NEWSReport No. IN 97-7               INTERNATIONAL ACTION          March 18, 1997

                FCC GRANTS IDC-AMERICA NON-INTERCONNECTED 
                      PRIVATE LINE RESALE AUTHORITY  

     The FCC's International Bureau yesterday granted IDC-America, an affiliate of
Japan's second largest international private line carrier, authority to resell non-interconnected
international private lines between the United States and Japan.  This marks the third
Japanese affiliated carrier to be granted such authority in the last six months. The Bureau's
order finds that, "authorizing IDC-America to resell this service will increase competition in
the U.S. international services market and provide consumers with more price competition
and service choices."  

     The Bureau has previously granted similar authority to KDD-America, which is
affiliated with Kokusai Denshin Denwa Co., Ltd. ("KDD-Japan"), and ITJ-America, which
is affiliated with International Japan, Inc. ("ITJ-Japan").  KDD-Japan and ITJ-Japan are the
two other facilities-based private line providers in Japan, in addition to International Digital
Communications, Inc. ("IDC-Japan"). 

     As required by the Commission's 1995 Foreign Carrier Entry Order, the Bureau
determined that IDC-America's affiliate, International Digital Communications, Inc. ("IDC-
Japan"), does not have market power in the facilities-based international private line market. 
Therefore, the Bureau did not need to analyze whether Japan affords U.S. carriers effective
competitive opportunities ("ECO") to compete in that market.  Due to IDC-Japan's low
market share and relatively small size compared to KDD-Japan, the largest international
facilities-based provider in Japan, the Bureau concluded that IDC-Japan does not have the
ability to discriminate against U.S. unaffiliated private line carriers in favor of IDC-America. 
Despite finding that IDC-Japan lacks market power, the Bureau expressed reservations about
the competitiveness of the Japanese international private line market.  The Bureau is
concerned about (1) the somewhat restricted supply of international private lines in Japan, (2)
the Ministry of Posts and Telecommunication's regulation that permits entry into the
international private line market only if "appropriate in light of demand in the service area,"
(3) Japan's foreign ownership restrictions, and (4) the significantly higher international
private line prices for the Japanese half-circuit than for the corresponding U.S.-half.  The
Bureau further notes that Japan committed to lift its foreign entry and foreign ownership
restrictions in the World Trade Organization basic telecommunications negotiations effective
January 1998, although it maintains a 20 percent foreign investment restriction for KDD-
Japan and NTT. 

     Action by the Chief, Telecommunications Division, International Bureau, March 17,
1997, by Order, Authorization and Certificate (DA 97-571).

                                  - FCC -
     For further information contact Helene Schrier Nankin, Telecommunications Division,
International Bureau, 418-1466.