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A. 1. a.(1)(a) i) a) 1 .1 .1 .1 .1 .1 .1 .1 Technical2d 4Ba1DocumentgDocument Style Style\s0  zN8F I. ׃  a5TechnicalTechnical Document Style)WD (1) . a6TechnicalTechnical Document Style)D (a) . a2TechnicalTechnical Document Style<6  ?  A.   2"o1a3TechnicalTechnical Document Style9Wg  2  1.   a4TechnicalTechnical Document Style8bv{ 2  a.   a1TechnicalTechnical Document StyleF!<  ?  I.   a7TechnicalTechnical Document Style(@D i) . 2 3oea8TechnicalTechnical Document Style(D a) . Doc InitInitialize Document Stylez   0*0*0*  I. A. 1. a.(1)(a) i) a) I. 1. A. a.(1)(a) i) a)DocumentgPleadingHeader for Numbered Pleading PaperE!n    X X` hp x (#%'0*,.8135@8:"<x` ` X X a.Affiliation for Purposes of Entry Authorizationxpp(# 52 64  >Z$<XxX` ` X X b.Affiliation for Purposes of PostEntry Regulation pp(# 65 66  >%<XxX` ` X ` ` 3. Definition of Facilitiesbased Carrier pp(# 67 71  >&<XxX` ` X ` ` 4. Resale Entry by Foreign Carriers pp(# 72 79  >r'<XxX` ` X X a.Resale of Switched Services p!(#@ 74  >8(<XxX` ` X X b.Resale of Private Lines pp(# 75 79  >(<XxX` ` X ` ` 5. Other Forms of Market Entry pp(# 80 83"(0*0*0*1"Ԍ ><XxX` ` X X a.Domestic Interexchange Services p!(#@ 81  ><XxX` ` X X b.Enhanced Services p!(#@ 82  ><XxX` ` X X c.Separate Satellite Systems and Other Noncommon Carriers p!(#@ 83  ><XxX` ` xC.` ` Modification of Dominant Carrier and Other Operating Safeguards ` pp(# 84 91  ><XxX` ` xD.` ` Section 310(b)(4) Standard for Radio Licensee Ownership By Foreign Entities ` p(# 92 103  >0<XxX` ` X ` ` 1. Application to Common Carrier Licenses pp(# 93 96  ><XxX` ` X ` ` 2. Application to Aeronautical Licenses pp(# 97 98  ><XxX` ` X ` ` 3. Application to Broadcast Licenses p(# 99 103 IV. CONCLUSION . . . . . . . . . . . . . . . . . . . `(#104 106 XxPV. ORDERING CLAUSES p(# 107 111  >` <p I. INTRODUCTION ׃  > <x1.` ` This Notice of Proposed Rulemaking proposes new policies governing the participation of foreign carriers in the U.S. international telecommunications market. In this Notice, we set out three goals of our regulation of the U.S. international telecommunications market: (1) to promote effective competition in the global market for communications services; (2) to prevent anticompetitive conduct in the provision of international services or facilities; and (3) to encourage foreign governments to open their communications markets. We consider how to achieve these goals through implementation of Sections 214 and 310 of the Communications Act, as amended ("the Act"). We find that allowing foreign carrier entry into the U.S. international services market will further the public interest by providing additional competition that will benefit consumers. We tentatively conclude, however, that unrestricted foreign carrier facilitiesbased entry is not in the public interest when U.S. carriers do not have effective opportunities to compete in the provision of services and facilities in the foreign carrier's primary markets.  ><x2.` ` We propose to modify our public interest standard for considering foreign carrier applications under Section 214 of the Act to enter the U.S. market to provide international facilitiesbased services. We seek comment on requiring as an important element of our public interest standard a demonstration that effective market access is, or will soon be, available to U.S. carriers seeking to provide basic, international telecommunications facilitiesbased services in the primary markets served by the carrier desiring entry. We also would continue to consider other factors as part of our public interest analysis, such as national security, the openness of other telecommunications segments of the foreign carrier's primary markets, and the ability and incentives of the foreign carrier to discriminate against unaffiliated U.S. carriers. "r'0*((/"Ԍ ><x3.` ` In addition, this Notice proposes a specified level of foreign carrier ownership in a U.S. carrier at which the proposed entry standard would apply. We ask whether it is desirable to consider an applicant to be "affiliated" with a foreign carrier for purposes of our new rules when the foreign carrier acquires an ownership interest of a certain minimum level or a controlling interest at any level. We request comment on whether the minimum level of ownership should be set at greater than ten percent, twentyfive percent, or some other level of the capital stock of the applicant. This Notice also clarifies the definition of a facilitiesbased carrier.  >H <x4.` ` Finally, this Notice asks whether the goals of this proceeding would be served by incorporating the proposed effective market access test as an element of the Section 310(b)(4) public interest analysis applicable to foreign entities seeking to acquire an indirect ownership interest of more than 25 percent in U.S. radio licensees. Thus, the Notice asks whether our evaluation of the public interest should consider whether the primary markets of the foreign entity offer effective market access to U.S. licensees to provide the same type of radiobased services as requested in the United States. We also seek comment on other public interest factors we should consider.  ><x5.` ` We seek public comment on whether these proposals are  >V<administratively feasible and whether these approaches or other  ><alternatives will best serve our goals.  ><  ><II. BACKGROUND ׃  >n<  >4<xA.` ` Petitions for Rulemaking(#`  ><  ><x` ` 1. AT&T's Petition (#  >L<x6.` ` AT&T filed a petition for rulemaking on September 22, 1993, requesting that the Commission institute a rulemaking to: (1) comprehensively review the issues arising from foreign carrier participation in the U.S. telecommunications market; and (2) promulgate rules that address "the current regulatory  >*<dichotomy between the United States and foreign countries.">* > <ԍ FCC File No. RM8355.> AT&T states that the international telecommunications industry is changing from a bilateral services model to a global market, where customers are demanding "seamless" international networks. It argues that U.S. carriers must obtain comparable market access abroad to compete effectively in the provision of basic interexchange and international services. Likewise, it says, foreign carriers wishing to become global are compelled to gain entry to the U.S. market in some manner. According to AT&T, the traditional regulatory concern about "whipsawing" has been" %V0*((-" overshadowed by the possibility that a foreign monopoly carrier now may be in a position to provide service originating or terminating in the United States and its home country, whereas U.S. competing carriers would not.  ><x7.` ` First, AT&T proposes that, before approving foreign carrier entry into the United States, the Commission should make a finding as to whether comparable opportunities for U.S. carriers to compete in the home markets of the prospective entrants presently are available or will be available within a  ><reasonable period not to exceed two years.H  > <ԍ AT&T states that a successful comparable market access showing should include the following elements: 1) U.S. carriers can offer substantially similar services under similar conditions in the foreign country as can be offered in the United States; 2) existence of safeguards to prevent crosssubsidization between the monopoly and competitive market segments; 3) equal access available; 4) availability of published, nondiscriminatory tariffs for interconnection in the foreign country; 5) portability of telephone numbers; 6) timely and nondiscriminatory disclosure of network information; 7) protection of carrier and customer proprietary information; and 8) effective competition actually exists. Second, AT&T states that the Commission should condition any authorization for entry in the U.S. services market by foreign carriers having the ability to discriminate among U.S. carriers in their home markets on the agreement by the foreign carrier to nonstructural safeguards to minimize the opportunity for such discrimination. AT&T states that, at a minimum, the Commission should require: (1) no exclusive arrangements for the provision of basic or enhanced services; (2) proportionate return of foreignbilled traffic; (3) costbased accounting rates within 30 days; (4) consent of originating and terminating carriers to refile U.S. originating or terminating traffic; (5) interconnection or distribution arrangements in the foreign country that are available to all U.S. carriers; (6) no special concessions certification; and (7) information received from other U.S. carriers to be protected and not used for the benefit of itself or its U.S. affiliate.  ><x8.` ` Several comments were filed in response to AT&T's  >n<petition.jn  >"<ԍ Supporting comments were filed by Sprint Communications Co. L.P. (Sprint). The parties expressing some form of opposition to AT&T's petition are ACC Global Corp. (ACC), the British Embassy, British Telecommunications plc (BT), Cable & Wireless, Inc. (C&W), DOMTEL Communications, Inc. (DOMTEL), EMI Communications Corp. (EMI), ENTEL International B.V.I. Corp. (ENTELChile), IDB Communications Group, Inc. (IDB), Teleglobe"x'0*((t(" Inc. (Teleglobe), Telefonica Larga Distancia de Puerto Rico, Inc. (TLD), Coalition of International Communications Users (International Telecom Users), MCI Telecommunications Corp. (MCI), and MotorColumbus AG (MotorColumbus). Only Sprint supports AT&T's petition. The majority"n0*((0" of the commenters oppose AT&T's petition, arguing generally that AT&T's proposed rules would require "mirror reciprocity," which the opponents claim would be unrealistic given the varied telecommunications systems. They also argue that existing  ><safeguards, especially those contained in the 1992 International  ><Services Order > <ԍ Regulation of International Common Carrier Services, 7 FCC  > <Rcd 7331 (1992)(International Services). and the TLD Order >h <ԍ Telefonica Larga Distancia de Puerto Rico, 8 FCC Rcd 106,  >. <111113 (1992)(TLD Order). are sufficient to protect competition in the U.S. international and interexchange  >j<marketplace.RjP  >H<ԍ See MCI Comments at 5; TLD Comments at 56; C&W Comments at 67, 911, 13; ENTELChile Comments at 23, 89; IDB Comments at 45. They support the Commission's policy of deciding market entry questions on a casebycase basis, so as to take  ><into consideration specific circumstances in each case.fj  ><ԍ See ENTELChile Comments at 7, and ACC Comments at 23.f  ><x` ` 2. IDB's Petition  (#  > <x9.` ` Issues related to AT&T's petition also were raised in a  > <petition for rulemaking filed by IDB on October 29, 1993.>  >Z<ԍ FCC File No. RM8392.> In this petition, IDB asks the Commission to adopt a uniform definition of a facilitiesbased carrier for purposes of Commission rules and policies governing international common carriers. IDB states that a uniform definition is important to provide carriers with certainty regarding their reporting obligations and their ability to interconnect international private lines to the U.S. public switched network. IDB proposes that we regulate a carrier as a facilitiesbased carrier when it obtains the maximum interest in the underlying facility permitted by law. AT&T filed comments against IDB's petition, saying there is a clear definition which need not be changed. MFS International, Inc. (MFS) supports IDB's petition. Because the issues involved in adopting such a definition directly relate to how we regulate U.S. international carriers, we will address IDB's petition in this rulemaking. "40*(( "  >< Q F  xB.` ` Existing Policy Under Section 214  (#`  ><x 10.` ` We currently examine applications filed by foreign carriers or their U.S. affiliates (collectively "foreign carriers") for international Section 214 authority on a casebycase basis. We balance our policy in favor of open market entry against the potential for undue discrimination by the foreign parent against unaffiliated U.S. carriers. Under this policy, we have authorized foreign carriers to resell international switched  ><services, R >L <ԍ See, e.g., Cable & Wireless Communications, Inc., 7 FCC  > <Rcd 6855 (Int. Fac. Div. 1992); BT North America Inc., DA 941257, International Bureau, rel. Nov. 14, 1994. noninterconnected private line services, and private line services interconnected to the public switched network ("PSN") upon a determination that the foreign country on the other end of the circuit provides equivalent opportunities to  > <U.S. carriers to resell interconnected private lines.   >~<ԍ See, e.g., Cable & Wireless, Inc., DA1344, Tele. Div.,  >D<rel. Dec. 8, 1994; Cable & Wireless, Inc., DA 941227, Tele.  > <Div., rel. Nov. 2, 1994; Cable & Wireless, Inc., 8 FCC Rcd 1664  ><(Com. Car. Bur. 1993); fONOROLA Corporation and EMI Corporation,  ><7 FCC Rcd 7312 (1992), Order on Recon., 9 FCC Rcd 4066 (1994). In addition, we recently authorized several foreign carriers to acquire U.S. international facilities subject to safeguards to protect U.S. carriers providing international service from  >& <discrimination.R &  ><<ԍ See infra paras. 1214.R  ><x 11.` ` In recent years, we have addressed the issues raised by foreign carrier market entry in several significant cases. In 1991, we authorized Atlantic TeleNetwork, Inc. (ATN), a 100 percent U.S.owned carrier, to provide facilitiesbased switched  ><service to Guyana, even though ATN indirectly controlled the  ><monopoly service provider in Guyana.    >4<ԍ Atlantic TeleNetwork, Inc., 6 FCC Rcd 6529 (1991), appl. for review denied, 8 FCC Rcd 4776 (1993), appeal pending sub nom.  ><Atlantic TeleNetwork, Inc. v. FCC, U.S. Court of Appeals, D.C. Circuit, No. 931616.  To protect against potential discrimination that could arise on the U.S.Guyana route by virtue of ATN's bottleneck control over Guyana's telecommunications infrastructure, we imposed on ATN the same conditions then placed on international common carriers classified as dominant, foreignowned carriers, as well as other nondiscrimination safeguards.  ><x 12.` ` A year later, we approved the acquisition of Telefonica Larga Distancia de Puerto Rico (TLD), a U.S. domestic and" 0*(("  ><international long distance carrier, by Telefonica de Espana (Telefonica), the governmentcontrolled monopoly carrier of  ><Spain.T  ><ԍ TLD Order, 8 FCC Rcd 106.T Because TLD would be controlled by the Spanish telecommunications administration, which exercised bottleneck control over Spain's telecommunications infrastructure, we imposed regulatory safeguards to prevent TLD from acting in concert with Telefonica or other foreign carriers to discriminate against U.S. carriers in the terms and conditions of access to foreign markets for the origination and termination of U.S. international traffic. We noted that, in this particular instance, the potential for anticompetitive harm to U.S. carriers was mitigated by the fact that the applications involved a limited number of circuits; traffic would originate only from Puerto Rico and the U.S. Virgin Islands; and no interconnected private line service would be involved. We also considered the benefit to the Puerto Rico government of the capital generated by the privatization of TLD. However, we said that, with respect to future facilitiesbased applications from TLD (or any carrier affiliated with a foreign carrier), we would assess whether the authority sought posed an additional risk of anticompetitive  >x<behavior, and, if so, whether regulatory safeguards would be sufficient to protect against it.  ><x 13.` ` In June 1994, we authorized ENTELChile, a Chilean long  ><distance carrier, to acquire the U.S. carrier AmericaTel.V >t<ԍ AmericaTel Corporation, 9 FCC Rcd 3993 (1994)(AmericaTel  >:<Order). At the time of the AmericaTel Order, Telefonica indirectly owned 20 percent of ENTELChile. Telefonica has since  ><divested its interest. See Letter from Raul R. Rodriguez, Counsel to AmericaTel Corporation, to William F. Caton, Acting Secretary, FCC, dated October 31, 1994. We found that: (1) Chile's market for domestic long distance and international services was increasingly competitive and open to U.S. investment and participation; (2) Chile has increasingly liberalized its telecommunication laws and regulations aimed at promoting competition and preventing discrimination against U.S. and other foreign carriers; and (3) the nondiscrimination safeguards available under Chile's regulatory regime and the safeguards we imposed as a condition of authorization would be sufficient to protect U.S. carriers in their provision of international service between the United States and Chile. We required AmericaTel to submit annual progress reports detailing the status of the telecommunications industry and regulatory regime in Chile and reserved the right to review the terms and conditions of the authorization in the event that the safeguards imposed in the order or by virtue of Chilean regulation failed to sustain competition on the U.S.Chile route. "0*((p&"Ԍ ><x 14.` ` Shortly thereafter, we reviewed the British Telecommunications plc (BT) acquisition of a noncontrolling  ><interest in MCI as part of a global alliance to provide services  >R<to customers worldwide.R ><ԍ BT/MCI Declaratory Ruling, 9 FCC Rcd 3960 (1994)(BT/MCI  >n<Order). We found that the terms of the investment did not result in a transfer of control to BT requiring prior FCC approval and that BT's 20 percent investment in MCI, even when combined with other foreign ownership for a total of up to 28 percent foreign ownership in MCI, was permissible under Section 310(b)(4) of the Communications Act. Additionally, we found that MCI's commitments to accept no special concessions and to maintain certain provisioning and maintenance records, combined with the reporting requirements we imposed, adequately protected against the potential for BT to leverage its dominant position in the U.K. telecommunications market to discriminate in favor of MCI over competing U.S. carriers. In so deciding, we took into account the United Kingdom's relatively liberal regulatory regime and the existence  >& <of competition in the U.K. domestic telecommunications market.  >< xC.` ` Existing Policy Under Section 310   >><x15.` ` Section 310(b)(4) establishes benchmarks applicable to foreign entities seeking to acquire an ownership interest in the parent company of a U.S. radio licensee. Specifically, Section 310(b)(4) imposes the following benchmarks: 25 percent foreign ownership, 25 percent foreign directors, and no foreign officers. Currently, the Commission examines requests to exceed the Section 310(b)(4) benchmarks on a casebycase basis, and has generally considered the following factors: national security, the extent of alien participation in the parent holding company, and the nature of the license, including whether the licensee exercises control over content. In addition, the Commission may consider  ><any other public interest factors appropriate.  >L<x16. ` ` One of Congress' principal reasons for enacting Section 310 of the Communications Act of 1934 was its concern for national security and preventing alien activities against the  ><government during a time of war.xR >H!<ԍ See generally S. Rep. No. 781, 73d Cong., 2d Sess. 7  >"<(1934). See also Moving Phones Partnership L.P. v. FCC, 998 F.2d  >"<1051, 105556 (D.C. Cir. 1993)(referring to "national security policy underlying section 310(b)" and indicating that "the rationale is equally applicable to common carrier radio stations, as they, also, are a part of the nation's communications network"). The original national security rationale for limiting foreign ownership in a parent corporation has less applicability today than it had in the 1930's. Today there is a plethora of"x'0*(((" service providers. No single licensee which is owned in part by a foreign corporation could take over the wireless or wireline services in the United States in a time of war.x Accordingly, the Commission"0*(("" has traditionally sought to ascertain whether a country with which a prospective licensee or its parent is associated enjoys "close and friendly relations with the United States" and,  >R<therefore, is not a "national security concern."R ><ԍ See, e.g., GRC Cablevision, Inc., 47 FCC2d 467, 468 (1974) ("We note . . . that the noncitizens are from a country [Canada] that has traditionally had close and friendly relations with the United States . . . .").  ><  ><x17. The Commission has also traditionally considered the extent of alien participation in the parent corporation of a Title III radio licensee. More specifically, the Commission has considered where the parent corporation is incorporated (the United States or elsewhere); the citizenship of the stockholders,  ><officers and directors of the parent corporation; and whether there are intermediate corporations between the licensee and the  >H <parent corporation that are incorporated in the United States ,  > <are owned by U.S. citizens or interests, and have U.S. officers  > <and directors.x  >$<ԍ See, e.g., BT/MCI Order, 9 FCC Rcd at 3964, para. 22 (1994).x  > < x  >` <x18.` ` In addition, the Commission has traditionally considered the type of radio license at issue in assessing whether the public interest would be disserved by foreign ownership in a parent corporation exceeding the Section 310(b)(4) benchmarks. For example, the Commission has concluded that concern about the effect of foreign ownership on national security is lessened when common carrier radio licenses are  ><involved because they are "passive" in nature and the licenses  ><confer no control over the content of transmissions.  >4<ԍ BT/MCI Order, 9 FCC Rcd at 3964, para. 23; Teleport  ><Transmission Holdings, Inc., 8 FCC Rcd 3063 (Com. Car. Bur.  ><1993); IDB Communications Group, Inc., 6 FCC Rcd 4652, 4653 (Com.  > <Car. Bur. 1991); Data General Corporation and Digicom, Inc., 2 FCC Rcd 6060 (Dom. Fac. Div. 1987). x  ><x19.` ` Finally, the Commission may also consider other relevant factors, including the furtherance of established  ><Commission policies such as increased competition or the wide" 0*((@"  ><dissemination of licenses.H >V<ԍ See, e.g., Implementation of Section 309(j) of the  ><Communications Act Competitive Bidding, 9 FCC Rcd 2348, 2349, para. 4 (1994) (In which Commission announced policy of promoting competition among a diverse group of service providers).H  ><xp III. DISCUSSION׃  >R< Xx(#  ><x20.` ` The focus of telecommunications service providers has become increasingly global over the last several years, reflecting the increasingly global nature of the economy. The United States has become the most vital market for shaping world competition over 20 percent of all international  ><communications services involve the United States.R >, <ԍ See ITU Direction of Traffic: International Telephone Traffic, 1994, p.7, Table 2.2; TeleGeography 1, 85 (G. Staple ed. 1993). Most of the major U.S. corporations are now multinational. Over 40 percent of the world's multinational corporations are headquartered in  >H <the United States.ZH  ><ԍ Telecommunications Reports, Oct. 10, 1994, at 17.Z These commercial customers prefer onestop shopping to satisfy their varied and specialized communications needs. In addition, the many Americans who travel internationally, or have family or friends in other countries, have an interest in efficient, affordable global telecommunications. International telecommunications service offerings increasingly involve provision of an "endtoend"  ><package of services, including domestic (in two or more countries) and traditional international services. Both U.S. and foreign telecommunications service providers are developing strategies to serve their customers' needs through alliances with other service providers and entry into foreign international and domestic markets.  ><x21.` ` Our procompetitive U.S. regulatory policy has permitted a number of foreign carriers to enter the U.S. international and domestic services market to meet customer demands. Many other countries permit various forms of entry into their markets by foreignbased carriers, including many U.S. telecommunications providers. When such entry has been accompanied by regulatory liberalization, countries allowing entry already are experiencing the benefits of competition. We believe both the carriers and the consumers of those countries with liberalized entry policies should receive the benefits of having their carriers compete in the lucrative U.S. market.  >d<x22.` ` But many important foreign communications services and  >*<facilities markets or market segments remain closed to U.S."* P 0*(($" competition, even while entities from those markets have entered  ><or seek to enter similar U.S. markets. ><ԍ For instance, in 1993 the Office of Technology Assessment concluded that 85 percent of the European Union's ("E.U.'s") telecommunications services market remained closed to foreign entities. In the AsiaPacific region, most countries, including South Korea, Singapore, Malaysia, China, and Japan maintain a monopoly in basic local voice services. As detailed below, asymmetric market access is detrimental to both U.S. service  >R<providers and U.S. consumers. Closed foreign markets preserve the market power of foreign entities in their home markets and closed markets may inhibit competition in the provision of global  ><communications services.L4 >f <ԍ See infra paras. 2829.L  >0<x23.` ` Under these circumstances, current policies based on  ><the traditional correspondent services model] >F<ԍ In a traditional correspondent services arrangement, a U.S. carrier enters into an operating agreement with an unaffiliated foreign carrier under which the two companies agree  >< to jointly own and operate international facilities and terminate each other's telecommunications traffic.] may not adequately address questions of market access, undue discrimination and potential anticompetitive effects that arise in today's evolving telecommunications markets, where carriers seek entry on both ends of international circuits. Further, our casebycase review of foreign carrier applications has caused uncertainty in the  > <market due to the lack of a clear standard for evaluating applications by foreign carriers with different degrees of market power in their home markets. Moreover, there is a risk that casebycase determinations of the public interest may inadvertently underemphasize the general global interest of the United States in promoting a competitive world market.  ><x24.` ` In addition, our current approach to considering foreign entry into U.S. radiobased telecommunications and broadcast markets through application of Section 310(b)(4) may not be the most effective means of promoting global competition in these areas. It may be that our decisions in public interest determinations under Section 310(b)(4) should more directly consider how the decision will influence the development of a competitive market for international communications services.  ><x25.` ` We believe a rulemaking proceeding would help the Commission to articulate standards to provide more coherent principles to guide its deliberations concerning individual cases. A formal rulemaking also would give foreign entities more certainty when making investment decisions, and provide an" h 0*(( " incentive for foreign administrations with currently closed markets to consider opening their markets.  >R<Xx A.X` ` Commission Goals (#`  ><x26.` ` We have three basic goals in this rulemaking:  >j<Xx` ` 1. To promote effective competition in the global market for communications services.(#  ><x` ` 2. To prevent anticompetitive conduct in the provision of international services or facilities.(#  > <x` ` 3. To encourage foreign governments to open their communications markets.(#  >` <x27.` ` The promotion of effective competition in the global market is our primary goal. Such competition will achieve for U.S. consumers reduced rates, increased quality, and new innovative services, including the availability of global communications services. Thus, through this rulemaking, we intend to promote the opportunity for U.S. consumers to choose among multiple suppliers based on innovative offerings, service quality and efficiencies, and price competitiveness. As explained below, the other two goals are necessary to reach this first goal.  ><x28.` ` A necessary step towards obtaining effective competition is the prevention of anticompetitive conduct in the  ><provision of international services or facilities. In a truly competitive global market, entry of foreign carriers into the U.S. international market would be procompetitive. However, because global competition remains highly asymmetric, unrestricted entry by foreign carriers from closed markets into the open U.S. market has the potential to inhibit competition, particularly with respect to the provision of global communications services to highend users such as multinational companies. For instance, a foreign carrier would be able to acquire 1+ access to U.S. consumers and hold itself out as a ubiquitous provider of U.S. international services while U.S. carriers could not make the same representations in the foreign carrier's home market. In addition, such a carrier would be able to offer its customers benefits such as lower costs and faster provisioning of services provided between its closed markets and the United States.  >"<x29.` ` Such conduct by foreign carriers may have anticompetitive effects for several reasons. First, it preserves and maintains a monopoly in the foreign carrier's home market. Second, it allows the foreign entity to use that monopoly to gain a competitive advantage in other markets that are, or could be, competitive, including communications between its foreign home market and the United States, communications in the United"r' 0*((/" States, and global network services. The foreign competitor has a competitive advantage, and will therefore win customers, not because of its superior business acumen, responsiveness to customers, or technological innovation, but because of its protected status in its home market. The possession of such unmeritorious advantages is a disservice to consumers in all these markets because, in the absence of full competition on the merits by all competitors, consumers do not receive reduced rates, increased quality, and innovation.  ><x30.