[Federal Register Volume 59, Number 213 (Friday, November 4, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-27331]
[[Page Unknown]]
[Federal Register: November 4, 1994]
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FEDERAL COMMUNICATIONS COMMISSION
[DA 94-1098]
Direct Telecommunications Services Between United States and Cuba
AGENCY: Federal Communications Commission.
ACTION: Notice.
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SUMMARY: In accordance with the provisions of the Cuban Democracy Act
of 1992, the Commission approved the applications of five U.S. carriers
to provide direct telecommunications services between the United States
and Cuba. The services authorized include both switched voice and
private line services. The companies whose applications were granted
are WilTel International, Inc., MCI Telecommunications Corp., LDDS
Communications, Inc., Sprint Communications Company L.P. and IDB
WorldCom Services, Inc. This will allow these carriers to help meet the
large demand for direct telecommunications services between the United
States and Cuba. Under the guidelines established by the Department of
State, these carriers are required to submit reports indicating the
numbers of circuits activated by facility, on or before June 30, and
December 31 of each year, and on the one-year anniversary of this
notification in the Federal Register.
EFFECTIVE DATE: November 4, 1994.
FOR FURTHER INFORMATION CONTACT: Troy F. Tanner, Attorney, Common
Carrier Bureau, (202) 418-1470.
SUPPLEMENTARY INFORMATION:
In the matter of WilTel International, Inc., File No. I-T-C-94-227;
Application for authority to acquire and operate satellite and cable
facilities for the provision of direct services between the United
States and Cuba; MCI Telecommunications Corp., File No. I-T-C-94-228;
LDDS Communications, Inc., File No. I-T-C-94-229; Sprint Communications
Company L.P., File No. I-T-C-94-247; IDB WorldCom Services, Inc., File
No. I-T-C-94-260, Applications for authority to acquire and operate
satellite facilities for the provision of direct services between the
United States and Cuba.
Memorandum Opinion, Order, Authorization & Certification
Adopted: October 4, 1994
Released: October 5, 1994
By the Chief, International Facilities Division:
1. The Commission has under consideration the above-captioned
applications filed by WilTel International, Inc. (``WilTel''), MCI
Telecommunications Corporation (``MCI''), LDDS Communications, Inc.
(``LDDS'') , Sprint Communications Company L.P. (``Sprint''), and IDB
WorldCom Services, Inc. (``IDB'') requesting authority pursuant to
Section 214 of the Communications Act of 1934, as amended, to establish
channels of communication between the United States and Cuba for the
provision of direct services. The applications were placed on the
Commission's public notice. AT&T filed petitions to deny against all of
the applications. For the reasons stated below, we grant the
applications.
Background
2. WilTel requests authority to acquire by lease from Comsat and
operate 120 64-kbps digital satellite voice-grade circuits, and up to
two satellite video transmission circuits on an occasional use basis,
provided via the INTELSAT Atlantic Ocean Region (AOR) satellite at
335 deg. E.L., for the provision of international message telephone
service (``IMTS'') and other switched services\1\ and for international
private line service between the United States and Cuba. In an
amendment to its application, WilTel also requests the flexibility to
use either the INTELSAT and/or an Intersputnik satellite. WilTel states
the proposed satellite facilities will be located between an
appropriately authorized U.S. international fixed-satellite earth
station and the appropriate satellite.\2\
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\1\These services include facsimile, data and video transmission
services.
\2\WilTel also requests authority to provide service to Cuba via
the fiber optic undersea cable, CUBUS-1, that has been proposed in
the application for a cable landing license of WilTel Undersea
Cable, Inc., FCC File No. SCL-94-002. Because this cable landing
license has yet to be granted, we will defer acting on WilTel's
request to use these facilities until such time that we are assured
the cable facilities will be available for WilTel's use.
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3. MCI requests authority to acquire by lease from Comsat and
operate 150 64-kbps satellite circuits\3\ between the Mount Jackson,
Virginia earth station and an appropriate INTELSAT-AOR satellite,
together with the necessary connecting facilities between the Mt.
Jackson earth station and MCI's operating centers at Pottstown,
Pennsylvania and San Antonio, Texas, for the provision of all of MCI's
authorized services, including IMTS, between the United States and
Cuba.
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\3\MCI states these circuits are bearer circuits with a
compression ratio ability of 5:1, thereby allowing MCI to
potentially derive as many as 750 circuits.
