[Federal Register Volume 77, Number 227 (Monday, November 26, 2012)]
[Proposed Rules]
[Pages 70400-70407]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-28224]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 1 and 63
[IB Docket No. 12-299; FCC 12-125]
Reform of Rules and Policies on Foreign Carrier Entry Into the
U.S. Telecommunications Market
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: In this document, the Commission is proposing to make changes
to the criteria under which it considers applications and notifications
from foreign carriers or affiliates of foreign carriers for entry into
the U.S. market for international telecommunications services and
facilities under section 214 of Communications Act of 1934, as amended
(the ``Act'') and section 2 of the Cable Landing License Act. By this
document, the Commission seeks to eliminate outdated or unnecessary
rules, simplify rules that it may retain, reduce regulatory costs and
burdens imposed on applicants, and improve transparency with respect to
filing requirements of the ECO Test. It also seeks to promote
competition to achieve greater decisional flexibility in evaluating
applications and notifications, and continue to protect
[[Page 70401]]
important interests related to national security, law enforcement,
foreign policy, and trade policy.
DATES: Submit comments on or before December 26, 2012, and replies on
or before January 15, 2013. Written comments on the Paperwork Reduction
Act (PRA) proposed information collection requirements must be
submitted by the public, Office of Management and Budget (OMB) and
other interested parties on or before January 25, 2013.
ADDRESSES: You may submit comments, indentified by Docket No. 12-299,
by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Federal Communications Commission's ECFS Web site: http://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting
comments.
People with Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by email to [email protected], phone: 202-418-
0530 (voice), tty: 202-418-0432.
In addition to filing comments as described above, a copy of any
comments on the PRA information collection requirements contained
herein should be submitted to the FCC via email to [email protected] and to
Nicholas A. Fraser, OMB, via email to [email protected]
or via fax at 202-395-5167.
For detailed instructions on submitting comments and additional
information on the rulemaking process, see the SUPPLEMENTARY
INFORMATION section of this document.
FOR FURTHER INFORMATION CONTACT: Jodi Cooper or James Ball, Policy
Division, International Bureau, FCC, (202) 418-1460 or via email to
[email protected], [email protected]. On PRA matters, contact Cathy
Williams, Office of the Managing Director, FCC, (202) 418-2918 or via
email to [email protected].
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Proposed Rulemaking in IB Docket No. 12-299, FCC 12-125, adopted on
October 10, 2012 and released on October 11, 2012. The full text of
this document is available for inspection and copying during normal
business hours in the FCC Reference Center, 445 12th Street SW.,
Washington, DC 20554. The document also is available for download over
the Internet at http://transition.fcc.gov/Dailylowbar;Releases/Daily--
Business/2012/db1011/FCC-12-125A1.pdf. The complete text also may be
purchased from the Commission's duplicating contractor, Best Copy and
Printing, Inc. (BCPI), located in Room CY-B402, 445 12th Street, SW.,
Washington, DC 20554. Customers may contact BCPI at its Web site,
http://www.bcpiweb.com, or call 1-800-378-3160.
Comment Filing Procedures
Pursuant to Sec. Sec. 1.415, 1.419, interested parties may file
comments and reply comments on or before the dates indicated above.
Comments may be filed using the Commission's Electronic Comment Filing
System (ECFS). See Electronic Filing of Documents in Rulemaking
Proceedings, 63 FR 24121 (1998).
Electronic Filers: Comments may be filed electronically
using the Internet by accessing the ECFS Web site at http://fjallfoss.fcc.gov/ecfs2/.
Paper Filers: Parties who choose to file by paper must
file an original and one copy of each filing. If more than one docket
or rulemaking number appears in the caption of this proceeding, filers
must submit two additional copies for each additional docket or
rulemaking number. Filings can be sent by hand or messenger delivery,
by commercial overnight courier, or by first-class or overnight U.S.
Postal Service mail. All filings must be addressed to the Commission's
Secretary, Office of the Secretary, Federal Communications Commission.
All hand-delivered or messenger-delivered paper filings
for the Commission's Secretary must be delivered to FCC Headquarters at
445 12th St. SW., Room TW-A325, Washington, DC 20554. The filing hours
are 8 a.m. to 7 p.m. All hand deliveries must be held together with
rubber bands or fasteners. Any envelopes must be disposed of before
entering the building.
Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9300 East Hampton
Drive, Capitol Heights, MD 20743.
U.S. Postal Service first-class, Express, and Priority
mail must be addressed to 445 12th Street SW., Washington, DC 20554.
