[Federal Register Volume 61, Number 88 (Monday, May 6, 1996)]
[Rules and Regulations]
[Pages 20155-20170]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10974]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 3
[MD Docket No. 93-297; FCC 96-110]
Administration of U.S. Certified Accounting Authorities in
Maritime Mobile and Maritime Mobile-Satellite Radio Services
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: This Report and Order establishes final rules related to the
administration of U.S. certified accounting authorities in the maritime
mobile and maritime mobile-satellite radio services except for distress
and safety communications. The rules are required in order to ensure
adherence to international settlement procedures. This Report and Order
contains modified information collections requirements subject to the
Paperwork Reductions Act of 1995.
EFFECTIVE DATE: This regulation is effective July 5, 1996 subject to
the review of information collection requirements by the Office of
Management and Budget. Upon approval of the information collections
requirement from the Office of Management and Budget (OMB). The
Commission will publish a public notice to notify the public of the
effective date.
ADDRESSES: Comments on the information collections contained in this
Report and Order should be directed to Office of The Secretary, Federal
Communications Commission, 1919 M Street, N.W., Washington, DC 20554.
In addition to filing comments with the Secretary, a copy of any
comments on the information collections contained herein should be
submitted to Dorothy Conway, Federal Communications Commission, Room
234, 1919 M Street, N.W., Washington, DC 20554, or via the Internet to
dconway@fcc.gov and to Timothy Fain, OMB Desk Officer, 10236 NEOB, 725
17th Street, N.W., Washington, DC 20503 or via the Internet to
fain__t@al.eop.gov.
FOR FURTHER INFORMATION CONTACT: Shirley F. Wood, Office of the
Managing Director, Financial Analysis Branch, Telephone: (202) 418-1990
or via the Internet at swood@fcc.gov.
SUPPLEMENTARY INFORMATION:
Synopsis of Commission's Report and Order Adopted March 13, 1996 and
Released April 23, 1996
1. The Federal Communications Commission's International
Telecommunications Settlements Section, located in Gettysburg,
Pennsylvania, acts as a national clearinghouse for the settlement of
international maritime mobile service and maritime mobile-satellite
service accounts. In this capacity, the FCC is known as an accounting
authority and settles accounts for messages transmitted or received by
U.S. licensed vessels via foreign coast station facilities.
2. The FCC has also allowed private entities to settle accounts
with foreign administrations. By approving these additional
``accounting authorities'', the FCC has, in effect, delegated a portion
of its traditional responsibilities regarding settlement of maritime
accounts to private enterprise, at least in those instances where the
accounting authority is settling accounts of U.S. licensed ship
stations.
3. The FCC is issuing final rules regarding the approval and/or
operations of accounting authorities. This Report and Order delineates
rules for (a) determining the eligibility for granting/revoking
certification as a U.S. accounting authority, (b) settlement
operational procedures, (c) reporting requirements, and (d) enforcement
procedures.
4. Further, the Report and Order establishes rules to ensure
compliance by ship station licensees to make proper and timely payments
and declares the ship station licensee to be ultimately responsible for
settlement of their accounts.
5. The complete text of this rulemaking may be purchased from the
Commission's copy contractor, International Transcription Service, Inc.
(202) 857-3800, 2100 M Street, N.W., Suite 140, Washington, DC 20037.
Paperwork Reduction Act
The Commission, as part of its continuing effort to reduce
paperwork burdens, invites the general public and OMB to comment on the
information collections contained in this Report and
[[Page 20156]]
Order, as required by the Paperwork Reduction Act of 1995, Pub. L. No.
104-13. OMB notification of action is due July 5, 1996; public and
agency comments are due at the same time. 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: 3060-0584.
Title: Administration of U.S. certified accounting authorities in
maritime mobile and maritime mobile-satellite radio services.
Form No.: FCC Form 44 and FCC Form 45.
Type of Review: Revision to an existing collection to consolidate
three information collection requirements.
Respondents: Individuals and households; businesses and other for-
profit.
Number of Respondents: 25.
Estimated Time Per Response: Three hours per response for
Application for Certification of Accounting Authority form; one hour
per response for the Annual Statistical Report of Settlement Operations
form; and one hour per response for the Report of Additions/
Modifications/Deletions to Inventory.
Needs and Uses: The Commission will use the information in this
information collection to determine eligibility of applicant; to create
internal studies and to ensure compliance. The Commission will also use
the information to identify the accounting authorities of U.S. licensed
vessels and to update the reporting of changes in accounting authority
functions to the International Telecommunication Union for inclusion in
their List of Ship Stations Report. The Report and Order is modified to
reduce a monthly reporting of changes to the inventory of ships for
which the accounting authority performs settlements to a semi-annual
requirement. A requirement for this information was included in the
Notice of Proposed Rulemaking, 58 FR 246, December 27, 1993, however,
the burden of the requirement was not adequately addressed at that
time.
Adopted: March 13, 1996.
Released: April 23, 1996.
By the Commission.
Table of Contents
Paragraph
Topic No.
I. Introduction.............................................. 1-2
II. Background............................................... 3-12
III. Issues Analysis......................................... 13
A. Eligibility............................................. 14-22
B. Application Procedures.................................. 23-33
C. Settlement Operations................................... 34-44
D. Reporting Requirements.................................. 45-50
E. Enforcement............................................. 51-53
F. Conclusion.............................................. 54
IV. Procedural Matters.......................................
A. Ex Parte................................................ 55
B. Final Regulatory Flexibility Analysis................... 56
V. Ordering Clauses........................................ 57-58
I. Introduction
1. By this Report and Order, the Commission adopts rules governing
the administration of accounting authorities in the maritime mobile and
the maritime mobile-satellite radio services, except for distress and
safety communications. The Report and Order establishes a certification
process and settlement procedures within a regulatory framework that is
flexible enough to invite participation by many diverse entities. The
rules clarify accounting authority responsibilities and strengthen the
settlement process while promoting the improvement of standards and
settlement operations in industry.
2. The rules we adopt below establish an application and approval
process for becoming an accounting authority to ensure that only
qualified applicants perform this function. The application process and
procedural rules also apply to entities currently settling accounts
under interim Commission certification. The interim certification will
be cancelled 60 days after the effective date of these rules if these
entities do not follow the application process. The Report and Order
also establishes standardized operational procedures and reporting
requirements that will assist the FCC in monitoring the overall
settlement function. The rules establish the accounting authority's
receipt date of accounts for purposes of determining the appropriate
conversion rate for the Special Drawing Rights (SDRs) and sets forth
enforcement procedures for both accounting authorities who are not
operating in accordance with FCC and established international
procedures and for ship station licensees where the licensee fails to
remit proper and timely payment for public correspondence
communications to the Commission or to another accounting authority.
Finally, the rules declare that the ship station licensee is ultimately
liable for proper and timely payment of accounts.
II. Background
3. International telecommunications settlements involve the
collection and payment by various accounting entities of charges due
foreign administrations for messages transmitted at sea by or between
maritime mobile stations located on board ships subject to U.S.
registry and utilizing foreign coast and coast earth station
facilities. The United States Government has performed accounting
settlements for maritime mobile service message charges since 1913 and,
more recently, for maritime mobile-satellite service messages.
4. On June 10, 1934, the Federal Radio Commission was absorbed by
the Federal Communications Commission (FCC), which had been created by
the Communications Act of 1934. At that time the international radio
accounts were transferred to the jurisdiction of the FCC, where they
are now maintained.
5. The subjects of international telecommunications accounting and
settlements are addressed in the International Telecommunication
Convention (Nairobi, 1982), in the International Telecommunication
Regulations (Melbourne, 1988) (ITR), in the ITU Radio Regulations and
in the ITU-T (formerly CCITT) Recommendations.1 The ITU-T develops
technical, operational and service recommendations applicable to
essentially all international telecommunications services via wire and
radio. Provisions of Conventions and Regulations have treaty status and
are therefore binding on the parties thereto. The ITU-T Recommendations
do not have treaty status and are not legally binding. However, as a
practical matter, the ITU-T Recommendations are
[[Page 20157]]
effectively the standards that govern international telecommunications.
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\1\ ``CCITT'' is the French acronym for the International
Telegraph and Telephone Consultative Committee within the
International Telecommunication Union (ITU). ``CCITT'' was,
nevertheless, the recognized acronym used in most languages--
including English. At the ITU Additional Plenipotentiary Conference
(APP) in Geneva (December 1992), the structure, working methods, and
construct of the basic ITU treaty instrument was modified. The
result is that the names of the sub-entities of the ITU have changed
(e.g., the CCITT has become the Telecommunication Standardization
Sector--ITU-T and the primary treaty instruments have become the ITU
Constitution and the ITU Convention with consequential renumbering
of all provisions). We note the changes coming from the APP were
placed into provisional effect on March 1, 1993, with the formal
entry into force of these changes being July 1, 1994 (as between
those ITU Member countries who have ratified or acceded to the new
instruments). We will, subsequently, refer to the new nomenclatures
within this proceeding wherever practicable.
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6. The World Administrative Radio Conference (Geneva, 1979) changed
the procedures governing accounting practices in the maritime mobile
and maritime mobile-satellite services, partly in response to the
perceived need to improve the efficiency of the international
telecommunication settlements system. The Final Acts of the Conference,
ratified by the U.S. Senate on October 27, 1983, revised Chapter IX of
the international Radio Regulations by establishing a new Article 66
which set forth the following general principles to govern the
international accounting for public correspondence in the maritime
mobile and maritime mobile-satellite services:
5086 Sec. 2. Charges for radiocommunications from ship to shore shall
in principle, and subject to national law and practice, be collected
from the maritime mobile station licensee:
5087 (a) by the administration that has issued the license; or
5088 (b) by a recognized private operating agency; or
5089 (c) by any other entity or entities designated for this purpose by
the administration referred to in No. 5087.
7. The Mobile World Administrative Radio Conference in 1987 passed
a resolution (contained in the Regulations as Resolution No. 334)
providing that the provisions of Article 66 should merely refer to the
International Telecommunication Regulations (ITR), assuming that the
World Administrative Telegraph and Telephone Conference (WATTC-88)
placed the substance of the Article 66 provisions into the ITR. The
WATTC-88 did incorporate these provisions into the ITR, effective July
1, 1990 (ITR, Appendix 2). We assume a future competent
Radiocommunication Conference will eventually implement the provisions
of Resolution No. 334.2 In any event, both the current Radio
Regulations and the ITR provide that the ITU-T Recommendations are to
be taken into account when applying the international regulatory
provisions. As it now stands, the implementing recommendations
developed by the ITU-T include: (1) Rec. D.90 on charging, accounting
and refunds; (2) Rec. D.195 on settlement of international
telecommunication balances of accounts; (3) Rec. E.200 on operational
provisions for maritime mobile services; (4) Rec. F.100 on mobile
operational provisions; and (5) the newest recommendation adopted, Rec.