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4. LDDS requests authority to acquire by lease from Comsat and
operate 150 64-kbps satellite circuits between an appropriately
authorized east coast earth station and an appropriate INTELSAT-AOR
satellite for the provision of IMTS and private line services between
the United States and Cuba. In an amendment to its application, LDDS
also requests authority to use interchangeably the 150 circuits with
the Intersputnik, or Columbia Communication Corporation (``Columbia'')
satellites in addition to the INTELSAT satellites.
5. Sprint requests authority to acquire by lease from Comsat and
operate 120 voice-grade satellite circuits\4\ between the Orion
international Standard A earth station located at Shenandoah, Virginia
and the INTELSAT-AOR satellite at 335 deg. E.L., connecting with its
operating center in New York, New York, by using its own facilities.
Sprint proposes to use these facilities to furnish all of Sprint's
authorized services, including IMTS, between the United States and
Cuba.
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\4\Sprint initially requested 30 digital satellite circuits, but
clarified its request in a letter to the Commission on October 3,
1994, stating that the circuits are equivalent to one E-1 circuit
which, in turn, can derive 120 virtual voice-grade circuits.
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6. IDB requests authority to acquire by lease from Comsat and
operate 120 voice-grade satellite circuits\5\ between an appropriately
authorized international earth station in the United States and either
an INTELSAT-AOR satellite or the Intersputnik satellite located at
14 deg. W.L. (``Statsionar 4''), together with the necessary connecting
facilities between the earth station and an operating center in New
York, New York, for the provision of IMTS between the United States and
Cuba.
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\5\IDB states these are the number of circuits derived from one
2 Mbps channel (an E-1 circuit) operating at a compression ratio of
4:1.
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7. All of the applicants state that they have reached an agreement
with EMTELCUBA of Cuba, to provide the matching facilities from the
satellite's mid-point to an earth station in Cuba. Initially, under the
terms of the agreements, EMTELCUBA agreed with each applicant to a 50/
50 split of a $1.20 per minute accounting rate for switched traffic,
and a $4.85 surcharge per call for collect calls to be paid to the
originating carrier. All of the applicants state that this rate is
consistent with the U.S. Department of State's policy guidelines
(``Policy Guidelines'').\6\ They also state that they will initiate
service within one year.
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\6\See Infra 10.
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8. The applicants state that that public interest would be served
by a grant of their applications because it will result in the rapid
introduction of new lines of telecommunications between the United
States and Cuba. They state that an immediate and large demand exists
for direct telecommunications services between the United States and
Cuba, and their proposed services will help meet that demand within the
regulatory framework established by the Cuban Democracy Act of 1992 (22
U.S.C. Sec. 6002 et seq.).
9. AT&T filed a petition to deny against each of these applications
stating that because of the $4.85 surcharge per call for collect calls,
the applicants' accounting rate agreements with EMTELCUBA conflict with
the International Settlements Policy (``ISP'') and with the directive
of the Commission that U.S. carriers negotiate to achieve cost-based
accounting rates with foreign administrations.\7\ All of the applicants
individually filed oppositions to AT&T's petition. They unanimously
agreed that an ISP waiver under Sec. 64.1001 of the Commission's Rules
is not required because AT&T's operating agreement with the Cuban
administration expired nearly four years ago. Therefore, the applicants
argue that because AT&T's operating agreement is no longer in force,
their proposed arrangements do not depart from any current
arrangements, and no ISP waiver is required. In addition, WilTel, MCI,
and LDDS argue that the Policy Guidelines do not prohibit collect
surcharges, and that the $4.85 surcharge per call is appropriate and
not excessive for collect calls.
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\7\See Regulation of International Accounting Rates, 6 FCC Rcd
3552 (1991) (expansion of traditional focus of the ISP of preventing
whipsawing to include the adverse effect of above-cost levels of
accounting rates on U.S. carriers and consumers).
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Discussion
10. In a letter dated July 22, 1993, the U.S. Department of State
informed us of the Executive Branch's general policy guidelines for
implementation of the telecommunications provisions of the Cuban
Democracy Act, which provides that ``telecommunication services between
the United States and Cuba shall be permitted.''\8\ Among the policy
guidelines are the following requirements: (1) the proposals must have
the potential to be operational within a year; (2) settlements must not
be more favorable to Cuba than the current 50/50 split of the $1.20 per
minute accounting rate; (3) proposals must be limited to equipment and
services necessary to deliver a signal to Cuba; (4) proposals must
utilize modes of communications already in place between the United
States and Cuba; and (5) carriers shall report the number of circuits
activated by facility on June 30 and December 31 of each year and on
the one-year anniversary of the notification by the Commission in the
Federal Register.