` ` In general, the potential for exploitation of a foreign carrier's market power is decreased by: (1) access to facilities at both ends of the international connection for all U.S. carriers; and (2) effective competitive safeguards (including interconnection rules) enforced by an appropriate regulatory  > <authority at both ends. Our decision in AmericaTel shows our willingness to accept foreign carrier entry if these two conditions are met. If, however, the foreign carrier is not subject to facilities competition and competitive safeguards, its affiliation with a U.S. carrier or entry into the U.S. market may raise serious competitive questions.  ><x31.` ` Therefore, another key to global competition is foreign market liberalization. It is unlikely competition could thrive if a particular market keeps out some of its most effective global competitors. The demand for seamless global services by business means that U.S. carriers serving the other country must be able to originate traffic from their customers in that country to other markets around the world. Encouraging global competition further means that there needs to be international facilitiesbased competition on the U.S. and foreign ends of an international route. Open markets permit U.S. carriers to respond to foreign carriers in relevant markets, allowing U.S. carriers to be healthier competitors both at home and abroad. For example, U.S. wireless service providers' participation in foreign countries' cellular markets has strengthened both U.S. and foreign competitors and has resulted in improved service to both foreign and U.S. consumers. Closed markets frustrate all these public interest benefits.  ><x32.` ` Access to the U.S. market through international Section 214 authorizations or Title III licenses may be an appropriate tool to achieve the benefits of competition such as low prices, high quality, and innovation. The benefits U.S. companies would receive by having an outlet for their capital, technology and expertise would be balanced by the same benefits flowing to their foreign counterparts through entry into the U.S. market. Also, access to the U.S. market, as a uniform standard, could be administratively more efficient and less of a burden on the Commission's resources than the drafting of multiple sets of conditions to fit the particular attributes of each foreign market on a casebycase basis."r' 0*((/"Ԍ ><ԙx 33.` ` Therefore, we propose the addition of an effective market entry standard to our public interest analysis of foreign carrier entry applications under Section 214 as a tool to encourage foreign administrations to open their markets to U.S. entities. This, in turn, will eliminate opportunities for foreign entities to engage in conduct that might have anticompetitive effects in the provision of international services or facilities, including undue discrimination or other abuses of bottleneck facilities, and will promote effective global market competition. We also request comment on whether our goals in this proceeding will be furthered by incorporating the effective market access test as an element of our Section 310(b)(4) analysis for Title III common carrier, aeronautical and broadcast license applications.  > < x!34.` ` Whatever entry standard we adopt in this proceeding for international Section 214 authorizations will not be an end in itself. It will only be an interim step designed to further the goal of effective competition in the global communications market. Therefore, we expect that, as the trend of liberalization and privatization continues around the world, and more countries  >><permit facilitiesbased competition for voice and other services, the need for such entry standards will diminish.  ><Xx B.X` ` Section 214 Standard For Entry By Foreign Carriers(#`  ><x` ` 1. International Facilitiesbased Entry By Foreign  ><Carriers  (#  >n<x` `  a.Regulated Open Entry Under Section 214   ><x"35.` ` Currently our rules do not prohibit foreignowned or affiliated carriers from acquiring and operating international switched and private line facilities on a common carrier basis in the United States. We have permitted some services by foreign carriers on international routes, including routes where the  ><applicant is affiliated with a foreign carrier. Prior to authorizing entry, we have reviewed the potential effects on competition in the U.S. market. If necessary, we have imposed safeguards to prevent undue discrimination and unfair  ><competition._ >F!<ԍ See TLD Order, 8 FCC Rcd at 109113._ In our recent facilitiesbased authorizations to  ><foreign carriers, we found that our nondiscrimination safeguards were sufficient in part either because of the competition and regulation that existed in the foreign carriers' home market, or because the authority granted was limited in scope.  >#<x#36.` ` We have followed this course to encourage competition"#V0*(( +"  ><in the U.S. international services market. >V<ԍ See TLD Order, 8 FCC Rcd at 108. See also Regulatory  ><Policies and International Telecommunications, CC Docket No. 86 ><494, Report and Order and Supplemental Notice of Inquiry, 4 FCC  ><Rcd 7387, 7428 (1988)(citing Notice of Inquiry and Proposed  >n<Rulemaking, 2 FCC Rcd 1022, 1025 (1987)). See also FTC  >4<Communications, Inc., 2 FCC Rcd 6114 (1987) (granting switched service facilitiesbased authorization to U.S. carrier 14.9 percent of which is owned by company held indirectly by the French government).  Some have questioned, however, whether the benefits of such competition are undermined when new entrants are able to succeed because of privileged access to closed foreign markets.  ><x$37.` ` Our experience leads us to believe that an open entry policy, without explicit standards, may not provide sufficient incentive for foreign markets to open. In addition, in light of demands by multinational firms for endtoend telecommunications services and "onestop shopping," safeguards may not compensate for the disadvantages U.S. carriers face when competing against a foreign carrier that operates in both the United States and closed foreign markets. The competitive strengths and abilities  > <of individual service providers rather than the regulatory structure of markets should determine the success of service  > <providers in the global telecommunications market.a  ><ԍ See AmericaTel, 9 FCC Rcd at 3996, para. 14.a  >& <x` `  b.Effective Market Access   ><x%38.` ` We tentatively conclude that we should modify our entry standard for international facilitiesbased carriers to encourage the formation of a competitive global market. We believe that our standard should permit entry into the U.S. international facilitiesbased services market by foreignaffiliated carriers where the foreign carriers' markets are open to U.S. carriers. Therefore, we believe that an important element of our proposed public interest test should be effective market access for U.S. carriers in the primary international telecommunications markets served by the carrier desiring entry. This access must exist at the time of entry, or in the near future. We also will consider other factors which we have previously applied under our public interest analysis such as national security; the openness of other telecommunications segments of the foreign carrier's primary market; and the ability and incentive of the foreign  >L<carrier to discriminate against unaffiliated U.S. carriers. (#(#X  ><x&39.` ` Initially, we request comment on the scope of this Commission's statutory jurisdiction to consider the availability  >d<of effective market access to foreign markets as one factor in"d 0*((#" our public interest analyses under Sections 214 and 310(b)(4) of the Act. Under our authority to regulate foreign commerce in  ><communication by wire and radio,r ><ԍ See Section 1 of the Communications Act of 1934, 47 U.S.C. 151.r we have examined the degree of  >R<market openness for the purpose of ensuring the efficacy of our  ><competition safeguards. ><ԍ See AmericaTel Order, 9 FCC Rcd at 39974001; BT/MCI  ><Order, 9 FCC Rcd at 3969. In order to ensure compliance with our International Settlements Policy, we have also examined the openness of other markets to determine whether equivalent  >j<international private line resale opportunities exist.jp >h <ԍ See ACC Global Corporation, 9 FCC Rcd 6240 (1994);  >. <fONOROLA and EMI, 7 FCC Rcd at 7312. In this Notice, we seek comment on the scope of our jurisdiction to consider the openness of foreign markets to further the three goals described in Section III.A.  >H <x'40.` ` We propose to define effective market access as the  > <ability for U.S. carriers, either currently or in the near future, to provide basic, international telecommunications facilitiesbased services in the primary markets served by the foreign carrier seeking entry. A primary market is one where a  >& <carrier has a significant facilitiesbased presence.I &  >x<ԍ See para. 43, infra.I We would consider the following factors, none of which would be dispositive, to determine whether effective market access exists: (1) whether U.S. carriers can offer in the foreign country international facilitiesbased services substantially similar to those the foreign carrier seeks to offer in the United States; (2) whether competitive safeguards exist in the foreign country to protect against anticompetitive and discriminatory practices, including costallocation rules to prevent crosssubsidization; (3) the availability of published, nondiscriminatory charges, terms and conditions for interconnection to foreign domestic carriers' facilities for termination and origination of international services; (4) timely and nondiscriminatory disclosure of technical information needed to use or interconnect with carriers' facilities; (5) the protection of carrier and customer proprietary information; and (6) whether an independent regulatory body with fair and transparent procedures is established to enforce competitive safeguards. In considering these indicators to determine whether effective market access exists, we will not necessarily require that each factor be present in order to make a favorable finding, particularly if there is evidence that the market is fully competitive. Rather, we will look to the arguments of the applicant and commenting"*R 0*(($" parties as to the appropriate weight of each factor in a particular market.  >R<x(41.` ` We do not propose to adopt AT&T's "comparable market access" standard as a method of regulating entry. AT&T would require the Commission to find that competitive opportunities essentially identical to those in the United States are available to U.S. carriers in the home markets of the prospective entrants. Given the varying market and regulatory conditions around the world, it would be impossible to find a situation where essentially identical market access exists. The AT&T test would require that the regulations and market structure of the foreign country mimic those of the United States. Such a strict test would be impossible to meet, and thus would not encourage open markets. We also believe that there are times when public interest factors other than comparable market access might be decisive on the issue of entry. For example, if comparable market access exists for international facilitiesbased services in a particular country, but all other telecommunications markets are closed to U.S. carriers, the balance of the public interest factors may weigh against granting entry to a carrier from that country. While market entry is an important part of the public interest analysis, we do not share AT&T's view that comparable  ><market access must exist before foreign carrier entry is allowed.  >V<x)42.` ` We also do not believe it necessary to adopt AT&T's request for costbased accounting rates as a condition of foreign carrier entry. AT&T proposes that as a prerequisite to entry the foreign carrier should agree that it will within thirty days reduce accounting rates for all U.S. carriers to the lesser of either costbased levels, or the lowest rate charged by the foreign carrier to other telecommunications entities from any other country. This requirement should not be necessary because we expect accounting rates to drop as a natural consequence of the introduction of effective market access. We propose, however, that the presence of costbased accounting rates be part of our total public interest analysis to determine whether facilitiesbased market entry should be allowed.  >*<x*43.` ` We request comment on the following approach for applying the effective market access element of the public interest test. If a foreign carrier desires to enter the U.S  >| <basic international facilitiesbased market either directly or  >B!<through affiliation!B! >#<ԍ See infra Section III.B.2.a. for a discussion of the definition of "affiliation." with an authorized U.S. carrier, we would assess whether the primary market, or markets, of the carrier offers effective opportunities to U.S. carriers to compete in the provision of basic, international services and facilities. We recognize that a foreign carrier might operate in several"Z$!0*((," geographic markets. Therefore, for this part of the test we will only look at primary markets: those key markets where the carrier has a significant ownership interest in a facilitiesbased telecommunications entity that has a substantial or dominant market share of either the international or local termination telecommunications market of the country, and traffic flows between the United States and that country are significant. A carrier's secondary market would be defined as a market in which it has an ownership interest in a facilitiesbased carrier, but is not a substantial or dominant carrier, or where insignificant traffic flows exist between the United States and that country.  >H <x+44.` ` Under this approach, if a U.S. carrier can compete as a facilitiesbased provider of international basic services in the primary market(s) of the carrier seeking entry, we would find that the carrier has met the effective market access element of our public interest standard. Where a foreign carrier's primary markets are open, even if secondary markets closed, we would find that the market access element has been met.  >x<x,45.` ` Once we have reviewed the effective market access element of our public interest analysis, we would assess other public interest factors which might weigh in favor of, or against, allowing entry into the U.S. market. Such factors could include the state of liberalization in the foreign carrier's domestic market and the availability of other market access opportunities to U.S. carriers; the status of the foreign carrier as a government or nongovernment entity; the general significance of the proposed entry to promotion of competition in global markets; the presence of costbased accounting rates; and any national security implications. Finally, we would solicit the views of the Executive Branch on the proposed foreign carrier's entry into the U.S. market.  >L<x-46.