biennial Review of International Common Carrier Regulations
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: On July 9, 1998, the Federal Communications Commission adopted
a Notice of Proposed Rulemaking (NPRM) to further streamline the rules
governing international common carriers. The Commission proposes to
eliminate review of many international applications, reduce the scope
of information that must be provided in applications, and clarify its
rules so that carriers can more easily understand their obligations.
The proposals will benefit U.S. consumers because they will eliminate
unnecessary regulatory delay and will facilitate entrance into the
international telecommunications market. The Commission believes that
the proposed rules will lessen the regulatory burdens on applicants,
authorized carriers, and the Commission by allowing carriers to operate
more efficiently.
DATES: Comments are due on or before August 10, 1998; and reply
comments are due on or before August 25. Written comments by the public
on the proposed information collections are due September 22, 1998.
ADDRESSES: Federal Communications Commission, 1919 M Street, NW, Room
222, Washington, DC 20554. A copy of any comments on the information
collections contained herein 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: Douglas Klein, Attorney-Advisor,
Policy and Facilities Branch, Telecommunications Division,
International Bureau, (202) 418-1470. For additional information
concerning the information collections contained in this NPRM contact
Judy Boley at 202-418-0214, or via the Internet at jboley@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Proposed Rulemaking, FCC 98-149, adopted on July 9, 1998. The full
text of this NPRM is available for inspection and copying during normal
business hours in the FCC Reference Center
[[Page 39794]]
(Room 239) of the Federal Communications Commission, 1919 M Street, NW,
Washington, DC 20554. The complete text of this NPRM also may be
purchased from the Commission's copy contractor, International
Transcription Service, Inc., 1231 20th Street, NW, Washington, DC
20036, (202) 857-3800.
The Commission initiated this proceeding in response to the
Telecommunications Act of 1996, which requires the Commission to review
all regulations that apply to operations or activities of any provider
of telecommunications service and to repeal or modify any regulation it
determines to be no longer necessary in the public interest.
This NPRM contains proposed or modified information collections
subject to the Paperwork Reduction Act of 1995 (PRA), It has been
submitted to the Office of Management and Budget (OMB) for review under
the PRA. OMB, the general public, and other Federal agencies are
invited to comment on the proposed or modified information collections
contained in this proceeding.
Summary of Notice
1. The Commission adopted a Notice of Proposed Rulemaking (FCC 98-
149) to further streamline the international Section 214 authorization
process and tariff requirements. This proceeding was initiated pursuant
to the Telecommunications Act of 1996, which directs the FCC to
undertake, on every even-numbered year, a review of all regulations
that apply to operations or activities of any provider of
telecommunications service and to repeal or modify any regulation it
determines to be no longer necessary in the public interest.
Accordingly, the Commission has begun a comprehensive 1998 biennial
review of telecommunications and other regulations that are overly
burdensome or no longer serve the public interest. We seek comment on
the proposals contained in this Notice.
2. In this proceeding, the Commission proposes to streamline and,
where appropriate, eliminate many of the rules for seeking
authorization pursuant to Section 214. The Commission proposes a
blanket Section 214 authorization for international service to
unaffiliated points. The blanket authorization would certify that it
would serve the pubic interest, convenience, and necessity to allow any
entity that would be a non-dominant carrier to provide facilities-based
service, or to resell the international services of other carriers, to
any international points except a market in which an affiliated carrier
operates. Carriers providing service pursuant to this blanket
authorization would continue to be subject to all of the Commission's
rules and regulations governing international service. Furthermore, the
authorization of any particular carrier could be revoked or conditioned
as necessary.
3. We seek comment on the scope of the proposed blanket Section 214
authorization. In particular, we seek comment on whether there is a
smaller or larger class of carriers or services for which a blanket
authorization would be appropriate. For example, should the blanket
authorization be limited to the resale of other carriers' services
instead of also authorizing the provision of facilities-based services?
Comments should address whether there remain any public interest
considerations that might warrant denying an authorization to provide
facilities-based service to a foreign market where the applicant has no
affiliate. Furthermore, we seek comment on ways to identify
affiliations that are equally unlikely to raise public interest
concerns that therefore should not require prior Commission review.
Commenters should address whether there is a way to include within the
blanket authorization a carrier's provision of facilities-based or
resold service on routes where it has an affiliation with a carrier
that, for example: we have previously found (in some other context) to
lack market power in the foreign destination market; has no
telecommunications facilities in that market; and/or has only mobile
wireless facilities in that market. We tentatively conclude that we
must maintain a requirement that carriers notify the Commission that
they are providing international service pursuant to the blanket
authorization, and that we must be able to condition or revoke an
authorization if necessary to prevent anticompetitive effects. We seek
comment on the applicability of our tentative conclusions to commercial
mobile radio services (CMRS) licenses.
4. We propose to add a new rule section to define pro forma and to
allow carriers to undertake pro forma assignments and transfers of
control of international Section 214 authorizations without Commission
approval. We tentatively conclude that given the mechanisms in place,
many pro forma transfers and assignments meet the forbearance standard
as defined by Section 10 of the Communications Act. So that the
Commission can maintain accurate records of the entities holding
Section 214 authorization, we propose to require that authorized
carriers that undertake a pro forma assignment notify the Commission by
letter within 30 days after consummation of the transaction. We
tentatively conclude that we need not require that carriers notify us
of pro forma transfers of control. The proposed rule would apply to all
authorized international carriers.
