[Federal Register Volume 60, Number 41 (Thursday, March 2, 1995)]
[Proposed Rules]
[Pages 11644-11646]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-5127]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 63
[IB Docket No. 95-22, FCC 95-53]
Foreign-Affiliated Entities: In the Matter of Market Entry and
Regulation
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: The Federal Communications Commission is proposing to modify
its approach to determining the public interest in cases where a
foreign carrier [[Page 11645]] or its affiliate applies for authority
under Section 214 of the Communications Act to enter the U.S. market to
provide international facilities-based services. In reviewing such
applications, the Commission proposes to examine whether effective
market access is available, or will soon be available, to U.S. carriers
in the primary markets of the foreign carrier seeking entry. This would
be an important element of the Commission's public interest
determination. In addition, the Commission requests comment on whether
it should modify certain aspects of its regulation of U.S.
international carriers. It also clarifies and requests comment on its
definition of an international facilities-based carrier. Finally, the
Commission asks whether it should incorporate the proposed effective
market access test as an important element of the Section 310(b)(4)
public interest analysis it applies to foreign entities seeking to
acquire an indirect ownership interest in U.S. radio licenses. The
proposals contained in the Notice are intended to establish standard
rules to regulate foreign carrier entry into the U.S. marketplace in
order to promote effective global competition, prevent anti-competitive
conduct and encourage foreign governments to open their communications
markets.
DATES: Comments must be submitted on or before March 28, 1995. Reply
comments must be submitted on or before April 28, 1995.
ADDRESSES: All comments and reply comments concerning these proposals
should be addressed to: Office of the Secretary, Federal Communications
Commission, Washington, DC 20554. Comments and reply comments will be
available for public inspection during regular business hours in the
FCC Reference Center (Room 239) of the Federal Communications
Commission, 1919 M St., NW., Washington, DC 20554.
FOR FURTHER INFORMATION CONTACT:
Troy F. Tanner or Susan Lee O'Connell, Attorney-Advisors, Policy and
Facilities Branch, Telecommunications Division, International Bureau,
(202) 418-1470.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Proposed Rulemaking adopted on February 7, 1995 and released
February 17, 1995. The full text of this Notice is available for
inspection and copying during normal business hours in the FCC
Reference Center (Room 239), 1919 M St., NW., Washington, DC. The
complete text of this Notice also may be purchased from the
Commission's copy contractor, International Transcription Service,
Inc., (202) 857-3800, 2100 M Street, NW., Suite 140, Washington, DC.
20037.
Regulatory Flexibility Act
A. Reason for Action
This rulemaking proceeding is initiated to obtain comment regarding
proposed changes to the Commission's entry standard for foreign
carriers desiring to enter the U.S. international telecommunications
market, as well as changes to the Commission's public interest standard
for foreign entities that seek to acquire an indirect interest in a
U.S. common carrier, aeronautical, or broadcast radio license. Comment
is also requested on proposed modifications to the Commission's
dominant carrier safeguards as well as to other non-discrimination
safeguards. Comment is also sought on the Commission's definition of an
international facilities-based carrier.
B. Objectives
The Commission seeks to establish standard rules and procedures to
regulate foreign entry into the U.S. marketplace in order to promote
effective competition and prevent anti-competitive conduct in the
market for international communications services, as well as to
encourage foreign governments to open their communications markets.
C. Legal Basis
The proposed action is authorized under Sections 4 and 303(r) of
the Communications Act of 1934, as amended, 47 U.S.C. Secs. 154,
303(r).
D. Reporting, Recordkeeping and Other Compliance Requirements
The actions contained in this Notice of Proposed Rulemaking may
affect large and small carriers. We propose to require that dominant,
foreign-affiliated carriers maintain or provide certain records
regarding their foreign carrier affiliates. These U.S. carriers may be
required to comply with proposed requirements to file certain reports,
but this is not estimated to be a significant economic burden for these
entities.
E. Federal Rules That Overlap, Duplicate or Conflict With These Rules
None.
