[Federal Register Volume 63, Number 159 (Tuesday, August 18, 1998)]
[Proposed Rules]
[Pages 44224-44229]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-22292]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 43 and 64

[IB Docket No. 98-148; FCC 98-190]


1998 Biennial Regulatory Review--Reform of the International 
Settlements Policy and Associated Filing Requirements

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: On August 6, 1998, the Federal Communications Commission 
adopted a Notice of Proposed Rulemaking (NPRM) to adopt significant 
changes to the Commission's International Settlements Policy (ISP) and 
associated rules. The changes in this policy are intended to promote 
greater competition and lower international calling prices. The 
Commission proposes to lift regulations under the existing policy that 
restricts the kinds of arrangements U.S. carriers may enter into with 
foreign telecommunications carriers in World Trade Organization (WTO) 
member countries. This action is part of the FCC's biennial review to 
eliminate or modify rules where appropriate.

DATES: Comments are due on or before September 16, 1998 and reply 
comments are due on or before October 16, 1998.

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

FOR FURTHER INFORMATION CONTACT: Robert C. McDonald, Attorney-Advisor, 
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, FCC 98-190, adopted on August 6, 1998. The full 
text of this NPRM is available for inspection and copying during normal 
business hours in the FCC Reference Center (Room 239) of the Federal 
Communications Commission, 1919 M Street, N.W., Washington, D.C. 20554. 
The complete text of this NPRM is available over the Internet on the 
Commission's World Wide Web page, http://www.fcc.gov. The text of the 
NPRM also may be purchased from the Commission's copy contractor, 
International Transcription Service, Inc., 1231 20th Street, N.W., 
Washington, D.C. 20036, (202) 857-3800.

Summary of Notice

    1. The Commission proposes to scale back significantly on the 
Commission's application of the International Settlements Policy (ISP) 
and associated filing requirements. The ISP has governed U.S. carriers' 
bilateral accounting rate negotiations with foreign carriers for many 
years. These policies have largely been a success in safeguarding U.S. 
carrier dealings with monopoly foreign carriers. These rules may not, 
however, be necessary on routes where there is competition in the 
foreign market and they may, in fact, impede the further development of 
competition on such routes. In light of the significant number of 
countries that recently have introduced competition in their 
telecommunications markets, the NPRM proposes significant changes to 
the Commission's ISP and associated rules.
    2. The Commission initiated this proceeding in response to the 
Telecommunications Act of 1996, which requires the Commission to review 
all regulations that apply to operations or activities of any provider 
of telecommunications service and to repeal or modify any regulation it 
determines to be no longer necessary in the public interest.
    3. The ISP and related filing requirements were implemented to 
prevent whipsawing. These rules currently apply to U.S. carrier 
arrangements for IMTS with all foreign carriers, except where a U.S. 
carrier receives authorization to enter into an alternative settlement 
arrangement under our flexibility policy or to provide ISR. We believe, 
however, that whipsawing is a concern that is largely associated with 
foreign carriers with monopoly power. Where U.S. carriers are able to 
terminate international traffic by interconnecting with a carrier that 
lacks market power, we believe that whipsawing is not a significant 
danger. We thus seek comment in this Notice on whether we should 
continue to apply the ISP and related filing requirements to U.S. 
carrier arrangements with foreign carriers from WTO Member countries 
that lack market power in the relevant foreign telecommunications 
market.
    4. With respect to the ISP, there also appears to be little danger 
that a foreign carrier that lacks market power will have the ability to 
whipsaw U.S. carriers. Indeed, without market power over facilities and 
services essential to terminate international traffic, an attempt at 
whipsawing by a foreign carrier that lacks market power should be 
countered by a defection by U.S.