5. We seek comment on a proposal to amend Sec. 63.21 of the rules
to provide that an international Section 214 authorization effectively
authorizes the carrier to provide services through its wholly owned
subsidiaries. Although this proposal promotes flexibility, it must not
be used by carriers to circumvent any structural-separation provision
in the Commission's rules. We seek comment on whether the proposed rule
would defeat any of the Commission's structural-separation
requirements.
6. The Commission's rules currently provide that a carrier with a
global facilities-based authorization may not use non-U.S-licensed
facilities unless and until it has received specific prior approval or
the Commission generally approves their use and so indicates on an
exclusion list maintained by the International Bureau. We propose to
amend the rules and the exclusion list to allow any carrier with a
global facilities-based authorization to use any non-U.S.-licensed
submarine cable system without prior Commission approval of each cable
system. The exclusion list would then provide that carriers with global
Section 214 authorizations to provide facilities-based service would be
authorized to serve any unaffiliated market except Cuba and would be
permitted to use any facilities except non-U.S.-licensed satellite
systems that are not specifically identified. This proposed rule change
would not affect the rules for use of non-U.S.-licensed satellite
systems, which continues to be governed by the policies adopted in the
Commission's DISCO II Order (62 FR 64167, December 4, 1997).
7. We also seek comment on our proposal to eliminate the need to
apply for separate Section 214 authority to build a new common carrier
cable system by including the authorization to construct new lines in
the global facilities-based Section 214 authorization. We tentatively
conclude that we must limit this provision by stating that it does not
authorize the construction or extension of lines that may have a
significant effect on the environment as defined in our rules. We
propose to eliminate the requirement currently in the rules that
requires the applicant to include a statement whether an authorization
of the facilities is categorically excluded from environmental
processing. We
[[Page 39795]]
tentatively conclude that the construction of new submarine cable
systems will not have a significant effect on the human environment and
therefore should be categorically excluded from our environmental
processing requirements. This proposal is subject to a change in the
application fees for cable landing licenses and Section 214
authorizations, which are set by statute.
8. We also propose to reorganize and simplify some of our existing
rules. We tentatively conclude that we should reorganize Sec. 63.18,
which describes the contents of international Section 214 applications,
and list the obligations of each category of carrier in a separate rule
section. We propose to include in the rules a provision codifying the
benchmark settlement rate condition that we adopted in the Benchmarks
Order (62 FR 45758, August 29, 1997). We also propose to create new
sections for definitions and for our policy on the provision of
switched services over international private lines.
9. We also propose to modify our rules so that applicants will be
required to list only the direct and indirect shareholders with
interests greater than 25 percent.
Currently, applicants must report every 10-percent-or-greater
direct and indirect shareholder. We seek comment on whether it remains
necessary to scrutinize direct and indirect investments in applicants
at a greater level of detail than we require after the carrier is
authorized.
10. In the Foreign Participation Order, 62 FR 64741. December 9,
1997, we removed the prior-approval requirement for dominant carriers
but neglected to amend the rules to provide that dominant resellers of
international private lines are nevertheless subject to the annual
reporting requirement. We propose to strike the word non-dominant from
that provision and move that provision to the new rule section
containing obligations generally applicable to resellers.
11. We propose to require that carriers authorized to undertake an
assignment notify the Commission by letter within 30 days after either
consummation of the assignment or a decision not to go forward with the
assignment. We also propose to clarify that a carrier that changes its
name need only notify the Commission by letter within 30 days after the
name change.
12. We propose to create a new Section 63.16 containing the
Commission's policy on the provision of switched services over
international private lines interconnected to the public switched
network. This section would provide that carriers could seek a
Commission finding authorizing such service by filing a petition for
declaratory ruling, rather than a Section 214 application. This change
would not modify the requirement that carriers have the necessary
underlying Section 214 authority to provide facilities-based or resold
service between the United States and the country at the foreign end of
the private line.
13. No substantive changes are intended other than those discussed
in the NPRM. We seek comment on whether any inadvertent substantive
changes would result from the proposed reorganization of our rules.
Initial Regulatory Flexibility Analysis
14. The Regulatory Flexibility Act of 1990, 5 U.S.C. 601-612, (RFA)
as amended by the Contract with America Advancement Act of 1996, Pub.
L. 104-121, 110 Stat. 847, requires an initial regulatory flexibility
analysis in notice-and-comment rulemaking proceedings, unless we
certify that ``the rule will not, if promulgated, have a significant
economic impact on a substantial number of small entities.'' The
purposes of this proceeding are to eliminate some regulatory
requirements and to simplify and clarify other existing rules. The
proposals do not impose any additional compliance burden on small
entities dealing with the Commission. In fact, we anticipate that the
rule changes we propose will reduce regulatory and procedural burdens
on small entities. Accordingly, we certify, pursuant to Section 605(b)
of the RFA, that the rules, if promulgated, would not have a
significant economic impact on a substantial number of small business
entities, as defined by the RFA. The Office of Public Affairs,
Reference Operations Division, will send a copy of this NPRM to the
Chief Counsel for Advocacy of the Small Business Administration in
accordance with Section 603(a) of the Regulatory Flexibility Act. We
will analyze the information submitted during the comment period, and
if it is determined at the final rule stage that the rule changes will
have a significant economic impact on a substantial number of small
entities, a final regulatory flexibility analysis will be prepared.
