[Federal Register Volume 65, Number 130 (Thursday, July 6, 2000)]
[Proposed Rules]
[Pages 41613-41620]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-17027]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[IB Docket No. 00-106, FCC 00-210]


Review of Commission's Consideration of Applications Under the 
Cable Landing License Act

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document solicits comments on a proposed mechanism for 
streamlining the licensing of international submarine cable systems. 
Under the proposal, applicants would have three options to qualify for 
streamlined review. The Commission initiated this proceeding as a means 
of tailoring its licensing process to encourage rapid, facilities-based 
entry by multiple firms that can bring new capacity to keep up with the 
increased demand.

DATES: Comments are due on or before August 21, 2000, and reply 
comments are due on or before September 21, 2000. Written comments by 
the public on the proposed information collections are due on or before 
August 21, 2000. Written comments must be submitted by the Office of 
Management and Budget (OMB) on the proposed information collections 
before September 5, 2000.

[[Page 41614]]


ADDRESSES: Federal Communications Commission, Secretary, 445 12th 
Street, SW., Room TW-B204F, Washington, DC 20554. In addition to filing 
comments with the Secretary, a copy of any comments on the proposed 
information collections contained herein should be submitted to Judy 
Boley, Federal Communications Commission, Room 1-C804, 445 12th Street, 
SW, Washington, DC 20554, or via the Internet to [email protected], and to 
Edward C. Springer, OMB Desk Officer, Room 10236 NEOB, 725 17th Street, 
NW, Washington, DC 20503 or via the Internet to 
[email protected].

FOR FURTHER INFORMATION CONTACT: Peggy Reitzel, Policy and Facilities 
Branch, Telecommunications Division, International Bureau, (202) 418-
1499. For additional information concerning the proposed information 
collections contained in this Notice of Proposed Rulemaking contact 
Judy Boley at (202) 418-0214, or email at [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rule Making, FCC 00-210, adopted on June 8, 2000, and 
released on June 22, 2000. The full text of this document is available 
for inspection and copying during normal business hours in the FCC 
Reference Center (Room CY-A257) of the Federal Communications 
Commission, 445 12th Street, SW, Washington, DC 20554. The document is 
also available for download over the Internet at http://www.fcc.gov/Bureaus/International/Notices/2000/fcc00210.txt. The complete text of 
this document 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.
    This Notice of Proposed Rulemaking contains proposed information 
collections subject to the Paperwork Reduction Act of 1995 (PRA). It 
has been submitted to the Office of Management and Budget (OMB) for 
review under the PRA. OMB, the general public, and other Federal 
agencies are invited to comment on the proposed information collections 
contained in this proceeding.