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\8\Letter dated July 22, 1993, from Richard C. Beaird, Acting
U.S. Coordinator and Director, Bureau of International
Communications and Information Policy, U.S. Department of State to
FCC Chairman James H. Quello.
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11. In accordance with the Policy Guidelines, we forwarded copies
of the above-captioned applications to the Department of State and
requested that it advise us as to its views. Pursuant to our request,
the Department of State issued a follow-up letter dated May 23,
1994.\9\ The Department of State found the IMTS portions of the
applications to be fully consistent with the Policy Guidelines except
for the $4.85 surcharge per call for collect calls. The Department
found that the proposed surcharge was unreasonable and unjustified. It
observed that the proposed surcharge far exceeded the approximately
$.60 average rate for all countries in the region and the prevalent
$1.00 rate for those countries having a surcharge. Therefore, the
Department of State had no objection to our approval of the IMTS
applications without the $4.85 surcharge provision. The Department of
State, however, did state that it would favorably consider a surcharge
provision that is determined by us to be based on costs, other
international norms and practices, relevant ITU Recommendations, and
our ISP.
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\9\Letter dated May 23, 1994, from Richard C. Beaird, Senior
Deputy U.S. Coordinator, Bureau of International Communications and
Information Policy, U.S. Department of State to FCC Chairman Reed
Hundt.
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12. In light of the Department of State's letter, and our own
review of the applications, we concluded that we would not process the
applications as filed because of the agreements with EMTELCUBA for the
$4.85 surcharge. Rather than dismiss the applications, we gave the
applicants the opportunity to amend their applications to reflect a new
agreement renegotiated with EMTELCUBA that provides for either no
surcharge for collect calls, or a surcharge that was reasonable and
justified.\10\
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\10\See Letter dated July 29, 1994 from Wendell Harris,
Assistant Bureau Chief/International, Common Carrier Bureau, to all
five applicants.
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13. On September 6, 1994, LDDS amended its application to include a
new operating agreement with EMTELCUBA that reflected a reduction in
the proposed surcharge of $4.85 per call for collect calls to $1.00 per
call. A week later, the other four applicants similarly amended their
applications to reflect a $1.00 per call surcharge. We sent copies of
these amendments to the Department of State, and requested their advice
as to whether these new surcharges were in compliance with the Policy
Guidelines.\11\ On October 3, 1994, we received a letter from the
Department of State expressing its view that the new $1.00 per call
surcharge was in compliance with the Policy Guidelines.\12\ The
Department of State stated that the new proposed surcharge of $1.00 per
call appears consistent with international norms and practices,
relevant ITU Recommendations, and current surcharge rates in the
region. The Department of State notes, however, that it hopes that this
and other surcharge rates will generally be reduced or eliminated in
the future.
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\11\See Letters dated September 9 and 16, 1994 from Wendell
Harris, Assistant Bureau Chief/International, Common Carrier Bureau,
to Richard C. Beaird, Senior Deputy U.S. Coordinator, Bureau of
International Communications and Information Policy, U.S. Department
of State.
\12\Letter dated October 3, 1994, from Richard C. Beaird, Senior
Deputy U.S. Coordinator, Bureau of International Communications and
Information Policy, U.S. Department of State to FCC Chairman Reed
Hundt.
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14. Upon our own review of the applications, we agree with the
Department of State that the five applicants' amended operating
agreements with EMTELCUBA are in compliance with the Policy Guidelines.
The $1.00 per call surcharge for collect calls is within the range of
surcharges that other countries in the Caribbean region have for these
types of calls, and reflects the cost to the originating country of
providing the service. Accordingly, we find that this new surcharge is
reasonable and justified. It is our desire, however, as it is the
Department of States's, that this surcharge eventually be reduced or
eliminated in the future.
15. In addition, we find AT&T's arguments that the $4.85 per call
surcharge is in violation of the ISP to be inapposite. AT&T's arguments
were based on the original $4.85 per call surcharge, not the amended
$1.00 per call surcharge. Further, we note that AT&T's petition stated
that a $1.00 surcharge would be consistent with industry practices.