Initial Paperwork Reduction Act of 1995 Analysis
15. This Notice of Proposed Rulemaking contains both proposed and
modified information collections. As part of our continuing effort to
reduce paperwork burdens, we invite the general public and the Office
of Management and Budget (OMB) to comment on the information
collections contained in this NPRM, as required by the Paperwork
Reduction Act of 1995, Pub. L. 104-13. Public and agency comments are
due September 22, 1998. Comments should address the following: (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: 3060-0686.
Title: Streamlining the International 214 Process and Tariff
Requirements.
Form No.: N/A.
Type of Review: Revision of existing collection.
Respondents: Business or other For-Profit.
Number of Respondents: 105.
Estimated Time Per Response: 1 hour.
Total Annual Burden: 105.
Estimated costs per respondent: $150.00.
Frequency of Response: Annually; Semi-Annually; Quarterly: and On
occasion reporting requirements.
Needs and Uses: The information collections are necessary largely
to determine the qualifications of applicants to provide common carrier
international telecommunications services, or to construct and operate
submarine cables, including applicants that are affiliated with foreign
carriers, and to determine whether and under what conditions the
authorizations are in the public interest, convenience, and necessity.
The information collections are necessary for the Commission to
maintain effective oversight of U.S. carriers that are affiliated with,
or involved in certain co-marketing or similar arrangements with,
foreign carriers that have sufficient market power to affect
competition adversely in the U.S. market. The information collected is
necessary for the Commission to ensure that rates, terms and conditions
for international service are just and reasonable, as required by the
Communications Act of 1934.
Comment Filing Procedures
16. Comments and reply comments should be captioned in IB Docket
No. 98-118. Pursuant to applicable procedures set forth in Secs. 1.415
and 1.419 of the Commission's rules, 47 CFR
[[Page 39796]]
1.415, 1.419, interested parties may file comments on or before August
10, 1998, and reply comments on or before August 25, 1998. To file
formally in this proceeding, you must file an original and four copies
of all comments, reply comments, and supporting comments. If you want
each Commissioner to receive a personal copy of your comments, you must
file an original and nine copies. Comments and reply comments should be
sent to Office of the Secretary, Federal Communications Commission,
1919 M Street, NW., Room 222, Washington, DC 20554, with a copy to
Douglas Klein of the International Bureau, 2000 M Street, NW., Suite
800, Washington, DC 20554. Parties should also file one copy of any
documents filed in this docket with the Commission's copy contractor,
International Transcription Services, Inc., 1231 20th Street, NW.,
Washington, DC 20036. Comments and reply comments will be available for
public inspection during regular business hours in the FCC Reference
Center, 1919 M Street, NW., Room 239, Washington, DC. Parties are also
encouraged to file a copy of all pleadings on a 3.5-inch diskette in
WordPerfect 5.1 format.
17. For purposes of this proceeding, we hereby waive those
provisions of our rules that require formal comments to be filed on
paper, and we encourage parties to file comments electronically.
Electronically filed comments that conform to the following guidelines
will be considered part of the record in this proceeding and accorded
the same treatment as comments filed on paper pursuant to our rules. To
file electronic comments in this proceeding, you must use the
electronic filing interface available on the FCC's World Wide Web site
at http://dettifoss.fcc.gov:8080/cgi-bin/ws.exe/beta/ecfs/upload.hts.
Further information on the process of submitting comments
electronically is available at that location and at http://www.fcc.gov/
e-file/.
18. Written comments by the public on the proposed information
collections are due on or before September 22, 1998. In addition to
filing comments with the Secretary, a copy of any comments on the
information collections contained herein 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.
Ordering Clauses
19. Accordingly, it is ordered that, pursuant to Sections 1, 4(i),
10, 11, 201(b), 214, 303(r), 307, 309(a), and 310 of the Communications
Act of 1934, as amended, 47 U.S.C. 151, 154(i), 160, 161, 201(b), 214,
303(r), 307, 309(a), 310, this notice of proposed rulemaking is hereby
adopted.
20. It is further ordered that the Office of Public Affairs,
Reference Operations Division, shall send a copy of this notice of
proposed rulemaking, including the regulatory flexibility
certification, to the Chief Counsel for Advocacy of the Small Business
Administration, in accordance with paragraph 603(a) of the Regulatory
Flexibility Act, 5 U.S.C. 601 et seq.
21. It is further ordered that the Office of Public Affairs,
Reference Operations Division, shall send a copy of this notice of
proposed rulemaking to the Council on Environmental Quality.
List of Subjects in 47 CFR Parts 1, 43, and 63
Communications common carriers, Reporting and recordkeeping
requirements.
Federal Communications Commission.
Magalie Roman Salas,
Secretary.