Summary of Notice of Proposed Rulemaking

    1. On June 8, 2000, the Commission adopted a Notice of Proposed 
Rulemaking (NPRM) to initiate a proceeding to establish streamlined 
rules for processing applications for submarine cable landing licenses. 
This proceeding is one of the Commission's continuing efforts to 
streamline the submarine cable landing licensing process. The 
streamlining proposal is designed to provide guidance for industry in 
submitting applications and for the Commission in reviewing such 
applications. The streamlining approach is designed to provide more 
certainty and flexibility for participants in the application process, 
to promote increased investment and infrastructure development by 
multiple providers, and to decrease application processing time. The 
approach in the NPRM reflects broad input from participants in the 
submarine cable industry. In November 1999, the International Bureau 
held a Public Forum (64 FR 56347, Oct. 19, 1999) and has held numerous 
informal meetings with individual industry participants to solicit 
views about ways the Commission might improve its regulation of the 
submarine cable landing licensing process to further promote consumer 
benefits from increased cable capacity and facilities-based 
competition. The Commission seeks comments on the proposals and 
tentative conclusions contained in this NPRM.
    2. The Commission proposes a mechanism under which an applicant for 
a submarine cable landing license will have three options to qualify 
presumptively for grant on a streamlined basis. The NPRM proposes the 
following three streamlining options: a demonstration that the route on 
which the proposed cable would operate is or will become competitive; a 
demonstration of sufficient independence of control of the proposed 
cable from control of existing capacity on the route; or the existence 
of certain pro-competitive arrangements.
    3. Under the proposal, an applicant could choose any one of the 
three options to qualify presumptively for grant on a streamlined 
basis. The Commission states that if an application does not qualify 
for streamlining, it will be reviewed on a non-streamlined basis 
without prejudice.
    4. The Commission proposes that, when considering an application to 
land and operate a submarine cable that will connect to a non-WTO 
member, it would consider whether the applicant is, or is affiliated 
with, a carrier that has market power in a market where the cable 
lands. If so, the Commission proposes to consider whether that 
destination market offers effective competitive opportunities (ECO) for 
U.S. companies to land or operate a submarine cable in that country. 
Therefore, the Commission proposes that such a cable would not qualify 
presumptively for grant on a streamlined basis, and, in addition to the 
de jure and de facto ECO criteria, the Commission would continue to 
consider other factors consistent with the Commission's discretion 
under the Cable Landing License Act that may weigh in favor of or 
against grant of a license. The Commission seeks comment on this 
proposal.
    5. The Commission seeks comment on control of three key submarine 
facilities: the wet link of a submarine cable system; cable landing 
stations serving a submarine cable system; and exclusive backhaul 
facilities associated with the landing stations of a submarine cable 
system. The Commission tentatively concludes that an examination of a 
firm's influence over these three key facilities is necessary to 
determine whether a cable project raises competitive concerns. The 
Commission seeks comment on this tentative conclusion.
    6. In the NPRM, the Commission proposes that, to meet any of the 
three streamlining options, an applicant must provide sufficient 
documentation. The Commission states that such documentation should 
include, for example, cable landing license applications, Commission 
Orders, the International Bureau's Circuit Status Report, the various 
Construction & Maintenance Agreements (C&MAs) or capacity purchase 
agreements for the cables, and industry press releases. The Commission 
seeks comment on other types of documentation that would be useful for 
applicants seeking to qualify for the streamlining options. The 
Commission also proposes that the streamlining options should apply 
equally for initial applications to land and operate submarine cables 
and to applications to assign or transfer control of existing submarine 
cable landing licenses. The Commission seeks comment on this proposal.
    7. The first proposed streamlining option is a demonstration that 
the route in question is, or will become, competitive because there are 
multiple, independently controlled cables serving the route. The 
Commission proposes that, when an applicant seeks to make a competitive 
route demonstration, the Commission would consider a ``route'' to be 
the connection between the U.S. and a landing point in a foreign 
country. The Commission also notes that an applicant could choose to 
show that there are other economically comparable means to access the 
destination route through a landline or submarine connection using 
another cable or facility stemming from a point-to-point route other 
than the destination route, i.e., hubbing. The Commission

[[Page 41615]]

