WPCq 2B)J Z CourierCourierAlbertus Extra-BoldCourier Bold`7X@HP LaserJet 4_230_1HPLAS4.PRS 4x  @\_)^X@26 FPZ3|xCourierAlbertus Extra-Boldv (W1) (Bold)Courier New (Bold) (TT)HP LaserJet 4/4MtScript ROOM 224HPLAS4.WRSSx  @,,PX@2=XZy'lf <?xxx,2x6X@`7X@2CJ,ϫX? p7X<r5ddd,Oed6X@`7@s4ddd,鑡d `7D <<<Xlx,<6X@DQ,@R&HHHX,hH6X@DQh@[*PPPXP6X@DQ@<?xxx,2x6X@`7X@2CJ,ϫX? p7X<r5ddd,Oed6X@`7@s4ddd,鑡d `7<E<<<,΃<6X@`7,@<R&HHH,,H6X@`7h@<[*PPP,MP6X@`7@zvvooYddY44UUFFz4UBYtBnnyy2v7cvvnCzvhcnonvyXzXshn~|yxxxxxxxxxxxxxxxxxxxBJ\4BBBBBQBBzzz?govBQBddvgBB?gokrdddxx4UvFxxxx44UUdzoFxxBJddovBddYYvBYovzzzzz????vBBBB",tB^ f ^JHsHddHHHdHH`xsNYsk|dddddHdx`vhHov;;|;vxvvUUQvo|o]ddd8Jd;ddddd`zhzhzhzhN;N;N;N;vzzzzvvvvodtzzozvlllltltlt8;Nvl0lPs`~`tttHHdkUd|\|Hvttvx`]x`oJddJJJWddddddddddddddddddddddddddddddddddddddddNdJ`hh]]]`dd]JJ;;zzddd~~Jd]"dd9dCCzJdov`JvosdzUvdddddddsvodszd]szN4ddvo`szsz]~]vozNsJJJzdYC\   pxtll\tll@\@\`L2o     $//O&A, AT&T, Petition for Waiver Intl. Settlements, DA 9547//$ $/63.01 Contents of Applications/$ $/64.1001 International Settlements Policy & Waivers/$ $/300.214 Extension of Lines/$ ///newjob/// $///DA 9547,1/20/95///$ DA 9547  S <7#X? p7ϫX#Before the  Federal Communications Commission 2Washington, D.C. 20554  r5E-#d6X@`7Oe@#In the Matter of American Telephone & ) File No. USP94W210 Telegraph Company ) ) Petition For Waiver of the ) International Settlements Policy ) for a Change in the Accounting ) Rate for Switched Voice Service ) with Canada )  s5r-n ORDER AND AUTHORIZATION ă  s4- dAdopted: January 11, 1995 Released:January 25, 1995 By the Chief, Telecommunications Division  s5]- I. INTRODUCTION ă 1. American Telephone and Telegraph Company (AT&T) has filed a petition for  r5S-waiver of the Commission's International Settlements Policy (ISP)XS ?<ԍ#MP6X@`7@#The ISP requires uniform settlement rates, accounting rates, and division of tolls for  [*R -U.S. international carriers on parallel routes. See Implementation and Scope of Uniform  [* -Settlements Policy for Parallel International Communications Routes, 51 Fed. Reg. 4736 (1986)  [*\!-(ISP Order); Reconsideration, 2 FCC Rcd 1118 (1987); Further Reconsideration, 3 FCC Rcd 1614 (1988). In 1991, the Commission reformed the ISP to encourage and facilitate accounting rate  [*f"-reductions by U.S. carriers. See Regulation of International Accounting Rates, 6 FCC Rcd 3553  [*"-(1991) (Phase I Report and Order); Reconsideration, 7 FCC Rcd 8049 (1992).X to introduce and establish an accounting rate for International 800 service (I800) between the  r5-United States and its correspondent in Canada, Unitel Communications ("Unitel").v ?%<ԍ#MP6X@`7@#AT&T, Petition for Waiver, USP94W210, May 11, 1994. The Commission staff sent a letter to AT&T stating that it must await formal staff"H0*((b%"  r5-action before the proposed accounting rate could be implemented. ?7<ԍ#MP6X@`7@#See Letter from George S. Li to Elaine R. McHale, AT&T, dated May 24, 1994. In this decision, we approve the accounting rate for I800 service between AT&T in the United States"0*((q%"  s43-and Unitel in Canada.X3U ?8$<ԍ#MP6X@`7@#The Canadian Radiotelevision and Telecommunications Commission (CRTC) issued a decision  [*%-approving Unitel's application for the accounting rate for I800 service with AT&T. See Order, Telecom Order CRTC 94848, Ottawa, July 22, 1994.X  s4-B II. SUMMARY OF WAIVER REQUEST ă "(0 0*(()""Ԍ 2. AT&T seeks to introduce and establish an accounting rate for I800 service with Unitel of $0.26 per minute during the "Full" period and $0.22 per minute during"0 0*((""  r5-the "Reduced" period,(} ?7<ԍ#MP6X@`7 @#The "Full" period is in effect Monday through Friday from 8 A.M. to 6 P.M.; the "Reduced" period is in effect Monday through Friday from 6 P.M. through 8 A.M., all day Saturday, Sunday, December 25th, and January 1st.( and to include a surcharge of $0.005 for each such message. The effective date would be January 29, 1994 and coincide with the initiation of I800 service between AT&T in the United States and Unitel in Canada. The accounting rate would be divided equally between AT&T and Unitel and the surcharge would be paid to the nonbilling administration. No opposition to the proposal has been filed.  