[[Page 44225]]

carriers to another operator. We thus tentatively conclude that we 
should not apply the ISP to agreements concluded with foreign carriers 
from WTO Member countries that lack market power on the relevant route. 
U.S. carriers would therefore be free to enter unencumbered into 
commercial negotiations with foreign carriers in WTO Member countries 
that lack market power. We seek comment on whether carriers that lack 
market power in the foreign market may retain some ability to whipsaw 
where government policies or other foreign market conditions preclude 
real competition. We tentatively conclude that the long term benefits 
of removing our ISP for arrangements with foreign carriers that lack 
market power will outweigh any short-term risks involved. We seek 
comment on this tentative conclusion.
    5. We also seek comment on whether to exempt U.S. carriers from 
filing contracts and accounting rate information under section 43.51 
and 64.1001 of our rules for arrangements with foreign carriers that 
lack market power. 47 CFR 43.51, 64.1001. We tentatively conclude that 
we should amend the Sec. 43.51 contract filing requirement and the 
Sec. 64.1001 accounting rate filing requirements so that contracts and 
accounting rate information for arrangements with foreign carriers that 
lack market power in WTO Member countries would not need to be filed 
with the Commission. We seek comment on this tentative conclusion.
    6. In the Foreign Participation Order, 62 FR 64741, December 9, 
1997, recon. pending, we adopted a presumption, for the purpose of 
applying the No Special Concessions rule, that carriers with less than 
50 percent market share in the relevant markets lack sufficient market 
power to affect competition adversely in the United States. We propose 
to apply this same 50 percent market share presumption for purposes of 
determining whether to apply our ISP and related filing requirements. 
We seek comment on how, if we adopt our proposal to eliminate the ISP 
and filing requirements for arrangements with foreign carriers that 
lack market power in WTO Member countries, we should make the 
determination that the foreign carrier lacks market power. For example, 
should the Commission make an affirmative finding whether a foreign 
carrier possesses market power, or should we leave the determination of 
whether a foreign carrier falls outside our presumptive 50 percent 
market share screen, so that the ISP and our filing requirements apply, 
to the carrier that concludes the arrangement? We note that carriers 
that accept a special concession from a foreign carrier that lacks 
market power are currently required to file publicly contracts with the 
Commission along with information that the foreign carrier has a market 
share of less than 50 percent in the relevant markets. Opposing parties 
thus have the opportunity to rebut this presumption by demonstrating 
that the carrier indeed possesses market power. If we were to adopt our 
tentative conclusion to eliminate the contract filing requirement for 
agreements with foreign carriers that lack market power in the foreign 
market, we seek comment on whether the Commission and potential 
competitors would lack the information needed to determine whether an 
agreement qualifies for the exception to our filing requirement and No 
Special Concessions rule.
    7. We believe that, in most foreign markets, the determination of 
whether a carrier has market power is clear cut, because most foreign 
markets are divided between a former incumbent with a market share of 
well over 50 percent and new entrants with market shares far below 50 
percent. Nevertheless, we recognize that there may be some need to 
preserve Commission oversight to ensure that carriers do not engage in 
exclusive dealings with foreign carriers that possess market power. 
This oversight should, however, be balanced with our goal of allowing 
carriers the freedom to negotiate agreements freely with carriers that 
lack market power. We seek comment on several alternatives for 
determining whether to apply our ISP and related filing requirements to 
a particular arrangement. First, we could adopt a rule that 
arrangements with foreign carriers with less than 50 percent market 
share do not have to be filed, and not require any filing to 
substantiate the claim that the foreign carrier lacks market power. 
Second, we could require that a carrier that seeks to enter an 
arrangement with a foreign carrier that lacks market power identify the 
route and file a certification that the carrier on the foreign end of 
the international route lacks market power, without revealing the 
identity of the foreign correspondent. Third, we could require a 
carrier to identify the foreign carrier and publicly file data 
indicating that the foreign carrier possesses less than 50 percent 
market share in each of the relevant markets or file a petition for 
declaratory ruling that a foreign carrier with greater than 50 percent 
market share nevertheless lacks market power. We also seek comment on 
whether, if we adopt this third proposal, we should allow confidential 
treatment for such filings.
    8. We seek to simplify our regulatory requirements to the greatest 
extent possible, consistent with our commitment to preventing abuse of 
market power by foreign carriers in their dealings with U.S. carriers. 
We seek comment on whether our proposal to eliminate the ISP and 
related filing requirements for arrangements with foreign carriers that 
lack market power in WTO Member countries achieves this goal. We 
tentatively conclude that this approach is warranted because carriers 
without market power have a substantially diminished ability to whipsaw 
U.S. carriers. We further tentatively conclude that this approach is 
consistent with the regulatory framework we adopted in our Foreign 
Participation Order, 62 FR 64741, December 9, 1997, recon. pending. We 
seek comment on our proposed approach for regulating arrangements 
between U.S. carriers and foreign carriers that lack market power in 
WTO Member countries, and on any other approaches that would further 
our goals.
    9. We also seek comment on whether, under certain circumstances, we 
should decline to apply the ISP and related filing requirements to U.S. 
carrier arrangements with all foreign carriers in selected WTO Member 
country markets, including arrangements with those carriers that 
possess market power. We seek comment on what standard we should employ 
for identifying routes on which we should not apply the ISP. We propose 
to decline to apply the ISP on routes where the Commission has already 
authorized ISR.
    10. Alternatively, we seek comment on whether a settlement rate 
threshold lower than a benchmark rate is appropriate. For example, we 
could apply the current best practices rate of $.08 per minute, 
established in our Benchmarks Order, as the threshold. Under this 
proposal, we would decline to apply our ISP on routes where at least 50 
percent of the traffic is settled at a rate of $.08 per minute or less. 
Commenters suggesting an alternative settlement rate threshold should 
provide a documented basis for any threshold suggested.
    11. We also seek comment on whether any other standard is 
appropriate. For instance, we could decline to apply the ISP only in 
cases where 50 percent of traffic on the route is settled at or below 
benchmark rates and the foreign market permits U.S. carriers to provide 
service via ISR. We seek comment on these alternatives, and on any 
other alternative standard we could adopt to

