E7-18777. Modification of the Rules and Procedures Governing the Provision of International Telecommunications Service

AGENCY:

Federal Communications Commission.

ACTION:

Final rule.

SUMMARY:

In this Report and Order, the Federal Communications Commission amends its rules governing the provision of international telecommunications service. The Commission amends the rule regarding the discontinuance of international services to reduce the notice period to 30 days. The Commission also clarifies its rules governing the provision of international roaming service by U.S. Commercial Mobile Radio Service (CMRS) carriers, changes in de jure control of an international section 214 authorization holder, and the treatment of asset acquisitions. The Commission declines, however, to modify its rule governing the provision of services by a subsidiary of an international section 214 authorization holder. The Commission also declines to adopt changes to its rules governing a CMRS carrier's 214 authorization process. However, the Commission does amend its cable landing license application rules and application procedures to require applicants to certify their compliance with the Coastal Zone Management Act (CZMA).

DATES:

Effective October 25, 2007, except for the amendments to §§ 1.767(k)(4), 63.19(a)(1) and (a)(2), and 63.24(c) which contain information collection requirements that have not been approved by the Office of Management and Budget (OMB). The Commission will publish a document in the Federal Register announcing the effective date of these rules. Written comment by the public on the modified information collection requirements are due November 26, 2007.

FOR FURTHER INFORMATION CONTACT:

David Krech, Policy Division, International Bureau at [phone] or Cara Grayer, Policy Division, International Bureau at [phone]. For additional information concerning the information collection(s) contained in this document, contact Judith B. Herman at 202-418-0214, or via the Internet at [e-mail].

SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's Report and Order in IB Docket No. 04-47, FCC 07-118, adopted June 20, 2007 and released on June 22, 2007. The full text of the Report and Order is available for public inspection and copying during regular business hours at the Commission's Reference Information Center, Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC 20554. The document also may be purchased from the Commission's duplicating contractor, Best Copy and Printing, Inc., Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554, telephone [phone], facsimile 202-488-5563, or via e-mail [e-mail].

Summary of Report and Order

1. On March 4, 2004, the Commission released a Notice of Proposed Rulemaking (NPRM) (Amendment of Parts 1 and 63 of the Commission's Rules, IB Docket No. 04-47, 69 FR 13276, March 22, 2004) seeking comment on several potential changes to its international section 214 authorization process and to the rules relating to the provision of U.S.-international telecommunications services. The Commission sought comment on whether to: (1) Amend the procedures for discontinuance of an international service; (2) amend the rules to clarify that U.S.-authorized resale carriers can resell the U.S.-inbound international services of either U.S. carriers or foreign carriers; (3) amend the rules to allow commonly controlled subsidiaries to provide international service under their parent's section 214 authorization; (4) revise the international section 214 requirements placed on Commercial Mobile Radio Service (CMRS) carriers; (5) permit a 30-day notification period for CMRS carriers to provide international resale service; (6) amend § 1.767 of the Commission's rules governing procedures for consideration of applications for cable landing licenses in order to assure compliance with the Coastal Zone Management Act of 1972 (CZMA); and (7) amend the ownership and other rules to clarify their intent. Ten parties filed comments in response to the Commission's NPRM. Based on review of the record in this proceeding and for the reasons set forth in the Report and Order, the Commission modified its rules governing the provision of international telecommunications service.

2. Discontinuance Issues: The procedures for discontinuing an international service are contained in § 63.19 of the Commission's rules. This rule sets forth different procedures for discontinuing international service, depending on whether a carrier is classified as a non-dominant, dominant, or a CMRS carrier. Prior to this Order, the notice period for the discontinuance of international service by non-dominant carriers differed from the notice period governing the discontinuance of a domestic service provided by such carriers. In this Order, the Commission amends its rules to reduce the notification period for a non-dominant carrier's discontinuance of international service from 60 days to 30 days, to be more consistent with the minimum period generally allowed before a non-dominant carrier can receive authority to discontinue domestic service. In addition, the Commission modifies its rules to require international carriers to file a copy of the notification with the Commission at the same time they provide notification to their affected customers.