Summary of Notice of Proposed Rulemaking
1. The Notice of Proposed Rulemaking (NPRM) proposes changes to the
criteria that the Federal Communications Commission (FCC) considers in
analyzing applications filed by foreign carriers or affiliates of
foreign carriers for entry into the U.S. market for international
telecommunications services and facilities pursuant to section 214 of
the Communications Act of 1934, as amended, and section 2 of the Cable
Landing License Act. The Commission seeks comment in the NPRM on
proposals to eliminate or, in the alternative, simplify the ECO Test
that applies to Commission review of (1) international section 214
applications, (2) cable landing license applications, and (3)
notifications of foreign carrier affiliations. The ECO Test is a set of
criteria designed to protect the U.S. telecommunications market from
potential anticompetitive activities by foreign carriers or their
affiliates with market power in their country. The Commission currently
applies the ECO Test to applications filed by foreign carriers or their
affiliates from countries that are not members of the WTO. The
Commission also applies the ECO Test in the context of its rules
requiring authorized U.S. international carriers and cable landing
licensees to notify the Commission of their foreign carrier
affiliations.
2. In the 1995 Foreign Carrier Entry Order, the Commission
concluded that the public interest would be served by regulating the
entry of foreign carriers or their affiliates into the U.S. market for
international telecommunications and facilities under section 214 of
the Communications Act. In that proceeding the Commission adopted rules
that examined, as one factor in its overall public interest analysis of
an application for international section 214 authority, whether
``effective competitive opportunities'' exist for U.S. carriers in the
destination markets of foreign carriers seeking to enter the U.S.
international services market through affiliation with a new or
existing carrier. The Commission applied the ECO Test only to
applications to provide service to foreign points where the affiliated
foreign carrier had market power, and the Commission's analysis did not
distinguish between World Trade Organization (WTO) countries and non-
WTO Member countries. Although the Foreign Carrier Entry Order did not
discuss application of the ECO Test to submarine cable applications,
the Commission historically had applied an analysis similar to the
section 214 ECO Test analysis on a case-by-case basis under the Cable
Landing License Act.
3. The Commission, in its 1997 Foreign Participation Order,
replaced the section 214 ECO Test adopted in the Foreign Carrier Entry
Order, with an open entry standard for applicants from WTO Member
countries. The Commission adopted a rebuttable presumption by which it
presumes that foreign investment from WTO Member
[[Page 70402]]
countries does not pose competitive concerns in the U.S. market. The
Commission, however, retained the ECO Test with respect to foreign
entrants from non-WTO Member countries, finding that circumstances that
existed when it adopted the Foreign Carrier Entry Order had not changed
sufficiently with respect to countries that were not members of the
WTO, i.e., that non-WTO countries were not liberalized and presented
legal and practical barriers to entry. The Commission concluded that
its goals of increasing competition in the U.S. telecommunications
service market and opening foreign telecommunications service markets
would continue to be served by opening the U.S. market to applicants
from non-WTO countries where the applicants can demonstrate that there
are effective competitive opportunities for U.S. carriers in the
foreign country. The Commission did not presume, however, that an
application from a carrier in either a WTO or non-WTO country poses no
national security, law enforcement, foreign policy or trade policy
concerns, and accords deference to Executive Branch agencies in
identifying and interpreting issues of concern related to these
matters.
4. ECO Test Criteria for Section 214 Applications and
Notifications: The ECO Test that applies to international section 214
authority applications filed by foreign carriers or certain of their
affiliates is codified in section 63.18(k) of the Commission's rules.
For section 214 applications, the Commission's rules require that a
foreign carrier applicant from a non-WTO country must demonstrate: (1)
The legal ability of U.S. carriers to enter the foreign market and
provide facilities-based and/or resold international services, in
particular international message telephone service (IMTS), (2) the
existence of reasonable and nondiscriminatory charges, terms and
conditions for interconnection to a foreign carrier's domestic
facilities for termination and origination of international services or
the provision of the relevant resale service, (3) the existence of
competitive safeguards in the foreign country to protect against
anticompetitive practices, (4) the existence of an effective regulatory
framework in the foreign country to develop, implement and enforce
legal requirements, interconnection arrangements and other safeguards,
and (5) any other factors the applicant deems relevant to the ECO Test
demonstration.
5. The Commission also applies the ECO Test in the context of its
rules requiring authorized international section 214 carriers to notify
the Commission of their foreign carrier affiliations. A U.S. authorized
carrier that acquires or seeks to acquire an affiliation with a foreign
carrier that is authorized to operate in a non-WTO country that the
U.S. carrier is authorized to serve under section 214 must show, under
the ECO Test requirements in Sec. 63.18 of the Commission's rules,
that its operations on the route for which it proposes to acquire an
affiliation with the non-WTO foreign carrier continues to serve the
public interest. If the U.S. carrier cannot make this showing, or
demonstrate that the foreign carrier lacks market power in the non-WTO
Member country, then the Commission may impose conditions necessary to
address any public interest harms or may proceed to an immediate
revocation hearing.