seeks comment on these methods of defining a route. The Commission also 
notes that in the context of reviewing certain mergers, the Commission 
has chosen to adopt a regional approach to analyzing the international 
transport market. The Commission seeks comment on whether it should 
instead consider adopting a regional route approach in determining 
whether there are sufficient competitive options within the submarine 
cable market. The Commission notes that commenters advocating a 
regional route approach should address how the Commission might define 
``region.''
    8. To satisfy the option that the route is or will become 
competitive, the Commission proposes that an applicant demonstrate that 
there are at least three independently controlled cables, including the 
applicant's proposed cable, serving the route on which the applicant 
wishes to operate the proposed cable. The Commission proposes that an 
applicant rely only on cables that have become operational within 36 
months of the filing of the current application. The Commission seeks 
comment on whether 36 months is the appropriate cut-off period for 
cables becoming operational. The Commission also seeks comment on 
whether three is the appropriate minimum number of independent cables 
and states that commenters arguing that three is not the appropriate 
minimum should suggest and support an alternate minimum number.
    9. For purposes of the competitive route streamlining option, the 
NPRM seeks comment on how to attribute control of proposed and existing 
cables. Specifically, the NPRM seeks comment on the extent of ownership 
in the three key submarine cable facilities (wet link, cable landing 
stations, and exclusive backhaul facilities) that would give a firm 
control of proposed or existing cables for purposes of this 
streamlining option. The NPRM states that, for example, one approach 
would be to attribute control of an entire cable to any entity that: 
owns 50 percent or more of the equity in the wet link of the cable; 
owns 50 percent or more of the equity in a landing station on the 
cable; is the exclusive backhaul provider at a landing station of the 
cable; or exercises de facto control over the wet link of the cable or 
a landing station on the cable. Alternatively, the NPRM seeks comment 
on whether there may be other options to consider in determining what 
level of ownership of key submarine cable facilities would give a firm 
control of a cable system for purposes of this streamlining option. 
With regard to the landing station element, the NPRM states that the 
Commission would not propose to attribute control of any of the cable 
system to an entity controlling fewer than all of the landing stations 
in a particular country.
    10. Stating that it is concerned that including these 
demonstrations for all landing points for a proposed cable may create a 
disincentive for cable landing license applicants seeking to qualify 
for the competitive route streamlining option to include a loop on the 
cable that serves a previously underserved country, the Commission 
seeks comment on whether the Commission should adopt an exception under 
which a landing point on the route of a proposed cable would not need 
to be included in the competitive route analysis.
    11. The NPRM also seeks comment on whether the Commission should 
entertain petitions for declaratory ruling regarding the 
competitiveness of certain routes in lieu of the case-by-case showings 
as proposed in the NPRM. The NPRM asks commenters to identify specific 
showings that a petitioner would need to make in order for the 
Commission to declare a particular route competitive in this manner. 
The NPRM also asks commenters to address whether the benefits of the 
proposed 36-month cut-off are so significant that the Commission should 
not entertain petitions for declaratory ruling regarding the 
competitiveness of particular routes. The Commission also seeks comment 
on whether a declaratory ruling should remain effective, if, subsequent 
to the declaratory ruling, two or more firms that control facilities on 
the route have merged.
    12. The second proposed streamlining option is a demonstration that 
the proposed cable system will be controlled predominantly by new 
entrants. For purposes of this streamlining option, the Commission 
proposes to identify a ``key applicant group'' of a proposed cable and 
seeks comment on the extent of ownership in the three key submarine 
cable facilities (wetlink, cable landing stations, and exclusive 
backhaul facilities) that would give a firm control of a cable system 
for purposes of including the firm in the key applicant group of a 
proposed cable. The Commission states that, for example, one approach 
would be to include in the key applicant group any entity that: owns 50 
percent or more of the equity in the wet link of the proposed cable; 
owns 50 percent or more of the equity in a landing station on the 
proposed cable; is the exclusive backhaul provider at a landing station 
of the proposed cable; or exercises de facto control over the wet link 
of the proposed cable or a landing station on the proposed cable. 
Alternatively, the Commission seeks comment on whether there may be 
other options to consider in determining what level of ownership of key 
submarine cable facilities would give a firm control of a cable system 
for purposes of including the firm in the key applicant group of the 
proposed cable.
    13. The proposed streamlining option would consist of a 
demonstration that entities in the key applicant group of a proposed 
cable control less than 50 percent of the existing wet link capacity on 
the route to be served by the proposed cable. The Commission states 
that an applicant that is providing service on the route for the first 
time could satisfy this proposed streamlining option simply by 
certifying that the key applicant group of the proposed cable does not 
control any existing wet link capacity on the route to be served by the 
proposed cable. In a situation in which an applicant is proposing to 
serve previously unserved routes, the Commission seeks comment on 
whether it should streamline the processing of such an application.
    14. For a proposed cable whose key applicant group controls 
existing capacity on the route to be served by the proposed cable, the 
NPRM states that an applicant could make a showing that it controls 
less than 50 percent of the existing wet link capacity on the route. 
The Commission proposes to attribute the entire capacity of an existing 
cable system to any entity that owns 50 percent or more of the equity 
in the wet link of the existing cable or exercises de facto control 
over the wet link of the existing cable. In addition, the Commission 
seeks comment on whether and to what extent it should attribute to a 
firm capacity on an existing cable based on the firm's percentage of 
control of landing stations in any country in which that existing cable 
lands. The Commission invites alternative proposals for attributing 
capacity and seeks comment on the appropriate treatment of joint 
ventures and affiliates in this context.
    15. The NPRM proposes that applicants choosing this streamlining 
option provide a list of all firms in the key applicant group and a 
calculation of this group's share of existing capacity on the route. 
The Commission states that it believes that this information should be 
readily available through cable landing license applications, 
Commission Orders, the International Bureau's annual Circuit Status 
Report, the various C&MAs and capacity purchase agreements for the 
cables, and

[[Page 41616]]