3. International Roaming Issues: International roaming allows the customers of U.S.-licensed CMRS carriers to use the networks of foreign-licensed wireless carriers to make calls while traveling in foreign countries. Roaming agreements between U.S and foreign carriers may permit U.S. carriers' customers that are roaming in other countries to call the United States or other countries. U.S.-CMRS carriers bill their customers for international roaming service, and their international roaming rates and plans are available on the carriers' Web sites.

As an initial matter, the Commission finds that international roaming involves call termination in the United States that comes within the Commission's jurisdiction. The Commission amends §§ 63.18(e)(2) and 63.23(c) of its rules to permit explicitly all U.S.-authorized resale carriers to provide international service by reselling the international services of any other authorized U.S. common carrier or foreign carrier, or by entering into a roaming or other arrangement with a foreign carrier. The Commission clarifies that a U.S. carrier's resale authority includes authority to provide U.S. inbound or outbound service via resale or other arrangement between the carrier and any other authorized U.S. carrier or foreign carrier. This rule change eliminates uncertainty about the ability of U.S.-authorized resale carriers to provide U.S.-inbound service to customers under a roaming or other arrangement that a U.S. carrier has with a foreign carrier, including arrangements that allow for customer use of a calling card issued by a U.S. carrier.

4. Commonly-Controlled Subsidiary Issues: Under the Commission's rules, a commonly-controlled subsidiary must obtain its own international section 214 authorization, while a wholly-owned subsidiary may provide service pursuant to its parent company's authorization. In this Order, the Commission finds that it would not be in the public interest to amend its rules to allow commonly-controlled subsidiaries to provide international service pursuant to their parent's international section 214 authorization. The Commission reiterated that the differences in ownership between a parent and a subsidiary that it controls but does not wholly own may raise issues that require separate review.

5. International 214 Authorizations for CMRS Carriers: The Commission sought comment on whether it should exempt CMRS carriers from the requirement to file an application for international section 214 authority prior to providing service. The Commission decided not to make any changes to the procedures for granting international section 214 authorizations at this time. The Commission intends to develop a fuller record on possible changes further streamlining the application process that would apply to all carriers providing international service, including, but not limited to, CMRS carriers as a part of a larger review. The Commission intends to address CMRS carrier issues as a part of that proceeding, and the docket will be kept open until that time.

6. Transfer of Control: The Commission amends § 63.24 to clarify that a diminution of an entity's ownership interest in a carrier from more than 50 percent to 50 percent or less constitutes a transfer of control that must be reported to the Commission.

7. Asset Acquisition: The Commission adds a note to § 63.24 to clarify that an asset acquisition that will not result in a loss of service for its customers should be treated as an assignment rather than a discontinuance of service. Specifically, the Commission clarifies that when a carrier sells its customer base, or a portion of its customer base, to another carrier, the sale of assets will be treated as an assignment, which requires prior Commission approval under § 63.24 of the rules.

8. Modification of Cable Landing License Rules: The Coastal Zone Management Act (CZMA) was enacted to encourage the participation of and cooperation among state, local, regional, and federal government agencies that have programs that affect the coastlines. The statute authorizes states to develop coastal management programs, subject to federal approval by NOAA. A coastal management program defines permissible land and water use within the state coastal zone. Under 16 U.S.C. 1456(c)(3)(A), states with federally-approved management programs are entitled to review such uses for consistency with those programs any “required federal license or permit to conduct an activity, in or outside of the coastal zone, affecting any land or water use or natural resource of the coastal zone of that state.” In the NPRM, the Commission sought comment on whether to amend its rules to require applicants for a cable landing license to comply with the CZMA.