6. ECO Test criteria for Submarine Cable Applications and
Notifications: The Commission's ECO Test as it applies to applications
for submarine cable landing licenses filed by foreign carriers or
certain of their affiliates is not codified in the rules. The test is
similar, but not identical, to the analysis for international section
214 applications. The Commission examines: (1) The legal, or de jure,
ability of U.S.-licensed companies to have ownership interests in
submarine cables landing in the foreign market, and (2) if no explicit
legal restrictions on ownership exist, the practical, or de facto,
ability of U.S.-licensed companies to have ownership interests in cable
facilities in the foreign market. The Commission also considers other
public interest factors consistent with its discretion under the Cable
Landing License Act that may weigh in favor of or against grant of a
license, including any national security, law enforcement, foreign
policy or trade policy concerns that may be raised by a particular
application.
7. In addition, the Commission applies the ECO Text in the context
of its rules requiring U.S. authorized cable landing licensees to
notify the Commission of their foreign carrier affiliations. Under
Commission rules, U.S. cable landing licensees have a continuing
obligation to notify the Commission of an affiliation with a foreign
carrier authorized to operate in a destination market where the U.S.-
licensed cable lands. In certain circumstances, cable landing licensees
have an obligation to obtain prior approval before acquiring an
affiliation with a foreign carrier authorized to operate in a market
where the U.S.-licensed cable lands. That is, the U.S. licensee must
demonstrate in its notification either that the foreign carrier lacks
market power in that country or that there are effective competitive
opportunities for U.S.-licensed companies to land and operate submarine
cables in that country. If the licensee is unable to make either
showing, then the Commission may impose conditions on the authorization
or proceed to an authorization revocation hearing.
8. Re-examining the ECO Test: The Commission now believes it is
time to review the requirements of the ECO Test as it applies to
section 214 authority applications, cable landing license applications,
and foreign carrier affiliation notifications. There are now 156
countries that are Members of the WTO (in addition to the European
Union), and 27 observer countries that are in the process of joining,
or acceding to, the WTO. While this leaves approximately one-quarter of
all countries outside the WTO that have not opened up their markets
pursuant to WTO accords, the non-WTO Member countries represent a de
minimis fraction, or approximately five percent of the world's gross
domestic product. The detailed ECO Test requirements, as initially
adopted in the Foreign Carrier Entry Order, were designed to be applied
to countries that could support advanced regulatory regimes. Today, the
ECO Test applies only to non-WTO Member countries, and these countries
are small countries that may not have the necessary resources to
support a regulatory framework that meets the detailed ECO Test
requirements.
9. The Commission therefore proposes to re-examine current ECO Test
requirements to either eliminate the ECO Test or modify ECO Test
criteria it uses in review of section 214 applications, cable landing
license applications, and foreign carrier affiliation notifications. If
the ECO Test is maintained, the Commission proposes to codify that test
in its rules governing submarine cable landing license applications.
However, whether the ECO Test is eliminated or modified, the Commission
proposes to continue to maintain its review of section 214
applications, cable landing license applications, and foreign carrier
affiliation notifications under its dominant carrier safeguards and
``no special concessions'' rules. These rules, according to the
Commission in previous rulings, help to prevent certain anticompetitive
strategies that foreign carriers can use to discriminate among their
U.S. carrier correspondents, such as refusal to interconnect and
circuit blocking. Absent these rules, foreign
[[Page 70403]]
carriers with market power could use their market power to discriminate
in favor of certain U.S. carriers, including their own affiliates.
Furthermore, applications for section 214 authority and cable landing
licenses, and foreign affiliation notifications, that involve foreign
carrier entry or investment will continue to be coordinated with the
appropriate Executive Branch agencies, and the Commission will accord
deference to their views in matters related to national security, law
enforcement, foreign policy, or trade policy that may be raised by a
particular transaction.
10. Proposals to Eliminate the ECO Test: The Commission seeks
comment on elimination of the ECO Test for section 214 authorizations,
cable landing licenses and foreign carrier affiliation notifications.