Finally, we have not received any additional pleadings from AT&T
arguing that the amended operating agreements are in violation of our
ISP.
16. We find that a grant of the above-captioned five applications
will serve the public interest subject to the conditions set forth
below. These applications are consistent with the Executive Branch's
Policy Guidelines. The applicants state that they will initiate service
within one year, and expect to initiate service shortly after all
requisite regulatory approvals have been obtained. To the extent the
applicants propose to use the INTELSAT, Intersputnick, and Columbia
satellite facilities and appropriately authorized existing earth
station facilities, we find these proposals satisfy the requirement
that facilities already be in existence and be limited to equipment and
services necessary to deliver a signal to Cuba.
17. Accordingly, it is ordered that application File No. I-T-C-94-
227 is granted and WilTel is authorized to:
a. Lease from Comsat and operate up to 120 64-kbps satellite
circuits, and up to two satellite video transmission circuits on an
occasional use basis, between an appropriately authorized U.S.
international fixed-satellite earth station and the INTELSAT-AOR
satellite at 335 deg. E.L., together with the necessary domestic
connecting facilities between the earth station and WilTel's operating
center, connecting with similar circuits between the satellite and an
earth station in Cuba, furnished by EMTELCUBA; or
b. In lieu of the INTELSAT circuits, establish up to 120 64-kbps
satellite circuits between an appropriately authorized U.S.
international fixed-satellite earth station and an appropriate
Intersputnik satellite, together with the necessary domestic connecting
facilities between the earth station and WilTel's operating center,
connecting with similar circuits between the satellite and an earth
station in Cuba, furnished by EMTELCUBA; and
c. Use the facilities in either (a) or (b) above to provide IMTS
and other switched services (including facsimile, data and video
transmission services), and international private line services,
between the United States and Cuba.
18. It is further ordered that application File No. I-T-C-94-228 is
granted and MCI is authorized to:
a. Lease from Comsat and operate 150 64-kbps satellite circuits
between the Mount Jackson, Virginia earth station and an appropriate
INTELSAT-AOR satellite, together with the necessary connecting
facilities between the Mt. Jackson earth station and MCI's operating
centers at Pottstown, Pennsylvania and San Antonio, Texas, connecting
with similar circuits between the satellite and an earth station in
Cuba, furnished by EMTELCUBA; and
b. Use the above facilities to provide all of MCI's authorized
services, including IMTS, between the United States and Cuba.
19. It is further ordered that application File No. I-T-C-94-299 is
granted and LDDS is authorized to:
a. Lease from Comsat and operate 150 64-kbps satellite circuits
between an appropriately authorized U.S. international fixed-satellite
earth station and an appropriate INTELSAT-AOR satellite, together with
the necessary domestic connecting facilities between the earth station
and LDDS's operating center, connecting with similar circuits between
the satellite and an earth station in Cuba, furnished by EMTELCUBA; or
b. In lieu of the INTELSAT circuits, establish up to 150 64-kbps
satellite circuits, between an appropriately authorized U.S.
international fixed-satellite earth station and an appropriate
Intersputnik or Columbia satellite, together with the necessary
domestic connecting facilities between the earth station and LDDS's
operating center, connecting with similar circuits between the
satellite and an earth station in Cuba, furnished by EMTELCUBA; and
c. Use the facilities in either (a) or (b) above to provide IMTS
and private line services between the United States and Cuba.
20. It is further ordered that application File No. I-T-C-94-247 is
granted and Sprint is authorized to:
a. Lease from Comsat and operate one E-1 circuit (30 64-kbps
circuits), which can derive 120 virtual voice-grade circuits, between
the Orion international Standard A earth station located at Shenandoah,
Virginia and the INTELSAT-AOR satellite at 335 deg. E.L., together with
the necessary connecting facilities between its operating center in New
York, New York, and the Orion earth station, connecting with similar
circuits between the satellite and an earth station in Cuba, furnished
by EMTELCUBA; and
b. Use the above facilities to provide all of Sprint's authorized
services, including IMTS, between the United States and Cuba.