industry press releases. Comments are sought on whether this is the 
case.
    16. Global Crossing submitted a proposal it suggests the Commission 
use as a basis for addressing competitive issues in the submarine cable 
market in a Notice of Proposed Rulemaking. Specifically, Global 
Crossing proposes a structural solution under which, for an applicant 
to receive a submarine cable landing license, the applicant would need 
to demonstrate that the landing parties on the U.S. end of the cable do 
not have a combined share of more than 35 percent of the active half 
circuits, including half circuits of full circuits, on the U.S. side of 
the route served by the cable. The NPRM seeks comment on this proposal.
    17. The third proposed streamlining option is a demonstration of 
sufficient pro-competitive arrangements. The Commission states that, as 
a general matter, the pro-competitive provisions should constrain the 
ability of major carriers on a cable to set supracompetitive prices by 
controlling backhaul and the timing of the final capacity upgrade of 
the cable system, which ultimately would result in higher prices for 
consumers. The Commission seeks comment on its general conclusions, and 
whether the Commission's licensing processing processes should reflect 
these goals.
    18. As part of the pro-competitive policy, the Commission proposes 
that an applicant, in ownership or other documents, include specific 
provisions regarding landing stations and competitive backhaul. The 
Commission seeks comment on two alternatives for such provisions. 
First, the Commission states that, in order to qualify for 
streamlining, applicants might include in ownership or other documents 
general provisions allowing for sufficient collocation at a landing 
station by other owners or their designees and stating that there will 
be no restrictions on who can provide backhaul. Alternatively, the 
Commission states that, in order to qualify for streamlining, 
applicants might be required to make more specific demonstrations. As 
an example, the Commission notes that it might provide that an 
applicant include provisions explicitly stating that: sufficient space 
at all landing stations in the United States, and at each foreign 
landing station on the route where applicants plan to land the proposed 
cable, will be made available to any other owner, or the designee of 
any other owner, for the purpose of collocating equipment to provide 
backhaul; all owners or designees of owners may use such space for the 
provision by them of backhaul services to others; and there will be no 
restrictions on the ability of any owner to subcontract the provision 
of backhaul. The Commission notes that, to make specific demonstrations 
regarding backhaul, an applicant could include provisions in ownership 
or other documents explicitly stating that at least two separate 
parties will provide backhaul, rather than a single entity, at all 
landing stations in the United States, and at each foreign landing 
station on the route where applicants plan to land the proposed cable.
    19. The Commission seeks comment on these two alternatives and any 
other alternative that commenters deem to be more appropriate. The 
Commission also seeks comment on whether collocation and backhaul 
rights provided by applicants should apply only to owners of equity or 
to IRU holders as well. In addition, the Commission notes that there 
has been some concern expressed about high rates charged for connection 
to cables and backhaul from cable landing stations, and seeks comment 
on ways in which the Commission might ensure the ability of carriers to 
obtain connection to a cable and backhaul to points of presence at 
competitive rates.
    20. The Commission also proposes that, in order to qualify under 
this streamlining option, an applicant include certain provisions in 
ownership or other documents about wet link capacity upgrades and use 
of capacity. The Commission seeks comment on whether, in order to 
qualify for this streamlining option, a provision should be included in 
ownership or other documents that would allow the capacity of a cable 
to be upgraded either by a 51 percent vote of the owners or by any 
group of owners voting to fully fund the cost of the upgrade. The 
Commission notes that, in the latter case, ownership or other documents 
would indicate that all owners, not just owners voting to fully fund 
the upgrade, will have the right to buy into the upgrade consistent 
with their contractual rights. The Commission also seeks comment on 
whether a firm's interest in a cable should be measured in terms of 
circuits, dollar value of investment or some other measure. In 
addition, the Commission seeks comment on whether, in order to qualify 
for this streamlining option, an applicant should include provisions in 
ownership or other documents explicitly stating that, after the initial 
capacity has been funded, there will be no restrictions on resale or 
transfer of capacity and no restrictions on parties reselling their 
ownership shares and/or reselling or leasing their rights on the cable. 
The Commission seeks comment on whether an applicant should explicitly 
state that there will be no unreasonable charges assessed on owners 
wishing to resell or transfer capacity or ownership shares, or wishing 
to resell or lease their rights on the cable.
    21. The Commission also seeks comment on whether, as an additional 
pro-competitive arrangement, an applicant should include a provision in 
ownership or other documents explicitly allowing smaller firms to 
combine their capacity requirements for the purpose of obtaining volume 
discounts.
    22. The Commission also proposes methods to streamline the process 
and seeks comment on the proposals. The Commission notes because of the 
unique role of the Executive Branch with respect to submarine cable 
landing licenses, and because the Commission we intends to coordinate 
closely with the Executive Branch, the Commission does not propose a 
wholesale adoption of the Section 214 streamlining process for 
submarine cable landing license applications. With respect to timing 
for review of submarine cable landing license applications, the 
Commission proposes that, if an application qualifies presumptively for 
grant on a streamlined basis under one of the three streamlining 
options, the Commission will grant the application 60 days from the 
date the International Bureau issues a public notice accepting the 
application for filing, or indicate in a public notice why grant of the 
application within 60 days cannot be provided. The Commission seeks 
comment on this proposal and states that it expects that the period 
between the filing of an application and the release of a public notice 
ordinarily would not be lengthy because the International Bureau would 
put an application out on public notice promptly after determining that 
the application is complete.
    23. The NPRM also discusses the possibility of a conditional grant 
of a cable landing license whereby the Commission would condition its 
grant of authority on ultimate approval by the Secretary of State. The 
Commission also proposes to issue streamlined licenses by public 
notice, rather than by issuing an Order and seeks comment on whether 
issuing a public notice would satisfy the requirement under the Cable 
Landing License Act that grants be issued by ``written license.''
    24. The Commission states its intention to continue its private 
submarine cable policy in order to further stimulate competition in the 
market, but states that it does not