If the ECO Test is eliminated, the Commission would maintain the
distinction in its rules between carriers or affiliates from WTO and
non-WTO Member countries. Non-WTO applicants for section 214
authorizations would no longer be required to demonstrate compliance
with the ECO Test. Instead, the Commission would rely on its authority
to analyze potential anticompetitive harm on a case-by-case basis to
make a public interest determination as to whether U.S. carriers are
experiencing competitive problems in that market, and whether the
public interest would be served by authorizing the foreign carrier to
enter the U.S. market. The case-by-case analysis would require
applicants to submit the information to us required by our rules
applicable to section 214 applications and cable landing license
applications. The applications would not be eligible for streamlined
processing, and the foreign carrier affiliation notifications would
continue to be subject to a 45-day notification prior to consummation
of the transaction. Existing section 214 carriers and cable landing
licensees would still have to provide information showing that it is,
or is seeking to become affiliated with, a foreign carrier with market
power in a non-WTO country. The Commission could consult with the
United States Trade Representative (USTR) and other agencies as to any
anticompetitive problems that may exist for U.S. companies in the
country of the applicant. U.S. carriers would also have an opportunity
to file comments as to whether they have experienced problems in
entering the relevant market of a non-WTO country. The Commission would
have the flexibility to request additional information, if needed,
which may be similar to the type of information required by the current
ECO Test. If the Commission finds that U.S. carriers are experiencing
competitive problems in that market, then it would have the flexibility
to seek additional information from the applicant relating to U.S.
carrier ability to enter the foreign market of the applicant and
impose, if necessary, appropriate conditions on the authorization or
license.
11. The Commission requests comment on eliminating an ECO Test
determination from our rules and policies applicable to U.S.-licensed
companies and applicants under section 214 of the Communications Act
and under the Cable Landing License Act. Specifically, commenters
should address whether the Commission's dominant carrier safeguards and
the ``no special concessions'' rules provide adequate protection
against anti-competitive harm, or whether additional safeguards are
necessary to protect U.S. carriers from competitive harm in their
provision of U.S. international services and facilities on routes
between the United States and non-WTO countries.
12. In proposing elimination of the ECO Test, the Commission seeks
comment on to what extent eliminating the ECO Test would reduce costs
incurred by carriers by the review of applications involving an ECO
Test determination, and whether there may be benefits in retaining the
ECO Test criteria that outweigh the costs and burdens associated with
it.
13. Alternative Proposal to Modify the Section 214 ECO Test: If the
Commission maintains the ECO Test, it seeks comment on ways to simplify
and improve its application. First, under a modified approach, the
Commission proposes retaining--either in a rule or by application on a
case-by-case basis under our broad authority--the first prong of the
section 214 ECO Test that requires the Commission to determine whether
U.S. carriers have the legal, or de jure, ability to enter the foreign
destination market and provide international facilities-based services
and/or resold services. The Commission requests commenters to identify
and comment on known legal barriers to entry in markets of non-WTO
Member countries that may continue to exist, and more specifically of
how laws, regulations, policies, and practices known to commenters
prevent U.S. carriers from competing in a particular foreign market
should this legal requirement be removed.
14. In modifying the ECO Test, the Commission also proposes to
eliminate certain criteria that it considers to determine whether there
are practical, or de facto, effective competitive opportunities for
U.S. carriers to enter the foreign destination market. Specifically,
the Commission proposes to eliminate (1) the requirement that
applicants show that there is an effective regulatory framework in the
foreign country to develop, implement, and enforce legal requirements,
interconnection arrangements and other safeguards, and (2) the
requirement that applicants must show whether competitive safeguards
exist in the foreign country to protect against anticompetitive
practices, with the exception of retaining a competitive safeguard that
requires timely and nondiscriminatory disclosure of technical
information needed to interconnect with carriers' facilities.
Therefore, the Commission would continue to require applicants to show
that there are reasonable and nondiscriminatory charges, terms, and
conditions for interconnection to a foreign carrier's domestic
facilities for termination and origination of international services.
The Commission seeks comment on whether there is a practical basis for
retaining these requirements based on carriers' experiences
interconnecting to a foreign carrier's domestic facilities for
termination and origination of international services. Further, the
Commission also seeks comment on whether there is a policy basis for
retaining current ECO Test criteria that apply to remaining non-WTO
markets, and whether fewer criteria or additional criteria are required
for either type of authorization.
15. Codification of the Submarine Cable ECO Test: The ECO Test for
submarine cable landing licenses is not codified in the Commission's
rules. Whether or not the ECO Test is eliminated or modified, the
Commission proposes to amend the cable licensing rules to include
certifications concerning foreign carrier affiliations in a manner
similar to section 214 authorization rules. If the Commission retains
the ECO Test, then the Commission proposes to codify in the cable
landing license rules an ECO Test that contains criteria similar to the
section 214 ECO Test criteria proposed in the alternative rules. Under
this approach, the Commission seeks comment on proposed rules that
would require applicants from non-WTO countries to demonstrate that
U.S. carriers have both the legal, or de jure, and practical, or de
facto, ability to own and operate submarine cables in a country where a
cable lands. To
[[Page 70404]]
demonstrate de facto ability, the applicant would have to show that
U.S. carriers would have the ability to collocate facilities, provide
or obtain backhaul capacity, access technical network information, and
interconnect to the public switched telephone network. These proposed
rules would also apply to notifications filed by a cable landing
licensee that becomes, or seeks to become, affiliated with, a foreign
carrier possessing market power in a non-WTO Member country where the
cable lands. The Commission seeks comment on these proposals.