21. It is further ordered that application File No. I-T-C-94-260 is
granted and IDB is authorized to:
a. Lease from Comsat and operate one 2 Mbps channel (an E-1 circuit
or 30 64-kbps circuits), which can derive 120 virtual voice-grade
circuits, between an appropriately authorized U.S. international fixed-
satellite earth station and an appropriate INTELSAT-AOR satellite,
together with the necessary connecting facilities between the earth
station and an operating center in New York, New York, connecting with
similar circuits between the satellite and an earth station in Cuba,
furnished by EMTELCUBA; or
b. In lieu of the INTELSAT circuits, establish up to one 2 Mbps
channel (an E-1 circuit or 30 64-kbps circuits), which can derive 120
virtual voice-grade circuits, between an appropriately authorized U.S.
international fixed-satellite earth station and the Intersputnik
satellite located at 14 deg. W.L. (``Statsionar 4''), together with the
necessary connecting facilities between the earth station and an
operating center in New York, New York, connecting with similar
circuits between the satellite and an earth station in Cuba, furnished
by EMTELCUBA; and
c. Use the facilities in either (a) or (b) above to provide IMTS
services between the United States and Cuba.
22. It is further ordered that the service authorized herein must
be implemented within one year from the date of release of this order.
23. It is further ordered that WilTel, MCI, LDDS, Sprint and IDB
shall split 50/50 with EMTELCUBA the $1.20 per minute accounting rate
for the IMTS services.
24. It is further ordered that the surcharge agreed to between the
applicants and EMTELCUBA for received collect calls shall be no greater
than $1.00 per call.
25. It is further ordered that the applicants shall submit reports
on or before June 30, and December 31 of each year, and on the one-year
anniversary of the notification of the grant of these applications in
the Federal Register indicating the numbers of circuits activated by
facility.
26. It is further ordered that this authorization is subject to the
applicants' obtaining all necessary licenses and authorizations from
the Departments of Treasury and Commerce.
27. It is further ordered that this order is subject to revocation
without a hearing in the event the Department of State or the Federal
Communications Commission determines that the continuation of
communications between the United States and Cuba is no longer in the
national interest.
28. It is further ordered that our authorization for the applicants
to provide private lines is limited to the provision of such private
lines only between the United States and Cuba--that is, private lines
which originate in the United States and terminate in Cuba or which
originate in Cuba and terminate in the United States. In addition, the
applicants may not--and applicants' tariffs must state that their
customers may not--connect private lines provided over these facilities
to the public switched network at either the U.S. or foreign end, or
both, for the provision of international basic telecommunications
services, including switched voice services, unless authorized to do so
by the Commission upon a finding that its correspondents afford resale
opportunities equivalent to those available under U.S. law, in
accordance with Regulation of International Accounting Rates, Phase II,
First Report and Order, 57 FR 646, January 8, 1992 7 FCC Rcd 559
(1991), Order on Reconsideration and Third Further NPRM, 57 FR 57455,
December 4, 1992 7 FCC Rcd 7927 (1992), petition for reconsideration
pending.
29. It is further ordered that, pursuant to Section 203 of the
Communications Act, 47 U.S.C. 203, and Part 61 of the Commission's
Rules, 47 CFR Part 61, the applicants shall file and have in effect a
tariff for the services authorized in this order before offering
services to the public.
30. It is further ordered that the applicants shall file copies of
any operating agreements entered into by themselves or their parent/
affiliates with their correspondents within 30 days of their execution,
and shall otherwise comply with the filing requirements contained in
Section 43.51 of the Commission's Rules, 47 CFR 43.51.
31. It is further ordered that the applicants shall file annual
reports of overseas telecommunications traffic required by Section
43.61 of the Commission's Rules 47 CFR 43.61.
32. It is further ordered that the applicants shall file a Section
214 application for any additional circuits they propose to establish
between the United States and Cuba.
33. Acceptance of this authorization shall be deemed acceptance of
the conditions set forth herein.
34. It is further ordered that the Petitions to Deny against each
applicant filed by AT&T are denied.
35. This authorization is issued pursuant to Section 0.291 of the
Commission's Rules and is effective upon adoption. Petitions for
reconsideration under Section 1.106 or applications for review under
Section 1.115 of the Commission's Rules may be filed within 30 days of
public notice of this order (see Section 1.4(b)(2)).
Federal Communications Commission.
George S. Li,
Chief, International Facilities Division, Common Carrier Bureau.
[FR Doc. 94-27331 Filed 11-3-94; 8:45 am]
BILLING CODE 6712-01-M