[[Page 41617]]

propose to abandon the distinction between submarine cable systems 
which operate on a common carrier and a non-common carrier basis. The 
Commission also seeks comment on whether, in a situation in which an 
applicant is proposing to serve previously unserved routes, the 
Commission should impose conditions, such as a nondiscrimination 
requirement, on the license, regardless of whether the Commission 
grants the license on a streamlined basis. The Commission also seeks 
comment on the types of situations in which it might be appropriate for 
the Commission to require a cable to be operated on a common carrier 
basis and asks commenters to address whether the Commission should 
consider indirect means to a destination point in determining the level 
of competition on a route and whether a route is a thin route. The 
Commission also seeks comment on what effect, if any, the imposition of 
common carrier regulations or common carrier-like obligations may have 
on a company's business decision whether to build a cable.
    25. In addition, the Commission seeks comment on whether any of the 
routine conditions currently imposed on cable landing licenses should 
be eliminated or modified. The Commission also notes that Level 3 
suggested that the Commission develop special conditions for the 
licenses of submarine cables whose participants include carriers that 
are ``major suppliers,'' regardless of whether those carriers are U.S.-
licensed carriers, and states that Level 3 defines a ``major supplier'' 
as that term is defined in the Reference Paper to the WTO Basic Telecom 
Agreement. Level 3 argued that to prevent such carriers from acting 
anticompetitively in the submarine cable market, the Commission should 
impose conditions relating to: cable station access, requiring a major 
supplier to provide competing carriers with, for example, physical 
collocation at the cable station, circuit provisioning and 
interconnection intervals; backhaul, requiring a major supplier to 
allow competing carriers to negotiate a backhaul contract with the 
major supplier on a timely and reasonable basis with nondiscriminatory 
pricing; and procedures, requiring a major supplier to expedite orders 
for service with reasonable times and reasonable charges, to ensure 
freely available information, and, for consortium cables, to separate 
submarine cable and related operations from terrestrial operations. The 
Commission seeks comment on Level 3's suggestions and states that 
commenters advocating that the Commission adopt Level 3's suggestions 
should indicate whether we should define ``major supplier'' as Level 3 
defines the term, or whether we should adopt an alternative definition, 
and explain how the proposed definition would work in practice.
    26. To provide more certainty to potential cable landing license 
applicants, the Commission proposes a method for determining who should 
be included as an applicant for a cable landing license. Specifically, 
the Commission proposes that an entity should be included as an 
applicant for a cable landing license for a proposed cable system, 
regardless of whether the entity also is a Section 214 licensee, if the 
entity is a landing station owner or: the entity has a five percent or 
greater ownership interest in the proposed cable which includes voting 
rights, except if the ownership is exclusively at foreign points on the 
cable system, and the entity will use the U.S. points of the cable 
system in any capacity, unless the capacity merely is ``hard-patched'' 
through and is not dropping traffic in the U.S. or using the U.S. 
points of the cable system to re-originate traffic. Under the 
Commission's proposal, if an entity, at the time it files the 
application and the license is granted does not plan to use the U.S.-
points of the cable system, but later decides to do so, that entity 
would need to file an application to be added to the license. The 
Commission seeks comment on whether a five percent or greater ownership 
interest would ensure that we include entities with a significant 
ability to affect the operation of a cable system, but that we not 
burden smaller carriers or investors and notes that, under a five 
percent or greater ownership threshold, fewer entities will be required 
to obtain licenses than under the current practice. The Commission 
seeks comment on whether a different percentage would be appropriate to 
accomplish these goals. The Commission notes, that, under this 
proposal, an entity that is a licensee for an existing submarine cable 
but does not own a landing station and has less than a five percent 
ownership interest in the cable, may file with the Commission a request 
that its license be relinquished.
    27. The Commission also seeks comment on whether it would 
facilitate processing if it encourages or mandates electronic filing 
for the applications. As the Commission did with respect to streamlined 
assignments and transfers of control of international Section 214 
authorizations, the Commission proposes to delegate to the 
International Bureau the authority to identify those particular 
applications that do warrant public comment and additional Commission 
scrutiny under current stated Commission policies. Comments are 
solicited on this proposal as well as others described in the NPRM.
    28. The Commission declines to propose modifying or waiving 
licensing or regulatory fees. The Commission does, however, seek 
comment generally on whether, if the Commission ultimately adopts the 
streamlining measures proposed in the NPRM, it would be in the pubic 
interest to propose a modification of the regulatory fees.