16. The Commission also requests comment on the benefits and costs
of the current ECO Test with respect to cable landing license
applications and notifications. Specifically, is there an incentive for
non-WTO countries to open their markets to U.S. carriers under the
current test, or are there any other benefits to U.S. carriers in
modification of the ECO Test? Conversely, what are the costs an
applicant incurs in providing information under the current ECO Test?
The Commission encourages commenters to discuss all aspects of this
proposal as well as practical problems cable landing license applicants
face in complying with the current ECO Test requirements.
Paperwork Reduction Act of 1995 Analyses
17. This document contains proposed new and modified information
collection requirements. The Commission, as a part of its continuing
effort to reduce paperwork burdens, invites the general public and the
Office of Management and Budget (OMB) to comment on the information
collection requirements contained in this document, as required by the
Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In addition,
pursuant to the Small Business Paperwork Relief Act of 2002, Public Law
107-198, see 44 U.S.C. 3506(c)(4), the Commission seeks specific
comment on how it might ``further reduce the information collection
burden for small business concerns with fewer than 25 employees.''
18. Written comments by the public on the proposed and/or modified
information collections are due December 26, 2012. Written comments
must be submitted by the public, Office of Management and Budget (OMB),
and other interested parties on or before January 25, 2013. In addition
to filing comments with the Secretary, Marlene H. Dortch, a copy of any
comments on the information collection(s) contained herein should be
submitted to Judith B. Herman, Federal Communications Commission, Room
1-C804, 445 12th Street, SW., Washington, DC 20554, or via email to
[email protected] and to Kim A. Johnson, OMB Desk Officer, Room
10236 NEOB, 725 17th Street NW., Washington, DC 20503 or via email to
[email protected].
Initial Regulatory Flexibility Analysis
19. Pursuant to the Regulatory Flexibility Act (RFA), the
Commission certifies that that an Initial Regulatory Flexibility
Analysis (IRFA) of the possible significant economic impact on small
entities by the proposals considered in this NPRM is not warranted, and
that a regulatory flexibility certification is appropriate for the
reasons stated below.
20. First, the ECO Test rules that the Commission proposes to
either eliminate or modify in this NPRM affect only applications filed
by foreign carriers or their affiliates that hold market power in a
country that is not a member of the WTO. Based on statistics available,
there are currently 156 WTO Member countries (in addition to the
European Union), and we calculate, based on 2010 World Bank gross
domestic product (GDP) data, that the remaining non-WTO Member
countries represent approximately five percent of the world's GDP. The
ECO Test requirements are detailed and were designed to be applied to
countries that could support advanced regulatory regimes. Most of the
non-WTO Member countries are countries that may not have the necessary
resources to support a regulatory framework that meets the ECO Test
requirements. In this NPRM the Commission is proposing either to
completely eliminate or modify the current ECO Test criteria that will
result in lessening the economic impact on applicants from non-WTO
Member countries requesting an ECO Test determination.
21. The Commission believes that the proposal and other options on
which it seeks comment in this NPRM will reduce costs and burdens
currently imposed on applicants, carriers, and licensees, including
those that are small entities, and accelerate the authorization and
licensing process, while continuing to ensure that the Commission has
the information it needs to carry out its statutory duties. Therefore,
the Commission certifies that the proposals in this NPRM, if adopted,
will not have a significant impact on a substantial number of small
entities. The Commission will send a copy of the NPRM, including the
certification, to the Chief Counsel for Advocacy of the Small Business
Administration (SBA).
Ordering Clauses
22. It is ordered that, pursuant to sections 1, 2, 4(i) and (j),
201-205, 208, 211, 214, 303(r), and 403 of the Communications Act of
1934, as amended, 47 U.S.C. 151, 152, 154(i)-(j), 201-205, 208, 211,
214, 303(r), and 403, and the Cable Landing License Act, 47 U.S.C. 34-
39 and Executive Order No. 10530, section 5(a), reprinted as amended in
3 U.S.C. 301, this Notice of Proposed Rulemaking is adopted.
23. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Notice of Proposed Rulemaking, including the Initial
Regulatory Flexibility Certification, to the Chief Counsel for Advocacy
of Small Business Administration.
List of Subjects
47 CFR Part 1
Administrative practice and procedure, Cable landing licenses.
47 CFR Part 63
Communications common carriers.
Federal Communications Commission.
Bulah P. Wheeler,
Associate Secretary.