F.111 on principles of service for mobile systems.
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\2\ The ITU Voluntary Group of Experts (VGE), charged with
simplifying the Radio Regulations has, indeed, made such a
recommendation. Once adopted by a competent World Radiocommunication
Conference, the VGE recommendation would result in Article 66 simply
stating that: ``The provisions of the ITR, taking into account ITU-T
Recommendations, shall apply [to charging and accounting for
Maritime Radiocommunications].''
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8. The organization within the FCC responsible for the settlement
of maritime mobile and maritime mobile-satellite accounts with foreign
administrations is the International Telecommunications Settlements
(ITS) Section of the Financial Operations Division, Office of the
Managing Director. The settlement operation basically consists of
examining and processing invoices received from foreign administrations
to ensure the validity of the charges and, in turn, billing U.S. ship
station licensees for the charges due the foreign country. The accounts
generally contain the ship call sign and name, the date the message was
transmitted, the number of words or minutes, the cost per word or
minute in gold francs or Special Drawing Rights (SDRs) and the amount
due shown in either gold francs or SDRs. Collections are then processed
and appropriate payments made to the foreign countries or their agents
through the U.S. Treasury.
The settlement clearinghouse service was performed by the FCC at no
cost to licensees until December 19, 1989 when Public Law 101-239
established a $2.00 per line item administrative fee applicable to all
ITS billings.
9. The FCC, in accordance with international procedures described
within this document, has also permitted private entities, called
``accounting authorities'', to settle accounts between U.S. registered
ships and foreign administrations just as ITS does. (See In The Matter
of Accounting and Operating Procedures in the Maritime Mobile Service,
FCC 80-741, Mimeo No. 28600 (released December 12, 1980).) The
accounting authority may settle accounts of foreign licensed vessels in
addition to settling U.S. accounts. Vessel operators/licensees choosing
to have these private entities settle their accounts are generally also
charged a fee under a contractual arrangement. In certain cases, the
vessels are owned and/or operated by the same company that is acting as
an accounting authority.
10. Accounting authorities have been established or certified by
the FCC in accordance with the procedures delineated in the ITU-T
Recommendations. Those procedures allow administrations to establish up
to 25 accounting authorities per country. Specifically, accounting
authorities are designated by the assignment of an individual
Accounting Authority Identification Code (AAIC). This code is used by
ships and foreign coast stations to identify where charges for messages
transmitted through foreign facilities are to be sent for collection.
All accounting authorities approved by the FCC to settle maritime
accounts for U.S. licensed vessels are assigned a discrete four-
character alpha-numeric code. Accounting authorities operating in the
U.S. are assigned codes with a ``US'' prefix. Currently, only eight
codes beginning with the prefix ``US'' are authorized, including US01
which is used by the Commission's ITS Section in its settlement
activities.3 Foreign-based accounting authorities may also be
certified to settle accounts of U.S. licensed vessels. If approved,
they use the AAIC originally assigned to them by their country of
origin. The Commission has currently certified seven foreign-based
accounting authorities 4 to settle accounts for U.S. flag vessels.
Although all certifications have technically been interim
certifications, fifteen years have elapsed since the original interim
assignments.
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\3\ Besides the FCC, the accounting authorities assigned a
``US'' code are: Mackay Communications, Inc.; Radio-Holland
Communications, Inc.; SAIT Communications, Inc.; Mobile Marine
Radio, Inc.; Exxon Communications Company; Raytheon Service Company
and Global Communications, Inc.
\4\ The following foreign companies have been approved as
accounting authorities: Kelvin Hughes, Ltd. (England); Peninsular
Electronics, Ltd. (England); STC International Marine, Ltd.
(England); Marconi International Marine Co., Ltd. (England); E.B.
Communications, Ltd. (England); International Radio Traffic Services
(Ireland) and ANDgate, Ltd. (Gibraltar).
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11. There are currently no rules, formal guidance or procedures
issued by the Commission for determining who should be certified as an
accounting authority. There are no FCC standards of conduct for
accounting authorities nor any requirement to keep the Commission
informed of their activities. There are no rules to ensure that the
overall United States settlement activity is conducted uniformly. We
believe that at least minimal regulations should be in place to assist
current and future accounting authorities in adhering to those
international procedures as a matter of public interest and in
fulfillment of U.S. treaty interests.
12. On November 9, 1993, the Commission adopted a Notice of
Proposed Rulemaking (NPRM) that invited comment on our proposed rules
governing the administration of
[[Page 20158]]
accounting authorities (2FCC Record, Volume 8, No. 26, December 13-23,
1993). The NPRM proposed rules providing for: (1) a certification
process, (2) settlement procedures, (3) compliance procedures, and (4)
determining responsibility for proper and timely settlement of
accounts.
III. Issues Analysis
13. The NPRM proposed rules and raised many issues regarding the
administration of accounting authorities. Comments and Reply Comments
were received from eleven (11) entities and are discussed in the
paragraphs below where we review each of the categories and consider
the comments. The commenters are listed in Appendix 2 of the Report and
Order.
A. Eligibility
14. The NPRM proposed no U.S. citizenship requirements, but did
propose certain restrictions regarding the physical location of
settlement facilities for those accounting authorities wishing to be
assigned an AAIC with a ``US'' prefix. The NPRM proposed that prior
experience in accounting or settlement activities will be considered
but is not a prerequisite to becoming an accounting authority; and,
that applicants must (1) be willing and able to accept clients at a
reasonable charge; (2) agree to accept accounts in both gold francs and
Special Drawing Rights (SDRs) and to use the conversion rate as
directed by the International Monetary Fund; and (3) agree to conduct
operations in accordance with applicable FCC policies and rules, the
International Telecommunication Regulations and other international
rules, regulations, agreements, and, where appropriate, ITU-T
Recommendations. Finally, the NPRM proposed that all entities intending
to settle accounts of U.S. licensed vessels obtain prior Commission
authorization to do so.
15. Comments. Mackay Communications (Mackay) urged that we prohibit
the Commission from ``operating as a Recognized Private Operating
Agency'' so that it can be neutral and enforce compliance of
regulations without creating potential conflicts of interest. In reply
comments, COMSAT Corporation (COMSAT) stated that the Commission can
still be an impartial administrator and questioned Mackay's suggestion
that the Commission remove itself from the accounting authority
function.
Response. The Commission cannot operate as a Recognized Private
Operating Agency because (1) we are a Federal government agency and (2)
we do not operate telecommunications installations nor do we provide
telecommunications services. However, we believe that Mackay meant
``accounting authority'' and address this response in that context. The
Commission has a dual role in the administration of settlement of
accounts for international telecommunications. First, as the
administration responsible for settlement of accounts of U.S.-flag
vessels, we are establishing rules for non-U.S. governmental accounting
authorities. Second, the Commission provides a valuable function in
that ship station licensees who do not select an accounting authority,
simply ``default'' to US01, the AAIC of the Commission's International
Telecommunications Settlements Section (ITS) which performs the FCC's
accounting authority function. We believe that the functions are
separate and can be administered without any conflict of interest.
16. Comments. Mackay urged the Commission to consider a requirement
that the applicant must offer services to all U.S.-flagged vessels--not
just vessels owned directly or indirectly by the applicant. EXXON
Communications Company (EXXON) stated their objection to any proposal
that accounting authorities ``be required to serve as common carriers
offering service indiscriminately to the public.'' They pointed out
that they serve as an accounting authority for their vessels only, they
are not a revenue generating endeavor and, ``were the Commission to
require EXXON to hold itself out to the general public
indiscriminately, it would no longer be in a position to serve as an
accounting authority.'' In reply comments, the American Institute of
Merchant Shipping (AIMS) agreed with EXXON's proposal that accounting
authorities should not be required to act as a common carrier and
COMSAT opposed a ban on accounting authorities who process settlements
exclusively for their own vessels. COMSAT further stated that ``the
Commission may consider imposing conditions on the certifications
awarded to these entities, e.g., the Commission may wish to reserve the
right to require such accounting authorities to serve all customers or
relinquish their AAIC when there are no * * *. codes available and
there is a demonstrable need for broader-based services.''
Response. We believe the function of accounting authorities should
be such that the public's best interests are served by the
organizations. Such is not the case when an accounting authority
settles accounts for themselves only. Thus, the rules we have adopted
require that accounting authorities settle accounts for any qualified
ship station licensees who request it. Accounting authorities may
require credit checks, and clients must accept the terms of settlement
charges, deposits, etc. However, it is not the Commission's intent in
establishing these rules to place additional requirements on the
interim accounting authorities nor to establish a requirement in the
application process that could not be overcome. We acknowledge COMSAT's
workable suggestions and we are waiving this requirement for accounting
authorities who are ``grandfathered'' with the provision that, should
all 25 AAICs be assigned and the need for additional codes become
necessary, these same organizations will be required to extend their
services to the public or to relinquish their certification. Should
these grandfathered accounting authorities cease their settlement
activities, the new accounting authorities assigned the AAICs will be
required to serve the general public. 47 CFR, Part 3, section 3.10 is
amended to add this waiver information.
17. Comments. Mobile Marine Radio, Inc. (MMR) requested that the
Commission impose requirements that accounting authorities verify the
creditability of its clients and ``another means of guarantee for the
provider could be a requirement that the accounting authority * * *
share in a loss should it occur.'' COMSAT supported the recommendation
that accounting authorities be required to verify the credit worthiness
of their customers and that accounting authorities should be able to
reject customers they determine are credit risks and further suggest a
rule to require a deposit from customers before contracting to settle
accounts.
Response. The rules we are adopting below declare that the ship
station licensee is ultimately responsible for the proper and timely
payment of their accounts (47 CFR Part 3, section 3.76). However, this
in no way relieves the accounting authority from performing their
settlement activities timely and accurately. We have purposely left out
regulations which would prevent accounting authorities from verifying
the credit standings of potential clients or requiring deposits. The
contractual agreement between accounting authorities and clients should
be entered into mutually without further regulation. Ship station
licensees who do not enter into such an arrangement will default to
US01, the International Telecommunications Settlement Section at
Gettysburg, Pennsylvania.
[[Page 20159]]
18. Comments. Mackay raised the issue of foreign accounting
authorities settling traffic for U.S.-flagged vessels. Mackay does not
object, provided U.S.-flagged vessels of foreign accounting authorities
are required to pay the same ``federal excise taxes'' that vessels
represented by U.S. accounting authorities are required to pay.