s5- III. DISCUSSION ă  r5- 3. In its Phase I Report and Order, the Commission delegated authority to the  r5-Common Carrier BureauOb} ?X <ԍ#MP6X@`7 @#This authority has been transferred to the International Bureau. See Amendment of Parts 0, 1, 25, 64, and 73 of the Commission's Rules to Reflect a Reorganization Establishing the  [* -International Bureau, 9 FCC Rcd 7050 (1994).O "to consider, on a casebycase basis, granting ISP waiver requests that include a lower, more economically efficient, costbased, international accounting rate when supported by sound analysis of the benefits that  r5|-will result from the implementation of that rate."|} ?<ԍ#MP6X@`7 @#Regulation of International Accounting Rates, 6 FCC 3552 (1991) at 3554. The Commission stated that the Bureau should approve accounting rate changes if the changes result in a) a more costbased accounting rate, and b) either a commitment to lower calling prices or  r5q -some other public interest benefit.Xq } ?l<ԍ#MP6X@`7 @#Id.X In this context, we must decide under the ISP whether the proposed accounting rate is in the public interest. Specifically, we must determine whether a surcharge on I800 service between the United States and Canada, in addition to the basic settlement payment that is owed for each minute of service, is justified to compensate a carrier for the cost it incurs to originate an I800 call and, whether the particular surcharge proposed by AT&T in its petition for waiver is a reasonable one if we determine that a surcharge is justified. 4. With this proposal, AT&T would initiate I800 service with Unitel. The two carriers have an agreement to provide switched telephone service at an accounting rate of $0.26 per minute during the "Full" period and $0.22 per minute during the "Reduced" period but that agreement does not include I800 service. AT&T, however, has an agreement with Stentor, another Canadian carrier providing service with U.S. carriers, to provide I800 service and the accounting rate that is in effect is $0.36 per minute during the "Full" period and $0.30 per minute during the "Reduced" period. There is no surcharge for I800 service provided by AT&T and Stentor. 5. The accounting rate for service between the United States and Canada, while probably higher than the average cost and surely greater than the incremental cost, is the lowest U.S. accounting rate. This proposal would bring the accounting rate for I800 service even closer to the cost of service, thus promoting our goal of lower, more costbased accounting rates. We are, therefore, encouraged by the proposal to reduce the accounting rate per minute for I800 service below the rate that is currently used to settle accounts for I800 service between the United States and Canada. In addition, the proposal incorporates the notion that costs are lower during offpeak hours than during the peak period, thereby advancing the achievement of economically efficient accounting rates. We expect that the combination of a lower I800 accounting rate and the peak/offpeak accounting rate structure will result in net settlement payments to Canada being lower than they would have been otherwise, particularly if, as we believe, the reduction encourages others to adopt a similar I800 accounting rate with U.S. carriers. We are also reassured by the step to bring the rate per minute for I800 service into alignment" 0*((&" with the accounting rates per minute for IMTS between the United States and Canada because it is consistent with our policy to discourage the introduction of higher,  r5N-nonuniform, international accounting rates that exceed the cost of service. MN} ?<ԍ#MP6X@`7 @#See American Telephone and Telegraph Company and MCI Communications Corporation, 5 FCC Rcd 4618 (1990). In short, we approve AT&T's proposal to introduce an accounting rate per minute for I800 service with Unitel at the same level as its IMTS accounting rate. 6. We now address that portion of the waiver proposing to include a surcharge for each I800 message that would be paid to the nonbilling administration. Several features of I800 service between the United States and Canada distinguish it from I800 service with other countries and from other IMTS calls. Unlike most international calls that originate and are billed in the same country, an I800 call from Canada to the United States originates in Canada but is