` ` We believe the above approach would be the most effective way to promote both global competition and competition in the provision of U.S. international services, with their associated benefits for users. This approach would, in most cases, limit facilitiesbased competition by new foreign carrier entrants to those cases that affirmatively promote global competition and encourage the opening of foreign markets. We believe that, in the long run, this approach should result in stronger, more equal competition both in the United States, and abroad, because carriers would not have marketing and provisioning advantages resulting from operating both in closed foreign home markets and in the United States.  >Z$<x.47.` ` We also believe this approach addresses our goal of removing opportunities for undue discrimination and other conduct that might have an adverse effect on competition. Linking facilitiesbased entry to effective market access is the surest means of preventing anticompetitive conduct by a foreign carrier. "r'!0*((/" If other public interest factors weigh in favor of allowing entry, safeguards such as dominant carrier regulation can still be imposed to guard against undue discrimination and anticompetitive conduct.  ><x/48.` ` Further, we believe this approach would be the best method of furthering our goal of encouraging foreign governments to liberalize their telecommunications markets. In this respect, two views were presented in response to AT&T's proposed "comparable market access" test. AT&T contends that foreign governments have no incentive to liberalize if the United States does so unilaterally. AT&T argues that these governments might  >H <liberalize if given an incentive, i.e., access to the U.S. market by their carriers. On the other hand, several other carriers have argued that, if the U.S. government increases restrictions on U.S. market access, other governments might retaliate with increased restrictions as well.  > <x049.` ` We believe that our proposed public interest standard addresses both AT&T's concern about providing incentives to open, and the other carriers' concerns about inviting retaliation. By having effective market access as the first element of our public interest standard, we are emphasizing that we will recognize and reward carriers from those markets that are liberalizing. At the same time, we are trying to avoid sending a signal that might be misinterpreted as a closing of our markets. Indeed, this proposed  ><approach, unlike AT&T's, purposely does not require "mirror reciprocity" for this reason. We maintain flexibility under this approach to look at all of the public interest factors surrounding entry, and balance the market conditions of the primary markets to see what opportunities are present for U.S.  ><carriers to compete there."j >P<ԍ For example, the Commission traditionally has not been concerned with contentrelated issues in authorizing the provision of U.S. international common carrier services. These issues, however, may warrant consideration in our international Section 214 public interest analysis as common carriers seek to enter national and global markets for video and audio programming as well as video and audio transmission.  Even if a foreign carrier cannot demonstrate that effective market access exists for U.S. carriers in its primary markets, it may still show that other public interest factors warrant its entry into the U.S. market. Thus, we believe the advantages of this flexible approach would offset any  ><disadvantages that might occur by not allowing immediate facilitiesbased entry by all foreign carriers. Furthermore, we believe this flexible approach will promote the objectives of the Administration's Global Information Infrastructure (GII)"*"0*(($"  ><initiative#H  >V<ԍ See Vice President Al Gore, Speech at World Telecommunications Development Conference (Mar. 22, 1994)(transcript available at the Federal Communications Commission). One of the goals outlined by the Vice President in his speech before the World Telecommunications Development Conference was to encourage competition as a means of increasing innovation, reliable service, and economic growth. Vice President Gore also emphasized the importance of a flexible, effective regulatory framework that can help ensure the continued openness of the more liberal foreign telecommunications markets, and promote the opening of closed foreign telecommunications markets to competitive entry.  by encouraging competition.  ><x` `  c.Other Matters   ><x150.` ` We do not believe that our goals would be furthered by requiring an effective market access showing when a U.S. carrier acquires an ownership interest in a foreign carrier. If, however, the foreign carrier acquired by the U.S. carrier is a monopoly, or otherwise warrants dominant carrier treatment under Section 63.10 of our rules, we would regulate the U.S. carrier in  ><the same manner as if the foreign carrier itself had entered the U.S. market. That is, we would apply our dominant carrier and other nondiscrimination safeguards to the U.S. carrier in its  > <provision of U.S. international services.T$  >t<ԍ See infra Section III.C. T x  > <x251.` ` Finally, we propose to implement whatever approach we ultimately adopt in this proceeding through the Section 63.01 application process and the Section 63.11 notification process. Section 63.11 of the rules requires carriers to notify the Commission within ninety days of the acquisition of an  >x<"affiliation"%xf  >l<ԍ See infra Section III.B.2.a. for proposed new definition of "affiliation." with a foreign carrier. We would continue to place these notifications on public notice. We propose, however, to change the notification period specified in Section 63.11 from ninety (90) days to thirty (30) days. In addition to using the notification to determine whether a change in regulatory status may be warranted under Section 63.10, we would also use the notification to determine whether further review of the facts surrounding the acquisition is warranted, and, if so, whether the carrier's Section 214 certificates should be designated for hearing. The carrier also would have the option, prior to the acquisition, of seeking a declaratory ruling that such acquisition serves the public interest, convenience and necessity."%0*(("Ԍ ><ԙ x` ` 2. Definition of Affiliation (#  ><x` `  a.` Affiliation for Purposes of Entry Authorization(#  ><  ><x352.` ` We propose to apply any entry standard adopted in this  ><rulemaking for international Section 214 applications only to those potential entrants that are "affiliated" with a "foreign  >0<carrier."S&H 0 ><ԍ We propose to define "foreign carrier" as we have defined it in Section 63.01(r)(1)(ii) of the rules: "... any entity that is authorized within a foreign country to engage in the provision of international telecommunications services offered to the public in that country within the meaning of the International  >d <Telecommunication Regulations, see Final Acts of the World Administrative Telegraph and Telephone Conference, Melbourne, 1988 (WATTC88), Art. 1." We construe this definition of a  ><foreign carrier as we did in International Services. Thus, it includes foreign carriers that provide intercity or local access  >B<services or facilities in a foreign country. International  ><Services, 7 FCC Rcd at 7334 n.47.S We tentatively conclude that it is not necessary to include within the scope of this rulemaking those potential entrants with foreign owners that do not fall within the definition of a foreign carrier. This is in contrast to Section 310(b) of the Act, which applies to ownership by any foreign entity. We believe that limiting the scope of this rulemaking to foreign carriers should promote development of effective global competition by providing national and global carriers with the  >` <flexibility they need to structure their businesses and raise  >& <capital from foreign sources other than foreign carriers,M'&  ><ԍ We also ask infra in Section III.D. whether we should adopt a liberalized application of Section 310(b)(4), as it applies to licensing U.S. common carrier, broadcast and aeronautical radio facilities, which will permit us to recognize foreign countries' efforts to liberalize their telecommunications markets. We note, however, that our discussion regarding identifying foreign carrier affiliations for purposes of authorizing entry under Section 214 is irrelevant for purposes of applying Section 310(b)(4), which is governed by statute. M while controlling the potential for abuse of market power by certain foreign carriers. We request comment on this approach, particularly about whether it adequately encourages more open markets abroad. x  ><x453.` ` In conjunction with its request that we adopt a comparable market access standard, AT&T argues that we should change our definition of affiliation from a control standard to  ><one that treats a U.S. carrier as an affiliate of a foreign carrier when the foreign carrier owns five percent or more of the"'0*((P"  ><U.S. carrier.( >V<ԍ For a more detailed discussion of our current definition  ><of affiliate, see infra para. 65. One reason to revise our affiliation standard is that it may not address many of the ways in which foreign carriers seek to serve the U.S. international telecommunications market. For instance, there have been direct acquisitions of U.S. carriers, such as TLD and AmericaTel, joint ventures involving lessthancontrolling ownership interests in U.S. carriers, such as the BT/MCI venture, and comarketing arrangements such as AT&T's WorldPartners Company.  ><x554.` ` We note that, in the International Services proceeding, the Department of Justice (DOJ) commented that a lessthancontrolling interest by a foreign carrier in a U.S. carrier could give the foreign carrier the financial incentive to favor its  > <U.S. affiliate. Indeed, DOJ recently alleged in its Complaint in  > <U.S. v. MCI Communications Corporation and BT FortyEight Company  > <(NEWCO),W)  >D<ԍ U.S. v. MCI Communications Corporation and BT FortyEight  > <Company (NEWCO), Case No. 1:94 CV01317 (D.D.C. filed June 15,  ><1994)(hereinafter cited as U.S. v. MCI). DOJ and the defendants (MCI and NEWCO) stipulated to an entry of a Final Judgment.W that the acquisition of 20 percent of MCI shares by BT may substantially lessen competition in the provision of international telecommunications services between the United  > <States and the United Kingdom.*  >v<ԍ See DOJ Competitive Impact Statement filed June 15, 1994  ><<in U.S. v. MCI at 10. DOJ was particularly concerned with the territorial allocation provision and loss of rights provisions entered into between BT and MCI that would force BT to rely upon its 20 percent investment in MCI as a primary source of  ><revenues from the U.S. telecommunications market.C+P  ><ԍ See id. at 11.C  ><  ><x655.` ` In our Declaratory Ruling regarding the BT/MCI venture, we also found that a lessthancontrolling interest could be a  ><source of concern.s,R  > <ԍ In particular, we found that BT's 20 percent interest in MCI, the second largest U.S. long distance carrier, coupled with its participation on MCI's Board of Directors, could provide BT with the incentive both to discriminate in favor of MCI and to influence the corporate decisionmaking process of MCI. In addition, we noted that BT and MCI had jointly created NEWCO (now called "Concert") which, at least initially, would develop and market enhanced service products, which could require access to the basic services network controlled by BT in the United Kingdom. Finally, we noted that BT would be forced to rely on"~'+0*(((" its 20 percent investment in MCI as a primary source of revenues  >V<from the U.S. telecommunications market. BT/MCI Order, 9 FCC Rcd at 3967, para. 36.s Thus, in spite of the fact that MCI and BT",0*((`" would not be "affiliated" within the meaning of our current rules, we concluded that certain factors created incentives for BT to favor MCI.  ><x756.` ` We believe that the competitive implications of the BT/MCI transaction, and other joint ventures developing, underscore the inappropriateness of using control as a threshold level of foreign ownership at which an entry standard would apply for foreign carriers. While we recognize that some U.S. carriers may need additional capital to compete worldwide, and may benefit from foreign carrier investment, we are concerned that if a foreign carrier acquires even a lessthancontrolling ownership interest in a U.S. carrier, this also may confer on the foreign carrier the incentive to discriminate in favor of the U.S. carrier. Although in many such instances the incentive to discriminate may be minimal, our safeguards may not always be sufficient to limit the potential for undue discrimination (and other competitive advantages resulting from the exercise of market power) that could occur when a foreign carrier has an ownership interest in a U.S. international carrier.  >><x857.` ` We therefore tentatively conclude that a new affiliation standard is needed that will identify those instances of foreign carrier investment that may require review to see if they implicate the public interest goals of this proceeding. Accordingly, for the purposes of establishing an entry standard, we propose to adopt a definition of affiliation that includes cases where a foreign carrier acquires a direct or indirect ownership interest of a certain minimum percentage level, or a controlling interest at any level, in a U.S. carrier. We seek comment on what that level of interest should be. In reaching a decision, we will look at what level of ownership may give the foreign carrier the incentive to discriminate in favor of the U.S. carrier or to engage in other strategic conduct that might have anticompetitive effects. We also are concerned whether the investment may provide the U.S. carrier with other competitive advantages that flow from the exploitation of the foreign affiliate's market power, such as the ability to market its services exclusively in conjunction with those offered by the foreign carrier. Such exclusive arrangements would be of concern at least until we are assured of effective facilitiesbased competition on the foreign end. We emphasize, however, that whatever minimum level of ownership we adopt is meant only to be a trigger for our entry review, not a bar to entry. As outlined in this Notice, our review will then take into consideration all factors that might weigh in favor of, or against, allowing entry. "#,0*(( +"Ԍ ><x958.` ` An interest of five percent, as suggested by AT&T, has been found by the Commission to be an appropriate standard of  ><ownership affiliation in other important regulatory areas such as  >R<the Telephone CompanyCable Television CrossOwnership rules.-R ><ԍ See Telephone CompanyCable Television CrossOwnership rules, Section 63.54 63.58. We find, however, that applying an entry standard and competitive safeguards at a five percent investment might unreasonably limit the ability of U.S. carriers to attract foreign investment, and impose unnecessary administrative burdens on potential entrants. We believe that any residual concerns about potential anticompetitive effects at this level of investment can be adequately dealt with through our standard nondiscrimination safeguards that we apply to all U.S. international carriers and through the enforcement process if necessary.  > <x:59.` ` A greater than ten percent ownership interest in a U.S. carrier by a foreign carrier may warrant our scrutiny. Analogous precedent from orders issued under the terms of the AT&T Consent Decree and from the Securities and Exchange Commission ("SEC") supports the reasonableness of a ten percent cap. In a blanket  ><waiver granted by the U.S. District Court in United States v.  >x<Western Electric Company (AT&T Consent Decree), the Court, with support of the DOJ, permitted the Bell Operating Companies to acquire up to ten percent of foreign telephone companies, subject to certain nondiscrimination conditions. Section 16(a) of the Securities Exchange Act of 1934, as amended ("the Exchange Act"), also is instructive. Section 16(a) provides that an owner of greater than ten percent of the publiclytraded equity securities (other than exempt securities) of a publiclyheld company must file periodic ownership reports with the SEC. This level of ownership is thought to give the security holder the position of an insider and the ability to influence the affairs of the company.  ><x;60.` ` Alternatively, we request comment on whether a greater than 25 percent ownership interest should be considered affiliation under our rules. This level would be consistent with the Section 310(b)(4) of the Communications Act benchmark for indirect foreign investment in radio facilities in the United States. A greater than twentyfive percent investment would likely be a level of ownership that would give a foreign carrier a large enough stake to have an incentive to discriminate in favor of its U.S. affiliate. However, we are concerned that a 25  >| <percent level could be perceived by U.S. carriers as so high that  >B!<it would discourage procompetitive foreign investment.  >"<x<61.` ` We propose that, in addition to a controlling interest""-0*((0*"  ><at any level, .R >V<ԍ We propose to assess control based on Commission precedent  ><under Sections 310(d) and 214(a) of the Act. See International  ><Services, 7 FCC Rcd at 7333, para. 13, n.28.  investment by a foreign carrier in a U.S. international common carrier over a specified threshold will be subject to the entry standard discussed in Section III.B.1,  >R<supra. We request comment on whether that threshold level should be set at greater than ten percent, 25 percent, or some other  ><level of capital stock./R >N <ԍ Our assessment of "capital stock" ownership will be done under the standards developed in Commission case law for determining such ownership. If a foreign carrier controls a U.S. carrier, or invests more than the specified threshold level in the U.S. carrier, the foreign carrier would be considered affiliated with the U.S. carrier. The affiliated U.S. carrier would then be subject to the entry standard proposed in Section III.B.1. We also request comment on how we should apply our effective market access test in situations where more than one foreign carrier or a foreign carrier consortium has ownership interests in a U.S. carrier.  > <x=62.` ` We propose not to include in our definition of affiliation nonequity business relationships between carriers  >& <(e.g., where a U.S. carrier is involved in a joint venture with a foreign carrier to manufacture switching equipment). While such relationships between carriers can also provide them with the incentive to favor one another in the exchange of basic services, we tentatively conclude that such incentives are relatively attenuated compared with those that are present with ownership interests. We seek comment on this conclusion.  >V<x>63.` ` We also tentatively conclude that no foreign carrier entry regulation is required for comarketing arrangements, such as AT&T's WorldPartners Company, provided they are, both in  ><theory and in practice, nonexclusiveP0 R >2<ԍ The nonexclusivity requirement would apply at least until we are assured of effective facilitiesbased competition on the foreign end. This requirement is grounded in antitrust concerns. Normally, cooperative arrangements between firms in "vertical" situations where one firm passes on a service, such as a phone call that originated in a foreign country, to a firm that completes it, such as a telecommunications company in the United States create efficiencies and are consistent with antitrust principles. When the upstream company is a monopoly or has "market power," however, the potential exists for discrimination and skewing of competition in the "downstream" market (calls terminating in the United States in the above hypothetical).  >z'<See, e.g., Berkey Photo, Inc. v. Eastman Kodak Co., 603 F.2d 263,"z'/0*((r)"  ><276 (2d Cir. 1979), cert. denied, 444 U.S. 1093 (1980). The nonexclusive requirement is designed to mitigate any such discrimination.P (e.g., they do not give the"00*((@" U.S. carrier the exclusive right to provide joint basic services  ><in correspondence with any particular foreign carrierm1 >6<ԍ See International Services, 7 FCC Rcd at 7333, para. 11.m). We conclude, however, that we need to review whether our public interest goals would be served by imposing reporting requirements on U.S. carriers that participate in comarketing arrangements for the provision of basic global network services. It appears at a minimum that, under Section 43.51 of the Commission's Rules, these types of arrangements require the filing of their comarketing agreements.  ><x?64.` ` Finally, we further propose to reserve the right to review any transaction that involves foreign carrier participation in which unique factors suggest Commission review would be necessary to serve the public interest, even with foreign carrier participation at levels below the investment threshold chosen. We seek comment on all of the above proposals and tentative conclusions.  > <x` `  b.` Affiliation for Purposes of PostEntry Regulation(#  >x<  >><x@65.` ` After we have determined that the public interest would be served by permitting a certain foreign carrier to enter the U.S. market, the next step is to determine whether the carrier should be regulated as dominant or nondominant. Part of the  >V<decisionmaking process, as established in International Services, is a determination whether the carrier is "affiliated" with a foreign carrier. In that proceeding, we defined a U.S. carrier as an affiliate of a foreign carrier when the U.S. carrier controls, is controlled by, or is under common control with a foreign carrier. We use this definition to classify a U.S.  ><carrier as dominant or nondominant on a particular international  ><route, based on the market power of its foreign affiliate.2jp ><ԍ Under the framework adopted in International Services, we regulate a U.S. international carrier, whether U.S. or foreignowned, as dominant only on those routes where a foreign affiliate of the carrier has the ability to discriminate in favor of its U.S. affiliate in the provision of services or facilities used to terminate U.S. international traffic. 7 FCC Rcd at 73323, para. 10.  As the Commission noted, however, the order did not address the question of entry standards for foreignaffiliated entities.  ><xA66.` ` In light of our goals, and proposed definition of" 20*((!" affiliation for purposes of regulating entry, we request comment on whether we should revise the definition of affiliation adopted  ><in International Services to conform to the one proposed for  >R<entry purposes. One consequence of redefining affiliation at a lessthancontrolling interest for purposes of applying dominant carrier regulation is that more carriers would be subject to such regulation. For instance, a U.S. carrier that is currently regulated as nondominant could now be deemed dominant on a  >0<particular U.S. international route if the foreign carrier on the other end of the route has, or acquires, a lessthancontrolling ownership interest in the U.S. carrier. Likewise, if a U.S. carrier acquires a lessthancontrolling interest in a foreign carrier on a particular U.S. international route, that carrier  > <could be deemed dominant on that route.J3  >d < x<Ѝ See 47 C.F.R.  63.10. Although we do not propose to do an  xx<effective market access analysis whenever a U.S. carrier acquires  > < xx<a foreign carrier, see supra para. 50, we reiterate that dominant  xx<carrier regulation would apply if the foreign carrier acquired is  x<a monopoly carrier, or otherwise warrants dominant carrier treatment  x<under Section 63.10 of our rules. In addition, we propose to impose  xh<the same dominant carrier and other nondiscrimination safeguards on  x<the U.S. carrier that we impose on foreign carrier affiliates that  ><we authorize to enter the U.S. market .J Considering these consequences and issues of administrative simplicity, we ask for comment on whether it is desirable to conform these affiliation definitions for purposes of entry and postentry regulation.  >& <  > <x` ` 3. Definition of Facilitiesbased Carrier (#  >x<xB67.` ` Our regulation of international services relies upon a distinction between facilitiesbased services and resale. However, IDB's petition raises the fundamental question of whether our current rules clearly distinguish between resellers and facilitiesbased carriers. IDB asserts that recent Commission  >V<actions, including our International Resale Policy decision,M4V >j<ԍ Regulation of International Accounting Rates, Phase II  >0<First Report and Order, 7 FCC Rcd 559 (1991)(International Resale  ><Policy); see also Order on Reconsideration and Third Further  ><Notice of Proposed Rulemaking, 7 FCC Rcd 7927 (1992)(Phase II  > <Order on Reconsideration). To prevent evasion of the settlements process through oneway resale of private lines for the provision of switched services into the United States, we require that applicants seeking authority to resell international private lines for the provision of switched services demonstrate that the country at the other end of the private line affords equivalent  >&%<resale opportunities. M have caused disputes regarding the definition of a facilitiesbased carrier. IDB contends we have historically treated a  ><carrier that leases a cable or satellite circuit as a facilities"40*((@"ԫ ><based carrier, but that our International Resale Policy treats those who operate by leasing private line circuits as resellers. Further, IDB notes that we have imposed upon resellers the  >R<Section 63.15(b) circuitaddition reporting requirement5RR ><ԍ ` ` See IDB Petition at 45 (citing LDDS Communications,  >n<Inc., 8 FCC Rcd 924 (1993); fONOROLA and EMI, 7 FCC Rcd  >4<7312(1992), Order on Recon., 9 FCC Rcd 4066 (1994)). that we  ><previously applied only to facilitiesbased carriers.J6 ><ԍ 47 C.F.R.  63.15(b) (1994). J   ><xC68.` ` IDB urges us to adopt a consistent definition of a facilitiesbased carrier that turns on whether the carrier has acquired the "maximum interest" in a cable or satellite circuit permitted by law. IDB argues that, under such a rule, a carrier would be considered facilitiesbased in the United States if it purchases an ownership or indefeasible right of user (IRU) interest in a cable or satellite or leases satellite capacity  > <directly from Comsat, because those are the maximum interests allowed under U.S. law. To the extent the Commission seeks to exercise jurisdiction over carriers providing the foreign half >` <circuit,7` p >^<ԍ IDB disputes the Commission's jurisdiction over foreign  >$<halfcircuits. See IDB Petition at 9, n.19. IDB would have us treat as facilitiesbased a carrier that directly leases a halfcircuit, if that is the maximum interest allowed in that country. IDB believes there is no rational basis for treating carriers that lease capacity from Comsat as facilitiesbased, while treating carriers as resellers when they lease capacity from foreign carriers with legal monopolies over their countries' telecommunications infrastructures.  >V<xD69.` ` AT&T opposes IDB's request and characterizes it as an  ><attempt to evade our International Resale Policy. AT&T argues that IDB's proposed "maximum interest" test would vitiate the meaning of a facilitiesbased carrier. AT&T notes that the  >n<International Resale Policy was prompted by a concern that "oneway resale" from countries that do not afford "equivalent" resale opportunities could increase U.S. facilitiesbased carriers' outpayments, increase their cost of service, and thus harm U.S.  ><customers. IDB's proposed definition would, according to AT&T, legitimize such oneway resale by redefining all resellers overseas as facilitiesbased and thus exempting them from the  ><equivalency requirement.8R >*%<ԍ AT&T Comments at 5. AT&T also argues that any doubts as to who should file Section 63.15 reports will be clarified in the rulemaking in CC Docket No. 93157. " 80*((""Ԍ ><xE70.` ` MFS supports IDB's rulemaking request. MFS notes that other countries are following U.S. initiatives in liberalizing telecommunications but do not yet permit carriers competing with the established carrier to own their own international transmission circuits. MFS asserts that the Commission's current definition merely prevents U.S. entities from entering overseas markets. MFS believes that IDB's proposed maximum interest definition would allow such competition to flourish. Such entry, according to MFS, would allow U.S. carriers to reduce foreign users' cost of communications service and would pressure existing carriers to reduce their prices.  >H <xF71.` ` We tentatively conclude that we should continue our current policy of treating a carrier as facilitiesbased in the  > <United States if it purchases an ownership or IRU interest in a U.S. halfcircuit in an international satellite or submarine cable (whether common carrier or noncommon carrier), or if it leases a U.S. half circuit from Comsat or from a noncommon  > <carrier international satellite or submarine cable provider.{9  >B<ԍ See, e.g., Phase II Order on Reconsideration, 7 FCC Rcd at 7931.{ Our concern with IDB's proposal is that it could undermine our  >x<International Resale Policy by permitting carriers to interconnect foreign leased circuits with the U.S. public switched network without demonstrating that the foreign country affords equivalent resale opportunities to U.S. carriers. This would result in an undesirable increase in the settlements deficit. In addition, it could implicitly encourage foreign countries to stop short of creating full facilitiesbased competition by appearing to legitimize limiting competition to resale of leased circuits. Our current definition avoids this  >n<result and is consistent with the public interest goals of this proceeding. We propose to codify that definition in this proceeding. We request comment on our proposal to codify this definition of a U.S. facilitiesbased carrier.  >L<x` ` 4.X Resale Entry by Foreign Carriers(#  ><  ><xG72.