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Introduction T  X-TPx1.` ` NYNEX Long Distance Company (NYNEX LD), Ameritech Communications, Inc. (ACI), and Bell Atlantic Communications, Inc. (BACI) each filed an application seeking authority pursuant to Section 214 of the Communications Act of 1934, as amended (Act), and  XR-Section 63.01 of the Commission's rules,ZR]& yO-ԍx47 U.S.C.  214; 47 C.F.R.  63.01.Z to provide international telecommunications services originating from "outof region" points in the United States and terminating at international points through the resale of switched services of unaffiliated common carriers. NYNEX LD, ACI, and BACI request classification as nondominant resellers of international switched services on all routes for which they seek authorization.  X -x2.` ` For the reasons set forth below, we find that a grant of NYNEX LD's, ACI's, and BACI's applications, subject to the conditions set forth below, will serve the public  X"-interest under Section 214 of the Act. The conditions that we apply to our grant of NYNEX  Ei LD's, ACI's, and BACI's Section 214 applications are the same as the interim safeguards that the Commission recently adopted as a condition for nondominant treatment of the Bell Operating Companies' (BOCs) provision of outofregion, domestic interstate, interexchange"U%X0*(('$"  X-services (including interLATA and intraLATA services).$]& yOy-ԍxBell Operating Company Provision of OutofRegion Interstate, Interexchange Services, CC Docket No.  {OA-9621, Report and Order, FCC 96288 (released July 1, 1996) (BOC Domestic OutofRegion Order). The Commission did not determine the appropriate regulation of a BOC's provision of international service in the  {O-BOC Domestic OutofRegion Order. See id. at n.5. The conditions we attach to our grant of the instant Section 214 applications will remain in place pending the outcome of the  X-Commission's Interexchange NPRM. z]& yO7-ԍxPolicy and Rules Concerning the Interstate, Interexchange Marketplace and Implementation of Section 254(g) of the Communications Act of 1934, CC Docket No. 9661, FCC 96123 (released Mar. 25, 1996)  {O -(Interexchange NPRM or Interexchange proceeding) (seeking comment on whether to modify or eliminate the separation requirements that apply as a condition of nondominant treatment of independent local exchange carrier (LEC) provision of outofregion, domestic interstate, interexchange services, and whether, if it modifies or eliminates these requirements for independent LECs, it should also modify or eliminate its requirements for BOC outofregion domestic interstate, interexchange services).  In the meantime, we believe that our grant of NYNEX LD's, ACI's, and BACI's applications subject to the conditions set forth below will facilitate the efficient and rapid provision of international services, as contemplated by the Telecommunications Act of 1996, while still protecting ratepayers and competition in the U.S. international services market.  XJ- II. Background ĐTTP  X - TPxA.` ` Competitive Carrier Proceeding  X -x3.` ` In 1980, in its First Report & Order in Competitive Carrier, the Commission  X -devised the dominant/nondominant regulatory scheme for Title II rate and entry regulation. ]& {O-ԍxSee Policy & Rules Concerning Rates for Competitive Common Carrier Services and Facilities  {OL-Authorizations Therefor, CC Docket No. 79252 (Competitive Carrier), First Report & Order, 85 FCC 2d 1  {O-(1980); Second Report & Order, 91 FCC 2d 59 (1982); recon., 93 FCC 2d 54 (1983); Third Report & Order, 48  {O-Fed. Reg. 46,791 (1983); Fourth Report & Order, 95 FCC 2d 554 (1983), vacated, AT&T v. FCC, 978 F.2d 727  {O-(1992), cert. denied, MCI Telecommunications Corp. v. AT&T, 113 S.Ct. 3020 (1993); Fifth Report & Order,  {Ot-98 FCC 2d 1191 (1984); Sixth Report & Order, 99 FCC 2d 1020 (1985), rev'd, MCI Telecommunications Corp.  {O>-v. FCC, 765 F.2d 1186 (D.C. Cir. 1985). In a series of orders, the Commission distinguished between carriers with market power  X -(dominant carriers) and those without market power (nondominant carriers). D]& {O -ԍxSee 47 C.F.R.  61.3(o) (Dominant carrier is defined as "[a] carrier found by the Commission to have  {Ol!-market power (i.e., power to control prices)"). The  Ei " 0*(( "  Ei Commission also determined that, if a common carrier was determined to be "nondominant," Title II regulatory requirements would be "streamlined." The Commission gradually relaxed its regulation of nondominant carriers because it concluded that nondominant carriers lacked the incentive and ability to engage in conduct that might be anticompetitive or otherwise  X-inconsistent with the public interest.]& {O-ԍxSee BOC Domestic OutofRegion Order at  46 for a comparison of the regulatory requirements imposed on dominant and nondominant domestic carriers.  Xv-x4.` ` The Commission has applied standard principles of antitrust analysis to determine whether a carrier possesses market power in the provision of the relevant service in  XH-the relevant geographic market.YH"]& {O -ԍxRevisions to Price Cap Rules for AT&T Corp., 10 FCC Rcd 3009, 3016 (1995) (Commercial Services  {O -Order); Competition in the Interstate Interexchange Marketplace, CC Docket No. 90132, Report and Order, 6  {O -FCC Rcd 5880, 5888 (1991) (First Interexchange Competition Order), recon., 6 FCC Rcd 7569 (1991), further  {Oy-recon., 7 FCC Rcd 2677 (1992); Motion of AT&T Corp. to be Declared NonDominant for International Service,  {OC-Order, FCC 96209 (released May 14, 1996) (AT&T International NonDominance Order); Competitive Carrier,  {O -First Report and Order, 85 FCC 2d at 21; Motion of AT&T to be Reclassified as a NonDominant Carrier, 11 FCC Rcd 3271, 329394 (1995).Y This analysis includes a focus on: (1) market share, (2) the  X1-demand elasticity of a carrier's customers,.Z1n ]& {OP-ԍxCommercial Services Order at 3016 (demand elasticity or responsiveness is the propensity of customers to switch carriers or otherwise change the amount of services they purchase from a carrier in response to relative changes in price and quality).. (3) the supply elasticity of the market, 1 ]& yOr-ԍxThe Commission has explained that there are two factors that determine supply elasticities in the market. The first is the supply capacity of existing competitors. Supply elasticities tend to be high if existing competitors have or can easily acquire significant additional capacity in a relatively short time period. The second factor is low entry barriers. Supply elasticities tend to be high even if existing suppliers lack excess capacity if new  {O-suppliers can enter the market relatively easily and add to existing capacity. First Interexchange Competition  {O\-Order at 5888. (4) a carrier's cost structure, size and resources, and (5) control of bottleneck facilities.  X -  X -x5.` ` The Commission first applied its dominant/nondominant regulatory scheme to  X -U.S. international carriers in 1985.  ]& {O-ԍxSee International Competitive Carrier Policies, Report & Order, 102 FCC 2d 812 (1985) (International  {O\ -Competitive Carrier), recon. denied, 60 RR 2d 1435 (1986). In International Competitive Carrier, the Commission  X -determined that, for international service, demand and supply elasticity revealed distinct  Ei " h 0*(( "  X- Ei product markets, international message telephone service (IMTS) and nonIMTS, \]& {Oy-ԍxInternational Competitive Carrier at  22; see also id. at  22, and n.20 (also treating television, space  {OC-segment and multipurpose earth station services as separate products); see also id. at  6, n.6 ("[e]xamples of nonIMTS services are telex, telegram . . . private line, high and low speed data, [and] videoconferencing"). and that every destination country constituted a separate geographic market based "primarily on the need for a carrier to obtain an operating agreement prior to providing service to a given  X-country."F ]& {OX-ԍxId. at  37.F The Commission also