Report No. CC-568          COMMON CARRIER ACTION              April 5, 1994


      FCC AFFIRMS THAT CANADA AFFORDS RESALE OPPORTUNITIES EQUIVALENT
             TO THOSE IN THE U.S.; AT&T DENIED RECONSIDERATION

     The Commission has denied AT&T's petition for reconsideration
and affirmed its previous finding that Canada affords resale
opportunities equivalent to those available in the United States. 
The Commission also granted BT's request and clarified that the
resale authorizations for private lines between the United States
and Canada are limited to the carriage of U.S.--Canada traffic due
to the Canadian policy requiring "maximum use of Canadian
facilities." 

     AT&T requested  reconsideration of the Commission's previous
finding that Canada affords resale opportunities equivalent to
those available in the United States, and the accompanying grant of
the applications of fONOROLA Corporation and EMI Communications for
authority to resell, inter alia, international private lines
between the United States and Canada.  AT&T argued that, in
granting the applications of fONOROLA and EMI, the Commission had
focused solely on the issue of nondiscrimination and did not
undertake a comparative analysis of the resale opportunities
available within Canada and the United States, thus misapplying the
equivalency test.  In the alternative, AT&T asked the Commission to
adopt new traffic reporting and monitoring measures for
international private line resellers.

     On November 4, 1992, the Commission granted fONOROLA and EMI
authority to resell, inter alia, international private lines
between the United States and Canada for the provision of switched
services.  These authorizations represented the first time that the
Commission applied its International Resale Order to authorized
resale of private lines only to countries determined to afford
resale opportunities equivalent to those available in the United
States.  In the International Resale Order, the Commission
concluded that the public interest in cost-based international
telecommunications services will be served by encouraging the
resale of international telecommunications services, including
private lines.  The Commission further stated that it expects the
resale of international private lines to exert downward pressure on 
high collection and above-cost accounting rates.

                                  (over)


                                    -2-

     In an effort to safeguard the U.S. public interest against the
negative impact of "one-way" resale, the Commission conditioned its
policy by requiring international private line resale applicants to
demonstrate that resale opportunities equivalent to those available
under U.S. law are afforded by the destination foreign country.

     In the fONOROLA/EMI Order, the Commission concluded that the
licensing scheme, tariffing requirements, ability to interconnect
to the public switched network at both ends, terms and conditions
for resale of WATS/volume discount services, line-side access
coupled with discounted contribution charges, and foreign ownership
policy in Canada provide equivalent opportunities for U.S.-based
resellers to enter and participate effectively in the Canadian
resale market.  

     Therefore, upon consideration of the complete record, the
Commission determined that Canada affords equivalent private line
resale opportunities.

     With respect to AT&T's alternative proposal, the Commission
stated that adoption of AT&T's proposed monthly traffic reporting
and monitoring measures would frustrate the broader goal of its
International Resale Order, to further competition in the
international resale market in order to obtain the public benefit
of cost-based telecommunications services.  However, the Commission
has recognized that there is a significant time delay between the
initiation of resale services and the filing of current annual
traffic data reports.  Therefore, the Commission adopted a
requirement that all international private line resellers file
certain traffic reports on a semi-annual basis during the first
three years of an equivalency finding.

     Action by the Commission April 4, 1994, by Order on
Reconsideration (FCC 94-81).  Chairman Hundt, Commissioners Quello
and Barrett.  

                                   -FCC-

     News Media contact: Patricia A. Chew at (202) 632-5050.
     Common Carrier Bureau contact: Jennifer A. Warren and Susan
O'Connell at (202) 632-3214.