[[Page 44226]]

identify routes on which we need not apply our ISP.
    12. We also seek comment on whether we should decline to apply our 
Sec. 43.51 contract filing and Sec. 64.1001 accounting rate filing 
requirements to the extent we decline to apply the ISP on certain 
routes. See 47 CFR 43.51, 64.1001. We seek comment on whether we should 
require public filing, require confidential filing or remove the filing 
requirements altogether for arrangements on certain routes where we 
decline to apply the ISP. For instance, if we remove these filing 
requirements generally, should we maintain them for arrangements 
entered into with foreign carriers with market power, or only for 
affiliated foreign carriers with market power?
    13. Our proposal to eliminate the ISP and related filing 
requirements on routes where we permit ISR would greatly reduce 
regulatory oversight for arrangements between U.S. carriers and foreign 
carriers on those routes. We believe that our proposal will further our 
goal of eliminating unnecessary regulatory burdens, while continuing to 
prevent abuse of market power by foreign carriers in their dealings 
with U.S. carriers. We seek comment on our proposed approach for 
eliminating regulatory requirements on routes where we believe they are 
not necessary, and on any other approaches that would further our 
goals.
    14. We further seek comment on what modifications we can make to 
our flexibility policy to encourage more carriers to negotiate 
alternative settlement arrangements. Specifically, we propose to modify 
our flexibility policy to limit the filing of commercial information on 
routes that qualify for flexibility. Our current flexibility rules 
require a carrier seeking to implement a flexible arrangement to obtain 
approval by filing a petition for declaratory ruling with the 
Commission. Under our rules, carriers must include a summary of the 
terms and conditions of the alternative settlement arrangement in their 
petition. In addition, carriers are required under Sec. 43.51 of our 
rules to file a copy of all settlement arrangements, including 
alternative settlement arrangements.
    15. We seek comment on whether these filing requirements inhibit 
carriers from negotiating alternative settlement arrangements. Would a 
foreign carrier be less willing to negotiate a favorable arrangement 
with one U.S. carrier if the terms of the agreement must be disclosed 
to all competing carriers in the U.S. market? We seek comment on 
whether we should modify our flexibility policy for alternative 
settlement arrangements which do not trigger our safeguards. Thus, for 
alternative settlement arrangements affecting less than 25 percent of 
the inbound or outbound traffic on a particular route, and for 
arrangements that are not between affiliated carriers or carriers 
involved in a joint venture, we propose to allow carriers to file a 
petition for authorization to enter into a flexible settlement 
arrangement without including a summary of the terms and conditions of 
the agreement or identifying the foreign correspondent in their 
petition. We also seek comment on whether we should decline to apply 
our Sec. 43.51 contract filing requirement for alternative settlement 
arrangements in these circumstances. We note that under this proposal, 
carriers could only seek approval without filing agreements with the 
Commission to the extent the presumption in favor of flexible treatment 
is not rebutted (i.e. there are not multiple facilities-based 
competitors capable of terminating international traffic operating in 
the foreign market).
    16. We also seek comment on the two safeguards we adopted in our 
Flexibility Order, 62 FR 5535, February 6, 1997, recon. pending. The 
first of these safeguards requires that any alternative arrangement 
affecting more than 25 percent of the outbound or inbound traffic on a 