F. Description, Potential Impact, and Number of Small Entities Involved
To the extent that the proposals discussed in this Notice of
Proposed Rulemaking propose to make equity investment by foreign
carriers in U.S. carriers more difficult, carriers seeking foreign
investment greater than the proposed threshold will be adversely
affected. These proposals are intended to ensure that U.S. carriers can
compete effectively in international markets and to open closed foreign
markets. Copies of this Notice will be sent to the Chief Counsel for
Advocacy of the Small Business Administration.
G. Any Significant Alternatives Minimizing the Impact on Small Entities
Consistent With the Stated Objectives
The Notice solicits comment on a variety of alternatives to achieve
Commission objectives.
Summary of Notice of Proposed Rulemaking
This Notice of Proposed Rulemaking proposes new policies governing
the participation of foreign carriers in the U.S. international
telecommunications market. The Commission proposes three goals of its
regulation of the U.S. international telecommunications market: (1) To
promote effective competition in the global market for communications
services; (2) to prevent anticompetitive conduct in the provision of
international services or facilities; and (3) to encourage foreign
governments to open their communications markets. The Commission
considers how to achieve these goals through implementation of Sections
214 and 310 of the Communications Act. The Commission finds that
allowing foreign carrier entry into the U.S. international services
market will further the public interest by providing additional
competition that will benefit consumers. The Commission tentatively
concludes, however, that unrestricted foreign carrier facilities-based
entry is not in the public interest when U.S. carriers do not have
effective opportunities to compete in the provision of services and
facilities in the foreign carrier's primary markets.
The Commission proposes to modify its public interest standard for
considering foreign carrier applications under Section 214 of the Act
to enter the U.S. market to provide international facilities-based
services. The Commission seeks comment on requiring as an important
element of its public interest standard a demonstration that effective
market access is, or will soon be, available to U.S. carriers seeking
to provide basic, international telecommuncations facilities-based
services in the primary markets served by the carrier desiring entry.
The Commission also would continue to consider other factors as part of
its public interest analysis, such as national security, the openness
of other telecommunications segments of the [[Page 11646]] foreign
carrier's primary markets, and the ability and incentives of the
foreign carrier to discriminate against unaffiliated U.S. carriers.
In addition, the Notice proposes a specified level of foreign
carrier ownership in a U.S. carrier at which the proposed entry
standard would apply. The Commission asks whether it is desirable to
consider an applicant to be ``affiliated'' with a foreign carrier for
purposes of the new rules when the foreign carrier acquires an
ownership interest of a certain minimum level or a controlling interest
at any level. The Notice requests comment on whether the minimum level
of ownership should be set at greater than ten percent, twenty-five
percent, or some other level of the capital stock of the applicant.
The Commission also seeks comment on whether the affiliation
standard it adopts should replace the current affiliation standard it
uses for purposes of classifying an affiliated U.S. carrier as dominant
or nondominant on a particular U.S. international route, based on the
market power of its foreign carrier affiliate on the foreign end of the
route. In addition, the Commission requests comment on whether certain
safeguards applied to dominant carriers should be modified to improve
their effectiveness. It additionally asks for comment on other proposed
nondiscrimination safeguards, including safeguards that would apply to
all U.S. international carriers. The Commission also clarifies the
definition of a facilities-based carrier and requests comment on its
proposal to codify that definition in this proceeding.
Finally, the Notice asks whether the goals of the proceeding would
be served by incorporating the proposed effective market access test as
an element of the Section 310(b)(4) public interest analysis applicable
to foreign entities seeking to acquire an indirect ownership interest
of more than 25 percent in U.S. radio licensees. Thus, the Notice asks
whether the Commission's evaluation of the public interest should
consider whether the primary markets of the foreign entity offer
effective market access to U.S. licensees to provide the same type of
radio-based services as requested in the United States. The Notice also
seeks comment on other public interest factors the Commission should
consider.
The Notice seeks public comment on whether these proposals are
administratively feasible and whether these approaches or other
alternatives will best serve the Commission's goals.
List of Subjects in 47 CFR Part 63
Communications common carriers.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 95-5127 Filed 3-1-95; 8:45 am]
BILLING CODE 6712-01-M