9. NOAA has regulatory responsibility over the state certification process and requirements for all applicants for federal licenses for activities in or outside of coastal zones under CZMA, 16 U.S.C. 1456(c)(3)(A). NOAA's regulations, 15 CFR part 930, subpart D, provide a process to determine when federal license or permit activities are subject to consistency review. If review is required, the applicant must certify that the proposed activity complies with the enforceable policies of a state management program, and all relevant states must concur in the applicant's certification before the Federal agency grants the license.

10. The Commission amends its cable landing license rules to comport with CZMA requirements to apply to applications for a license to construct and operate a submarine cable system or to modify the construction of a previously approved submarine cable system. The Commission will not consider the requirements of the CZMA to apply to applications for changes of ownership of the submarine cable system or landing stations (transfers or control or assignments) or other modifications of the cable landing license that do not effect the construction of the submarine cable system. The Commission therefore adds a note to § 1.767(a) of its rules clarifying that, in accordance with the express requirement that a federal license applicant “shall provide [the certification] in the application to the licensing or permitting agency,” all consistency certifications required by section 1456(c)(3)(A) must be included in the application filed with the Commission for a license to construct and operate a submarine cable system or to modify the construction of a previously approved submarine cable system.

11. In accordance with the requirement that state concurrence is to precede the grant of the cable landing license and to prevent the construction of any submarine cable system or cable landing station while a coastal state is reviewing the applicant's consistency certification, the Commission will not streamline the application or take any action on a cable landing license application pending notification, or documentation from the applicant, that all required state concurrences have been received or may be presumed. In sum, the Commission revises § 1.767 to clarify that any consistency certifications required by section 1456(c)(3)(A) must be included in cable landing license applications filed with the Commission to construct and operate or modify construction of a previously approved submarine cable system, and that construction or modification may not commence until all coastal states have concurred or may be presumed to have concurred with any required certifications included in the cable landing application. Further, § 1.767(k)(4) clarifies that the submarine cable system will not be located in any states where the cable landing licenses may be subject to the consistency certification requirements of the CZMA.

Paperwork Reduction Act

12. This Report and Order contains either new or modified information collections subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. It will be submitted to the Office of Management and Budget (OMB) for review under section 3507(d) of the PRA. OMB, the general public, and other Federal agencies are invited to comment on the modified information collection requirements contained in this proceeding. In addition, we note that pursuant to the Small Business Paperwork Relief Act of 2002, Public Law No. 107-198, (see 44 U.S.C. 3506 (c)(4)), the Commission previously sought specific comment on how the Commission might “further reduce the information collection burden for small business concerns with fewer than 25 employees.”

13. All comments regarding the requests for approval of the information collection should be submitted to Judith B. Herman, Federal Communications Commission, Room 1-C804, 445 12th Street, SW., Washington, DC 20554, or via the Internet to [e-mail]; phone [phone].

Final Regulatory Flexibility Analysis

14. The Regulatory Flexibility Act of 1980, as amended (RFA) requires that a Regulatory Flexibility Act analysis be prepared for notice-and-comment rule making proceedings, unless the agency certifies that “the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.” The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A “small business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA).

15. As stated in the Report and Order, this proceeding was initiated as part of the Commission's 2002 biennial regulatory review process. Through this review, the Commission has sought to: facilitate the introduction of new services; provide customers with more choices, innovative services, and competitive prices; improve the processing of authorization applications and regulation of international services; and lessen the regulatory burdens placed on carriers. In this proceeding, the Commission examined the rules regarding the authorization of international services under section 214 of the Act.

16. In the NPRM, the Commission certified that the rules proposed in this proceeding would not have a significant economic impact on a substantial number of small entities. The Commission stated that the proposals would be in the public interest and would lessen the burdens on all carriers, both small and large, providing international common carrier service pursuant to section 214 of the Act. In the Order, the Commission adopts many of the rule changes proposed in the NPRM. Thus, we certify that rule changes adopted in this Order will have no significant economic impact on a substantial number of small entities.