particular route may not contain unreasonably discriminatory terms and 
conditions and must be publicly filed. The other safeguard requires 
that all alternative arrangements between affiliated carriers and 
carriers involved in non-equity joint ventures be publicly filed. We 
adopted these safeguards to protect against potential anticompetitive 
actions by foreign and U.S. carriers with a significant share of their 
markets, and to provide a ``safety net'' for possible unanticipated 
consequences of our flexibility policy. We tentatively conclude that we 
should maintain these safeguards. We seek comment on this tentative 
conclusion and on our tentative conclusion to modify our filing 
requirements for alternative settlement arrangements that do not 
trigger our safeguards. We also seek comment, however, on whether we 
should modify the safeguard that currently requires all flexible 
arrangements entered into with affiliated carriers and joint-venture 
partners to be publicly filed with the Commission. Where the U.S. 
carrier's foreign affiliate does not possess market power in the 
foreign market, there is little danger that a flexible arrangement 
would have anticompetitive effects. The current safeguard, however, 
requires a U.S. carrier to make public flexible arrangements entered 
into with its foreign affiliate even if it lacks market power. We 
therefore seek comment on whether we should only require public 
availability of flexible arrangements entered into by U.S. carriers 
with affiliated carriers or with joint-venture partners that possess 
market power in the foreign market.
    17. If we adopt these proposals, we propose to modify the 
flexibility policy to require only that a carrier file a certification 
that the arrangement does not trigger our flexibility safeguards (i.e., 
that it affects less than 25 percent of traffic on the route and is not 
with an affiliate or joint venture partner) and to identify the 
destination market. We propose to permit other parties to file comments 
to rebut the presumption in favor of flexibility (demonstrating that 
the foreign market lacks multiple facilities-based competitors), but 
not comment on the nature of the flexible arrangement itself. We 
believe that this approach would enable U.S. carriers to enter into 
innovative arrangements that would otherwise not be viable if the full 
contents of the agreement were disclosed.
    18. We note that these proposed modifications to our flexibility 
rule may not be needed if we adopt our proposals in this Notice to lift 
the ISP and related filing requirements for settlement arrangements 
with foreign carriers that lack market power in WTO Member countries 
and settlement arrangements on WTO country routes where we permit ISR. 
Our flexibility policy provides an exception to the ISP. Thus, to the 
extent our ISP does not apply, our flexibility rules would be 
irrelevant. We seek comment on the proposals in this Notice for 
modifying our flexibility policy, and on any other modifications to our 
flexibility policy that would further our goals of encouraging the 
negotiation of more market-based arrangements and eliminating 
unnecessary regulatory burdens.
    19. We also seek comment on whether we should modify our ISR rules 
as a mechanism for putting greater pressure on settlement rates. We 
seek comment in this NPRM on whether we can permit ISR on more routes, 
consistent with our commitment to prevent one-way bypass. For example, 
should we permit carriers to provide ISR for a limited amount of 
traffic on routes where we would otherwise not authorize the provision 
of ISR? We believe that a limited offering of ISR could put significant 
pressure on settlement rates, while limiting the potential damage from 
one-way bypass. Another approach might be to decide in advance to lift 
our ISP requirement at some future point when international markets 
have become sufficiently