For the reasons discussed in the preamble, the Federal
Communications Commission proposes to amend 47 CFR parts 1 and 63, and
propose alternative rules to those parts as follows:
PART 1--PRACTICE AND PROCEDURE
1. The authority citation for part 1 continues to read as follows:
Authority: 15 U.S.C. 79 et seq.; 47 U.S.C. 151, 154(i), 154(j),
155, 157, 225, 227, 303(r), and 309.
2. Section 1.767 is amended by revising paragraph (a)(8), adding
note to (a)(8)(iv), and revising note to section to read as follows:
Sec. 1.767 Cable Landing Licenses.
(a) * * *
(8) For each applicant:
(i) The place of organization and the information and
certifications required in Sec. 63.18(h) and (o) of this chapter;
(ii) A certification as to whether the applicant is, or is
affiliated with, a foreign carrier, including an entity that owns or
controls a cable landing station, in any foreign country. The
certification shall state with specificity each such country;
(iii) A certification as to whether or not the applicant seeks to
land and
[[Page 70405]]
operate a submarine cable connecting the United States to any country
for which any of the following is true. The certification shall state
with specificity the foreign carriers and each country:
(A) The applicant is a foreign carrier in that country; or
(B) The applicant controls a foreign carrier in that country; or
(C) Any entity that owns more than 25 percent of the applicant, or
that controls the applicant, controls a foreign carrier in that
country.
(D) Two or more foreign carriers (or parties that control foreign
carriers) own, in the aggregate, more than 25 percent of the applicant
and are parties to, or the beneficiaries of, a contractual relation
(e.g., a joint venture or market alliance) affecting the provision or
marketing of arrangements for the terms of acquisition, sale, lease,
transfer and use of capacity on the cable in the United States; and
(iv) For any country that the applicant has listed in response to
paragraph (a)(8)(iii) of this section that is not a member of the World
Trade Organization, a demonstration as to whether the foreign carrier
lacks market power with reference to the criteria in Sec. 63.10(a) of
this chapter.
Note to Paragraph (a)(8)(iv): Under Sec. 63.10(a), the
Commission presumes, subject to rebuttal, that a foreign carrier
lacks market power in a particular foreign country if the applicant
demonstrates that the foreign carrier lacks 50 percent market share
in international transport facilities or services, including cable
landing station access and backhaul facilities, intercity facilities
or services, and local access facilities or services on the foreign
end of a particular route.
* * * * *
Note to Sec. 1.767: The terms ``affiliated'' and ``foreign
carrier,'' as used in this section, are defined as in Sec. 63.09 of
this chapter except that the term ``foreign carrier'' also shall
include any entity that owns or controls a cable landing station in
a foreign market. The term ``country'' as used in this section
refers to the foreign points identified in the U.S. Department of
State list of Independent States of the World and its list of
Dependencies and Areas of Special Sovereignty. See http://www.state.gov.
3. Section 1.768 is amended by revising paragraph (g)(2) to read as
follows:
Sec. 1.768 Notification by and prior approval for submarine cable
landing licensees that are or propose to become affiliated with a
foreign carrier.
* * * * *
(g) * * *
(2) In the case of a prior notification filed pursuant to paragraph
(a) of this section, the authorized U.S. licensee must demonstrate that
it continues to serve the public interest for it to retain its interest
in the cable landing license for that segment of the cable that lands
in the non-WTO destination market. Such a showing shall include a
demonstration as to whether the foreign carrier lacks market power in
the non-WTO destination market with reference to the criteria in Sec.
63.10(a) of this chapter. If the licensee is unable to make the
required showing or is notified by the Commission that the affiliation
may otherwise harm the public interest pursuant to the Commission's
policies and rules under 47 U.S.C. 34 through 39 and Executive Order
No. 10530, dated May 10, 1954, then the Commission may impose
conditions necessary to address any public interest harms or may
proceed to an immediate authorization revocation hearing.
Note to Paragraph (g)(2): Under Sec. 63.10(a), the Commission
presumes, subject to rebuttal, that a foreign carrier lacks market
power in a particular foreign country if the applicant demonstrates
that the foreign carrier lacks 50 percent market share in
international transport facilities or services, including cable
landing station access and backhaul facilities, intercity facilities
or services, and local access facilities or services on the foreign
end of a particular route.
* * * * *
PART 63--EXTENSION OF LINES, NEW LINES, AND DISCONTINUANCE,
REDUCTION, OUTAGE AND IMPAIRMENT OF SERVICE BY COMMON CARRIERS; AND
GRANTS OF RECOGNIZED PRIVATE OPERATING AGENCY STATUS
4. The authority citation for part 63 continues to read as follows:
Authority: Sections 1, 4(i), 4(j), 10, 11, 201-205, 214, 218,
403 and 651 of the Communications Act of 1934, as amended, 47 U.S.C.
151, 154(i), 154(j), 160, 201-205, 214, 218, 403, and 571, unless
otherwise noted.