17. In the Order, the Commission amends its rules regarding the discontinuance of international service by aligning the international rules with those rules for domestic service. The Order will amend the submarine cable landing rules to require applicants to include information regarding an applicant's compliance with the Coastal Zone Management Act of 1972. The Order clarifies the rules to eliminate confusion as to whether a CMRS carrier requires authority to resell U.S. inbound service of a foreign carrier for the U.S.-CMRS carrier's customers that are roaming in a foreign country. The Order requires a carrier to notify the Commission when there is a change in ownership to 50 percent or less. Also, a diminution of an entity's ownership interest in a carrier to 50 percent or less constitutes a transfer of control that must be reported to the Commission. The Order amends its rules to clarify that an asset acquisition that will not result in a loss of service for its customers should be treated as an assignment rather than a discontinuance of service. In addition, the Report and Order amends the rules so that when a carrier sells its customers or a portion of its customers to another carrier, the sale of assets will be treated as an assignment.

18. The rule changes adopted in this Report and Order will benefit all entities, both small and large. The rules for discontinuing international service will be consistent with the rules for discontinuing domestic service, thereby eliminating the disparities between domestic and international service rules. The Commission finds that it will be in the public interest to eliminate the requirement that CMRS carriers seek authority for the resale of inbound traffic. Rather, this authority will be included in the carrier's global resale authority. This rule change will reduce the filing requirements on CMRS carriers, many of which are small entities. Although the majority of submarine cable landing license applicants is not considered small entities, the rule changes affecting these applicants are nominal and will ensure that our rules are consistent with the Coastal Zone Management Act of 1972.

19. The rules adopted in the Report and Order are administrative and will streamline and clarify our processes. Therefore, we find that the rules adopted in this Order will not have a significant economic impact on a substantial number of small entities.

Ordering Clauses

20. Accordingly, it is ordered that, pursuant to the authority contained in sections 1, 4(i), 4(j) 11, 201-205, 211, 214, 219, 220, 303(r), 309, and 403 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 154(j), 161, 201-205, 211, 214, 219, 220, 303(r), 309 and 403, and sections 34-39 of the Cable Landing License Act, 47 U.S.C. 34-39, this report and order is hereby adopted.

21. It is ordered that the Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this report and order, including the Final Regulatory Flexibility Act Certification, to the Chief Counsel for Advocacy of the Small Business Administration in accordance with section 603(a) of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq.

22. It is further ordered that the Regulatory Flexibility Certification, as required by section 604 of the Regulatory Flexibility Act and as set forth above is adopted.

List of Subjects in 47 CFR Parts 1 and 63

• Cable
• Telecommunications

Federal Communications Commission.

Marlene H. Dortch,

Secretary.

Final Rules

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR parts 1 and 63 to read 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, 157, 225, 303(r) and 309.

2. Section 1.767 is amended by adding a note to paragraph (a)(10) and by adding new paragraph (k)(4) to read as follows:

§ 1.767

Cable landing licenses.

(a) * * *

(10) * * *

Note to paragraph (a)(10):

Applicants for cable landing licenses may be subject to the consistency certification requirements of the Coastal Zone Management Act, 16 U.S.C. 1456, if they propose to conduct activities, in or outside of a coastal zone of a state with a federally-approved management plan, affecting any land or water use or natural resource of that state's coastal zone. Before filing their applications for a license to construct and operate a submarine cable system or to modify the construction of a previously approved submarine cable system, applicants must determine whether they are required to certify that their proposed activities will comply with the enforceable policies of a coastal state's approved management program. In order to make this determination, applicants should consult National Oceanic Atmospheric Administration (NOAA) regulations, 15 CFR part 930, subpart D, and review the approved management programs of coastal states in the vicinity of the proposed landing station to verify that this type of application is not a listed federal license activity requiring review and that no state has sought or received NOAA approval to review the application as an unlisted activity. If it is determined that any certification is required, applicants shall consult the affected coastal state(s) (or designated state agency(ies)) in determining the contents of any required consistency certification(s). Applicants may also consult the Office of Ocean and Coastal Management (OCRM) within NOAA for guidance. The cable landing license application filed with the Commission shall include any consistency certification required by section 1456(c)(3)(A) for any affected coastal state(s). Upon documentation from the applicant, or notification from each affected coastal state, that the state has either concurred, or by its inaction, is conclusively presumed to have concurred with the applicant's consistency certification, the Commission may take action on the application.