Response. This subject is beyond the scope of this proceeding and
is not addressed in the Report and Order.
19. Comments. Mackay urged considering that owners of coast
stations or coast earth stations not be allowed as accounting
authorities. In reply comments, EXXON stated that Mackay has no
rationale for their suggestion and COMSAT opposes any limitation on
land earth station operators stating the ``operators * * * are more at
risk to justify their involvement * * * than many other entities * *
*''
Response. Our experience has been that we have encountered no
problems in the past with accounting authorities who are also owners
and/or operators of coast stations that lead us to believe there is a
potential problem. Thus, the final rule will not ban coast stations,
coast earth stations or any other entity from becoming accounting
authorities as long as they meet the eligibility requirements.
20. Comments. Radio Holland USA B.V. (Radio Holland) recommended
that prior relevant experience be a mandatory requirement. In reply
comments, COMSAT stated that prior experience as an accounting
authority should not be the sole determining factor for qualification.
Response. The Commission, in this final rule, has purposely
declined to adopt regulations requiring specific prior relevant
experience. We believe the rule at Part 3, section 3.10(c) is clear
that related prior experience will be reviewed favorably, however, this
experience or lack of experience will not be the sole determinant in
granting certification. COMSAT appears to be referring to the
``grandfathering'' process directed toward the interim accounting
authorities. In that case, experience will not be the sole determining
factor, either, but will be evaluated along with other requirements.
21. Comments. Mackay urges the Commission to consider prohibiting
``foreign-based RPOAs'' from settling for U.S.-flagged vessels unless
their administration has a reciprocal agreement allowing U.S.
accounting authorities to operate in their administration. In reply
comments, COMSAT agreed with Mackay that the Commission should consider
whether foreign administrations permit U.S. entities to apply for
accounting authority identification codes in their country.
Response. Based on our past experience where no problems of this
nature have occurred, we do not think it is necessary to adopt a policy
of reciprocity. At most, only ten of the AAICs will be available to
foreign-based organizations. We have not addressed this issue in the
rules adopted below, however, should the situation change, the
Commission could revisit the issue.
22. Comments. MMR commented that, in the case of assignment of a
U.S. accounting authority identification code, all settlements should
be processed and made from the physical location of the accounting
authority from its U.S. address. COMSAT stated there is no ``rule
section providing the standard of evidence for establishing that an
accounting authority will conduct operations in the United States'' and
recommended the submission of partnership or corporate documents
demonstrating where the entity intends to do business. COMSAT further
suggested imposing a jurisdictional requirement on foreign-based
accounting authorities settling for U.S. vessels requiring the
accounting authorities to be subject to the jurisdiction of the U.S.
courts.
Response. We will assign a ``US'' AAIC to those accounting
authorities who demonstrate they are operating from a physical U.S.
location. As the administration responsible, the FCC will be in a
better position to monitor operations and perform audits, as
applicable. Title 47 CFR, Part 3, section 3.11(a) is revised to state
this explicitly. Further, we believe the reporting requirements will
assist the Commission in assuring the accounting authority is
continuing to settle from a U.S. location. We do not think it is
necessary to subject foreign-based accounting authorities to the
jurisdiction of the U.S. courts. We have concluded that such a
requirement would be complex, unwieldy, and time consuming, far beyond
the regulatory structure we are establishing. At this time, it appears
that disputes can be satisfactorily resolved without judicial
intervention.
B. Application Procedures
23. The NPRM proposed rules requiring the filing of an original FCC
application form in order to be considered as an accounting authority.
The NPRM requested only basic information identifying the applicant and
describing the applicant's objectives and capabilities with respect to
the accounting authority function. The NPRM stated our intention to
request that any relevant experience of an applicant be detailed, that
the applicant's proposed settlement plans be provided and documents
demonstrating financial responsibility should provide an adequate basis
for determining whether to issue a certification. We intend to process
applications on a first-come, first-served basis, however, we proposed
to ``grandfather'' current accounting authorities as long as they are
otherwise qualified and follow the procedures established by the final
rule (Report and Order) to obtain permanent accounting authority
authorizations. Existing accounting authorities are not exempt from the
new application procedures and would be required to apply for permanent
accounting authority certifications within 60 days of the effective
date of these rules or risk losing their status as accounting
authorities. The NPRM established an FCC policy that a minimum of 15 of
the available 25 Accounting Authority Identification Codes (AAICs) be
reserved for use by accounting authorities conducting settlement
operations in the United States. Accounting authorities conducting
settlement operations within the United States will be assigned a
``US'' AAIC prefix if approved. Certified accounting authorities, who
maintain their settlement operations outside the U.S., would retain the
AAIC originally assigned by the country of origin.
24. The NPRM included language in the application and rules which
would make clear to applicants the requirement to adhere to applicable
FCC policies and rules, the International Telecommunication Regulations
(ITR), and other international rules, regulations, agreements, and,
where appropriate, ITU-T Recommendations. We invited comment as to the
types of documents acceptable for proving financial responsibility as
well as the specific criteria for evaluation. The NPRM proposed that,
although the United States is not a guarantor of payments by its
citizens, our proposed rules sought to minimize potential financial
risks that might be present if settlement operations are performed by
other accounting authorities. Further, the NPRM documented the FCC
policy that the ship station licensee has final responsibility for
settlement should their selected accounting authority be unable or
unwilling to make valid payments to foreign entities.
25. The NPRM also detailed the procedures the Commission will
utilize to obtain public comment on applications received by the
Commission. Comments received during
[[Page 20160]]
the informal public comment period will be taken into consideration in
making a determination as to whether to approve the applicant as an
accounting authority. The NPRM further states that, if the applicant is
found to be qualified, the Commission will inform the applicant, in
writing, that the application has been approved.
26. Comments. Mackay stated that they encourage the proposed
``grandfathering'' of interim accounting authorities. EXXON commented
that the proposed formal application process is unnecessary for the
grandfathering process. COMSAT stated they do not understand how the
grandfathered applications will participate in the licensing process,
that the grandfathered applications will limit the number of new
entrants to ten and the public interests will not be served by limiting
the number of new applicants. IDB Mobile Communications, Inc. (IDB)
agreed with COMSAT that ``all applicants should be considered equally
in the applicant process and should be subject to the same criteria for
approval.'' In reply comments, EXXON stated that all applicants do have
an equal opportunity to apply and ``there is no shortage of available
accounting authority identification codes.'' EXXON further commented it
is only fair to allow grandfathered accounting authorities to retain
their status and ``action to the contrary would prove extremely
disruptive to existing accounting procedures.'' In reply comments, AIMS
stated their agreement with EXXON's position, but COMSAT disagreed with
commenters who would restrict the certification process by exempting
interim accounting authorities from the application filing
requirements.
Response. The Commission does not intend to hinder the current
operations of interim accounting authorities and the final rule has
provided for the ``grandfathering'' of such applicants, provided they
meet the eligibility requirements. Applicants will be subject to the
same criteria and considered equally. It should be noted that, although
only ten accounting authority identification codes will be available
provided all interim accounting authorities are approved, this is not a
new limitation. Additionally, the interim rules for granting
certification did not provide the Commission with the same information
requested in this rule, and, since there have been no reporting
requirements, the Commission has little information about the
settlement activities of the interim accounting authorities.
Information provided in response to the Report and Order should assist
the Commission in its role as administrator of accounting authorities.
27. Comments. Mackay urged the Commission to give ``existing U.S.-
based RPOAs'' preference in order of consideration regardless of when
the application was received in relation to other applications. In
reply comments, COMSAT opposed any ban on foreign-based settlement
entities, but proposed that the Commission reserve the right to process
U.S.-based accounting authority applications before foreign-based
applicants, should the Commission receive more applications than the
available number of accounting authority identification codes.
Response. The rules we are adopting will not place a ban on
foreign-based settlement entities, however, it should be noted that,
although the rule states (47 CFR, Part 3, section 3.21(b)) that a
minimum of 15 identification codes will be retained for ``US'' codes,
that does not mean we will withhold certification of U.S. entities and
await applications from foreign-based entities until a quota of ten is
certified. In cases where U.S. applicants apply and no foreign-based
applications are on-hand, the U.S. applications could be approved.
28. Comments. Mackay commented they want to ensure there is
sufficient notification to enable existing accounting authorities to
complete the application process. COMSAT stated there is no mention of
the triggering date for filing.
Response. This final rule establishes the effective date of the
rules, which is 30 days following the publication of the Report and
Order in the Federal Register. Interim accounting authorities will be
required to apply for permanent accounting authority certifications
within 60 days of the effective date. Others seeking certification may
submit their applications at any time following the release date. They
cannot usurp those requesting ``grandfathering'' but they will be
considered on a first-come, first-served basis for the remaining codes.
29. Comments. Radio Holland recommended the retention of their
existing accounting authority identification code for interim
accounting authorities approved for a permanent ``license.'' Further,
Radio Holland seeks clarification of the term ``entity''.
Response. The Commission believes the implementation of these rules
should make little disruption to the manner in which interim accounting
authorities are currently conducting business. Title 47 CFR, Part 3,
section 3.22 is amended to state that those interim accounting
authorities approved for permanent certification will retain their
existing accounting authority identification code.
In addressing the request to define ``entity'', the following
definition is provided: An entity is an individual or a business that
is self-contained, separate and independent of other organizations. An
entity may exist within or be a part of an overall, widely diversified
organization.
30. Comments. Radio Holland pointed out their perceived
consequences if an application for an accounting authority with interim
certification was not approved. They pointed out that communications
from/to vessels would cease and a change in code might involve huge
costs. Radio Holland stated that certain countries mention the
accounting authority identification code on their registrations and
that, changes can cost up to $500 per vessel. Radio Holland proposed,
in case of non-approval, the Commission extend the period to include
time for resolution of problems including a 6-month period to satisfy
requirements. SAIT Communications (SAIT) recommended a procedure for
resolution of problems before a final decision. In reply comments,
EXXON agreed with SAIT that the rules should provide procedures for
appeal. IDB disagreed, in reply comments, with Radio Holland's proposal
of additional time to meet the requirements and proposed ``the
Commission only consider * * * applicants which meet the requirements
at the time of application and that the Commission subject every
applicant to the same level of scrutiny.'' In reply comments, COMSAT
Corporation agreed with commenters requesting a clarification of the
process for evaluating applications and the appeal rights of applicants
denied certification. Further, COMSAT proposed a ``thirty-day petition
to deny process for reviewing * * *.''
Response. The Commission recognizes the consequences of not
approving a permanent certification to an interim accounting authority.