[[Page 44227]]

competitive overall, e.g. when 50 percent of routes have been approved 
for ISR. We note that regulators in other markets that allow ISR, such 
as the United Kingdom, Sweden, Germany, and others, do not impose 
restrictions on ISR similar to those we have in place in the United 
States. We seek comment on whether it is possible to deter foreign 
carriers from engaging in one-way bypass that distorts the U.S. market 
through an approach other than prohibiting ISR altogether. For example, 
in the Benchmarks Order, 62 FR 45758, August 29, 1997, recon. pending, 
appeal filed, Cable & Wireless et al. v. FCC, No. 97-1612 (D.C. Cir. 
filed Sept. 26, 1997), we adopted a safeguard that would impose 
sanctions on a carrier whose provision of ISR results in a market 
distortion, i.e., one-way bypass. We adopted a presumption that a 
market distortion would occur if the ratio of inbound/outbound traffic 
increases by ten or more percent over two successive reporting periods. 
We seek comment on whether this or a different competitive safeguard 
would be an effective means of preventing one-way bypass in lieu of our 
existing safeguards, either now or as competitive conditions evolve.
    20. We seek comment on the effect of adopting the above proposals 
on our No Special Concessions rule as well as on the existing ISR and 
flexibility policies. We also seek comment on whether additional 
safeguards are necessary to address any possible competitive distortion 
that may result from limiting the scope of our ISP. We note that if we 
adopt our proposals to scale back our application of the ISP, our 
flexibility and ISR policies will apply only to arrangements with 
foreign carriers with market power in foreign markets to which the 
Commission does not allow ISR and to arrangements with carriers in non-
WTO Member countries.
    21. Our No Special Concessions rule prohibits U.S. international 
carriers from ``agreeing to accept special concessions directly or 
indirectly from any foreign carrier with respect to any U.S. 
international route where the foreign carrier possesses sufficient 
market power on the foreign end of the route to affect competition 
adversely in the U.S. market * * *.'' 47 CFR 63.14(a). We seek comment 
on whether to maintain the No Special Concessions rule for U.S. carrier 
arrangements with foreign carriers with market power if we adopt the 
proposal in this Notice not to apply the ISP and related filing 
requirements on ISR routes. It may be necessary to maintain the No 
Special Concessions rule because it applies more broadly than the ISP. 
For example, the No Special Concessions rule prohibits U.S. carriers 
from agreeing to accept from a foreign carrier that possesses market 
power exclusive arrangements with respect to operating agreements, 
interconnection of international facilities, private line provisioning 
and maintenance, as well as quality of service. The ISP, however, 
applies only to the settlement of international traffic and allocation 
of return traffic. We seek comment on whether such exclusive 
arrangements with a foreign carrier that possesses market power could 
adversely affect competition in the U.S. market on routes where we 
permit ISR, such that we should continue to apply the No Special 
Concessions rule.
    22. We also seek comment on the extent to which the No Special 
Concessions rule applies within the context of our ISR and flexibility 
policies in light of the changes to our rules proposed in this Notice. 
In the Flexibility Order, 62 FR 5535, February 6, 1997, recon. pending, 
the Commission stated that arrangements approved under the flexibility 
rules are permitted as an exception to the No Special Concessions rule. 
By contrast however, we have not made clear how the No Special 
Concessions rule applies to the settlement of traffic under an ISR 