* * * * *

(k) * * *

(4) Certifying that for applications for a license to construct and operate a submarine cable system or to modify the construction of a previously approved submarine cable system, the submarine cable system will not be located in any states where the cable landing licenses may be subject to the consistency certification requirements of the Coastal Zone Management Act, 16 U.S.C. 1456.

* * * * *

PART 63—EXTENSION OF LINES, NEW LINES AND DISCONTINUANCE, REDUCTION, OUTAGE AND IMPAIRMENT OF SERVICE BY COMMON CARRIERS; AND GRANTS OF RECOGNIZED PRIVATE OPERATING AGENCY STATUS

3. The authority citation for part 63 continues to read as follows:

Authority: Sections 1, 4(i), 4(j), 10, 11, 201-205, 214, 218, 403 and 651 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 154(j), 160, 201-205, 214, 218, 403, and 571, unless otherwise noted.

4. Section 63.18 is amended by revising paragraph (e)(2) introductory text to read as follows:

§ 63.18

Contents of applications for international common carriers.

* * * * *

(e) * * *

(2) Global Resale Authority. If applying for authority to resell the international services of authorized common carriers subject to § 63.23, the applicant shall:

* * * * *

5. Section 63.19 is amended by revising paragraphs (a)(1) and (a)(2) to read as follows:

§ 63.19

Special procedures for discontinuances of international services.

(a) * * *

(1) The carrier shall notify all affected customers of the planned discontinuance, reduction or impairment at least 30 days prior to its planned action. Notice shall be in writing to each affected customer unless the Commission authorizes in advance, for good cause shown, another form of notice.

(2) The carrier shall file with this Commission a copy of the notification on the date on which notice has been given to all affected customers. The filing may be made by letter (sending an original and five copies to the Office of the Secretary, and a copy to the Chief, International Bureau) and shall identify the geographic areas of the planned discontinuance, reduction or impairment and the authorization(s) pursuant to which the carrier provides service.

* * * * *

6. Section 63.23 is amended by revising paragraph (c) to read as follows:

§ 63.23

Resale-based international common carriers.

* * * * *

(c) Subject to the limitations specified in paragraph (b) of this section and in § 63.17(b), the carrier may provide service by reselling the international services of any other authorized U.S. common carrier or foreign carrier, or by entering into a roaming or other arrangement with a foreign carrier, for the provision of international basic switched, private line, data, television and business services to all international points.

Note to paragraph (c):

For purposes of this paragraph, a roaming arrangement with a foreign carrier is defined as an arrangement under which the subscribers of a U.S. commercial mobile radio service provider use the facilities of a foreign carrier with which the subscriber has no direct pre-existing service or financial relationship to place a call from the foreign country to the United States.

* * * * *

7. Section 63.24 is amended by adding a note to paragraph (b) and by revising paragraph (c) to read as follows:

§ 63.24

Assignments and transfers of control.

* * * * *

(b) * * *

Note to paragraph (b):

The sale of a customer base, or a portion of a customer base, by a carrier to another carrier, is a sale of assets and shall be treated as an assignment, which requires prior Commission approval under this section.

(c) Transfers of control. For purposes of this section, a transfer of control is a transaction in which the authorization remains held by the same entity, but there is a change in the entity or entities that control the authorization holder. A change from less than 50 percent ownership to 50 percent or more ownership shall always be considered a transfer of control. A change from 50 percent or more ownership to less than 50 percent ownership shall always be considered a transfer of control. In all other situations, whether the interest being transferred is controlling must be determined on a case-by-case basis with reference to the factors listed in Note to paragraph (c).

* * * * *