billed in the United States. The U.S. carrier bills its 800 customer in the United States for the call and owes a settlement payment to its Canadian correspondent for that call. Since several carriers provide 800 service in the United States and Canada, the local exchange carrier (LEC) in the country where the 800 call originates needs to identify the correct interexchange carrier (IXC) in that country to direct an 800  r5 -call to,<  } ?c<ԍ#MP6X@`7 @#This carrier identification is not necessary in other countries like the United Kingdom where one carrier, British Telecommunications, uses the 800 prefix for such calls and the other carrier, Mercury, uses the 500 prefix for such calls.< which then identifies the call as an international call and routes it to the international IXC in the other country serving the 800 customer. 7. A comprehensive data base with information about 800 customers in the United States and Canada enables LECs in both countries to identify the appropriate IXCs in Canada and the United States in order to match carriers with their customers. The data base must be updated regularly because a customer can shift its 800 business from one carrier to another carrier but retain the same 800 number after the change. This is referred to as "portability." It is, therefore, necessary to keep track of customers who switch their 800 service from one carrier to another carrier. Thus, when an 800 call originates in either Canada or the United States, the LEC that receives the call queries the data base to ascertain the international IXC who serves the 800 customer in the country where the call originates. Then the call is routed to the appropriate international IXC in the other country and on to the 800 customer for completion. 8. An LEC that originates an 800 call in the United States or Canada charges the IXC in the country where the call originates a basic access rate for the service it provides based on rates approved by federal regulatory authorities. In the United  r5|-States, the Commission approved the LECs' 800 data base access tariffs, M|w} ?b<ԍ#MP6X@`7 @#See Bell Operating Companies' Tariff for the 800 Service Management System, Tariff  [**-F.C.C. No. 1 and 800 Data Base Access Tariffs, 8 FCC Rcd 3242 (1993).  containing the data base access service rates of U.S. LECs for 800 calls in the United  r5-States.# } ?!<ԍ#MP6X@`7 @#The tariffs contain a data base query rate, which is a base rate for an 800 call, and vertical feature rates for a range of additional service options that are offered by the LECs. The rates vary from LEC to LEC.# The Commission found the industry mean rate to be $0.0044 per query with a  r5q-standard deviation of $0.0023 per query. Mq& } ?%<ԍ#MP6X@`7 @#See Bell Operating Companies Tariffs for 800 Service at 3244. The rates of some carriers were partially suspended pending further investigation of their reasonableness. AT&T states in its petition for waiver that the authorized tariff rates of Bell Operating Companies and independent companies for data base access service range from $0.002 to $0.009 per query. "f; 0*((t""Ԍ 9. AT&T also states that the CRTC authorized Canadian LECs to charge Canadian  r5-IXCs Canada a rate of $C0.007} ?<ԍ#MP6X@`7 @#The charge in Canada is equal to approximately $0.005 at the prevailing exchange rate of $1.00=$C1.4085. per message for the 800 data base access service.b} ?x<ԍ#MP6X@`7 @#See Ex Parte Pleading from Stephen C. Garavito, AT&T to the Commission, December 20, 1994. 10. The surcharge for each I800 call would enable AT&T and Unitel to recover the charge each carrier is required to pay LECs for the service they provide to originate I800 calls between the United States and Canada. Specifically, the surcharge would allow the nonbilling correspondent to recover the 800 data base access charge it pays to the LEC by receiving an additional amount in the settlement payment from the carrier that bills its customer for an I800 call. In this way, the data access charge for I800 calls would be shifted from the international carrier in the country where the call originates to the international carrier in the country where the call is billed. 