arrangement. An ISR arrangement between a foreign carrier and a U.S. 
carrier, for example, could be viewed as a prohibited special 
concession if the foreign carrier also exchanges traffic in a 
traditional correspondent relationship with other U.S. carriers under 
financial terms and conditions that differ from those governing the ISR 
arrangement. We believe that such an interpretation of our No Special 
Concessions rule was not contemplated when we adopted our ISR policy. 
We therefore tentatively conclude that our No Special Concessions rule 
does not apply to the terms and conditions under which traffic is 
settled, including allocation of return traffic, by a U.S. carrier on 
an ISR route. Notwithstanding an ISR arrangement, however, the No 
Special Concessions rule would prohibit exclusive arrangements with a 
foreign carrier with market power with respect to interconnection of 
international facilities, private line provisioning and maintenance, as 
well as quality of service. We seek comment on this tentative 
conclusion. We also seek comment on whether we should apply the No 
Special Concessions rule in this manner if we decide to retain the No 
Special Concessions rule for U.S. carrier arrangements that deviate 
from the ISP on ISR routes, as discussed above.
    23. Finally, although we seek to remove regulatory impediments to 
competition, we recognize that carriers that possess market power in 
the foreign market may have the potential to leverage that market power 
into the U.S. market. By removing the ISP and transparency 
requirements, we may be removing measures which limit the ability of 
such carriers to distort competition in the U.S. market. We therefore 
seek comment on whether we should adopt additional safeguards to 
prevent a competitive distortion, such as one-way inbound bypass, and 
on measures we should take in the event a competitive distortion 
occurs. For instance, we seek comment on whether we should modify our 
reporting requirements in order to more easily detect such a 
competitive distortion. We also seek comment on what measures we can 
take to ensure that the Commission is able to take swift action in the 
event of a competitive distortion. We recognize, however, that any 
safeguards we adopt may, to the extent they are not absolutely 
necessary, preclude carriers from responding to market influences and 
concluding agreements that may bring settlement rates closer to cost.
    24. We note in particular that removing our ISP and filing 
requirements may, in certain cases, allow carriers to conclude some 
types of arrangements upon which the Commission has not yet ruled. For 
example, commenting parties in other proceedings have expressed concern 
regarding whether carriers may negotiate arrangements to accept 
``groomed'' traffic, i.e. traffic that terminates in particular 
geographic regions. If we adopt our above proposal to remove the ISP 
and our filing requirements with respect to arrangements with carriers 
with market power in selected markets, we would no longer require pre-
approval or public filing of such arrangements. We seek comment on 
whether these types of grooming arrangements present a potential for 
anticompetitive effects, particularly with respect to arrangements 
between foreign carriers with market power and incumbent local exchange 
carriers. We also seek comment on whether the potential for such 
anticompetitive effects would justify an exception to our proposals to 
relax our application of the ISP or whether it would justify 
application of other safeguards.
    25. Currently, the Commission requires that carriers seek approval 
for changes in their accounting rate arrangements with foreign 
correspondents. Under the procedures set out in the Commission's rules, 
carriers seeking such approval must file