Rule Changes
Parts 1, 43, and 63 of title 47 of the Code of Federal Regulations
are amended as follows:
Part 1--Practice and Procedure
1. The authority citation for part 1 continues to read as follows:
Authority: 15 U.S.C. 79 et seq.; 47 U.S.C. 151, 154(i), 154(j),
155, 225, and 303(r).
2. Section 1.767 is amended by revising paragraphs (a)(6) and
(a)(7) and adding new paragraphs (a)(8) and (a)(9) to read as follows:
Sec. 1.767 Cable landing licenses.
(a) * * *
(6) A statement as to whether the cable will be operated on a
common carrier or non-common carrier basis;
(7) A list of the proposed owners of the cable system, their voting
interests, and their ownership interests by segment in the cable;
(8) For each proposed owner of the cable system, a certification as
to whether the proposed owner is, or has an affiliation with, a foreign
carrier. Include the information and certifications required in
Sec. 63.18(h)(1) and (2) of this chapter; and
(9) Any other information that may be necessary to enable the
Commission to act on the application.
* * * * *
3. Section 1.1306 is amended by adding the following sentence to
the end of Note 1:
Sec. 1.1306 Actions which are categorically excluded from
environmental processing.
* * * * *
Note 1: * * * The provisions of Sec. 1.1307(a) and (b) of this
part do not encompass the construction of new submarine cable
systems.
Part 43--Reports of Communication Common Carriers and Certain
Affiliates
4. The authority citation for part 43 continues to read as follows:
Authority: 47 U.S.C. 154.
5. Section 43.61 is amended by revising the last sentence of
paragraph (c) to read as follows:
Sec. 43.61 Reports of international telecommunications traffic.
* * * * *
(c) * * * For purposes of this paragraph, affiliation and foreign
carrier are defined in Sec. 63.09 of this chapter
PART 63--EXTENSION OF LINES AND DISCONTINUANCE, REDUCTION, OUTAGE
AND IMPAIRMENT OF SERVICE BY COMMON CARRIERS; AND GRANTS OF
RECOGNIZED PRIVATE OPERATING AGENCY STATUS
6. The authority citation for part 63 is revised to read as
follows:
Authority: 47 U.S.C. 151, 154(i), 154(j), 201-205, 218, 403, 533
unless otherwise noted.
7. New Sec. 63.09 is added to read as follows:
Sec. 63.09 Definitions applicable to international Section 214
authorizations.
The following definitions shall apply to Secs. 63.09-63.24 of this
part, unless the context indicates otherwise:
(a) Facilities-based carrier means a carrier that holds an
ownership, indefeasible-right-of-user, or leasehold interest in bare
capacity in the U.S. end of an international facility, regardless of
whether the underlying facility is a common carrier or non-common
carrier submarine cable or an INTELSAT or separate satellite system.
(b) Control includes actual working control in whatever manner
exercised and is not limited to majority stock ownership.
(c) Special concession is defined as in Sec. 63.14(b).
(d) Foreign carrier is defined as any entity that is authorized
within a foreign country to engage in the provision of international
telecommunications services offered to the public in that country
within the meaning of the International Telecommunication Regulations,
see Final Acts of the World
[[Page 39797]]
Administrative Telegraph and Telephone Conference, Melbourne, 1988
(WATTC-88), Art. 1, which includes entities authorized to engage in the
provision of domestic telecommunications services if such carriers have
the ability to originate or terminate telecommunications services to or
from points outside their country.
(e) An affiliation with a foreign carrier includes the following:
(1) A greater than 25 percent ownership of capital stock, or
controlling interest at any level, by the carrier, or by any entity
that directly or indirectly controls or is controlled by it, or that is
under direct or indirect common control with it, in a foreign carrier
or in any entity that directly or indirectly controls a foreign
carrier; or
(2) A greater than 25 percent ownership of capital stock, or
controlling interest at any level, in the carrier by a foreign carrier,
or by any entity that directly or indirectly controls or is controlled
by a foreign carrier, or that is under direct or indirect common
control with a foreign carrier; or by two or more foreign carriers
investing in the carrier in the same manner in circumstances where the
foreign carriers are parties to, or the beneficiaries of, a contractual
relation (e.g., a joint venture or market alliance) affecting the
provision or marketing of basic international telecommunications
services in the United States. A U.S. carrier also will be considered
to be affiliated with a foreign carrier where the foreign carrier
controls, is controlled by, or is under common control with a second
foreign carrier that is affiliated with that U.S. carrier under this
section.
(f) An affiliation with a U.S. facilities-based international
carrier is defined as in paragraph (e), except that the phrase ``U.S.
facilities-based international carrier'' shall be substituted for the
phrase ``foreign carrier.''
Note 1: The assessment of ``capital stock'' ownership will be
made under the standards developed in Commission case law for
determining such ownership. See, e.g., Fox Television Stations,
Inc., 10 FCC Rcd 8452 (1995). ``Capital stock'' includes all forms
of equity ownership, including partnership interests.