` ` We do not believe there is a need to regulate foreign carrier entry in the U.S. market for resale services as closely  >d<as we propose for facilitiesbased services. There is not as substantial a risk of anticompetitive harm to the global market when we allow foreign carriers into the U.S. international resale market. This risk is greatest when foreign carriers acquire U.S. international facilities. The ability to own and control facilities enables a carrier to manage competition by resellers. A reseller has minimal pricing flexibility when it must rely on a competitor that also supplies the infrastructure and underlying basic services which a reseller must use to provide its own services. In addition, the reseller cannot guarantee the quality"Z$90*((," of its services because the underlying facilities necessary to provide service are not within its control.  >R<xH73.` ` We also do not believe that applying an effective market access analysis to resellers would do as much to further the liberalization of foreign markets as applying this standard to facilitiesbased carriers, which generally have significant influence in the liberalization debate within their primary markets. And finally, our experience indicates that our existing entry standards for resellers have encouraged vigorous and effective competition among international resellers, providing  ><significant benefits to users. Under these circumstances, we propose to continue to apply relatively flexible entry requirements to foreignaffiliated resellers, as detailed below.  > < x` `  a.Resale of Switched Services   >` <  >& <xI74.` ` We tentatively conclude that our goals are well served by maintaining our open entry policy for international resale of  ><switched services. We found in International Services that open entry for switched service resale increases the competitiveness  >><of the international market, without resulting in substantial  ><potential for competitive harm..o: >Z<ԍ International Services, 7 FCC Rcd at 7335, para. 31.o There we established the presumption that even U.S. carriers with foreigncarrier affiliations should be regulated as nondominant in their provision of resold international message telephone service (IMTS). Although we did not adopt an entry standard in  ><International Services, we now tentatively conclude that this  ><presumption equally holds true for entry questions, i.e., that there should be a presumption that there is no competitive harm in permitting unlimited foreigncarrier entry for switched  ><resale, even to affiliated countries. As in International  ><Services, we propose that this be a rebuttable presumption. We invite comments on these tentative conclusions.  >L<  ><x` `  b.Resale of Private Lines   ><  ><xJ75.` ` The resale of private line services raises different market entry concerns from the resale of switched services. We  >*<recognized in International Services that there is a greater potential for discrimination in the provisioning of resold private lines. When a U.S. carrier serves a foreign market through the resale of private line service, it must obtain from the foreign carrier the foreign halfcircuits and any necessary local or intercity access facilities or services required to terminate U.S. traffic. A foreign carrier that owns or controls telecommunications facilities in both the United States and the destination market may have a competitive advantage over other U.S. carriers. This occurs if the foreign carrier has sufficient" %V:0*((-" market power in the destination country to discriminate among  ><U.S. carriers in the provisioning, pricing or interconnection of the foreign end of the private line.  ><xK76.` ` Resale of Noninterconnected Private Lines. We currently have an open entry policy for foreigncarrier resale of noninterconnected private lines. Resale of international private lines does not directly implicate the settlements process to the extent such lines are used only to carry nonswitched traffic. Given the benefits of competitive provision of noninterconnected private lines, the lack of impact on the settlements deficit, and the availability of safeguards to protect against discrimination in the provisioning of private lines, we propose to adopt a rebuttable presumption that there is no competitive harm in permitting unlimited foreigncarrier entry for noninterconnected private line resale. x  >& <xL77.` ` Resale of Interconnected Private Lines to Provide  > <Switched Services. We also propose to continue our current policy on foreigncarrier entry by resale of private lines interconnected to the public switched network. We believe that  >><the equivalency requirement established in our International  ><Resale Policy decision; >Z<ԍ See International Resale Policy, 7 FCC Rcd 559. The equivalency determination includes an analysis of whether foreign government regulation (1) permits open entry for U.S.based carriers into the international resale market; (2) mandates nondiscriminatory treatment of U.S.based carriers; and (3) authorizes U.S.based carriers to interconnect international private lines to the PSN at both ends. We have also emphasized that the prices, terms and conditions afforded U.S.based carriers should be equivalent to those available to foreignbased carriers providing service in the foreign country. We have examined foreign regulatory controls to ensure that they are  ><sufficient to limit the ability of the foreign market facilitiesbased carrier(s) to favor particular carriers or to cause competitive harm to the resale market generally. Our equivalency determinations have presumed an incentive to impede competition and analyzed foreignmarket regulatory controls on the ability of the foreign facilitiesbased carrier(s) to exercise that  > <incentive successfully. Our International Services order also provides for dominant carrier regulation of an affiliated foreign carrier where it appears that U.S. safeguards are necessary to supplement foreign government safeguards against potential  >#<discrimination. ħ is sufficient to ensure that a foreign monopoly carrier would be unable to exploit its market power with respect to its provision of interconnected private line services. We seek comment, however, on whether we should modify our equivalency requirement to conform to our effective market access standard. We ask for comment on whether a consistent approach to";0*((P" determining equivalency and effective market access would make this standard clearer and more administratively feasible.  >< x  >R<xM78.` ` AT&T has argued in other proceedings that we should adopt costbased accounting rates as a condition for authorizing affiliates of foreign carriers to resell interconnected private  ><lines to affiliated countries.6< ><ԍ See Supplemental Comments of AT&T, filed October 21, 1994,  ><in BT North America, Inc., File No. ITC93126, DA 95120, rel. Jan. 30, 1995 (application for authority under Section 214 of the Act to provide international resale services).6 AT&T argues that, without such a requirement, bilateral negotiations to reduce accounting rates will be futile. In support, AT&T states that, as a direct competitor with U.S. carriers, a foreign carrier will have every incentive to maintain abovecost accounting rates to keep the costs of U.S. facilitiesbased carriers' services higher. AT&T states that to avoid this squeeze by the foreign carrier, U.S. facilitiesbased carriers will be forced to make the uneconomic decision to use private line facilities, not because they are more efficient or less costly than embedded switched facilities, but to avoid the foreign carrier's abovecost accounting rate.  >& <We invite comment on these arguments in this proceeding.  ><xN79.` ` As a final matter, to eliminate any confusion over the scope of the prior certification requirement adopted in the  >><International Resale Policy order,T=> >t<ԍ See 7 FCC Rcd at 562, para 24.T we propose to codify the requirement that any carrier that seeks to connect a U.S. halfcircuit with a leased, foreign private line halfcircuit to provide a switched, basic service must obtain specific Section 214 authority to do so. This requirement applies regardless of whether the carrier owns, leases, or has an IRU interest in the  ><U.S. halfcircuit. That is, this requirement applies regardless of whether the carrier is providing service on the U.S. half >n<circuit as a facilitiesbased carrier or a reseller.>n6 >2<ԍ See supra Section III.B.3 (proposing to maintain our current definition of a facilitiesbased carrier). It also applies regardless of whether the carrier is originating traffic in the United States or terminating traffic in the United States.  ><Prior certification on a countrybycountry basis is necessary in order to effectively enforce the equivalency policy that we  >L<adopted in the International Resale Policy order.Q?L >d$<ԍ See 7 FCC Rcd 559 (1991). Q We request comment, however, on whether we should permit a private line reseller that has received an initial Section 214 certificate to provide a switched, basic service using a leased foreign halfcircuit to add countries without prior certification once we have"d  ?0*((#" adopted an order finding such countries to afford equivalent resale opportunities to U.S. carriers. Commenters should address whether notification to the Commission of additional countries is sufficient or even necessary.  ><  >< x` ` 5.X Other Forms of Market Entry (#  >j<xO80.` ` AT&T requests that we make this rulemaking applicable not only to carriers that hold international facilitiesbased Section 214 authorizations, but also to all U.S. telecommunications services providers, both domestic and international, including enhanced service providers. As detailed below, we believe that our current rules and policies governing domestic interexchange services, enhanced services, separate satellite systems and other noncommon carrier services do not warrant change. Accordingly, we propose to apply the rules we adopt in this proceeding only to common carriers providing international facilitiesbased services pursuant to Section 214 of the Act. We request comments on this tentative conclusion.  >x<x` `  a.Domestic Interexchange Services  ><xP81.` ` Historically, we have not imposed foreignownership restrictions on domestic interexchange services, other than the statutory requirements of Section 310 of the Act which limit foreign ownership of common carrier radio facilities. We believe that the public interest goals identified above are well served by this open entry standard for domestic interexchange service. A foreign carrier whose U.S. affiliate provides domestic interexchange service may not use its bottleneck facilities to disadvantage unaffiliated U.S. interexchange carriers where there is no direct interconnection of those facilities to the foreign carrier's U.S. interexchange facilities. We find this fact, combined with the competitive benefits of our longstanding open entry policy for domestic service, and the administrative burden of regulating entry, to outweigh any anticompetitive effects that might occur as a result of permitting foreign carriers to operate  ><in the U.S. domestic market.  >*<x` `  b.Enhanced Services   ><xQ82.` ` As for enhanced services,I@ > "<ԍ See 47 C.F.R.  64.702.I we have previously found that their deregulation under Title II of the Act has served the public interest. We have not placed any restrictions on the provision of enhanced services by foreignowned service providers. Continuing to permit foreign carriers to provide enhanced services presents no substantial risk of competitive harm in the market for such services. Therefore, continued deregulation of these services will also serve our goal of" %!V@0*((-" promoting effective global competition. x  ><x` `  c.` Separate Satellite Systems and Other  >R<Noncommon Carriers (#  >< xR83.` ` Finally, for similar reasons we do not propose to apply foreign carrier restrictions to participation in separate satellite systems and other noncommon carrier facilities. Foreign carriers seeking to enter the U.S. market to provide international common carrier facilitiesbased services would be subject to our proposed effective market entry standard whether they use separate satellites, private submarine cables, or traditional common carrier transmission facilities.  > < xC.` ` Modification of Dominant Carrier and Other Operating Safeguards(#`  >` <  >& <xS84.` ` In light of our tentative conclusions with respect to  > <market entry and affiliation issues, we seek comment on whether we should modify our existing rules for determining the regulatory status (i.e., dominant or nondominant) of U.S.  >><carriers that are affiliated with foreign carriers.A > ><ԍ See International Services, 7 FCC Rcd 7331 (1992); 47 C.F.R.  63.01(r), 63.10, and 63.11. The Commission regulates U.S. international common carriers that are dominant because of foreign affiliations, as dominant only on those routes where their foreign affiliates have the ability to discriminate against unaffiliated U.S. international carriers through the control of bottleneck services and facilities in the foreign market. With respect to those routes for which it is regulated as dominant, an affiliated carrier must: (a) obtain Commission approval before adding (or discontinuing) circuits; (b) file costsupport with its tariffs, which are effective only after 45 days notice (as opposed to 14 days for a nondominant carrier); and (c) report quarterly (as opposed to annually) on traffic and revenues. The  ><rules adopted in International Services did not modify the dominant carrier status, for the provision of certain international services, of AT&T, Comsat or U.S. carriers that provide international service for noncontiguous domestic points. 7 FCC Rcd at 7342, n.2. We asked whether we should change our definition of affiliation to be  ><consistent with whatever approach is adopted in response to the  ><proposals in Section III.B.2, supra.JB| >#<ԍ See supra para. 66. J In this section, we propose to maintain the other aspects of the framework we adopted in  ><International Services for determining the regulatory status of affiliated U.S. carriers. We believe this approach will best serve the goals of this proceeding. "n" B0*((0"Ԍ ><xT85.` ` We take this opportunity, however, to seek comment on whether we should modify the nondiscrimination safeguards that we traditionally apply to carriers regulated as dominant under our  >R<International Services decision. Our experience in recent years suggests some of our safeguards can perhaps be better tailored to meet our regulatory concerns. Accordingly, we request comment on whether we should eliminate the requirement that dominant, foreignaffiliated carriers file tariffs on 45 days notice with cost support, and allow them to comply with nondominant carrier  ><rules (i.e., file their tariffs on 14 days notice without costsupport). We propose maintaining our requirements that a carrier obtain prior Commission approval before adding (or discontinuing) circuits on those routes for which the carrier is regulated as dominant and that it file quarterly traffic and revenue reports for those routes. We request specific comment, however, on whether the prior certification requirement is necessary if we adopt the entry approach proposed in this rulemaking.  > <xU86.