However, we anticipate that interim accounting authorities will have no
problem completing the application process. Inasmuch as possible, we
propose to work through these situations during the comment period to
prevent unusual delays. 47 CFR, Part 3, section 3.29 is amended in the
Report and Order to provide procedures for seeking review when the
application for certification is denied. We do emphasize, however, that
all comments resulting from the public notice will be
[[Page 20161]]
considered in granting/denying certifications.
31. Comments. Mackay raised the issue of continued use of an
accounting authority identification code if a business is acquired,
merged or sold. Radio Holland proposed that codes not be canceled
automatically in case of transfer or change of control of an accounting
authority. Radio Holland is concerned that the new application of the
new controlling entity might not be considered due to the ``first come-
first served'' clause and the limitation of total codes. In reply
comments, COMSAT supported commenters who propose a modification of the
rule to permit the transfer of accounting authority identification
codes pursuant to the sale or transfer of control. EXXON recommended
that the Commission develop procedures for the pro-forma transfer of
control of accounting authorities.
Response. The final rules adopted below will allow the continued
use of accounting authority codes in these cases provided the new
entity can meet the eligibility qualifications. 47 CFR Part 3, section
3.51 is amended to require the transferee to comply with the same
application process including public comment and Commission scrutiny
that all applicants do. The rules also require the transferee to
certify to the Commission that all accounts are accepted and to provide
a list of the accounts. In the case of a merger of accounting
authorities, the merged entity will be allowed to decide which AAIC to
keep.
32. Comments. Mackay stated the Commission should define what
constitutes sound financial status and how the status will be monitored
in the future. Mackay suggested requiring the applicant to be a
business with established accounting procedures and formal audited
statements. Radio Holland recommended that a sound financial track
record be made a mandatory requirement. Marconi Marine asks if a copy
of their statutory accounts would be acceptable as evidence of
financial status. COMSAT recommended fairly strict financial
requirements and offered several options: (1) requiring a bond, (2)
requiring accounting authorities to demonstrate and maintain an asset
value of a certain percentage in relation to outstanding debts, (3)
requiring accounting authorities to put deposits in escrow, (4) dollar
requirements for cash-on-hand amounts, (5) limits on the number of
outstanding loans and the amount of risk undertaken, and/or (6)
requiring accounting authorities to take deposits from customers under
certain circumstances. COMSAT further recommended the rules be revised
to require the initial (and annual) submission of independently
``audited financial statements'' and cite requirements in the rural
cellular radio services (47 CFR 22.917(c)(6)). EXXON commented that a
formal financial showing should not be required of accounting
authorities with interim authority during the ``grandfathering''
process and, in reply comments, EXXON disagreed with COMSAT's proposal
for stricter financial requirements for accounting authorities. Global
Communications (Global) recommended accounting authorities require a
deposit from vessels to be placed in an escrow account to assure some
company reserve in case of default.
Response. The Commission is interested in ensuring that accounting
authorities have a sound financial background with a reputation for
good business practices. Any comments received following the public
notice announcing the application will be carefully considered.
However, we believe our objective can be met by requiring formal
financial statements from applicants who are business entities and
other documents, e.g., tax statements, statements proving assets and
liabilities from individuals. These, coupled with any forthcoming
comments, will provide adequate information for making a sound
decision. Marconi Marine's statutory accounts will probably be adequate
to prove financial responsibility. However, 47 CFR, section 3.24 is
amended in the final rule to include a requirement to provide
additional information to the Commission, as required. As to whether
accounting authorities who will be grandfathered should provide
financial responsibility evidence, as stated elsewhere, the interim
accounting authorities, although not subject to any formal FCC rules in
the past, must now prove their eligibility by complying with the
application process.
33. Comments. Mackay asked what method will be used to obtain
public comment and who will evaluate the comments. Mackay is concerned
that significant time and money could be spent while responding to
unsubstantiated comments or accusations. COMSAT requested that
applicants ``be subject to petitions to deny filed within 30 days of
the public notice identifying the applicant. Radio Holland recommended
consideration of consultation with selected U.S. coast stations and
foreign administrations involved in international telecommunication
settlements in assessing the qualifications and actual performance of
applicants. In reply comments, COMSAT supported Radio Holland's comment
``that the Commission consider foreign-based applicant's record in
dealing with U.S. service providers.''
Response. The public notice/comment process is discussed in Part 3,
section 3.29 of the final rule. The comments and application will be
evaluated by Commission employees designated by the Managing Director
and including the Accounting Authority Certification Officer. As to
whether consultations with U.S. service providers will be necessary,
these organizations will have an opportunity to comment as discussed in
the same rule cite.
C. Settlement Operations
34. The NPRM proposed several operational requirements for
accounting authorities. Basically, the operational requirements
parallel applicable ITR and other international rules, regulations,
agreements, and applicable ITU-T Recommendations and require adherence
to established international procedures. The NPRM proposed that
accounting authorities be allowed a full six months following
certification as an accounting authority to commence settlement
operations. The NPRM also proposed a settlement period within which
individual settlements must be accomplished, consistent with ITU
procedures. This provision requires accounting authorities to make
timely payment to foreign administrations and to accept accounts both
in gold francs and in Special Drawing Rights (SDRs). The proposed rules
are in accord with existing international procedure and FCC policy, as
is the requirement to settle accounts taking into consideration ITU-T
Recommendation D.90.* In addition, the NPRM proposed rules to
establish the requirement that accounting authorities cooperate fully
with the Commission concerning maritime settlements issues. Since the
United States government is required, upon request, to take all
possible steps, within the limits of applicable national law, to ensure
settlement of the accounts of the licensee, (Radio Regulations, Geneva
1979, Article 66, Section III Accounting, paragraph 10, number 5097;
and, International
[[Page 20162]]
Telecommunication Regulations, Melbourne 1988, Appendix 2--Additional
Provisions Relating to Maritime Telecommunications, paragraph 4.2) this
requirement is intended to ensure that the Commission is kept aware of
potential problems or issues which could affect the national interest
or which could have a significant impact on overall settlement
operations. The proposed rules also made accounting authorities subject
to audit by the Commission or its representative.
---------------------------------------------------------------------------
\*\ We note that the latest (ITU-T Study Group 3, December 1994)
accepted version of ITU-T Recommendation D.90 provides that bills be
paid by the accounting authority without delay and within 3 months
of receipt or within 4 months after dispatch, whichever is the
shortest period. However, the Revised Rec. D.90 also recognizes that
the ITR period of 6 months after dispatch is controlling.
---------------------------------------------------------------------------
35. Comments. One commenter, Global, responded both as an
accounting authority and a radiotelephone station. Global recommended
providing detailed requirements for the day-to-day operation of
accounting authorities. They commented that detailed rules would
eliminate confusion in identifying accounts, promote the dissemination
of mutual information and the timeliness of settlements and produce
better records and internal accounting. Global recommended requiring
accounting authorities with more than 100 vessels to maintain an
``800'' number 24 hours a day that coast stations can call for
information. They further stated that accounting authorities should
acknowledge receipt of invoices, should notify coast stations of
rejections within 30 days and clearly identify invoices being paid.
When invoices are paid by bank draft, a separate notice should be sent
to coast stations detailing the paid invoices.
Response. Global's recommendations are good, sound business
practices which we hope accounting authorities will consider. However,
the final rules do not provide detailed requirements for day-to-day
operation because the Commission believes that organizations should not
be limited in methodology as long as they achieve timely and accurate
settlements.
36. Comments. Marconi Marine referred to rules in the NPRM stating
that payments should be made in U.S. dollars. They stated that most of
their payments are made in Sterling.
Response. The final rules, Part 3, sections 3.46 and 3.47, provide
for payment in other currencies. However, it should be noted that,
although payments can be made in currency other than U.S. dollars, the
rules require a written agreement between the foreign administration(s)
and the accounting authority to be approved by the Commission. This
agreement can be a part of the original certification process or it can
be presented to the Commission at anytime.
37. Comments. COMSAT suggested the consideration of permitting
maritime customers to select direct billing payment methods from their
service providers. COMSAT further states that, although Article 66
provides for collection of charges for radiocommunications by RPOAs,
that, ``in order for RPOAs to settle accounts with foreign
administrations on behalf of their customers, the Commission requires
that the service provider be certified as an accounting authority.''
Response. There is no legal bar preventing service providers from
engaging in direct billing. (Radio Regulations, Geneva 1979, Article
66, Section II, Accounting Authority, para. 2, numbers 5086-5089; see
also ITR, Appendix 2) Neither do we believe the adopted rules contain
language that prevent a service provider from entering into contractual
agreements with their clients to include direct billing. The issue of
requiring RPOAs to become accounting authorities arises when the RPOA
settles debtor accounts for their clients.
38. Comments. Peninsular Electronics (Peninsular) commented that
most ship licensing administrations for which they are an accounting
authority require them to confirm acceptance of total accounting
responsibilities before they issue the Ship Radio Station license.
Their services cover settlement of all communications originated by
clients. They stated that the proposed rules only refer to settlement
with foreign administrations. Peninsular asks if U.S. settlements are
also covered by FCC regulations.
Response. These rules apply to settlements of accounts for U.S.
flag vessels for messages transmitted via foreign coast and coast earth
station facilities only. The final rules are amended, at 3.1 to explain
``[Accounting authorities] settle accounts due foreign administrations
for messages transmitted at sea by or between maritime mobile stations
located on board ships subject to U.S. registry and utilizing foreign
coast and coast earth station facilities.''
39. Comments. MMR commented that they were instrumental in
establishing the current 4-month settlement time frame, they are a
strong advocate for reducing the settlement time frame and they suggest
that settlements not handled within the allotted time frame should have
interest penalties applied and enforced. COMSAT Corporation urged the
Commission to ``consider expediting the settlement procedures down to
four months, or shorter * * *'' In reply comments, IDB recommended a
three-month settlement period and referred to the NPRM which requires a
6-month settlement period. In reply comments, COMSAT agreed with MMR
that accounting authorities who do not make timely settlements should
be assessed an interest penalty by the Commission.
Response. The Commission recognizes that many organizations have
up-to-date technology and can effect settlements well ahead of the 6-
month settlement period. This can be an advantage in soliciting
clients; however, it is not our intention to place additional burdens
on existing accounting authorities but to provide a structure within
which they can continue to function. The final rules do not adopt a
requirement that is more stringent than Radio Regulations, Article 66,
and ITR, Appendix 2 which require a 6-month settlement period (See note
to paragraph 34, above.). As to the issue of interest penalties, we
will not impose such a rule; however, the rules in 47 CFR, Part 3
establish a number of sanctions including cancellation of their
certification for those accounting authorities who repeatedly fail to
settle accounts timely.