Procedural Matters

    29. Ex Parte Presentations. This NPRM is a permit but disclose 
notice and comment rulemaking proceeding. Ex Parte presentations are 
permitted, except during the Sunshine Agenda period, provided they are 
disclosed as provided in the Commission's rules.
    30. Initial Regulatory Flexibility Act Analysis. Pursuant to the 
Regulatory Flexibility Act, an Initial Regulatory Flexibility Analysis 
was prepared and is incorporated as Attachment A of this summary. 
Written comments on the Initial Regulatory Flexibility Act Analysis are 
requested.
    31. Paperwork Reduction Act. The NPRM contains proposed information 
collections. The Commission, as part of its continuing effort to reduce 
paperwork burdens, invites the general public and the Office of 
Management and Budget (OMB) to take this opportunity to comment on the 
proposed information collections contained in the NPRM, as required by 
the Paperwork Reduction Act of 1995, Public Law 104-13. Written 
comments by the public on the proposed information collections are due 
the same day as comments on the NPRM, August 21, 2000. Written comments 
must be submitted by OMB on the proposed information collections 
September 5, 2000. Comments should address the following: (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 estimate; (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 Control Number: 3060-XXXX.
    Title: Applications under the Cable Landing License Act.

[[Page 41618]]

    Form Number: N/A.
    Type of Review: New collection.
    Respondents: Business and other for-profit entities.
    Number of Respondents: 55.
    Number of Responses: 55.
    Estimated Time Per Response: Under Section 1.767(a)-(e), we 
estimate approximately 10 hours will be imposed on 15 respondents. 
Under Section 1.767(f), we estimate 1 burden hour per respondent.
    Frequency of Response: On Occasion. Third party disclosure.
    Total Annual Burden: 95 hours (50% of burden estimated to be 
contracted to outside assistance).
    Total Annual Costs: $208,875.
    Needs and Uses: The information will be used by the Commission to 
determine the qualifications of applicants to construct and operate 
submarine cables, including applicants that are affiliated with foreign 
carriers, and to determine whether and under what conditions the 
authorizations are in the public interest, convenience, and necessity. 
The proposed information collections are necessary for the Commission 
to maintain effective oversight of U.S. carriers that are affiliated 
with, or involved in certain co-marketing or similar arrangements with, 
foreign carriers that have sufficient market power to affect 
competition adversely in the U.S. market. In addition, the Commission 
must maintain records that accurately reflect a party or parties that 
control a carrier's operations, particularly for purposes of enforcing 
the Commission's rules and policies.

Initial Regulatory Flexibility Analysis

    As required by the Regulatory Flexibility Act (RFA), 5 U.S.C. 603, 
the Commission has prepared this present Initial Regulatory Flexibility 
Analysis (IRFA) of the possible significant economic impact on small 
entities by the policies proposed in this Notice of Proposed Rulemaking 
(NPRM). Written public comments are requested on this IRFA. Comments 
must be identified as responses to the IRFA and must be filed by the 
deadlines for comments on the NPRM provided in Section IV, Subpart C of 
the NPRM. The Commission will send a copy of the NPRM, including this 
IRFA, to the Chief Counsel for Advocacy of the Small Business 
Administration. In addition, the NPRM and IRFA (or summaries thereof) 
will be published in the Federal Register.

A. Need for, and Objectives of, the Proposed Rules

    In recent years, there has been explosive growth in the number and 
capacity of submarine cables triggered in large part by increased 
Internet and data traffic. Because of this increased demand for 
capacity, the rapid pace of technological development, and the 
emergence of non-traditional ownership and financing structures in the 
submarine cable marketplace, the International Bureau has undertaken a 
review of its policies for licensing submarine cables. The result of 
this review is the initiation of this proceeding to establish 
streamlined rules for processing applications for submarine cable 
landing licenses.
    The streamlining proposal in the NPRM is designed to provide 
guidance for industry in submitting applications and for the Commission 
in reviewing such applications. The current precedent analyzing 
competitive issues in the submarine cable market is not extensive. In 
the absence of extensive precedent, the guidance contained in the 
proposed streamlining options should help ensure expeditious action on 
applications. In addition, the streamlining options in this NPRM seek 
to provide incentives for the development of facilities-based 
competition and capacity expansion to meet increasing demands.
    This approach reflects broad input from participants in the 
submarine cable industry. In November 1999 the International Bureau 
held a Public Forum and has held numerous informal meetings with 
individual industry participants to solicit views about ways the 
Commission might improve its regulation of the submarine cable landing 
licensing process to further promote consumer benefits from increased 
cable capacity and facilities-based competition. Industry participants 
expressed three objectives: expedited processing of applications, 
careful review of certain applications to guard against anticompetitive 
behavior, and encouragement of pro-competitive licensing procedures in 
other countries. To accomplish and balance these three objectives, the 
NPRM proposes streamlining that reflects pro-competitive policies. This 
approach is designed to provide more certainty and flexibility for 
participants in the application process, to promote increased 
investment and infrastructure development by multiple providers, and to 
decrease application processing time.
    To achieve these goals, the NPRM proposes a mechanism under which 
an applicant for a submarine cable landing license will have three 
options to qualify presumptively for grant on a streamlined basis. The 
NPRM proposes the following three streamlining options: (1) A 
demonstration that the route on which the proposed cable would operate 
is or will become competitive; (2) a demonstration of sufficient 
independence of control of the proposed cable from control of existing 
capacity on the route; or (3) the existence of certain pro-competitive 
arrangements. We believe that, on balance, the streamlining policies 
proposed in the NPRM are pro-competitive, and that, if an application 
falls within one of these three categories, we can presume that it is 
unlikely that we will have competitive concerns about the cable. We 
note that, if an application does not qualify for streamlining, it will 
be reviewed on a non-streamlined basis without prejudice.
    Our proposal to streamline the submarine cable landing licensing 
process is part of a continuing streamlining effort. The proposal's 
structure of identifying categories of applications eligible for 
streamlined processing is consistent with our process for streamlining 
Section 214 applications. The Commission continually seeks ways to 
grant licenses more quickly to allow parties to enter the market 
rapidly, especially as new technological developments make speed to 
market crucial for firms competing in the ever changing Internet-driven 
communications market.