` ` We also propose a new requirement, adopted in the  ><BT/MCI Order, that a dominant, foreignaffiliated carrier maintain complete records of the provisioning and maintenance of network facilities and services it procures from its foreign carrier affiliate, including, but not limited to, those it procures on behalf of customers of any joint venture for the provision of U.S. basic or enhanced services in which the U.S. carrier and its foreign carrier affiliate participate. These records should be available to the Commission upon request. We also propose to require that the U.S. carrier obtain a written commitment from its foreign carrier affiliate not to offer or provide, with respect to the provision of basic services, any special concessions to any joint venture for the provision of U.S. basic or enhanced services in which they both participate. We do not propose to change our current rule that prohibits any carrier that has an affiliation with a foreign carrier from agreeing to accept special concessions from any foreign carrier or administration with respect to traffic or revenue flows between the United States and any foreign country. This "no  ><special concessions" rule applies regardless of an affiliated  >d<carrier's regulatory status.TCd ><ԍ See 47 C.F.R.  63.14.T We seek comment on all these proposals and alternatives to these proposals.  ><xV87.` ` We further propose to require that any affiliated, facilitiesbased carrier regulated as dominant on any U.S. international route for the provision of switched services file with the Commission a complete list of the accounting rates that its foreign carrier affiliate maintains with all other countries. We also propose to apply this transparency requirement to affiliated carriers that we regulate as dominant in their provision of switched basic services via resold private lines. " %#VC0*((-" The required list of accounting rates would cover and specify all traffic relations and services of the foreign affiliate. We would require that this filing be made within 60 days of release of a Commission order classifying the carrier as dominant for the provision of switched services. We would also require that the carrier file within 30 days of the end of each calendar quarter any changes in its affiliate's accounting rates agreed to during that quarter. We propose to apply this transparency requirement to all facilitiesbased carriers and private line resellers now or hereafter classified as dominant for the provision of U.S. international switched services.  >H <xW88.` ` It has been U.S. policy within the International Telecommunication Union (ITU) and other international fora to promote costbased, nondiscriminatory and transparent accounting rates. Full disclosure of the foreign carrier's accounting rates will enable us to determine whether there is a noncostbased  >& <disparity between the rates maintained by that carrier with U.S. carriers and the rates it maintains with its other foreign  ><correspondents.LD0 ><ԍ We have directed U.S. carriers to negotiate with their foreign correspondents accounting rates that are consistent with relevant cost trends and that eliminate any noncostbased differences between accounting rates applied by a given foreign administration within its own region and those applied for the  ><United States. Regulation of International Accounting Rates,  ><Phase I First Report and Order, 6 FCC Rcd 3552, 3556 (1991),  >r<recon. denied, 7 FCC Rcd 8049 (1992). L Here, the information that we propose to require may assist us in monitoring the impact of foreign carrier entry, and selfcorrespondency, on U.S. accounting rates and whether such entry fosters or impedes progress in reducing accounting rates.  >V<xX89.` ` We propose not to apply this transparency requirement to a foreignaffiliated carrier that provides switched services  ><on a particular route solely through the resale of U.S. carriers' switched services. Such activity has little or no impact on the level of accounting rates. In addition, affiliated carriers that resell U.S. switched services are presumptively nondominant in  ><any event.NE >H!<ԍ See 47 C.F.R.  63.10(a)(4).N Because we have not found the provision of private line service to have a significant impact on the settlements process, we also do not propose to apply this transparency requirement to carriers regulated as dominant solely for the  ><provision of private line services.  ><xY90.` ` To the extent we modify our existing dominant carrier safeguards, we propose, with the exception noted for transparent accounting rates, to apply the new safeguards to a U.S. carrier's"*$N E0*(($" provision of all basic services for which we regulate it as dominant on a particular route. These dominant carrier safeguards, with the exception of the transparency requirement, would thus apply to U.S. carriers considered dominant on particular routes whether for the provision of facilitiesbased or resale services.  >j<xZ91.` ` We also request comment on AT&T's proposal that we expressly prohibit a foreign carrier or its U.S. affiliate from refiling U.S. originating or terminating traffic, without the  ><consent of the originating and terminating carriers. We request comment on whether an express prohibition is necessary, and how we should define the act of refiling. As for AT&T's request for a condition of proportionate return, since the 1950's, one of the guiding principles in our scrutiny of international traffic relations has been that U.S. carriers "should be permitted to  >` <share proportionately in . . . inbound traffic in order to be  >& <able to compete effectively."VF&  >|<ԍ Mackay Radio, 19 FCC 1321, 1340 (1954).V We have consistently applied this  > <principle,G V ><ԍSee, e.g., Telefonica Larga Distancia Puerto Rico, 8 FCC  ><Rcd 106 (1992); FTC Communications, Inc., 4 FCC Rcd 5633(Com.  >\<Car. Bur. 1989); U.S. Sprint, 3 FCC Rcd 1484 (Com. Car. Bur.  >"<1988); American Tel. & Tel. Co., 2 FCC Rcd 6409 (Com. Car. Bur. 1987). waiving it only where required by the public interest, as for example, when a foreign administration lacked  >x<technology capable of providing proportionate return.Hx ><ԍ See TRT Telecommunications Corp, 49 FCC2d 1408 (1974); TRT  ><Telecommunications Corp., 46 FCC2d 1042 (1974). We now  >><propose to codify our proportionate return policy as a rule of  ><general applicability to all carriers.IP  ><ԍIn Regulation of International Accounting Rates, Phase II Second Report and Order and Second Further Notice of Proposed  >n<Rulemaking, 7 FCC Rcd 8040, 8045 (1992), recon. pending, we requested comment on whether allowing some flexibility in our nondiscriminatory accounting rate, division of tolls, or proportionate return policies might be an appropriate means of achieving lower accounting rates as facilitiesbased competition is introduced in foreign countries. 7 FCC Rcd at 8046. We do not believe that this outstanding issue detracts from the desirability of codifying proportionate return as a rule of general applicability.  That is, all carriers, whether affiliated or not, must accept only their proportionate share of return traffic from foreign correspondents. Under this rule, we will, of course, continue to grant waivers where necessitated by the public interest. "%I0*((P"Ԍ ><ԙXx D.X` ` Section 310(b)(4) Standard for Radio Licensee Ownership  ><By Foreign Entities (#`  >R<x[92.` ` International Section 214 authorizations are required for the provision of international basic telecommunications services via any transmission facility on either a resale or facilities basis. In addition, authorizations under Title III of the Act are required for those entities seeking to operate  >0<specified classes of radio (wireless) station facilities. As  ><explained in Section II.C. supra, Section 310(b)(4) establishes a 25 percent foreign ownership benchmark for the parent holding company of common carrier, broadcast, and aeronautical fixed and  >H <en route ("aeronautical") radio licenses.JxH  > <ԍ Section 310(b)(4) states, in pertinent part: x` ` (b) No broadcast or common carrier or aeronautical en route or aeronautical fixed radio station license shall be granted to or held by x` ` hh@* * * x` ` (4) any corporation directly or indirectly x` ` controlled by any other corporation of x` ` which any officer or more than onefourth x` ` of the directors are aliens, or of which x` ` more than onefourth of the capital stock x` ` is owned of record or voted by aliens, x` ` their representatives, or by a foreign x` ` government or representative thereof, or x` ` by any corporation organized under the laws x` ` of a foreign country, if the Commission x` ` finds that the public interest will be served x` ` by the refusal or revocation of such license. 47 U.S.C.  310(b)(4) (1982).  We ask whether the goals of this proceeding would be served by incorporating the proposed effective market access standard into the public interest determinations under Section 310(b)(4)in situations where the foreign ownership would exceed the 25 percent statutory benchmark. Thus, related to our proposal that effective market  > <access should be a part of the public interest showing under Section 214 of the Act, we also ask whether the same factors should be part of our public interest analysis under Section 310(b)(4) of the Act regarding applications for Title III common  ><carrier and aeronautical fixed and en route radio licenses.K >#<ԍ We do not propose to apply the affiliation standard discussed in Section III.B.2. because the Section 310(b)(4) foreign ownership benchmark is a statutory requirement not subject to change. We further seek comment on whether the effective market access standard should be incorporated into the public interest"&K0*((" determination under Section 310(b)(4) concerning applications for broadcast licenses. As discussed below, the Commission has traditionally taken a stricter approach to alien ownership determinations under this provision where broadcast licenses are involved given the control over the content of transmissions exercised by broadcasters.  >j<XxX` ` 1.X Application to Common Carrier Licenses (#  ><x\93.` ` Under the plain language of the Communications Act and its legislative history, the Commission has broad discretion in applying Section 310(b)(4). Indeed, the legislative history of  >H <Section 310 itself concerning foreign investment in parent holding companies reflects Congressional concern that rigid restrictions "would probably seriously handicap" U.S. companies engaged in international communications with large interests in foreign countries in connection with their international  >& <communications.ZL&  >|<ԍ S. Rep. No. 781, 73 Cong., 2d Sess. 7 (1934). Z In addition, the Commission is authorized to  > <consider reciprocal treatment under Section 308 of the Act.)MH V ><ԍ See 47 U.S.C.  308(c)(1982), which states "[t]he Commission in granting any license for any station intended or used for commercial communication between the United States ... and any foreign country, may impose any terms, conditions, or restrictions authorized to be imposed with respect to submarinecable licenses by section 2 of an Act entitled "An Act relating to the landing and operation of submarine cables in the United States," approved May 24, 1921 ["Submarine Cable Landing License Act"]." The Submarine Cable Landing License Act states in part that licenses may be withheld if it will assist the United States in securing rights for the landing or operation of cables in  >R<foreign countries. See 47 U.S.C.  35.)  >x<x]94.` ` In those instances where the Commission has authorized foreign ownership or participation beyond the statutory  ><benchmarks, the Commission has generally considered the level of foreign presence in light of the extent of U.S. presence in other areas (ownership, officers, or directors) relevant to a public  >V<interest determination under Section 310(b)(4).RNVf  >J!<ԍ See, e.g., GRC Cablevision, Inc., 47 F.C.C. 2d 467, 30  >"<R.R. 2d. 827 (1974);  IDB Communications Group, Inc., 6 FCC Rcd  >"<4652 (Com. Car. Bur. 1991); and Teleport Transmission Holdings, 8 FCC Rcd 3063 (Com. Car. Bur. 1993).R In GRC  ><Cablevision, Inc., for example, where the Commission allowed 60  ><percent alien ownership of a licensee's parent, it specifically noted that the majority of the parent's board of directors was comprised of U.S. citizens and the parent itself was a U.S. corporation. Furthermore, the Common Carrier Bureau noted in"4'FN0*(( "  ><Millicom,eO >V<ԍ See Millicom Inc., 4 FCC Rcd 4846 (1989).e where it approved greater than 25 percent alien presence on the board of directors, that 90 percent of the shareholders and a majority of the board were U.S. citizens. More recently, the Common Carrier Bureau approved 65 percent alien ownership in a licensee's parent where there was a 75  ><percent U.S. presence in the corporate roles of officers and  ><directors.bPV ><ԍ Teleport Transmission Holdings, 8 FCC Rcd at 3065.b Additionally, the Commission has also considered in its public interest analysis whether the Title III licensees involved are common carrier licensees with no control over the  ><content of the transmissions . Q >h <ԍ See, e.g., Millicom, 4 FCC Rcd at 4847; Teleport  >. <Transmission, 8 FCC Rcd at 306465.  ><  ><x^95.` ` Section 310(b)(4) public interest determinations are often required at the same time as Section 214 authorizations when foreign carriers seek to enter the U.S. market, and many of the same policy considerations apply. We ask, therefore, whether a similar approach would be useful in both contexts. It appears that, in the case of common carrier radio licenses generally, such an approach would well serve the goals of this proceeding. Therefore, when an applicant in whom foreign ownership in the parent holding company exceeds the 25 percent benchmark seeks a common carrier radio license, or when a U.S. licensee seeks to increase the level of foreign ownership in its parent holding company beyond the 25 percent benchmark or previously authorized levels of foreign ownership, we ask whether our evaluation of the public interest should consider whether the foreign entity's primary markets pass the effective market access test.  ><x_96.` ` Thus, for example, if a foreign entity seeks to invest in the parent holding company of an applicant for authority to provide Personal Communication Services ("PCS"), should we consider whether U.S. companies can provide PCS, or its functional equivalent, in the foreign entity's primary market? We also seek comment on whether, just as with our public interest analysis under Section 214, we should find that our effective market access finding under Section 310(b)(4) is not dispositive of our decision to license a particular entity. For instance, once we have reviewed the effective market access element of our public interest analysis, should we also assess other public interest factors which might weigh in favor of, or against, allowing entry into the U.S. market? Such factors in this context could include the state of liberalization in the foreign country's other radiobased service markets, national security, or the competitiveness of the applicant's target market in the United States. Finally, we seek comment on whether, if we do"B!(8Q0*((n(" consider effective market access, this would be a more tailored and predictable application of Section 310(b)(4) that will assist us in encouraging and recognizing foreign countries' efforts to liberalize their communications market.  ><XxX` ` 2.X Application to Aeronautical Licenses (#  >j<x`97.` ` Section 310(b)(4) of the Act also applies to aeronautical en route and aeronautical fixed radio licenses. Aeronautical en route stations provide airground communications  ><for the operational control (flight management) of aircraft by their owners or operators. Communications relate to the safe and  >H <efficient operation of aircraft.RjH  > <ԍ En route stations are the means by which companies satisfy Federal Aviation Administration requirements to maintain reliable communications between each aircraft and its dispatch office, in the case of large airlines, or maintain flight following systems, in the case of small airlines and commercial aircraft operators. Aeronautical fixed stations provide point to point communications pertaining to safety, regularity and economy of flight.  The vast majority of en route  > <stations are licensed to Aeronautical Radio, Inc. (ARINC).S  ><ԍ ARINC renders its services on a nonprofit basis with costs distributed in proportion to use. Its principal stockholders as well as its principal customers are the U.S. scheduled airlines.  > <xa98.` ` Although there have been no foreign ownership determinations made in this area, it appears there may be benefits in applying the effective market access test to these aeronautical services. With the increasing presence of foreign airlines in U.S. markets and the potential for increased foreign ownership of U.S. airlines, this issue could arise in the near future. Accordingly, we ask whether the effective market access test also should be applied to these aeronautical licensees.  ><XxX` ` 3.X Application to Broadcast Licenses (#  ><xb99.` ` Given the potential benefits of considering market access as a factor in our foreign ownership determinations for common carrier and aeronautical licensees, we believe it is appropriate to ask whether a similar approach should be utilized in evaluating broadcast applications that propose indirect alien ownership in excess of the 25 percent statutory benchmark. We note in this context that we have had a traditionally heightened concern for foreign influence over or control of licensees which exercise editorial discretion over the content of their transmissions. Xx` ` (#  ><xc100.` ` The distinction between common carrier and broadcast") S0*(("" licensees in terms of content control has been the basis for our  ><traditionally disparate treatment of these licensees under Section 310(b)(4). While the Commission has granted applications permitting foreign ownership of a parent holding company of a  ><nonbroadcast licensee to exceed 25 percent,iT >n<ԍ See GRC Cablevision, Inc., 47 F.C.C. 2d 467 (1974)(although references in this case are to Section 310(a),  ><this Section was later recodified as Section 310(b)(4)); see also  ><Teleport Transmission Holding, Inc., 8 FCC Rcd 3063 (Com. Car. Bur. 1993). i the Commission has consistently declined to do so in broadcasting because of a  ><broadcast licensee's ability to control the content of its  >j<transmission.{Ujn >f <ԍ See, e.g., Primemedia Broadcasting, Inc., 3 FCC Rcd 4293 (1988).{ Thus, for example, in the GRC Cablevision case, granting a Cable Television Relay Service (CARS) construction permit to an entity whose parent was more than 50 percent foreign   owned, the Commission stressed that: "[o]ur action here  ><represents no departure from our traditional policies in regulation of broadcast television. Alien ownership in that medium presents different questions which we will deal with as  > <they rise in concrete situations."=V  >$<ԍ 47 F.C.C. 2d at 468.= The Commission stated that its decision to grant the application notwithstanding the  >` <involvement of aliens was based in part on the fact that "the facility in question [would] be used for the relay of broadcast  > <signals and [would] thus be largely passive in operation."W P  ><ԍ Id. at 468. See also Teleport 8 FCC Rcd at 3065 ("Finally, we note that the two licenses involved are common carrier licenses" and that the licensee "will exercise therefore  ><no control over the content of the transmissions"); GCI  ><Liquidating Trust, 7 FCC Rcd 7641 (1992)("licenses involved are in the pointtopoint microwave service where the licensee will  >n<exercise no control over content of the transmission"); Millicom  >4<Inc., 4 FCC Rcd 484647 (1989)("licensed stations provide common carrier service, and as a result, they involve facilities in which the licensee exercises no control over the content of the transmissions").  >x<xd101.` ` Although there is little discussion in the case law of the Commission's consistent concern over alien ownership interests in broadcast station holding companies in excess of 25 percent, the legislative history of 310(b) suggests that alien control of limited broadcast information outlets, particularly in time of war, was a principal consideration in adopting the  ><restrictions. As the court stated in Noe v. FCC: "the dangers from espionage and propaganda disseminated through foreignowned"*W0*((P" radio stations in the United States prior to and during war brought about the passage of the Radio Act of 1927 (superseded by  ><the Communications Act of 1934)...."JX ><ԍ Noe v. FCC, 260 F.2d 739, 741 (D.C. Cir. 1958) citing  ><Letter from the Secretary of the Navy (March 22, 1932), Hearings on H.R. 8301 Before the House Committee on Interstate and Foreign  >4<Commerce, 73d Cong., 2d Sess. 26 (1934).J Xx(#  ><xe102.` ` It may be appropriate now to revisit our restrictive approach to alien investment in broadcasting. In contrast to the situation that existed in 1927, there are currently a plethora of broadcast and other mass communications facilities available to the general public. Additionally, even if we incorporate the effective market access standard in our evaluation of broadcast applications, the nature of the casebycase review conducted under Section 310(b)(4) is such that we retain the discretion to deny particular applications if warranted by the facts of a  > <specific case.   > < Xx` ` (#  > <xf103.` ` Accordingly, we seek comment on whether we should consider effective market access as a factor in Section 310(b)(4) determinations involving broadcast licensees and, if so, what restrictions, if any, we should place on the level or type of interests which aliens would be permitted to hold. We invite commenters to submit any other proposals they believe would be appropriate in defining our Section 310(b)(4) analysis for broadcast licensees, including those which might permit alien control of a licensee's parent company. We emphasize, however, that any such proposals should carefully evaluate the risks and benefits to the public interest, paying particular attention to the fact that control of mass media facilities confers control over the content of widely available broadcast material.  >n<x IV. CONCLUSION ׃ xg104. In this Notice, we tentatively conclude that the public interest requires that we modify our public interest standard for considering foreign carrier applications to enter the U.S. market to provide international facilitiesbased services. In proposing this standard, we wish to promote three goals: (1) effective competition in the global market for communications services; (2) the prevention of anticompetitive conduct in the provision of international services or facilities; and (3) opening of foreign communications markets. We tentatively conclude that an important element of the public interest standard we would consider is whether there is, currently or in the near future, effective market access to U.S. carriers seeking to provide basic, international telecommunications facilitiesbased services in the primary markets of the foreign carrier desiring entry. We also propose to continue to consider other factors under our public""+X0*((0*" interest analysis. We suggest two alternative levels of foreign carrier ownership that would trigger this analysis: interests of greater than either 10 percent or 25 percent. We do not propose to change our approach to foreign carrier Section 214 applications for reselling international switched or private line services, or for providing domestic interexchange or enhanced telecommunications services.  >0<xh105.` ` We also ask whether we should adopt the effective market access test as an important element of the Section 310(b)(4) public interest analysis applicable to foreign entities seeking to acquire an indirect ownership interest in U.S. radio facilities. Thus, when a foreign entity seeks to acquire an indirect ownership interest of more than 25 percent in a common carrier, aeronautical radio or broadcast facility, we seek comment on whether we should find that an important element of the public interest requirement of Section 310(b)(4) has been met if the primary markets of the foreign entity offer effective market access to U.S. carriers to provide the same type of radiobased services as requested in the United States. We ask whether we should also consider other factors under our public interest analysis. We seek comment on all aspects of the proposals described above, and invite additional suggestions on how the Commission may best reach its stated goals. xi106. As required by Section 603 of the Regulatory Flexibility Act, the Commission has prepared an Initial Regulatory Flexibility Analysis (IRFA) of the expected impact on small entities of the proposals suggested in this document. The IRFA is set forth in Appendix A, Section II. Written public comments are requested on the IRFA. These comments must be filed in accordance with the same filing deadlines as comments on the  ><rest of the Notice (see Appendix A, Section III), but they must have a separate and distinct heading designating them as responses to the Initial Regulatory Flexibility Analysis. The Secretary shall send a copy of this Notice of Proposed Rulemaking, including the Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration in accordance with paragraph 603(a) of the Regulatory Flexibility Act. Pub. L. No. 96354, 94 Stat. 1164, 5  ><U.S.C. Section 601 et seq. (1980).  >| < V. ORDERING CLAUSES ׃ xj107. Accordingly, IT IS ORDERED that NOTICE IS HEREBY GIVEN of the proposed regulatory action described above, and that COMMENT IS SOUGHT on the proposals in this Notice.  > %<xk108.` ` IT IS FURTHER ORDERED that AT&T's petition for rulemaking is GRANTED IN PART to the extent that we are initiating a rulemaking to address foreign carrier entry into the U.S. market, and denied in all other respects."r',X0*((/"Ԍ ><ԙxl109.` ` IT IS FURTHER ORDERED that IDB's petition for rulemaking is GRANTED IN PART to the extent that we clarify our definition of what is a facilitiesbased carrier and seek comment  >R<on our definition, and denied in all other respects. xm110. This action is taken pursuant to Sections 4 and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C.  154, 303(r). xn111. For further information on this Notice contact Troy F. Tanner or Susan O'Connell, AttorneyAdvisors, Policy and Facilities Branch, Telecommunications Division, International Bureau, (202) 4181470. x` ` hh@FEDERAL COMMUNICATIONS COMMISSION  > <x` ` hh@William F. Caton x` ` hh@Acting Secretary "x-X0*(("  ><  ?<'#x6X@`7pX@#APPENDIX A Procedural Matters  ?<I. Ex Parte Rules NonRestricted Proceeding  ?<xThis is a nonrestricted notice and comment rulemaking  ?v<proceeding. Ex parte presentations are permitted, except during the Sunshine Agenda period, provided they are disclosed as  ?<provided in Commission rules. See generally 47 C.F.R. Sections 1.1202, 1.1203, and 1.1206(a).  ?<  ?^ < II. Initial Regulatory Flexibility Act  ? <xA. Reason for Action  ?~ < xThis rulemaking proceeding is initiated to obtain comment regarding proposed changes to the Commission's entry standard for foreign carriers desiring to enter the U.S. international telecommunications market, as well as changes to the Commission's public interest standard for foreign entities that seek to acquire an indirect interest in a U.S. common carrier, aeronautical, or broadcast radio license. Comment is also requested on proposed modifications to the Commission's dominant carrier safeguards as well as to other nondiscrimination  ?N<safeguards. Comment is also sought on the Commission's definition  ?<of an international facilitiesbased carrier.  ?<x B. Objectives xThe Commission seeks to establish standard rules and procedures to regulate foreign entry into the U.S. marketplace in order to promote effective competition and prevent anticompetitive conduct in the market for international communications services, as well as to open foreign communications markets.  ?<x C. Legal Basis xThe proposed action is authorized under Sections 4 and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C.  154, 303(r).  ?^"<x D. Reporting, Recordkeeping and Other Compliance  ?&#<Requirements xThe actions contained in this Notice of Proposed Rulemaking may affect large and small carriers. We propose to require that dominant, foreignaffiliated carriers maintain or provide certain records regarding their foreign affiliates. These carriers may be required to comply with proposed requirements to file certain"'.X0*((/" reports, but this is not estimated to be a significant economic burden for these entities.  ?X<x E. Federal Rules That Overlap, Duplicate or Conflict With  ? <These Rules xNone.  ?@<x F. Description, Potential Impact, and Number of Small Entities Involved  ?<  ?<xTo the extent that the proposals discussed in this Notice of  ?` <Proposed Rulemaking propose to make equity investment by foreign telecommunications carriers in U.S. carriers more difficult, carriers seeking foreign investment greater than the proposed threshold will be adversely affected. These proposals are intended to ensure that U.S. carriers can compete effectively in international markets and to open closed foreign markets. Copies  ?<of this Notice will be sent to the Chief Counsel for Advocacy of the Small Business Administration.  ?h<Xx G. Any Significant Alternatives Minimizing the Impact on  ?0<Small Entities Consistent with the Stated Objectives (#  ?<xThe Notice solicits comment on a variety of alternatives to achieve Commission objectives.  ?< III. Comment Dates xPursuant to applicable procedures set forth in Sections 1.415 and 1.419 of the Commission's Rules, 47 C.F.R. Sections 1.415 and 1.419, interested parties may file comments on or before March 28, 1995 and reply comments on or before April 28, 1995. To file formally in this proceeding, you must file an original and four copies of all comments, reply comments, and supporting comments. If you want each Commissioner to receive a personal copy of your comments, you must file an original plus nine copies. You should send comments and reply comments to: Office of the Secretary, Federal Communications Commission, Washington, D.C. 20554. Comments and reply comments will be available for public inspection during regular business hours in the FCC Reference Center (Room 239) of the Federal Communications Commission, 1919 M St., N.W., Washington, D.C. 20554.  >!<#w H@7ܧ@#