40. Comments. Mackay commented that the Commission should be more
specific regarding the extent, time and scope of proposed audits.
Marconi Marine commented that they do not see the necessity for audit
since they are regularly audited internally and externally. COMSAT
requested clarification of audit authority to describe events that
could ``trigger the audit process.''
Response. Routine audits are not a part of this rulemaking, rather,
an audit would normally be precipitated only in the event of a
disagreement as to amounts of accounts, late payments, etc. The audits
will be strictly related to accounting authority activities.
41. Comments. Peninsular pointed out that the NPRM states that ITU-
T recommendations are not legally binding, but it is indicated they
must be taken into account together with FCC rules and regulations.
Peninsular further commented that it is not clear whether compliance
with D.90 is an FCC requirement or if parallel FCC rules exist. Marconi
Marine expressed concern about references regarding ``abiding by FCC
rules'' and commented that ``this seems somewhat open ended to us, as
we do not know what rules we would be agreeing to abide by.'' Marconi
recommended altering the wording of the text to reflect agreement to
abide by rules relating to accounting authorities only.
Response. The Commission believes that accounting authorities
should follow the ITU-T recommendations which are generally considered
to
[[Page 20163]]
govern international telecommunications, and they should always be
considered in technical, operational and service decisions. Any
references to FCC rules within this Report and Order refer to 47 CFR,
Part 3, the new rules being established by this proceeding and related
to the oversight and administration of accounting authorities. 47 CFR,
Part 3, section 3.43(f) is amended to add the CFR reference.
42. Comments. MMR commented there are presently no guidelines
whereby accounting authorities can enlist assistance from its
administration ``when conflicts arise between the provider and the
accounting authority.'' In reply comments, COMSAT endorses MMR's
suggestion for enlisting the Commission's assistance in attempting to
resolve bad debt * * *''
Response. The Commission believes that each administration has a
responsibility to assist in resolving outstanding issues between
accounting authorities and clients or foreign administrations. The
Commission proposes to respond through all available methods to resolve
issues and are prepared to follow through by enforcing applicable rules
(Part 3, 3.52(b), 3.70-3.76).
43. Comments. COMSAT commented that the rules should make it clear
that the accounting authority is a guarantor of payment.
Response. In the rules adopted below, the non-governmental
accounting authorities, by virtue of their contractual agreement with
their clients and their signed application wherein they agree to
perform settlements in accordance with 47 CFR, Part 3, must perform
their settlement activities properly or be subjected to a number of
sanctions and/or cancellation of their certification.
However, the Report and Order does not state that any accounting
authority is a guarantor of payment. Rather, at Part 3, section 3.76,
the ship station licensee is declared responsible for final payment of
its accounts. Because the ship station licensee has the most to lose
for non-payment of accounts, the Commission believes care will be given
to the selection of an accounting authority.
44. Comments. Marconi Marine recommends the rules define more
clearly the complaint/inquiry resolution procedures and there should be
a clearly defined arbitration procedure.
Response. These rules, section 3.52, are purposely presented in
general terms because we believe complaints and arguments must be
addressed on a case-by-case basis. By leaving these rules ``general''
in tone, the Commission will be able to respond to issues without
restrictions. We think this approach will be an advantage to applicants
and/or accounting authorities. Section 3.52(a) is amended in the final
rule to require that a copy of complaint/inquiry resolution procedures
be sent, upon request, to the Commission.
D. Reporting Requirements
45. The NPRM proposed several new reporting requirements for
accounting authorities. These reports should enable the Commission to
monitor accounting authority operations to ensure adherence to the
adopted rules and to appropriate international settlement procedures.
Currently, the Commission submits monthly reports to the ITU in Geneva
detailing the inventory of U.S. licensed ship stations operating in
international waters. The NPRM proposed that accounting authorities
provide the Commission with a detailed report of additions, deletions,
or modifications to their inventory of serviced vessels each month. The
Commission would use this information to maintain the ITU database and
to assure efficient settlement operations. The proposed rules also
required an end of year inventory of vessels for which the accounting
authority is the settlement entity and an annual statistical report
which would provide information to the Commission regarding settlement
operations.
Comments will be addressed separately for each of the reports, as
follows:
Annual Statistical Report of Operations
46. Comments. Peninsular stated that their settlement operation
does not require identifying the actual number of settlements and this
information would not be readily available. They asked if the necessity
for this information could be reexamined. Marconi Marine commented they
would have difficulty providing both the number of line items and
payments to individual administrations. MMR asked what purpose the
collection of monetary statistics serves.
Response. The Commission is delegating a portion of its settlement
responsibility to the certified non-governmental accounting
authorities. Our oversight responsibilities require that we ensure that
settlements for U.S. licensees are being performed properly and timely.
The information will assist us in monitoring the volume and aging of
accounts. We have reviewed statements from foreign administrations and
observe the billings have sufficient detail (a line-by-line listing of
individual calls to a specific ship for a specific service) to comply
with this requirement. Therefore, the final rule will require
accounting authorities to comply with this reporting requirement.
47. Comments. COMSAT recommended modifying the rules to require
additional evidence of financial responsibility and recommended
quarterly statistical reports filed within one month of the end of each
quarter, showing an aging of liabilities. In reply comments, EXXON
opposed the proposals to require the annual reports on a quarterly
basis. EXXON further commented that if the report is required, it
should apply to accounting authorities settling for unaffiliated
entities and on an annual basis only. In reply comments, AIMS supported
EXXON's proposal that the reporting requirement apply only to
accounting authorities settling accounts for unaffiliated entities. In
reply comments, COMSAT supported ``the adoption of streamlined
reporting requirements which provide the Commission and the public with
an accurate * * * mechanism for monitoring the aging of accounts and
assessing the financial performance of accounting authorities.'' COMSAT
opposed any limitation of the annual statistical report and commented
that the report can be used to assess the accounting authority's
settlement performance, determine whether the accounting authority is
meeting its obligations to customers and service providers * * *''
Response. The Commission will retain the reporting requirement and
believes the usefulness of the information outweighs our desire to
minimize the burden of reporting. The NPRM, Part 3, 3.60(d) states that
the information will provide statistical data for Commission use.
Subsequently, we have determined that the data can be useful in
determining whether accounting authorities are performing settlements,
the volume of settlements and the timeliness of settlements. The
report, FCC Form 45 states ``provide statistical information to the
Commission for overall program monitoring purposes.'' Lines 2, 3, and 4
referenced by Peninsular address the average number of unprocessed
settlements on hand, the number processed to completion more than 180
days after dispatch from foreign administration and the percent of
settlements processed to completion more than 180 days after dispatch.
This information will be helpful in determining whether settlements are
being accomplished timely. Rule section 3.60 (d) is amended to include
the additional uses of the report.
[[Page 20164]]
Inventory of Vessels
48. Comments. MMR questioned the proposed requirement to report an
inventory of vessels. MMR believes this information is available
through the Private Radio Bureau's Licensing Division. Global, who is
both an accounting authority and a high-seas radiotelephone station,
cited the difficulty in using ITU's List of Ship Stations, saying it is
published once a year and is often out of date because of delays in
reporting changes to ITU.
Response. As background, the Commission/ITS has a responsibility to
provide a report of accounting authority information to ITU. ITS has
experienced the same problems that Global has in identifying the
accounting authorities of vessels. This reporting is accomplished in
the following manner: The Wireless Telecommunications Bureau maintains
a database of ships in the maritime service. That database is used to
prepare a report of changes in accounting authority functions to ITU,
however, the database can only be updated by ITS when current
information becomes available. By requiring accounting authorities to
provide the initial inventory of vessels and the end-of-year inventory,
the List of Ship Stations Report will provide more accurate, up-to-date
information. Additionally, the title of Part 3, section 3.60(a) is
changed to ``Initial Inventory of Vessels.''
Report of Additions/Modifications/Deletions
49. Comments. EXXON stated that they settle only for their own
vessels and their inventory remains relatively constant and a monthly
report would serve no useful purpose and be unduly burdensome. In reply
comments, AIMS agreed with commenters who feel it is unnecessary to
require monthly inventories when there is no change. COMSAT agreed with
EXXON regarding the modification of inventory reporting so that only
commercial accounting authorities are required to submit monthly
inventory reports. Global recommended that accounting authorities
should publish lists of ships accepted quarterly or monthly.
Response. We have considered the requests for a less burdensome
requirement. Part 3, section 3.60(b) is revised to require a semi-
annual report. However, we believe there is merit in requiring a ``no-
change'' report, as applicable. The report will assure a ``status-quo''
in inventory.
50. Comments. Marconi Marine stated that some information reported
would be commercially sensitive and should be kept confidential.
Response. The rules adopted below do not automatically offer
confidentiality because we do not believe that the information
requested is commercially sensitive. The application form states that
``Information requested by this form will be available to the public.''
Nonetheless, any entity submitting information to the Commission may
submit a request that such information not be made routinely available
for public inspection. We will consider requests as discussed in 47
CFR, section 0.459. A new rule section, Part 3, section 3.62, addresses
this issue.
E. Enforcement
51.The NPRM set forth the procedures the Commission will use to
investigate and to resolve complaints or infractions of the
Commission's rules or established international settlement procedures.
The proposed rules specified grounds for enforcement sanctions,
including forfeiture, and/or cancellation of an accounting authority's
certification and also specified that the Commission will afford an
accounting authority notice and an opportunity to present its side of
any issue involving cancellation of its accounting authority privilege.
The proposed rules also provide that any ship station licensee affected
by the cancellation of an accounting authority's privilege must find
another accounting authority to settle its accounts. The Commission
will notify the ship stations, via a Public Notice, of any
cancellations, and, inasmuch as possible, list individual shipowners
serviced by the cancelled accounting authority as identified from the
required reports of vessel inventories. Finally, the proposed rules
provided for forfeiture or other sanction action, should a ship
operator or licensee not remit full and timely payment to the
Commission or to an approved accounting authority when properly billed
or in the event that the accounting authority fails in their
responsibility to forward payment to the foreign entity. The Commission
reserves the right to cooperate with foreign administrations in
restricting public correspondence communications to and from vessels
for which valid payments have not been received or made as required
(Distress and safety communications must be carried without charge.)
and to utilize available debt collection procedures to collect amounts
owed.
52. Comments. Mackay stated that there is no mention of a procedure
to be followed or the opportunity for appeal if the Commission denies
privilege, Part 3, section 3.28, [and] further, Mackay commented that a
procedure and appeal process should be available under a rule section.