Note 2: Ownership and other interests in U.S. and foreign
carriers will be attributed to their holders and deemed cognizable
pursuant to the following criteria: Attribution of ownership
interests in a carrier that are held indirectly by any party through
one or more intervening corporations will be determined by
successive multiplication of the ownership percentages for each link
in the vertical ownership chain and application of the relevant
attribution benchmark to the resulting product, except that wherever
the ownership percentage for any link in the chain exceeds 50
percent, it shall not be included for purposes of this
multiplication. For example, if A owns 30 percent of company X,
which owns 60 percent of company Y, which owns 26 percent of
``carrier,'' then X's interest in ``carrier'' would be 26 percent
(the same as Y's interest because X's interest in Y exceeds 50
percent), and A's interest in ``carrier'' would be 7.8 percent (0.30
x 0.26). Under the 25 percent attribution benchmark, X's interest
in ``carrier'' would be cognizable, while A's interest would not be
cognizable.
8. Section 63.10 is amended by removing the third sentence of
paragraph (a) introductory text, the last sentence of paragraph (a)(4),
and the last sentence of paragraph (c)(5).
9. Section 63.11 is amended by revising paragraphs (a)(1) and
(a)(2) and by removing the last sentence of paragraph (c)(1) to read as
follows:
Sec. 63.11 Notification by and prior approval for U.S. international
carriers that have or propose to acquire an affiliation with a foreign
carrier.
(a) * * *
(1) acquisition of a direct or indirect controlling interest in a
foreign carrier by the authorized carrier, or by any entity that
directly or indirectly controls the authorized carrier, or that
directly or indirectly owns more than 25 percent of the capital stock
of the authorized carrier; or
(2) acquisition of a direct or indirect interest in the capital
stock of the authorized carrier by a foreign carrier or by an entity
that directly or indirectly controls a foreign carrier where the
interest would create an affiliation within the meaning of
Sec. 63.09(e)(2).
* * * * *
10. Section 63.14 is amended by removing the last sentence of
paragraph (a).
11. Section 63.15 is removed.
Sec. 63.15 [Removed]
12. New Sec. 63.16 is added to read as follows:
Sec. 63.16 Switched services over private lines.
(a) Except as provided in Sec. 63.22(g)(2), a carrier may provide
switched basic services over its authorized private lines if and only
if the country at the foreign end of the private line appears on a
Commission list of countries to which the Commission has authorized the
provision of switched services over private lines.
(b) An authorized carrier seeking to add a foreign market to the
list of markets to which carriers may provide switched services over
private lines must make the following showing in a Section 214
application filed pursuant to Sec. 63.18 or in a petition for
declaratory ruling:
(i) If seeking a Commission ruling to permit the provision of
international switched basic services over private lines between the
United States and a WTO Member country, the applicant shall demonstrate
either 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 or
that the country affords resale opportunities equivalent to those
available under U.S. law.
(ii) If seeking a Commission ruling to permit the provision of
international switched basic services over private lines between the
United States and a non-WTO Member country, the 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.
(c) With regard to showing under paragraph (b) of this section that
a destination country affords resale opportunities equivalent to those
available under U.S. law, an applicant shall include evidence
demonstrating that equivalent resale opportunities exist between the
United States and the subject country, including any relevant bilateral
or multilateral agreements between the administrations involved. The
applicant must demonstrate that the foreign country at the other end of
the private line provides U.S.-based carriers with:
(i) The legal right to resell international private lines,
interconnected at both ends, for the provision of switched services;
(ii) Reasonable and nondiscriminatory charges, terms and conditions
for interconnection to foreign domestic carrier facilities for
termination and origination of international services, with adequate
means of enforcement;
(iii) Competitive safeguards to protect against anticompetitive and
discriminatory practices affecting private line resale; and
(iv) Fair and transparent regulatory procedures, including
separation between the regulator and operator of international
facilities-based services.
Note 1 to Sec. 63.16: The Commission's benchmark settlement
rates are available in International Settlement Rates, Report and
[[Page 39798]]
Order, 12 FCC Rcd 19,806, 62 FR 45758 (August 29, 1997).
13. Section 63.17 is amended by changing ``(e)(6)'' to ``(e)(4)''
at the end of paragraph (b)(4).
14. Section 63.18 is amended by revising paragraphs (e), (g), (h),
and (i) to read as follows:
Sec. 63.18 Contents of applications for international common carriers.
* * * * *
(e) One or more of the following statements, as pertinent:
(1) Global Facilities-Based Authority. If applying for authority to
become a facilities-based international common carrier subject to
Sec. 63.22, the applicant shall:
(i) State that it is requesting Section 214 authority to operate as
a facilities-based carrier pursuant to Sec. 63.18(e)(1) of the
Commission's rules
(ii) List any countries for which the applicant does not request
authorization under this paragraph (see Sec. 63.22(a)); and
(iii) Certify that it will comply with the terms and conditions
contained in Secs. 63.21 and 63.22.
(2) Global Resale Authority. If applying for authority to resell
the international services of authorized U.S. common carriers subject
to Sec. 63.23, the applicant shall:
(i) State that it is requesting Section 214 authority to operate as
a resale carrier pursuant to Sec. 63.18(e)(2) of the Commission's
rules;
(ii) List any countries for which the applicant does not request
authorization under this paragraph (see Sec. 63.23(a)); and
(iii) Certify that it will comply with the terms and conditions
contained in Secs. 63.21 and 63.23.