[[Page 44228]]

either a modification request or a notification. The notification 
requirement applies to simple reductions in the applicable accounting 
rate. Such notifications must be filed prior to the effective date of 
the change in the accounting rate. Grant of these filings is automatic 
the day after filing. The accounting rate modification filing 
procedures apply to all other changes in accounting rates (except 
flexibility filings), including retroactive changes in the applicable 
accounting rate. Modification filings are automatically granted 21 days 
after filing if the filing is unopposed and the International Bureau 
has not notified the applicant that approval of the modification may 
not serve the public interest. Where a filing is not automatically 
granted, approval is only granted by formal action of the Bureau. The 
Bureau's experience indicates that there is confusion regarding the 
filing procedures applicable to a given agreement. For instance, in 
many cases carriers seek to use notification filing procedures for 
accounting rate arrangements that should be filed under modification 
procedures, causing increased staff workload and additional paperwork 
for filing parties.
    26. In light of the confusion caused by the existence of two 
standards for accounting rate filings, along with the fact that few 
filings are made under the notification procedure, we find that 
adopting the notification filing procedure has not had its intended 
effect of removing regulatory barriers to simple reductions in 
accounting rates. On the contrary, it is our experience that having two 
procedures for accounting rate filings has made procedures more 
complicated than they need to be. We therefore tentatively conclude 
that we should remove the option of filing a notification and require 
that all accounting rate filings be governed under the existing 
procedures for accounting rate modifications. We seek comment on this 
tentative conclusion.
    27. Our international settlements policy requires that U.S. 
carriers not accept exclusive settlement arrangements with foreign 
carriers and prohibits U.S. carriers from entering into any arrangement 
not made available to all U.S. carriers providing service on the route. 
For this reason, carriers making modification or notification filings 
are required under our rules to serve a copy of their filings on all 
facilities-based carriers providing services on the same route.
    28. The Commission is implementing an electronic filing system that 
will replace the current paper filing system for accounting rate 
modifications. This system will automatically generate reports of all 
accounting rate filings and will be available over the Internet on the 
Commission's web page. We seek comment on whether, in light of detailed 
information regarding accounting rate filings that will be available on 
the Internet, we can eliminate the increasingly cumbersome requirement 
that copies of accounting rate filings be served on all carriers 
providing service on a given route. We seek comment, alternatively, on 
whether the Commission should issue a public notice when it receives 
accounting rate filings instead of maintaining the service requirement. 
Due to the significant volume of such filings, we tentatively conclude 
that the information contained in public notices for accounting rate 
filings would be far less helpful than the information that will be 
available on the Commission's web page.
    29. We seek comment on these proposed changes to our accounting 
rate modification and notification filing requirements. We also seek 
comment on any other modifications that would simplify our regulations 
but also enable the Commission and interested parties to obtain the 
information necessary to monitor accounting rate agreements 
effectively, where necessary.
    30. Following adoption of the Flexibility Order, 62 FR 5535, 
February 6, 1997, recon. pending, the Commission received petitions for 
reconsideration from several parties, requesting that the Commission 
alter its competitive safeguards to differing degrees. In light of the 
above proposals to modify our ISP, we seek further comment on the 
issues raised by parties that filed petitions for reconsideration in 
the Flexibility proceeding. We invite interested parties to comment on 
the issues raised in the petitions for reconsideration of the 
Flexibility Order in light of the recent changes in our rules and the 
proposals detailed above.

Initial Regulatory Flexibility Certification

    31. The Regulatory Flexibility Act (RFA) requires that an initial 
regulatory flexibility analysis be prepared for notice-and-comment 
rulemaking proceedings, unless the agency certifies that ``the rule 
will not, if promulgated, have a significant economic impact on a 
substantial number of small entities.'' The RFA generally defines 
``small entity'' as having the same meaning as the terms ``small 
business,'' ``small organization,'' and ``small governmental 
jurisdiction.'' In addition, the term ``small business'' has the same 
meaning as the term ``small business concern'' under the Small Business 
Act. A small business concern is one which: (1) is independently owned 
and operated; (2) is not dominant in its field of operation; and (3) 
satisfies any additional criteria established by the Small Business 
Administration (SBA). The rule changes proposed in this Notice may 
directly affect approximately 10 facilities-based international 
telecommunications carriers. Neither the Commission nor SBA has 
developed a definition of ``small entity'' specifically applicable to 
these international carriers. Therefore, the definition to be used is 
the most appropriate definition under the SBA rules, which here is the 
definition of Communications Services, Not Elsewhere Classified (NEC). 
Under this definition, a small entity is one with $11.0 million or less 
in annual receipts. Based on information filed with the Commission, the 
subject facilities-based international telecommunications carriers do 
not fall within the above definition of ``small entity'' because they 
each have more than $11.0 million in annual receipts. We therefore 
certify that this document will not have a significant economic impact 
on a substantial number of small entities. The Commission will send a 
copy of this document, including this certification, to the Chief 
Counsel for Advocacy of the Small Business Administration.