Response. Part 3, section 3.29 is amended in the final rule to
provide time frames for problems encountered during the application
process. Every effort will be made to remedy any problems during the
timeframes. As to any format for appeal, we are purposely presenting
this rule section in general terms only because we believe these
situations would need to be addressed on a case-by-case basis. Part 3,
section 3.72(b) is also amended in the final rule to include timeframes
for appeal of sanctions and to include the address for filing an
appeal.
53. Comments. COMSAT urged the Commission to clarify that U.S.
approved accounting authorities may be sanctioned by the Commission for
failing to perform settlement operations here, or abroad, involving
either U.S.-registered or foreign vessels.
Response. The rules adopted below address settlement of accounts of
U.S. ship station licensees and do not address the settlement of
foreign vessels.
F. Conclusion
54. In this Report and Order, we are adopting rules that establish
basic qualifications and requirements for individuals or entities who
may wish to serve as accounting authorities for the settlement of
international radio maritime accounts involving U.S. registered vessels
operating in foreign or international waters. These rules also
establish requirements to ensure that accounting authorities operate in
accordance with established international procedures. There are few
changes in this final rule from the related Notice of Proposed
Rulemaking. All comments and changes are discussed in III, Issues
Analysis, paragraphs 13-53.
IV. Procedural Matters
A. Ex Parte
55. This is a non-restricted Report and Order rulemaking
proceeding. Ex parte presentations are permitted, except during the
Sunshine Agenda period, provided they are disclosed as provided in
Commission rules. See generally 47 CFR Sections 1.1202, 1.1203, and
1.1206(a).
B. Final Regulatory Analysis
56. Pursuant to the Regulatory Flexibility Act of 1980, the
Commission's final analysis is as follows:
(a) Purpose of this action: This Report and Order sets forth the
final rules
[[Page 20165]]
concerning the administration of accounting authorities in the maritime
mobile and the maritime mobile-satellite services except for distress
and safety communications.
(b) Summary of the issues raised by the public comments in response
to the Initial Regulatory Flexibility analysis: There were no comments
submitted in response to the Initial Regulatory Flexibility Analysis.
(c) Significant alternatives considered: The Notice of Proposed
Rulemaking (November 9, 1993) in this proceeding presented standards
for the approval/cancellation of accounting authority certifications
and set forth guidelines for settlement operations, reporting
requirements and enforcement. The commenters supported the Commission's
intent to provide an effective regulatory framework which permits
markets for communications services to function effectively while
eliminating unnecessary regulations. There were several requests for
more stringent guidelines. Upon review, we determined the public
interest would be better served by allowing accounting authorities to
perform settlements in an environment that allows them to operate as
closely as possible to the manner in which interim accounting
authorities have performed in previous years. Because the system has
worked relatively trouble-free with no established FCC rules in the
past, we intend to minimize any regulations/additional burden on
accounting authorities in this Order.
V. Ordering Clauses
57. Accordingly, it is ordered that the rules specified below are
adopted.
58. It is further ordered that the rules herein will be effective
immediately upon approval of the information collection requirements by
the Office of Management and Budget. The Commission will publish a
public notice to notify the public of the effective date.
List of Subjects in 47 CFR Part 3
Accounting, Administrative practice and procedure, maritime
carriers, Penalties, Reporting and recordkeeping requirements,
Telecommunications.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
Rule Changes
Title 47 of the Code of Federal Regulations is amended by adding a
new Part 3 as follows:
PART 3--AUTHORIZATION AND ADMINISTRATION OF ACCOUNTING AUTHORITIES
IN MARITIME AND MARITIME MOBILE-SATELLITE RADIO SERVICES
General
Sec.
3.1 Scope, basis, purpose.
3.2 Terms and definitions.
Eligibility
3.10 Basic qualifications.
3.11 Location of settlement operation.
Application Procedures
3.20 Application form.
3.21 Order of consideration.
3.22 Number of accounting authority identification codes per
applicant.
3.23 Legal applicant.
3.24 Evidence of financial responsibility.
3.25 Number of copies.
3.26 Where application is to be mailed.
3.27 Amended application.
3.28 Denial of privilege.
3.29 Notifications.
Settlement Operations
3.40 Operational requirements.
3.41 Amount of time allowed before initial settlements.
3.42 Location of processing facility.
3.43 Applicable rules and regulations.
3.44 Time to achieve settlements.
3.45 Amount of charges.
3.46 Use of gold francs.
3.47 Use of SDRs.
3.48 Cooperation with the Commission.
3.49 Agreement to be audited.
3.50 Retention of settlement records.
3.51 Cessation of operations.
3.52 Complaint/inquiry resolution procedures.
3.53 FCC notification of refusal to provide telecommunications
service to U.S. registered vessel(s).
3.54 Notification of change in address.
Reporting Requirements
3.60 Reports.
3.61 Reporting address.
3.62 Request for confidentiality.
Enforcement
3.70 Investigations.
3.71 Warnings.
3.72 Grounds for further enforcement action.
3.73 Waiting period after cancellation.
3.74 Ship stations affected by suspension, cancellation or
relinquishment.
3.75 Licensee's failure to make timely payment.
3.76 Licensee's liability for payment.
Authority: 47 U.S.C. 154(i), 154(j) and 303(r).
General
Sec. 3.1 Scope, basis, purpose.
By these rules the Federal Communications Commission (FCC) is
delineating its responsibilities in certifying and monitoring
accounting authorities in the maritime mobile and maritime mobile-
satellite radio services. These entities settle accounts for public
correspondence due to foreign administrations for messages transmitted
at sea by or between maritime mobile stations located on board ships
subject to U.S. registry and utilizing foreign coast and coast earth
station facilities. These rules are intended to ensure that settlements
of accounts for U.S. licensed ship radio stations are conducted in
accordance with the International Telecommunication Regulations (ITR),
taking into account the applicable ITU-T Recommendations.
Sec. 3.2 Terms and definitions.
(a) Accounting Authority. The Administration of the country that
has issued the license for a mobile station or the recognized operating
agency or other entity/entities designated by the Administration in
accordance with ITR, Appendix 2 and ITU-T Recommendation D.90 to whom
maritime accounts in respect of mobile stations licensed by that
country may be sent.
(b) Accounting Authority Certification Officer. The official
designated by the Managing Director, Federal Communications Commission,
who is responsible, based on the coordination and review of information
related to applicants, for granting certification as an accounting
authority in the maritime mobile and maritime mobile-satellite radio
services. The Accounting Authority Certification Officer may initiate
action to suspend or cancel an accounting authority certification if it
is determined to be in the public's best interest.
(c) Accounting Authority Identification Codes (AAICs). The discrete
identification code of an accounting authority responsible for the
settlement of maritime accounts (Annex A to ITU-T Recommendation D.90).
(d) Administration. Any governmental department or service
responsible for discharging the obligations undertaken in the
Convention of the International Telecommunication Union and the Radio
Regulations. For purposes of these rules, ``Administration'' refers to
a foreign government or the U.S. Government, and more specifically, to
the Federal Communications Commission.
(e) Authorization. Approval by the Federal Communications
Commission to operate as an accounting authority. Synonymous with
``certification''.
(f) CCITT. The internationally recognized French acronym for the
International Telegraph and Telephone Consultative Committee, one of
the
[[Page 20166]]
former sub-entities of the International Telecommunication Union (ITU).
The CCITT (ITU-T)\1\ is responsible for developing international
telecommunications recommendations relating to standardization of
international telecommunications services and facilities, including
matters related to international charging and accounting principles and
the settlement of international telecommunications accounts.
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\1\ At the ITU Additional Plenipotentiary Conference in Geneva
(December, 1992), the structure, working methods and construct of
the basic ITU treaty instrument were modified. The result is that
the names of the sub-entities of the ITU have changed (e.g., the
CCITT has become the Telecommunication Standardization Sector--ITU-T
and Recognized Private Operating Agency has become Recognized
Operating Agency-ROA). The changes were placed into provisional
effect on March 1, 1993 with the formal entry into force of these
changes being July 1, 1994. We will refer to the new nomenclatures
within these rules, wherever practicable.
---------------------------------------------------------------------------
Such recommendations are, effectively, the detailed implementation
provisions for topics addressed in the International Telecommunication
Regulations (ITR).
(g) Certification. Approval by the FCC to operate as an accounting
authority. Synonymous with ``authorization''.
(h) Coast Earth Station. An earth station in the fixed-satellite
service or, in some cases, in the maritime mobile-satellite service,
located at a specified fixed point on land to provide a feeder link for
the maritime mobile-satellite service.
(i) Coast Station. A land station in the maritime mobile service.
(j) Commission. The Federal Communications Commission. The FCC.
(k) Gold Franc. A monetary unit representing the value of a
particular nation's currency to a gold par value. One of the monetary
units used to effect accounting settlements in the maritime mobile and
the maritime mobile-satellite services.
(l) International Telecommunication Union (ITU). One of the United
Nations family organizations headquartered in Geneva, Switzerland along
with several other United Nations (UN) family organizations. The ITU is
the UN agency responsible for all matters related to international
telecommunications. The ITU has over 180 Member Countries, including
the United States, and provides an international forum for dealing with
all aspects of international telecommunications, including radio,
telecom services and telecom facilities.
(m) Linking Coefficient. The ITU mandated conversion factor used to
convert gold francs to Special Drawing Rights (SDRs). Among other
things, it is used to perform accounting settlements in the maritime
mobile and the maritime mobile-satellite services.
(n) Maritime Mobile Service. A mobile service between coast
stations and ship stations, or between ship stations, or between
associated on-board communication stations. Survival craft stations and
emergency position- indicating radiobeacon stations may also
participate in this service.
(o) Maritime Mobile-Satellite Service. A mobile-satellite service
in which mobile earth stations are located on board ships. Survival
craft stations and emergency position-indicating radiobeacon stations
may also participate in this radio service.
(p) Public Correspondence. Any telecommunication which the offices
and stations must, by reason of their being at the disposal of the
public, accept for transmission. This usually applies to maritime
mobile and maritime mobile-satellite stations.
(q) Recognized Operating Agencies (ROAs).\2\ Individuals, companies
or corporations, other than governments or agencies, recognized by
administrations, which operate telecommunications installations or
provide telecommunications services intended for international use or
which are capable of causing interference to international
telecommunications. ROAs which settle debtor accounts for public
correspondence in the maritime mobile and maritime mobile-satellite
radio services must be certified as accounting authorities.
---------------------------------------------------------------------------
\2\ Id.
---------------------------------------------------------------------------
(r) Ship Station. A mobile station in the maritime mobile service
located on board a vessel which is not permanently moored, other than a
survival craft station.