(3) Transfer of Control or Assignment. If applying for authority to
acquire facilities through the transfer of control of a common carrier
holding international Section 214 authorization, or through the
assignment of another carrier's existing authorization, the applicant
shall complete paragraphs (a) through (d) of this section for both the
transferor/assignor and the transferee/assignee. Only the transferee/
assignee needs to complete paragraphs (h) through (k) of this section.
At the beginning of the application, the applicant should also include
a narrative of the means by which the transfer or assignment will take
place. The Commission reserves the right to request additional
information as to the particulars of the transaction to aid it in
making its public interest determination. An assignee shall notify the
Commission no later than 30 days after either consummation of the
assignment or a decision not to consummate the assignment. The
notification may be by letter and shall identify the file numbers under
which the initial authorization and the authorization of the assignment
were granted. See also Sec. 63.24 (pro forma assignments and transfers
of control).
(4) Other Authorizations. If applying for authority to acquire
facilities or to provide services not covered by paragraphs (e)(1)
through (e)(3), the applicant shall provide a description of the
facilities and services for which it seeks authorization. The applicant
shall certify that it will comply with the terms and conditions
contained in Sec. 63.21 and Sec. 63.22 and/or Sec. 63.23, as
appropriate. Such description also shall include any additional
information the Commission shall have specified previously in an order,
public notice or other official action as necessary for authorization.
* * * * *
(g) Where the applicant is seeking facilities-based authority under
paragraph (e)(4) of this section, a statement whether an authorization
of the facilities is categorically excluded as defined by Sec. 1.1306
of this chapter. If answered affirmatively, an environmental assessment
as described in Sec. 1.311 of this chapter need not be filed with the
application.
(h) A certification as to whether or not the applicant is, or has
an affiliation with, a foreign carrier, supported by the following
information:
(1) In support of the required certification, each applicant shall
also provide the name, address, citizenship and principal businesses of
its greater-than-25-percent direct and indirect shareholders or other
equity holders and identify any interlocking directorates.
(2) The certification shall state with specificity each foreign
country in which the applicant is, or has an affiliation with, a
foreign carrier.
(3) Any applicant that seeks to provide international
telecommunications services to a particular country and that is a
foreign carrier in that country, or directly or indirectly controls a
foreign carrier in that country, or has an affiliation within the
meaning of paragraph Sec. 63.09(e)(2) of this section with a foreign
carrier in that country shall make one of the following showings:
(i) The named foreign country (i.e., the destination foreign
country) is a Member of the World Trade Organization; or
(ii) The applicant's affiliated foreign carrier lacks sufficient
market power in the named foreign country to affect competition
adversely in the U.S. market; or
(iii) The named foreign country provides effective competitive
opportunities to U.S. carriers to compete in that country's market for
the service that the applicant seeks to provide (facilities-based,
resold switched, or resold non-interconnected private line services).
An effective competitive opportunities demonstration should address the
following factors:
(A) If the applicant seeks to provide facilities-based
international services, the legal ability of U.S. carriers to enter the
foreign market and provide facilities-based international services, in
particular international message telephone service (IMTS);
(B) If the applicant seeks to provide resold services, the legal
ability of U.S. carriers to enter the foreign market and provide resold
international switched services (for switched resale applications) or
non-interconnected private line services (for non-interconnected
private line resale applications);
(C) Whether there exist reasonable and nondiscriminatory charges,
terms and conditions for interconnection to a foreign carrier's
domestic facilities for termination and origination of international
services or the provision of the relevant resale service;
(D) Whether competitive safeguards exist in the foreign country to
protect against anticompetitive practices, including safeguards such
as:
(1) Existence of cost-allocation rules in the foreign country to
prevent cross-subsidization;
(2) Timely and nondiscriminatory disclosure of technical
information needed to use, or interconnect with, carriers' facilities;
and
(3) Protection of carrier and customer proprietary information;
(E) Whether there is an effective regulatory framework in the
foreign country to develop, implement and enforce legal requirements,
interconnection arrangements and other safeguards; and
(F) Any other factors the applicant deems relevant to its
demonstration.
(4) Any applicant that proposes to resell the international
switched services of an unaffiliated U.S. carrier for the purpose of
providing international telecommunications services to the named
foreign country and that is a foreign carrier in that country or has an
affiliation with a foreign carrier in that country shall either provide
in its application a showing that would satisfy Sec. 63.10(a)(3) or
state that it will file the quarterly
[[Page 39799]]
traffic reports required by Sec. 43.61(c) of this chapter.
(5) With respect to regulatory classification under Sec. 63.10, any
applicant that certifies that it is or has an affiliation with a
foreign carrier in a named foreign country and that desires to be
regulated as non-dominant for the provision of particular international
telecommunications services to that country should provide information
in its application to demonstrate that it qualifies for non-dominant
classification pursuant to Sec. 63.10.
(i) Each applicant shall certify that the applicant has not agreed
to accept special concessions directly or indirectly from any foreign
carrier with respect to any U.S. international route where the foreign
carrier possesses sufficient market power on the foreign end of the
route to affect competition adversely in the U.S. market and will not
enter into such agreements in the future.