11. The proposed surcharge represents a discrete cost element for I800 service between Canada and the United States resulting from changes in the way 800 service is provided in both countries, measures taken in response to these developments, and the fact that regulatory bodies in both countries have authorized their LECs to charge the international IXCs for the service the LECs provide. This proposal is unique to I800 service between the United States and Canada and the surcharge is limited to such service. The surcharge proposed by AT&T, $0.005 per message, is slightly higher than the industry mean average data base access rate computed by the Commission for each data base query, $0.004 per query, but well within the threshold rate of $0.0067 per query we determined to be a reasonable rate for U.S. LECs during an interim period while the Commission conducts further investigation. We also recognize that an accounting rate is the result of negotiations between two carriers and, in the instant case, the proposed surcharge is approximately equal to the rate, perhaps somewhat lower depending on the exchange rate, Canadian LECs are authorized by the CRTC to charge for the service. Thus, we find the surcharge for I800 service provided by AT&T and Unitel to be a reasonable rate that reflects new conditions of supply between Canada and the United States for this service classification.  s59-0 IV. CONCLUSION ă 12. We conclude that the accounting rate per minute for I800 service proposed by AT&T is a reduction in the existing rate that will bring that rate closer to the cost of providing I800 service between the United States and Canada, and it also brings the accounting rate for that service classification into alignment with the accounting rate for IMTS. The accounting rate for service between the United States and Canada is the lowest rate in effect for U.S. carriers and well below the benchmark ranges we established to guide U.S. carriers in their negotiations with foreign administrations. Therefore, the I800 rate proposed by AT&T represents yet another step toward the achievement of more costbased, economically efficient, nondiscriminatory accounting rates. The lower accounting rate will result in net settlement payments to Canada being lower than they would have been at the current accounting rate. The alignment of the I800 accounting rate with the rate for other IMTS classifications is also an important step in this direction because, as we noted in a recent decision concerning accounting rates, we have found no reason to  r5-distinguish I800 accounting rates from other IMTS accounting rates.} ?&<ԍ#MP6X@`7 @#See Memorandum Opinion, Order and Authorization, DA 941260, November 14, 1994. 13. We also conclude that the proposal to impose a surcharge of $0.005 per"0*((2(" message for each I800 call is a reasonable costbased measure which reflects the feature of providing I800 service between the United States and Canada. We believe it is reasonable to allow AT&T and Unitel to recover charges that are based explicitly on the costs they incur on behalf of their correspondent to provide I800 service, costs which are incurred as a necessary part of providing the service. We have authorized LECs in the United States to charge IXCs for this service and note that the CRTC has also approved similar charges for service rendered by LECs in Canada. Moreover, the surcharge of $0.005 per message approximates an industry mean rate for data base query service provided by LECs in the United States and, therefore, is a reasonable rate.  s5--6 V. ORDERING CLAUSES ă 14. Accordingly, IT IS ORDERED that, AT&T's petition, File No. USP94210, for a waiver of the Commission's ISP to permit the proposed change in the accounting rate with Unitel in Canada is GRANTED, and AT&T is authorized to implement the proposed accounting rate for I800 service, including a surcharge for data base query service provided by LECs. 15. This Order is issued under Section 0.261 of the Commission's Rules and is effective upon adoption. Petitions for reconsideration under Section 1.106 or applications for review under Section 1.115 of the Commission's Rules may be filed  r5[-within 30 days of the date of public notice of this Order (see 47 C.F.R. Section 1.4(b)(2)). FEDERAL COMMUNICATIONS COMMISSION Diane J. Cornell Chief, Telecommunications Division International Bureau