5. Section 63.11 is amended by revising paragraph (g)(2) to read as
follows:
Sec. 63.11 Notification by and prior approval for U.S. international
carriers that are or propose to become affiliated with a foreign
carrier.
* * * * *
(g) * * *
(2) In the case of a prior notification filed pursuant to paragraph
(a) of this section, the U.S. authorized carrier must demonstrate that
it continues to serve the public interest for it to operate on the
route for which it proposes to acquire an affiliation with the foreign
carrier authorized to operate in the non-WTO Member country. Such a
showing shall include a demonstration as to whether the foreign carrier
lacks market power in the non-WTO Member country with reference to the
criteria in Sec. 63.10(a) of this chapter. If the U.S. authorized
carrier is unable to make the required showing in Sec. 63.10(a), the
U.S. authorized carrier shall agree to comply with the dominant carrier
safeguards contained in section 63.10(c), effective upon the
acquisition of the affiliation. If the U.S. authorized carrier is
notified by the Commission that the affiliation may otherwise harm the
public interest pursuant to the Commission's policies and rules, then
the Commission may impose conditions necessary to address any public
interest harms or may proceed to an immediate authorization revocation
hearing.
Note to Paragraph (g)(2): Under Sec. 63.10(a), the Commission
presumes, subject to rebuttal, that a foreign carrier lacks market
power in a particular foreign country if the applicant demonstrates
that the foreign carrier lacks 50 percent market share in
international transport facilities or services, including cable
landing station access and backhaul facilities, intercity facilities
or services, and local access facilities or services on the foreign
end of a particular route.
* * * * *
6. Section 63.18 is amended by revising paragraph (k), removing
paragraph (p), redesignating paragraph (q) as (p), and adding new
paragraph (q) to read as follows:
Sec. 63.18 Contents of applications for international common
carriers.
* * * * *
(k) For any country that the applicant has listed in response to
paragraph (j) of this section that is not a member of the World Trade
Organization, the applicant shall make a demonstration as to whether
the foreign carrier has market power, or lacks market power, with
reference to the criteria in Sec. 63.10(a) of this chapter.
Note to Paragraph (k): Under Sec. 63.10(a), the Commission
presumes, subject to rebuttal, that a foreign carrier lacks market
power in a particular foreign country if the applicant demonstrates
that the foreign carrier lacks 50 percent market share in
international transport facilities or services, including cable
landing station access and backhaul facilities, intercity facilities
or services, and local access facilities or services on the foreign
end of a particular route.
* * * * *
(q) Any other information that may be necessary to enable the
Commission to act on the application.
* * * * *
[[Page 70406]]
Alternative Proposed Rules
PART 1--PRACTICE AND PROCEDURE
1. The authority citation for part 1 continues to read as follows:
Authority: 15 U.S.C. 79 et seq.; 47 U.S.C. 151, 154(i), 154(j),
155, 157, 225, 227, 303(r), and 309.
2. Section 1.767 is amended by revising paragraph (a)(8) and note
to section to read as follows:
Sec. 1.767 Cable Landing Licenses.
(a) * * *
(8) For each applicant:
(i) The place of organization and the information and
certifications required in Sec. 63.18(h) and (o) of this chapter;
(ii) A certification as to whether the applicant is, or is
affiliated with, a foreign carrier, including an entity that owns or
controls a cable landing station, in any foreign country. The
certification shall state with specificity each such country;
(iii) A certification as to whether or not the applicant seeks to
land and operate a submarine cable connecting the United States to any
country for which any of the following is true. The certification shall
state with specificity the foreign carriers and each country:
(A) The applicant is a foreign carrier in that country; or
(B) The applicant controls a foreign carrier in that country; or
(C) Any entity that owns more than 25 percent of the applicant, or
that controls the applicant, controls a foreign carrier in that
country.
(D) Two or more foreign carriers (or parties that control foreign
carriers) own, in the aggregate, more than 25 percent of the applicant
and are parties to, or the beneficiaries of, a contractual relation
(e.g., a joint venture or market alliance) affecting the provision or
marketing of arrangements for the terms of acquisition, sale, lease,
transfer and use of capacity on the cable in the United States; and
(iv) For any country named in response to paragraph (a)(8)(iii) of
this section, the applicant shall make one of the following showings:
(A) The named country is a Member of the World Trade Organization;
or
(B) The foreign carrier lacks market power in the named country,
with reference to the criteria in Sec. 63.10(a) of this chapter; or
(C) The named country provides effective competitive opportunities
to U.S. cable landing licensees to have ownership interests in
submarine cables that land in that country. An effective competitive
opportunities demonstration should address the following factors:
(1) Whether U.S. cable landing licensees have the legal ability to
enter the market of the named country and have ownership interests in
submarine cables that land in that country;
(2) Whether there exist reasonable and nondiscriminatory charges,
terms and conditions to interconnect a cable in the named country, the
ability to collocate facilities, provide or obtain backhaul capacity,
and access to timely disclosed technical network information for the
purpose of providing services in the market of that country; and
(3) Any other factors the applicant deems relevant to its
demonstration.