* * * * *
15. Section 63.21 is amended by revising the section heading and
paragraph (a), and adding new paragraphs (i) and (j) to read as
follows:
Sec. 63.21 Conditions applicable to all international Section 214
authorizations.
* * * * *
(a) Each carrier is responsible for the continuing accuracy of the
certifications made in its application. Whenever the substance of any
such certification is no longer accurate, the carrier shall as promptly
as possible and in any event within thirty days file with the Secretary
in duplicate a corrected certification referencing the FCC File No.
under which the original certification was provided. The information
may be used by the Commission to determine whether a change in
regulatory status may be warranted under Sec. 63.10. See also
Sec. 63.11.
* * * * *
(i) Subject to the requirement of Sec. 63.10 that a carrier
regulated as dominant along a route must provide service as an entity
that is separate from its foreign carrier affiliate, and subject to any
other structural-separation requirement in Commission regulations, an
authorized carrier may provide service through any wholly owned
subsidiaries without seeking additional Commission authorization,
provided that this provision shall not be construed to authorize the
provision of service by any entity barred by statute or regulation from
itself holding an authorization or providing service.
(j) An authorized carrier that changes its name shall notify the
Commission by letter filed with the Secretary in duplicate within 30
days of the name change. Such letter shall reference the FCC File No.
under which the carrier's authorizations were granted.
* * * * *
16. Sections 63.22 through 63.25 are added to read as follows:
Sec. 63.22 Facilities-based international common carriers.
The following conditions apply to authorized international
facilities-based carriers:
(a) A carrier authorized under Sec. 63.18(e)(1) may provide
international facilities-based services to international points for
which it qualifies for non-dominant regulation as set forth in
Sec. 63.10, except in the following circumstance: If the carrier is or
is affiliated with a foreign carrier in a destination market and the
Commission has not determined that the foreign carrier lacks sufficient
market power in the destination market to affect competition adversely
in the U.S. market (see Sec. 63.10(a)), the carrier shall not provide
service on that route unless it has received specific authority to do
so under Sec. 63.18(e)(4).
(b) The carrier may provide service using half-circuits on any
appropriately licensed U.S. common carrier and non-common carrier
facilities (under either Title III of the Communications Act of 1934,
as amended, or the Submarine Cable Landing License Act, 47 U.S.C.
Secs. 34-39) that do not appear on an exclusion list published by the
Commission. Carriers may also use any necessary non-U.S.-licensed
facilities, including any submarine cable systems, that do not appear
on the exclusion list. Carriers may not use U.S. earth stations to
access non-U.S.-licensed satellite systems unless the Commission has
specifically approved the use of those satellites and so indicates on
the exclusion list, and then only for service to the countries
indicated thereon. The exclusion list is maintained on the Commission's
World Wide Web site at http://www.fcc.gov/ib/td/pf/exclusion list.html.
(c) The carrier may not provide service to any country listed on an
exclusion list published by the Commission unless it has received
specific authority under Sec. 63.18(e)(4).
(d) The carrier may provide international basic switched, private
line, data, television and business services.
(e) Subject to the requirements of the Submarine Cable Landing
License Act, 47 U.S.C. 34-39, the carrier is authorized to construct,
acquire, or operate lines in any new major common carrier facility
project between the United States and all international points that it
is authorized to serve on a facilities basis. This paragraph shall not
authorize the carrier to engage in any construction or extension of
lines that may have a significant effect on the environment as defined
in Sec. 1.1307 of this chapter. See Sec. 1.1312 of this chapter. The
carrier must seek specific Section 214 authority and comply with the
Commission's environmental rules before any such construction or
extension.
(f) Except as otherwise ordered by the Commission, the carrier may
provide facilities-based service to a market served by an affiliate
that terminates U.S. international switched traffic only if that
affiliate has in effect a settlement rate with U.S. international
carriers that is at or below the Commission's relevant benchmark
adopted in IB Docket No. 96-261. See FCC 97-280 (rel. Aug. 18, 1997)
(available at the FCC's Reference Operations Division, Washington, DC
20554, and on the FCC's World Wide Web Site at http://www.fcc.gov).
(g)(1) Except as provided in paragraph (g)(2) of this section, the
carrier may provide switched basic services over its authorized
facilities-based private lines if and only if the country at the
foreign end of the private line appears on a Commission list of
countries to which the Commission has authorized the provision of
switched services over private lines. See Sec. 63.16. If at any time
the Commission finds that the country no longer provides equivalent
resale opportunities or that market distortion has occurred in the
routing of traffic between the United States and that country, the
carrier shall comply with enforcement actions taken by the Commission.
(2) The carrier may use its authorized private line facilities to
provide switched basic services in circumstances where the private line
facility is interconnected to the public switched network on only one
end--either the U.S. end 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.
(h) The carrier shall file annual international circuit status
reports as required by Sec. 43.82 of this chapter.
(i) The authority granted under this part is subject to all
Commission rules and regulations and any conditions or limitations
stated in the Commission's public notice or order that serves as the
carrier's Section 214 certificate. See Sec. 63.12.
