$///DA 95-517 3/16/95///$ ///newjob/// (a)Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) DA 95-517 ) MCI Telecommunications Corporation ) File No. I-T-C-95-031 ) Application for Authority pursuant to ) Section 214 of the Communications Act ) of 1934, as amended, to Provide Switched ) Services via International Private Lines ) Interconnected to Public Switched ) Networks in the United States and the ) United Kingdom ) MEMORANDUM OPINION, ORDER AND AUTHORIZATION Adopted: March 7, 1995 Released:March 21, 1995 By the Chief, International Bureau: I. INTRODUCTION 1. In this order, we grant MCI Telecommunications Corporation ("MCI") authority to provide switched services via its U.S. international private line facilities between the United States and the United Kingdom. II. BACKGROUND 2. On October 24, 1994, MCI filed the captioned application pursuant to Section 214 of the Communications Act of 1934, as amended, and Section 63.01 of the Commission's Rules. MCI requests authority to provide switched services via international private lines between the United States and the United Kingdom that are interconnected to the public switched network ("PSN") in the United States, or in the United Kingdom, or both. 3. MCI proposes to use its own circuits in transatlantic cable systems in which it owns capacity, including TAT-8, TAT-9 and TAT-10. MCI also proposes to use circuits between U.S. earth stations and INTELSAT Atlantic Ocean Region ("AOR") satellites, which it will obtain from Communications Satellite Corp. ("COMSAT") under tariff. It proposes to procure additional capacity from other satellite providers as well. MCI proposes to connect circuits in these systems with circuits provided by entities that are authorized in the United Kingdom. These circuits will be interconnected to the PSN in the United States and/or the United Kingdom. 4. MCI argues that the Commission should grant its application based on the following: (1) the Commission's determination in its International Resale Order that the public interest is served by the provision of international switched services over private lines to those countries which provide resale opportunities equivalent to those afforded by the United States; (2) the Commission's conclusion that equivalent international private line resale opportunities exist in the United Kingdom for U.S.-based carriers seeking to provide service between the United States and the United Kingdom; and (3) the Commission's approval of applications to provide switched services by reselling international private lines between the United States and the United Kingdom. MCI contends that granting its application to provide switched services over its own U.S. international private lines will enable MCI to satisfy customer needs for services at competitive prices and will enable it to continue to participate and compete on the U.S. - U.K. route, which MCI is currently serving. MCI states that it has filed the instant application because the Commission may decide that the proposed service arrangement would constitute private line resale as defined in the Commission's International Resale Order. MCI adds that, if the Commission concludes that its proposed service arrangement is not within the ambit of the International Resale Order, MCI will withdraw the application. III. DISCUSSION 5. As an initial matter, resale is defined as an "activity wherein one entity subscribes to the communications services and facilities of another entity and then reoffers communications services and facilities to the public (with or without 'adding value') for profit." Because MCI will be using its own U.S. international private lines to provide switched services between the United States and the United Kingdom, by definition, MCI will not be reselling private line service. 6. MCI's application, however, does fall within the scope of the International Resale Order. We interpret this order to require that, whenever a carrier seeks to reroute switched traffic not subject to the settlements process over private lines interconnected to the PSN, that carrier must seek separate authorization to do so under Section 214. To obtain Commission authorization, an applicant must demonstrate that the subject country affords resale opportunities equivalent to those available under U.S. law. This equivalency requirement is designed to prevent the detrimental effects of one-way resale and the diversion of switched traffic from the international settlements process. Here, MCI proposes to reroute switched traffic over an international private line connected at one or both ends to the PSN. Therefore, MCI must obtain a separate Section 214 authorization to provide the proposed service and must demonstrate that the destination market, the United Kingdom, affords resale opportunities equivalent to those available in the United States. 7. The Commission has previously concluded that the United Kingdom provides equivalent resale opportunities. Additionally, we find that grant of the application will allow MCI to become a more effective competitor in the provision of switched services. Use of its U.S. international private lines to provide switched services should foster lower prices, innovative services and increased responsiveness to consumer needs on the U.S. - U.K. route. Consequently, we grant MCI's application and authorize MCI to provide switched services via international private lines between the United States and United Kingdom that are interconnected to the U.S. PSN, or the U.K. PSN, or both. IV. ORDERING CLAUSES 8. Upon consideration of the above-captioned application, IT IS HEREBY CERTIFIED that the present and future public convenience and necessity require the provision by MCI of switched services between the United States and the United Kingdom via international private lines interconnected to the PSN at either or both ends. 9. Accordingly, IT IS ORDERED that application File I-T-C-95-031 IS GRANTED. 10. IT IS FURTHER ORDERED that the conditions imposed in MCI Communications Corporation, File No. I-S-P-93-013, Declaratory Ruling and Order, 9 FCC Rcd 3960 (1994) (MCI Declaratory Ruling), paras. 64 - 67 and 70 are hereby imposed as conditions of this authorization; and that all filings required to be made pursuant to these conditions be submitted to the International Bureau. 11. IT IS FURTHER ORDERED that neither MCI nor any persons or companies directly or indirectly controlling it or controlled by it, or under direct or indirect common control with it, shall acquire or enjoy any right, for the purposes of handling or interchanging traffic to or from the United States, its territories or possessions which is denied to any other U.S. carrier by reason of any concession, contract, understanding, or working arrangement to which MCI or any such persons or companies controlling or controlled by MCI are parties. MCI shall additionally comply with Section 63.14 of the Commission's Rules, 47 C.F.R.  63.14 (see MCI Declaratory Ruling, 9 FCC Rcd at 3966- 67, para. 35). 12. IT IS FURTHER ORDERED that MCI shall comply with Section 203 of the Communications Act, 47 U.S.C.  203, Part 61, and Sections 43.51 and 43.61 of the Commission's Rules, 47 C.F.R. Part 61, and  43.51 and 43.61. 13. IT IS FURTHER ORDERED that MCI shall comply with any current and future Commission policies and requirements concerning international accounting and settlement rates, and shall file copies with the Commission of any operating agreements which it enters into with its foreign correspondents within 30 days of their execution. 14. IT IS FURTHER ORDERED that the authority granted herein for the provision of switched services via international private lines between the United States and the United Kingdom is limited to the provision of such services between the United States and the United Kingdom only -- that is, traffic that originates in the United States and terminates in the United Kingdom, or traffic that originates in the United Kingdom and terminates in the United States. 15. This Order is issued under Section 0.261 of the Commission's Rules and is effective upon adoption. Petitions for reconsideration under Section 1.106 or applications for review under Section 1.115 of the Commission's Rules may be filed within 30 days of the public notice of this Order (see Section 1.4(b)(2)). FEDERAL COMMUNICATIONS COMMISSION Scott Blake Harris Chief, International Bureau