[Federal Register Volume 62, Number 116 (Tuesday, June 17, 1997)]
[Rules and Regulations]
[Pages 32964-32965]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-15700]




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Part III


Federal Communications Commission

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47 CFR Part 63


Rules and Policies on Foreign Participation in the U.S. 
Telecommunications Market: Final and Proposed Rules and International 
Settlement Rates, Proposed Rule

  Federal Register / Vol. 62, No. 116 / Tuesday, June 17, 1997 / Rules 
and Regulations  

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 63

[IB Docket No. 97-142, FCC 97-195]


Rules and Policies on Foreign Participation in the U.S. 
Telecommunications Market

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: On June 4, 1997, the Federal Communications Commission 
(``Commission'') adopted a decision making technical corrections to the 
rules governing the entry of foreign-affiliated carriers into the U.S. 
market for basic telecommunications services. The rules it corrected 
were adopted in the Foreign Carrier Entry proceeding (60 FR 67332, 
December 29, 1996). The Commission took this action at the same time 
that it adopted a Notice of Proposed Rulemaking that proposes changes 
to the effective competitive opportunities test and related rules 
adopted in the Foreign Carrier Entry proceeding (See Rules and Policies 
on Foreign Participation in the U.S. Telecommunications Market (FCC 97-
195, IB Docket No. 97-142), published elsewhere in this issue).

EFFECTIVE DATE: July 17, 1997.

ADDRESSES: Federal Communications Commission, 1919 M Street, N.W., Room 
222, Washington, D.C. 20554.

FOR FURTHER INFORMATION CONTACT: Susan O'Connell, Attorney-Advisor, 
Policy and Facilities Branch, Telecommunications Division, 
International Bureau, (202) 418-1470.

SUPPLEMENTARY INFORMATION:

    1. On February 15, 1997, the United States and 68 other countries 
concluded an agreement to open markets for basic telecommunications 
services. This agreement, negotiated under the auspices of the World 
Trade Organization (WTO), covers 95 percent of the global market for 
basic telecommunications services. In light of the WTO Agreement, on 
June 4, 1997, the Federal Communications Commission initiated a 
proceeding to review its rules governing the entry of foreign 
affiliated entities into the U.S. market for basic telecommunications 
services. The Commission also amended Part 63 of its rules to reflect 
several technical corrections. (Review of Market Entry and Regulation 
of Foreign-Affiliated Entities, FCC 97-195, Order and Notice of 
Proposed Rulemaking, IB Docket No. 97-142.)
    2. The Commission revised Sec. 63.18(e)(3) of the rules that sets 
forth the equivalency test currently applied in authorizing the use of 
private lines between the U.S. and all countries for the provision of 
switched services. The equivalency test, as set forth in 
Sec. 63.18(e)(3), was adopted in the Foreign Carrier Entry proceeding 
(60 FR 67332, December 29, 1995). In drafting the rule, the word 
``reasonable'' was inadvertently omitted. As corrected, this paragraph 
will provide in relevant part that the ``charges, terms and conditions 
for interconnection to foreign domestic carrier facilities'' be both 
``reasonable and nondiscriminatory.''
    3. Section 63.11(b) was amended to clarify the Commission's 
notification requirement for U.S. international carriers. In the 
Foreign Carrier Entry Order, the Commission required that any U.S. 
international carrier that knows of a planned investment by a foreign 
carrier of a ten percent or greater interest, whether direct or 
indirect, in the capital stock of the authorized carrier shall notify 
the Commission within sixty days prior to the acquisition of such 
interest. The Commission has found that carriers have interpreted this 
rule to include only investments by foreign carriers and not 
investments by their parent holding companies. The Commission intended 
that the prior notification requirement provide it with an opportunity 
to determine whether a particular planned investment in a U.S. carrier 
raises concerns that a foreign carrier with market power may, as a 
result of the investment, obtain a financial incentive to discriminate 
in favor of the U.S. carrier. Such an incentive can exist whether the 
foreign carrier itself makes the investment in the U.S. carrier or 
whether the investment is made by an entity that directly or indirectly 
controls the foreign carrier, is controlled by the foreign carrier, or 
is under direct or indirect common control with the foreign carrier. 
The Commission amended Sec. 63.11 to cover all such ownership 
interests. The Commission also deleted the word ``within'' from the 
first sentence of Sec. 63.11(b) to make clear that carriers must notify 
the Commission of these planned investments at least 60 days before 
they are consummated.
    4. The Commission also amended Sec. 63.11(b) to make clear the 
current obligation of U.S. carriers that have notified the Commission 
of a 10 percent or greater planned investment by a foreign carrier or 
affiliated company to maintain the accuracy of the initial report by 
notifying the Commission of additional investment interests by the 
foreign carrier or an affiliated company.
    5. The Commission's decision also included an NPRM that solicits 
comments on a number of proposals governing foreign participation in 
the U.S. market for basic telecommunications services. (See Rules and 
Policies on Foreign Participation in the U.S. Telecommunications Market 
and the public notice soliciting supplemental comments in the 
International Settlement Rates proceeding, IB Docket No. 96-261 [61 FR 
68702, December 30, 1996] published elsewhere in this issue.)

Ordering Clause

    It is further ordered that the minor changes to part 63 of the 
Commission's rules, as set forth in the attachment, are hereby adopted 
effective July 17, 1997.

List of Subjects in 47 CFR Part 63

    Communications common carriers, Reporting and recordkeeping 
requirements.

Federal Communications Commission.
William F. Caton,
Acting Secretary.

Rule Changes

    Part 63 of Title 47 of the Code of Federal Regulations is amended 
as follows:

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

    1. The authority citation for Part 63 continues to read as follows:

    Authority: 47 U.S.C. 151, 154(i), 154(j), 201-205, 218, 403 and 
533, unless otherwise noted.

    2. Section 63.11 is amended by revising paragraph (b) to read as 
follows:


Sec. 63.11  Notification by and prior approval for U.S. international 
carriers that have or propose to acquire ten percent investments by, 
and/or an affiliation with, a foreign carrier.

* * * * *
    (b) Any carrier authorized to provide international communications 
service under this part that knows of a planned investment by a foreign 
carrier of a ten percent or greater interest, whether direct or 
indirect, in the capital stock of the authorized carrier shall notify 
the Commission sixty days prior to the acquisition of such interest. 
Any such authorized carrier shall report a ten percent or greater 
planned investment

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in the capital stock of the carrier by a foreign carrier, or by any 
entity that directly or indirectly controls or is controlled by a 
foreign carrier, or that is under direct or indirect common control 
with a foreign carrier. The notification shall certify to the 
information specified in paragraph (c) of this section. Carriers that 
have filed a notification pursuant to this paragraph are required to 
maintain the accuracy of the initial filing by notifying the Commission 
of additional investment interests by the foreign carrier or an 
affiliated company.
* * * * *
    3. Section 63.18 is amended by revising paragraph (e)(3)(i)(B) to 
read as follows:


Sec. 63.18  Contents of applications for international common carriers.

* * * * *
    (e) * * *
    (3) * * *
    (i) * * *
    (B) Reasonable and nondiscriminatory charges, terms and conditions 
for interconnection to foreign domestic carrier facilities for 
termination and origination of international services, with adequate 
means of enforcement;
* * * * *
[FR Doc. 97-15700 Filed 6-16-97; 8:45 am]
BILLING CODE 6712-01-P