(s) Special Drawing Right (SDR). A monetary unit of the
International Monetary Fund (IMF) currently based on a market basket of
exchange rates for the United States, West Germany, Great Britain,
France and Japan but is subject to IMF's definition. One of the
monetary units used to effect accounting settlements in the maritime
mobile and maritime mobile-satellite services.
(t) United States. The continental U.S., Alaska, Hawaii, the
Commonwealth of Puerto Rico, the Virgin Islands or any territory or
possession of the United States.
Eligibility
Sec. 3.10 Basic qualifications.
(a) Applicants must meet the requirements and conditions contained
in these rules in order to be certified as an accounting authority. No
individual or other entity, including accounting authorities approved
by other administrations, may act as a United States accounting
authority and settle accounts of U.S. licensed vessels in the maritime
mobile or maritime mobile-satellite services without a certification
from the Federal Communications Commission. Accounting authorities with
interim certification as of the effective date of this rule must submit
to the application process discussed in Section 3.20. They will be
``grandfathered'', i.e, granted permanent certification provided they
demonstrate their eligibility and present a proper application.
(b) U.S. citizenship is not required of individuals in order to
receive certification from the Commission to be an accounting
authority. Likewise, joint ventures need not be organized under the
laws of the United States in order to be eligible to perform
settlements for U.S. licensed vessels. See, however, Section 3.11.
(c) Prior experience in maritime accounting, general commercial
accounting, international shipping or any other related endeavor will
be taken into consideration by the Commission in certifying accounting
authorities. The lack of such expertise, however, will not
automatically disqualify an individual, partnership, corporation or
other entity from becoming an accounting authority.
(d) Applicants must provide formal financial statements or
documentation proving all assets, liabilities, income and expenses.
(e) Applicants must be willing to offer their services to the
public at a reasonable charge. This requirement will be waived for
applicants who settle their own accounts only and are eligible to be
``grandfathered'' during the initial application period. However,
should the need for additional accounting authorities be proven, these
accounting authorities will be required to offer their services to the
public or relinquish their certification.
Sec. 3.11 Location of settlement operation.
(a) Within the United States. A certified accounting authority
maintaining all settlement operations, as well as associated
documentation, within the United States will be assigned an AAIC with a
``US'' prefix.
(b) Outside the United States. A certified accounting authority
maintaining settlement operations outside the United States will be
assigned the same AAIC as that originally assigned to such entity by
the administration of the country of origin. However, in no case will
an entity be
[[Page 20167]]
certified as an accounting authority for settlement of U.S. licensed
vessel accounts unless the entity is requesting to conduct a settlement
operation in the United States or has already been issued an AAIC by
another administration.
Application Procedures
Sec. 3.20 Application form.
Written application must be made to the Federal Communications
Commission on FCC Form 44, ``Application For Certification As An
Accounting Authority'' in order to be considered for certification as
an accounting authority. No other application form may be used. No
consideration will be given to applicants not submitting applications
in accordance with these rules or in accordance with any other
instructions the Commission may issue. FCC Form 44 may be obtained from
the Commission by writing to the address shown in Section 3.61.
Sec. 3.21 Order of consideration.
(a) Accounting Authority applications will be processed on a first-
come, first-served basis. When applications are received on the same
day, the application with the earliest mailing date, as evidenced by
the postmark, will be processed first. Interim accounting authorities
seeking permanent certifications through the ``grandfathering'' process
will not compete with other applicants during the first 60 days
following the effective date of these rules which is allowed for
submission of their applications. After the ``grandfathering'' process
is completed, all other applicants will be processed as in paragraph
(a) of this section.
(b) At any given time, there will be no more than 25 certified
accounting authorities with a minimum of 15 ``US'' AAICs reserved for
use by accounting authorities conducting settlement operations within
the United States. The Commission will retain all valid applications
received after the maximum number of accounting authorities have been
approved and will inform such applicants that should an AAIC become
available for reassignment in the future, the Commission will
conditionally certify as an accounting authority the oldest of the
qualified pending applicants, as determined by the order of receipt.
Final certification would be conditional upon filing of an amended
application (if necessary). The Commission will inform the applicant of
his/her conditional selection in writing to confirm the applicant's
continued interest in becoming an accounting authority.
Sec. 3.22 Number of accounting authority identification codes per
applicant.
(a) No entity will be entitled to or assigned more than one AAIC.
(b) AAICs may not be reassigned, sold, bartered or transferred and
do not convey upon sale or absorption of a company or firm without the
express written approval of the Commission. Only the FCC may certify
accounting authorities and assign U.S. AAICs for entities settling
accounts of U.S. licensed vessels in the maritime mobile and maritime
mobile-satellite services.
(c) Accounting authorities who are ``grandfathered'' during the
initial application period may retain their interim AAIC.
Sec. 3.23 Legal applicant.
The application shall be signed by the individual, partner or
primary officer of a corporation who is legally able to obligate the
entity for which he or she is a representative.
Sec. 3.24 Evidence of financial responsibility.
All applicants must provide evidence of sound financial status. To
the extent that the applicant is a business, formal financial
statements will be required. Other applicants may submit documentation
proving all assets, liabilities, income and expenses which supports
their ability to meet their personal obligations. Applicants must
provide any additional information deemed necessary by the Commission.
Sec. 3.25 Number of copies.
One original and one copy of FCC Form 44, ``Application For
Certification As An Accounting Authority'' will be required. Only
applications mailed to the Commission on official, Commission approved
application forms will be considered. Applications should be mailed at
least 90 days prior to planned commencement of settlement activities to
allow time for the Commission to review the application and to allow
for the informal public comment period.
Sec. 3.26 Where application is to be mailed.
All applications shall be mailed to the Accounting Authority
Certification Officer in Washington, D.C. The designated address will
be provided on the FCC Form 44, ``Application for Certification As An
Accounting Authority''.
Sec. 3.27 Amended application.
Changes in circumstances that cause information previously supplied
to the FCC to be incorrect or incomplete and that could affect the
approval process, require the submission of an amended application. The
amended application should be mailed to the Commission immediately
following such change. See also Sections 3.24 and 3.51.
Sec. 3.28 Denial of privilege.
(a) The Commission, in its sole discretion, may refuse to grant an
application to become an accounting authority for any of the following
reasons:
(1) Failure to provide evidence of acceptable financial
responsibility;
(2) If the applicant, in the opinion of the FCC reviewing official,
does not possess the qualifications necessary to the proper functioning
of an accounting authority;
(3) Application is not personally signed by the proper official(s);
(4) Applicant does not provide evidence that accounting operations
will take place in the United States or its territories and the
applicant does not already possess an AAIC issued by another
administration;
(5) Application is incomplete, the applicant fails to provide
additional information requested by the Commission or the applicant
indicates that it cannot meet a particular provision; or
(6) When the Commission determines that the grant of an
authorization is contrary to the public interest.
(b) These rules provide sufficient latitude to address defects in
applications. Entities seeking review should follow procedures set
forth in Sections 1.106 or 1.115 of this chapter.
Sec. 3.29 Notifications.
(a) The Commission will publish the name of an applicant in a
Public Notice before granting certification and will invite informal
public comment on the qualifications of the applicant from any
interested parties. Comments received will be taken into consideration
by the Commission in making its determination as to whether to approve
an applicant as an accounting authority. Thirty days will be allowed
for submission of comments.
(b) The Commission will notify each applicant in writing as to
whether the applicant has been approved as an accounting authority. If
the application is not approved, the Commission will provide a brief
statement of the grounds for denial.
(c) The names and addresses of all newly certified accounting
authorities will be published in a Public Notice issued by the
Commission. Additionally, the Commission will notify the ITU within 30
days of any changes to its approved list of accounting authorities.
[[Page 20168]]
Settlement Operations
Sec. 3.40 Operational requirements.
All accounting authorities must conduct their operations in
conformance with the provisions contained in this section and with
relevant rules and guidance issued from time to time by the Commission.
Sec. 3.41 Amount of time allowed before initial settlements.
An accounting authority must begin settling accounts no later than
six months from the date of certification. Failure to commence
settlement operations is cause for suspension or cancellation of an
accounting authority certification.
Sec. 3.42 Location of processing facility.
Settlement of maritime mobile and maritime mobile-satellite service
accounts must be performed within the United States by all accounting
authorities possessing the ``US'' prefix. Other accounting authorities
approved by the Commission may settle accounts either in the U.S. or
elsewhere. See also Sections 3.11 and 3.21(b).
Sec. 3.43 Applicable rules and regulations.
Accounting authority operations must be conducted in accordance
with applicable FCC rules and regulations, the International
Telecommunication Regulations (ITR), and other international rules,
regulations, agreements, and, where appropriate, ITU-T Recommendations.
In particular, the following must be adhered to or taken into account
in the case of ITU-T.
(a) The latest basic treaty instrument(s) of the International
Telecommunication Union (ITU);
(b) Binding agreements contained in the Final Acts of World
Administrative Radio Conferences and/or World International
Telecommunication Conferences;
(c) ITU Radio Regulations;
(d) ITU International Telecommunication Regulations (ITR);
(e) ITU-T Recommendations (particularly D.90 and D.195); and
(f) FCC Rules and Regulations (47 CFR Part 3).
Sec. 3.44 Time to achieve settlements.
All maritime telecommunications accounts should be timely paid in
accordance with applicable ITU Regulations, Article 66 and
International Telecommunication Regulations (Melbourne, 1988).
Accounting authorities are deemed to be responsible for remitting, in a
timely manner, all valid amounts due to foreign administrations or
their agents.
Sec. 3.45 Amount of charges.
Accounting Authorities may charge any reasonable fee for their
settlement services. Settlements themselves, however, must adhere to
the standards set forth in these rules and must be in accordance with
the International Telecommunication Regulations (ITR) taking into
account the applicable ITU-T Recommendations and other guidance issued
by the Commission.
Sec. 3.46 Use of gold francs.
An accounting authority must accept accounts presented to it from
foreign administrations in gold francs. These gold francs must be
converted on the date of receipt of the bill to the applicable Special
Drawing Right (SDR) rate (as published by the International Monetary
Fund) on that date utilizing the linking coefficient of 3.061 gold
francs = 1 SDR. An equivalent amount in U.S. dollars must be paid to
the foreign administration. Upon written concurrence by the FCC, an
accounting authority may make separate agreements, in writing, with
foreign administrations or their agents for alternative settlement
methods, in accordance with ITU-T Recommendation D.195.
Sec. 3.47 Use of SDRs.