B. Legal Basis

    The NPRM is adopted pursuant to Sections 1, 4(i) and (j), 201-255, 
303(r) of the Communications Act as amended, 47 U.S.C. 151, 154(i), 
154(j), 201-255, and the Cable Landing License Act, 47 U.S.C. 34 
through 39 and Executive Order No. 10530, Sec. 5(a), reprinted as 
amended in 3 U.S.C. 301.

C. Description and Estimate of the Number of Small Entities to Which 
the Proposals Will Apply

    The RFA directs agencies to provide a description of, and, where 
feasible, estimate of the number of small entities that may be affected 
by the proposals, if adopted. The Regulatory Flexibility Act defines 
the term ``small entity'' as having the same meaning as the terms 
``small business,'' ``small organization,'' and ``small business 
concern'' under Section 3 of 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 SBA.
    The SBA has developed a definition of small entities for telephone 
communications companies other than radiotelephone (wireless) 
companies.

[[Page 41619]]

The Census Bureau reports that there were 2,321 such companies that had 
been operating for at least one year at the end of 1992. According to 
the SBA's definition, a wireline telephone company is a small business 
if it employs no more than 1,500 persons. All but 26 of the 2,321 
wireline companies listed by the Census Bureau were reported to have 
fewer than 1,000 employees. Thus, even if all 26 of those companies had 
more than 1,500 employees, there would still be 2,295 wireline 
companies that might qualify as small entities or small incumbent LECs. 
Although it seems certain that some of these carriers are not 
independently owned and operated, we are unable at this time to 
estimate with greater precision the number of wireline carriers and 
service providers that would qualify as small business concerns under 
the SBA's definition. Consequently, we estimate that fewer than 2,295 
of these wireline companies are small entities that might be affected 
by these proposals.
    Specifically, the streamlining options contained in the NPRM apply 
to entities applying for a license to land or operate submarine cables 
under the Cable Landing License Act, (or entities applying to transfer 
control of existing submarine cable landing licenses). The proposals, 
however, may affect other entities as well, including users of 
submarine cable service such as Internet service providers (ISPs) that 
lease capacity or purchase indefeasible rights of use (IRUs) on cable 
systems. The Commission, therefore, encourages these entities to 
comment on the proposals in the NPRM. The proposals are intended to 
reduce the burden on all applicants regardless of size, by permitting 
applicants to seek to have their applications qualify presumptively for 
grant on a streamlined basis. At this time, we are not certain as to 
the number of small entities that will be affected by the proposals. 
Agency data indicates there have been approximately 50 cable landing 
applications filed with the Commission since 1992, but the total number 
of licensees is difficult to determine, because many licenses are 
jointly held by several licensees. Based on this information, we would 
estimate that there could be 50 or fewer applicants that might be a 
small entity.

D. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements

    The reporting requirements proposed in the NPRM are voluntary and 
should not impose specific burdens on small entities. If an applicant 
for a submarine cable landing license wishes its application to qualify 
presumptively for a grant on a streamlined basis, the applicant could 
demonstrate that its application conforms to any one of the three 
streamlining options described in the NPRM. The NPRM seeks comment on 
the kinds of demonstrations an applicant could make to qualify for 
streamlining under the proposals.
    The documentation proposed by the NPRM is not standardized. The 
information is unique to the applicant. Although the information could 
be submitted in a standardized format, creating such a format would 
impose a burden on an applicant because the applicant has several 
options from which to choose for streamlined processing. For example, 
the NPRM suggests types of documentation including cable landing 
license applications, Commission Orders, the International Bureau's 
annual Circuit Status Report, the various C&MAs or capacity purchase 
agreements for the cables, and industry press releases. The NPRM also 
seeks comment on other types of documentation that would be useful for 
applicants seeking to qualify for the streamlining options proposed in 
the NPRM.
    In addition, it is not possible or practical to estimate the costs 
and burdens associated with the documentation applicants would need to 
submit to demonstrate satisfaction of the streamlining options. We 
believe that the applicant's documentation would be information that is 
maintained by the applicant in the normal course of business, and as 
such would not impose a significant burden on the applicant. We are 
seeking comments on possible costs and burdens associated with the 
documentation applicants would need to submit to qualify for 
streamlining under the options outlined in the NPRM.

E. Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    The RFA requires an agency to describe any significant alternatives 
that it has considered in reaching its proposed approach, which may 
include the following four alternatives (among others): (1) The 
establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliancor reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage or the rule, or any part thereof, for small 
entities.
    The proposals in this NPRM are designed to provide more certainty 
and flexibility for applicants, encourage investment and infrastructure 
development by multiple providers, expand available submarine cable 
capacity, and decrease application processing time. This may benefit 
small entities especially because the proposals would facilitate entry 
into the submarine cable market and expand international services. The 
Commission has proposed the following three options from which an 
entity may choose to qualify presumptively for streamlined processing: 
(1) A demonstration that the route on which the proposed cable would 
operate is or will become competitive; (2) a demonstration of 
sufficient independence of control of the proposed cable from control 
of existing capacity on the route; or (3) the existence of certain pro-
competitive arrangements. We request comment on these three 
streamlining options.
    We request comment on whether small entities would be adversely 
affected by the proposals herein and whether the proposals will enable 
small entities to respond to the demands of the market with minimum 
regulatory oversight, delays, and expenses. We believe that our 
proposals will promote the rapid expansion of capacity and facilities-
based competition, which will result in innovation and lower prices for 
U.S. consumers of international telecommunications services. We believe 
that our proposals would have either no impact, or would reduce, any 
economic burdens on small entities.
    The NPRM seeks comment on policies of particular benefit to small 
entities. First, with respect to the proposal regarding which entities 
need to apply for cable landing licenses, the NPRM notes that the 
greater a firm's investment in a cable system, the greater ability the 
firm has to influence the way in which a cable is operated. The NPRM 
further notes that firms with a greater ability to affect the operation 
of a cable system would expect to be subject to all conditions and 
responsibilities that that come with the right to land or operate the 
cable system. The NPRM notes that entities with minimal investment in a 
cable system, on the other hand, do not have the same ability to affect 
the operation of the cable system. There is not the same need, 
therefore, to subject these entities to the conditions and 
responsibilities that come with a cable landing license. Under the 
proposal in the NPRM, therefore, other than landing station owners, 
entities with less than a five percent ownership interest in a cable 
system would not need to be

[[Page 41620]]

included as an applicant for the cable landing license for a proposed 
cable. The NPRM notes that, under a five percent or greater ownership 
threshold, fewer entities will be required to obtain licenses than 
under the current practice. This means that fewer entities will be 
subject to the conditions and responsibilities that come with the right 
to land or operate a cable. The NPRM seeks comment on whether a 
different percentage would be appropriate to accomplish these goals. In 
addition, the NPRM provides that an entity that is a licensee for an 
existing submarine cable but does not own a landing station and has 
less than a five percent ownership interest in the cable, may file with 
the Commission a request that its license be relinquished.

F. Federal Rules that May Duplicate, Overlap, or Conflict With the 
Proposed Rules

    None.

Ordering Clauses

    Accordingly, pursuant to Sections 1, 4(i) and (j), 201-255 303(r) 
of the Communications Act as amended, 47 U.S.C. 151, 154(i), 154(j), 
201-255, 303(r), and the Cable Landing License Act, 47 U.S.C. 34 
through 39 and Executive Order No. 10530, Sec. 5(a), reprinted as 
amended in 3 U.S.C. 301, this notice of proposed rulemaking is hereby 
adopted and comments are requested.
    The Commission's Consumer Information Bureau, Reference Information 
Center, shall send a copy of this notice of proposed rulemaking, 
including the Initial Regulatory Flexibility Act Analysis, to the Chief 
Counsel for Advocacy of the Small Business Administration.

List of Subjects in 47 CFR Part 1

    Communications common carriers, Reporting and recordkeeping 
requirements, Telecommunications Miscellaneous rules relating to common 
carriers.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 00-17027 Filed 7-5-00; 8:45 am]
BILLING CODE 6712-10-P