[[Page 39800]]
Sec. 63.23 Resale-based international common carriers.
The following conditions apply to carriers authorized to resell the
international services of other authorized carriers:
(a) A carrier authorized under Sec. 63.18(e)(2) may provide resold
international services to international points for which the applicant
qualifies for non-dominant regulation as set forth in Sec. 63.10,
except that the carrier may not provide either of the following
services unless it has received specific authority to do so under
Sec. 63.18(e)(4):
(i) Switched resold services to a non-WTO Member country where the
applicant is or is affiliated with a foreign carrier; and
(ii) Switched or private line services over resold private lines to
a destination market where the applicant is or is affiliated with a
foreign carrier and the Commission has not determined that the foreign
carrier lacks sufficient market power in the destination market to
affect competition adversely in the U.S. market (see Sec. 63.10(a)).
(b) The carrier may not resell the international services of an
affiliated carrier regulated as dominant on the route to be served
unless it has received specific authority to do so under
Sec. 63.18(e)(4).
(c) Except as provided in paragraph (b) of this section, the
carrier may resell the international services of any authorized common
carrier, pursuant to that carrier's tariff or contract duly filed with
the Commission, for the provision of international basic switched,
private line, data, television and business services to all
international points.
(d) The carrier may provide switched basic services over its
authorized resold private lines if and only if the country at the
foreign end of the private line appears on a Commission list of
countries to which the Commission has authorized the provision of
switched services over private lines. See Sec. 63.16. If at any time
the Commission finds that the country no longer provides equivalent
resale opportunities or that market distortion has occurred in the
routing of traffic between the United States and that country, the
carrier shall comply with enforcement actions taken by the Commission.
(e) Any party certified to provide international resold private
lines to a particular geographic market shall report its circuit
additions on an annual basis. Circuit additions should indicate the
specific services provided (e.g., IMTS or private line) and the country
served. This report shall be filed on a consolidated basis not later
than March 31 for the preceding calendar year.
(f) The authority granted under this part is subject to all
Commission rules and regulations and any conditions or limitations
stated in the Commission's public notice or order that serves as the
carrier's Section 214 certificate. See Secs. 63.12, 63.21.
Sec. 63.24 Pro forma assignments and transfers of control.
(a) Definition. An assignment of an authorization granted under
this part or a transfer of control of a carrier authorized under this
part to provide an international telecommunications service is a pro
forma assignment or transfer of control if it falls into one of the
following categories and, together with all previous pro forma
transactions, does not result in a change in the carrier's ultimate
control:
(1) Assignment from an individual or individuals (including
partnerships) to a corporation owned and controlled by such individuals
or partnerships without any substantial change in their relative
interests;
(2) Assignment from a corporation to its individual stockholders
without effecting any substantial change in the disposition of their
interests;
(3) Assignment or transfer by which certain stockholders retire and
the interest transferred is not a controlling one;
(4) Corporate reorganization that involves no substantial change in
the beneficial ownership of the corporation;
(5) Assignment or transfer from a corporation to a wholly owned
subsidiary thereof or vice versa, or where there is an assignment from
a corporation to a corporation owned or controlled by the assignor
stockholders without substantial change in their interests; or
(6) Assignment of less than a controlling interest in a
partnership.
(b) A pro forma assignment or transfer of control of an
authorization to provide international telecommunications service is
not subject to the requirements of Sec. 63.18. A pro forma assignee or
a carrier that is the subject of a pro forma transfer of control is not
required to seek prior Commission approval for the transaction. A pro
forma assignee must notify the Commission no later than 30 days after
the assignment is consummated. The notification may be in the form of a
letter, and it must contain a certification that the assignment was pro
forma as defined in paragraph (a) of this section and, together with
all previous pro forma transactions, does not result in a change of the
carrier's ultimate control. A single letter may be filed for an
assignment of more than one authorization if each authorization is
identified by the file number under which it was granted.
Sec. 63.25 Special procedures for non-dominant international common
carriers.
(a) Any party that would be a non-dominant international
communications common carrier is authorized to provide facilities-based
international services, subject to Sec. 63.22, between the United
States and all international points, except that this paragraph shall
not authorize the party to provide service between the United States
and any country where an affiliated foreign carrier operates.
(b) Any party that would be a non-dominant international
communications common carrier is authorized to provide resold
international services, subject to Sec. 63.23, between the United
States and all international points, except that this paragraph shall
not authorize the party to provide service between the United States
and any country where an affiliated foreign carrier operates.
(c) Within 30 days of commencing service pursuant to paragraph (a)
or (b), the party shall notify the Commission by letter addressed to
the Chief, International Bureau, that it has commenced providing
service pursuant to Sec. 63.25 of the Commission's rules. Such letter
shall include the applicable information and certifications described
in Sec. 63.18.
(d) Notwithstanding paragraphs (a) and (b), the Commission reserves
the right to condition or revoke the authorization of any entity for a
violation of the Commission's rules or policies, and such condition or
revocation shall be effective against all successors, transferees, or
assigns, as ordered by the Commission.
[FR Doc. 98-19638 Filed 7-23-98; 8:45 am]
BILLING CODE 6712-01-P