An accounting authority must accept accounts presented to it from
foreign administrations in Special Drawing Rights (SDRs). These SDRs
must be converted to dollars on the date of receipt by the accounting
authority and an equivalent amount in US dollars must be paid to the
foreign administration. The conversion rate will be the applicable rate
published by the International Monetary Fund (IMF) for the date of
receipt of the account from the foreign administration. Upon written
concurrence by the FCC, any accounting authority may make separate
agreements, in writing, with foreign administrations or their agents
for alternative settlement methods, provided account is taken of ITU-T
Recommendation D.195.
Sec. 3.48 Cooperation with the Commission.
Accounting authorities must cooperate fully with the FCC in all
respects concerning international maritime settlements issues,
including the resolution of questions of fact or other issues arising
as a result of settlement operations.
Sec. 3.49 Agreement to be audited.
Accounting authorities accept their certifications on condition
that they are subject to audit of their settlement activities by the
Commission or its representative. Additionally, the Commission reserves
the right to verify any statement(s) made or any materials submitted to
the Commission under these rules. Verification may involve discussions
with ship owners or others as well as the requirement to submit
additional information to the Commission. Failure to respond
satisfactorily to any audit findings is grounds for forfeiture or
suspension or cancellation of authority to act as an accounting
authority for U.S. vessels.
Sec. 3.50 Retention of settlement records.
Accounting authorities must maintain, for the purpose of compliance
with these rules, all settlement records for a period of at least seven
years following settlement of an account with a foreign administration
or agent.
Sec. 3.51 Cessation of operations.
The FCC must be notified immediately should an accounting authority
plan to relinquish its certification or cease to perform settlements as
authorized. Additionally, the Commission must be advised in advance of
any proposed transfer of control of an accounting authority's firm or
organization, by any means, to another entity.
(a) When an accounting authority is transferred, merged or sold,
the new entity must apply for certification in its own right if it is
interested in becoming an accounting authority. Provided the new
applicant is eligible and completes the application process
satisfactorily, the AAIC will be transferred to the new applicant. In
the case of a merger of two accounting authorities, the merged entity
must decide which AAIC to retain.
(b) Section 3.21(a) will be waived for these applicants.
(c) The applicant must comply with application process including
public comment.
(d) The applicant must certify acceptance of all accounts and must
furnish a list of the accounts to the Commission at the time of
application.
Sec. 3.52 Complaint/inquiry resolution procedures.
(a) Accounting authorities must maintain procedures for resolving
complaints and/or inquiries from its contractual customers (vessels for
which it performs settlements), the FCC, the ITU, and foreign
administrations or their agents. These procedures must be available to
the Commission upon request.
(b) If a foreign administration requests assistance in collection
of accounts from ships licensed by the FCC, the
[[Page 20169]]
appropriate accounting authority will provide all information requested
by the Commission in a timely manner to enable the Commission to
determine the cause of the complaint and to resolve the issue. If
accounts are in dispute, the Commission will determine the amount due
the foreign administration, accounting authority or ROA, and may direct
the accounting authority to pay the accounts to the foreign
administration. If the accounting authority does not pay the disputed
accounts within a reasonable timeframe, the Commission may take action
to levy a forfeiture, cancel the AAIC privilege and/or to revoke any
operating authority or licenses held by that accounting authority. (See
also Section 3.72).
Sec. 3.53 FCC notification of refusal to provide telecommunications
service to U.S. registered vessel(s).
An accounting authority must inform the FCC immediately should it
receive notice from any source that a foreign administration or
facility is refusing or plans to refuse legitimate public
correspondence to or from any U.S. registered vessel.
Sec. 3.54 Notification of change in address.
The Commission must be notified in writing within 15 days of any
change in address of an accounting authority. Such written notification
should be sent to the address shown in Section 3.61.
Reporting Requirements
Sec. 3.60 Reports.
(a) Initial Inventory of Vessels. Within 60 days after receiving
final approval from the FCC to be an accounting authority, each
certified accounting authority must provide to the FCC an initial list
of vessels for which it is performing settlements. This list should
contain only U.S. registered vessels. Such list shall be typewritten or
computer generated, be annotated to indicate it is the initial
inventory and be in the general format of the following and provide the
information shown:
Vessel Name Call Sign
(b) Semi-Annual Additions/Modifications/Deletions to Vessel
Inventory. Beginning with the period ending on the last day of March or
September following submission of an accounting authority's Initial
Inventory of Vessels (See paragraph (a) of this section.) and each
semi-annual period thereafter, each accounting authority is required to
submit to the FCC a report on additions, modifications or deletions to
its list of vessels for which it is performing or intending to perform
settlements, whether or not settlements actually have taken place. The
list should contain only U.S. registered vessels. The report shall be
typewritten or computer generated and be in the following general
format:
ADDITIONS TO CURRENT VESSEL INVENTORY
Vessel Name Call Sign Effective Date
MODIFICATIONS TO CURRENT VESSEL INVENTORY
Previous Vessel Name Previous Call Sign New Vessel Name New Call Sign Effective Date
DELETIONS TO CURRENT VESSEL INVENTORY
Vessel Name Call Sign Effective Date
The preceding report must be received by the Commission no later than
15 days following the end of the period (March or September) for which
the report pertains. Modifications refer to changes to call sign or
ship name of vessels for which the accounting authority settles
accounts and for which basic information has previously been provided
to the Commission. Reports are to be submitted even if there have been
no additions, modifications or deletions to vessel inventories since
the previous report. If there are no changes to an inventory, this
should be indicated on the report.
(c) End of Year Inventory. By February 1st of each year, each
accounting authority must submit an end-of-year inventory report
listing vessels for which the accounting authority performed
settlements as of the previous December 31st. The list should contain
only U.S. registered vessels. The report must be typewritten or
computer generated and prepared in the same general format as that
shown in paragraph (a) of this section except it should be annotated to
indicate it is the End of Year inventory.
(d) Annual Statistical Report of Settlement Operations. By February
1st of each year, each accounting authority settling accounts for U.S.
registered vessels must submit to the FCC an Annual Statistical Report,
FCC Form 45, which details the number and dollar amount of settlements,
by foreign administration, during the preceding twelve months.
Information contained in this report provides statistical data that
will enable the Commission to monitor operations to ensure adherence to
these rules and to appropriate international settlement procedures. FCC
Form 45 can be obtained by writing to the address in 3.61 of these
rules.
Sec. 3.61 Reporting address.
All reports must be received at the following address no later than
the required reporting date:
Accounting Authority Certification Officer, Financial Operations
Division, Stop 1110A, Federal Communications Commission, 1919 M
Street NW., Washington, D.C. 20554
Sec. 3.62 Request for confidentiality.
Applicants should comply with Section 0.459 of this chapter when
requesting confidentiality and cannot assume that it will be offered
automatically.
Enforcement
Sec. 3.70 Investigations.
The Commission may investigate any complaints made against
accounting authorities to ensure compliance with the Commission's rules
and with applicable ITU Regulations and other international maritime
accounting procedures.
Sec. 3.71 Warnings.
The Commission may issue written warnings or forfeitures to
accounting authorities which are found not to be operating in
accordance with established rules and regulations. Warnings will
generally be issued for violations which do not seriously or
immediately affect settlement functions or international relations.
Continued or unresolved violations may lead to further enforcement
action by the Commission, including any or all legally available
sanctions, including but not limited to, forfeitures (Communications
Act of 1934, Sec. 503), suspension or cancellation of the accounting
authority certification.
Sec. 3.72 Grounds for further enforcement action.
(a) The Commission may take further enforcement action, including
forfeiture, suspension or cancellation of an accounting authority
certification, if it is determined that the public interest so
requires. Reasons for which such action may be taken include, inter
alia:
(1) Failure to initiate settlements within six months of
certification or failure to perform settlements during any subsequent
six month period;
[[Page 20170]]
(2) Illegal activity or fraud;
(3) Non-payment or late payment to a foreign administration or
agent;
(4) Failure to follow ITR requirements and procedures;
(5) Failure to take into account ITU-T Recommendations;
(6) Failure to follow FCC rules and regulations;
(7) Bankruptcy; or
(8) Providing false or incomplete information to the Commission or
failure to comply with or respond to requests for information.
(b) Prior to taking any of the enforcement actions in paragraph (a)
of this section, the Commission will give notice of its intent to take
the specified action and the grounds therefor, and afford a 30-day
period for a response in writing; provided that, where the public
interest so requires, the Commission may temporarily suspend a
certification pending completion of these procedures. Responses must be
forwarded to the Accounting Authority Certification Officer. See
Section 3.61.
Sec. 3.73 Waiting period after cancellation.
An accounting authority whose certification has been cancelled must
wait a minimum of three years before reapplying to be an accounting
authority.
Sec. 3.74 Ship stations affected by suspension, cancellation or
relinquishment.
(a) Whenever the accounting authority privilege has been suspended,
cancelled or relinquished, the accounting authority is responsible for
immediately notifying all U.S. ship licensees for which it was
performing settlements of the circumstances and informing them of the
requirement contained in paragraph (b) of this section.
(b) Those ship stations utilizing an accounting authority's AAIC
for which the subject accounting authority certification has been
suspended, cancelled or relinquished, should make contractual
arrangements with another properly authorized accounting authority to
settle its accounts.
(c) The Commission will notify the ITU of all accounting authority
suspensions, cancellations and relinquishments, and
(d) The Commission will publish a Public Notice detailing all
accounting authority suspensions, cancellations and relinquishments.
Sec. 3.75 Licensee's failure to make timely payment.
Failure to remit proper and timely payment to the Commission or to
an accounting authority may result in one or more of the following
actions against the licensee:
(a) Forfeiture or other authorized sanction.
(b) The refusal by foreign countries to accept or refer public
correspondence communications to or from the vessel or vessels owned,
operated or licensed by the person or entity failing to make payment.
This action may be taken at the request of the Commission or
independently by the foreign country or coast station involved.
(c) Further action to recover amounts owed utilizing any or all
legally available debt collection procedures.
Sec. 3.76 Licensee's liability for payment.
The U.S. ship station licensee bears ultimate responsibility for
final payment of its accounts. This responsibility cannot be superseded
by the contractual agreement between the ship station licensee and the
accounting authority. In the event that an accounting authority does
not remit proper and timely payments on behalf of the ship station
licensee:
(a) The ship station licensee will make arrangements for another
accounting authority to perform future settlements, and
(b) The ship station licensee will settle any outstanding accounts
due to foreign entities.
(c) The Commission will, upon request, take all possible steps,
within the limits of applicable national law, to ensure settlement of
the accounts of the ship station licensee. As circumstances warrant,
this may include issuing warnings to ship station licensees when it
becomes apparent that an accounting authority is failing to settle
accounts. See also Sections 3.70 through 3.74.
[FR Doc. 96-10974 Filed 5-03-96; 8:45 am]
BILLING CODE 6712-01-P