Note to Paragraph (a)(8)(iv): Under Sec. 63.10(a), the
Commission presumes, subject to rebuttal, that a foreign carrier
lacks market power in a particular foreign country if the applicant
demonstrates that the foreign carrier lacks 50 percent market share
in international transport facilities or services, including cable
landing station access and backhaul facilities, intercity facilities
or services, and local access facilities or services on the foreign
end of a particular route.
* * * * *
Note to Sec. 1.767: The terms ``affiliated'' and ``foreign
carrier,'' as used in this section, are defined as in Sec. 63.09 of
this chapter except that the term ``foreign carrier'' also shall
include any entity that owns or controls a cable landing station in
a foreign market. The term ``country'' as used in this section
refers to the foreign points identified in the U.S. Department of
State list of Independent States of the World and its list of
Dependencies and Areas of Special Sovereignty. See http://www.state.gov.
3. Section 1.768 is amended by revising paragraph (g)(2) to read as
follows:
Sec. 1.768 Notification by and prior approval for submarine cable
landing licensees that are or propose to become affiliated with a
foreign carrier.
* * * * *
(g) * * *
(2) In the case of a prior notification filed pursuant to paragraph
(a) of this section, the U.S. authorized licensee must demonstrate that
it continues to serve the public interest for it to retain its interest
in the cable landing license for that segment of the cable that lands
in the non-WTO Member country by demonstrating either that the foreign
carrier lacks market power in that country, with reference to the
criteria in Sec. 63.10(a) of this chapter, or that the country offers
effective competitive opportunities to U.S. cable landing licensees to
land and operate submarine cables in that country by making the
required showing in Sec. 1.767(a)(8)(iv)(C). If the licensee is unable
to make either required showing or is notified by the Commission that
the affiliation may otherwise harm the public interest pursuant to the
Commission's policies and rules under 47 U.S.C. 34 through 39 and
Executive Order No. 10530, dated May 10, 1954, then the Commission may
impose conditions necessary to address any public interest harms or may
proceed to an immediate authorization revocation hearing.
Note to Paragraph (g)(2): Under Sec. 63.10(a), the Commission
presumes, subject to rebuttal, that a foreign carrier lacks market
power in a particular foreign country if the applicant demonstrates
that the foreign carrier lacks 50 percent market share in
international transport facilities or services, including cable
landing station access and backhaul facilities, intercity facilities
or services, and local access facilities or services on the foreign
end of a particular route.
* * * * *
PART 63--EXTENSION OF LINES, NEW LINES, AND DISCONTINUANCE,
REDUCTION, OUTAGE AND IMPAIRMENT OF SERVICE BY COMMON CARRIERS; AND
GRANTS OF RECOGNIZED PRIVATE OPERATING AGENCY STATUS
4. The authority citation for part 63 continues to read as follows:
Authority: Sections 1, 4(i), 4(j), 10, 11, 201-205, 214, 218,
403 and 651 of the Communications Act of 1934, as amended, 47 U.S.C.
151, 154(i), 154(j), 160, 201-205, 214, 218, 403, and 571, unless
otherwise noted.
5. Section 63.18 is amended by revising paragraph (k)(3)
introductory text, paragraphs (k)(3)(ii) and (iii), removing paragraphs
(k)(3)(iv) and (v), and redesignating paragraph (k)(3)(vi) as (iv) to
read as follows:
Sec. 63.18 Contents of applications for international common
carriers.
* * * * *
(k) * * *
(3) The named foreign country provides effective competitive
opportunities to U.S. carriers to compete in that country's market for
the service that the applicant seeks to provide (facilities-based,
resold switched, or resold private line services). An effective
competitive opportunities demonstration should address the following
factors:
* * * * *
(ii) If the applicant seeks to provide resold services, the legal
ability of U.S. carriers to enter the foreign market and provide resold
international switched services (for switched resale applications) or
resold private line services (for private line resale applications);
[[Page 70407]]
(iii) Whether there exist reasonable and nondiscriminatory charges,
terms and conditions, including timely disclosed technical information,
for interconnection to a foreign carrier's domestic facilities for
termination and origination of international services or the provision
of the relevant resale service; and
(iv) Any other factors the applicant deems relevant to its
demonstration.
* * * * *
[FR Doc. 2012-28224 Filed 11-23-12; 8:45 am]
BILLING CODE 6712-01-P