Initial Paperwork Reduction Act of 1995 Analysis

    32. This Notice of Proposed Rulemaking contains a proposed 
information collection and will be submitted to the Office of 
Management and Budget (OMB).

Comment Filing Procedures

    33. Pursuant to Secs. 1.415 and 1.419 of the Commission's rules, 47 
CFR 1.415, 1.419, interested parties may file comments on or before 
September 16, and reply comments on or before October 16. Comments may 
be filed using the Commission's Electronic Comment Filing System (ECFS) 
or by filing paper copies. See Electronic Filing of Documents in 
Rulemaking Proceedings, 63 FR 24121 (May 1, 1998).
    34. Comments filed through the ECFS can be sent as an electronic 
file via the Internet to <http://www.fcc.gov/e-file/
ecfs.html. Generally, only one copy of an electronic 
submission must be filed. If multiple docket or rulemaking numbers 
appear in the caption of this proceeding, however, commenters must 
transmit one electronic copy of the comments to each docket or 
rulemaking number referenced in the caption. In completing the 
transmittal screen,

[[Page 44229]]

commenters should include their full name, Postal Service mailing 
address, and the applicable docket or rulemaking number. Parties may 
also submit an electronic comment by Internet e-mail. To get filing 
instructions for e-mail comments, commenters should send an e-mail to 
[email protected], and should include the following words in the body of the 
message, ``get form .'' A sample form and 
directions will be sent in reply.
    35. Parties who choose to file by paper must file an original and 
four copies of each filing. If more than one docket or rulemaking 
number appear in the caption of this proceeding, commenters must submit 
two additional copies for each additional docket or rulemaking number. 
All filings must be sent to the Commission's Secretary, Magalie Roman 
Salas, Office of the Secretary, Federal Communications Commission, 1919 
M St. N.W., Room 222, Washington, D.C. 20554.
    36. Parties who choose to file by paper should also submit their 
comments on diskette. These diskettes should be submitted to: Donna 
Christianson, International Bureau, Federal Communications Commission, 
2000 M Street, N.W., Room 836, Washington, D.C. 20554. Such a 
submission should be on a 3.5 inch diskette formatted in an IBM 
compatible format using WordPerfect 5.1 for Windows or compatible 
software. The diskette should be accompanied by a cover letter and 
should be submitted in ``read only'' mode. The diskette should be 
clearly labelled with the commenter's name, proceeding (Docket No. 98-
148), type of pleading (comment or reply comment), date of submission, 
and the name of the electronic file on the diskette. The label should 
also include the following phrase ``Disk Copy--Not an Original.'' Each 
diskette should contain only one party's pleadings, preferably in a 
single electronic file. In addition, commenters must send diskette 
copies to the Commission's copy contractor, International Transcription 
Service, Inc., 1231 20th Street, N.W., Washington, D.C. 20037.

Ordering Clauses

    37. Accordingly, it is ordered that, pursuant to Secs. 1, 4(i)-(j), 
201(b), 214, 303(r) and 403 of the Communications Act of 1934, as 
amended, 47 U.S.C. 151, 154(i)-(j), 214, 303(r), and 403, this Notice 
of Proposed Rulemaking is hereby adopted.
    38. It is further ordered that the commission's office of public 
affairs, reference operations division, shall send a copy of this 
Notice of Proposed Rule Making, including the Initial Regulatory 
Flexibility Certification, to the Chief Counsel for Advocacy of the 
Small Business Administration.

List of Subjects in 47 CFR Parts 43, and 64

    Communications common carriers, Reporting and recordkeeping 
requirements.

Federal Communications Commission
Magalie Roman Salas,
Secretary.
[FR Doc. 98-22292 Filed 8-17-98; 8:45 am]
BILLING CODE 6712-01-P