concluded that (a) AT&T was dominant in the provision of  X-IMTS and (b) all other IMTS providers (e.g., Sprint and MCI), except the noncontiguous  X-domestic carriers, were not dominant.F Z~]& {O -ԍxId. at  47 (identifying "Hawaiian Telephone for Hawaii; Alascom for Alaska; All American Cable & Radio for Puerto Rico; ITTCIVI for the U.S. Virgin Islands and RCA Globcom for Guam" as the carriers providing international service for noncontiguous domestic points).F The Commission determined that no carrier was  Xx-dominant in the provision of nonIMTS service for any geographic market.Mx]& {O-ԍxId. at 5156.M In addition, the  Xa-Commission found all foreignowned carriers to be dominant for all services to all countries.Va2 ]& {OD-ԍxId. at  7273, and 84. V The Commission recently found AT&T to be no longer dominant in the provision of  X3-international services.&3 ]& {O-ԍxAT&T International NonDominance Order. The Commission also recently further streamlined the Title  {Or-II regulation of nondominant international carriers. See Streamlining the International Section 214 Authorization Process and Tariff Requirements, IB Docket No. 95118, FCC 9679,  77, and 8081 (released  {O-Mar. 13, 1996) (Streamlining Order).   X -xB.` ` 1996 Act and BOC Domestic OutofRegion Order    X -x6.` ` In enacting the Telecommunications Act of 1996 (1996 Act), ]& {O<-ԍxPub. L. No. 104104, 110 Stat. 56 (1996), codified at 47 U.S.C.  151 et seq.đ Congress sought to establish "a procompetitive, deregulatory national policy framework" for the United States  X -telecommunications industry.k D]& yO -ԍxS. Conf. Rep. No. 104230, 104th Cong., 2d Sess. 1 (1996).k The 1996 Act, among other things, permitted the BOCs to  X- Ei provide interLATAz]& yO#-ԍxUnder the 1996 Act, a "local access and transport area" (LATA) is "a contiguous geographic area (A) established before the date of enactment of the [1996 Act] by a . . . [BOC] such that no exchange area includes points within more than 1 metropolitan statistical area, consolidated metropolitan statistical area, or State, except as expressly permitted under the AT&T Consent Decree; or (B) established or modified by a . . . [BOC] after such date of enactment and approved by the Commission." LATAs were created as part of the Modification of  {O'-Final Judgment's (MFJ) "plan of reorganization" by which the BOCs were divested from AT&T. See United"'0*((B'"  {OX-States v. Western Elec. Co., 552 F. Supp. 131 (D.D.C. 1982), aff'd sub nom. Maryland v. United States, 460  {O"-U.S. 1001 (1983); United States v. Western Elec. Co., 569 F. Supp. 1057 (D.D.C. 1983), aff'd sub nom.  {O-California v. United States, 464 U.S. 1013 (1983); see also United States v. Western Elec. Co., Civil Action No. 820192 (D.D.C. Apr. 11, 1996) (vacating the MFJ). Pursuant to the MFJ, "all BOC territory in the continental United States [was] divided into LATAs, generally centering upon a city or other identifiable community of interest." United States v. Western Elec. Co., 569 F. Supp. 990, 993 (D.D.C. 1983). The purpose of establishing the LATAs was to delineate the areas within which the respective BOCs would be permitted to  {O-provide telecommunications services (i.e., intraLATA services).  Id. at 995. services]& yOh -ԍx47 U.S.C.  153(21) (defining "interLATA services" as "telecommunications between a point located in a local access and transport area and a point located outside such area"). originating outside of their inregion states.J ]& {O -ԍ x47 U.S.C.  271(b)(2); see also id.  271(i)(1) (defining "inregion state" as "a State in which a Bell operating company or any of its affiliates was authorized to provide wireline telephone exchange service pursuant to the reorganization plan approved under the AT&T Consent Decree, as in effect on the day before the date of  {O-enactment of the . . . [1996 Act]"); id.  271(j) (a BOC's inregion service includes "800 service, private line service, or their equivalents that terminate in an inregion State of that . . . [BOC] and that allow the called party  {O-to determine the interLATA carrier [.]"). Prior to enactment of the 1996 Act, the BOCs were prohibited from  {Ov-providing interLATA services by the terms of the MFJ. See United States v. Western Electric Co., 552 F. Supp.  {O@-131 (D.C.C. 1982), aff'd sub nom. Maryland v. United States, 460 U.S. 1001 (1983). " 0*(("Ԍ X-ԙx7.` ` In the BOC Domestic OutofRegion Order, the Commission adopted an interim regime to govern the BOCs' provision of outofregion, domestic interstate, interexchange  X-services.& ]& {O-ԍxBOC Domestic OutofRegion Order at  23; id. at  2 (noting that the interim safeguards are the same as those that have applied for more than ten years to affiliates of independent LECs that are regulated as  {O!-nondominant interexchange carriers under the rules established in the Competitive Carrier, Fifth Report and  {O-Order, 98 FCC 2d 1191 (1984)). The regime was adopted as an interim measure "to facilitate the efficient and rapid provision of outofregion, domestic, interstate, interexchange services by the BOCs, . . . while . . . protecting ratepayers and competition in the interexchange market" pending the  X-Commission's establishment of final rules in the Interexchange proceeding.b]& {O8-ԍxBOC Domestic OutofRegion Order at  2.b The interim rules remove dominant carrier regulation for BOCs that provide outofregion, domestic interstate, interexchange services through an affiliate that complies with certain minimum safeguards. The affiliate must: (1) maintain separate books of account from the LEC; (2) not jointly own transmission or switching facilities with the LEC; and (3) take any tariffed services from the affiliated LEC pursuant to the terms and conditions of the LEC's generally  X -applicable tariff.: ]& {OB#-ԍxId.: The interim rules also treat BOC affiliates providing outofregion, domestic interstate, interexchange services as nonregulated affiliates under the Commission's  X -joint cost rules and affiliate transactions rules for purposes of the BOCs' accounting.l ]& {O&-ԍxId.; see 47 C.F.R.  32.27, 64.901904 .l BOCs that provide outofregion, domestic interstate, interexchange services directly rather than" 0*(( " through an affiliate that complies with the Commission's interim requirements remain subject  X-to dominant carrier regulation.c]& {Ob-ԍxBOC Domestic OutofRegion Order at  25.c  X-x8. ` ` The Commission observed that a number of BOCs had announced plans to  X-merge their operations, including Bell Atlantic and NYNEX.ZZ]& {O-ԍxId. at  33 (noting that on April 21, 1996, Bell Atlantic and NYNEX announced an agreement to merge, and that on April 1, 1996, SBC Communications Inc. and Pacific Telesis Group announced an agreement to merge).  The Commission stated its belief that such mergers raise concerns "that, in the period prior to a merger's consummation, one partner to the merger may act in ways to favor those outofregion services of its merger  X_-partner that originate in the first partner's service territory.":_|]& {O -ԍxId.: Determining that the record provided an inadequate basis on which to address the specific concerns raised by the pending mergers, the Commission "exclude[d] from the services covered by th[e] Order, those outofregion services that originate in the inregion states of a merger partner during the period  X -prior to the consummation of the merger.": ]& {O-ԍxId.: The Commission also determined that, in the event the potential merging parties sought to provide outofregion services originating in their respective partners' service territories, "those parties should request the Commission, on an individual case basis, for a determination of whether such services can be provided on a non X -dominant basis.": ]& {O-ԍxId.:  Xy- xC.` ` Applications=Zy2 ]& yO\-ԍxSince the filing of the instant Section 214 applications by NYNEX LD, ACI, and BACI, the Commission's new Part 63 rules for the filing of international Section 214 applications have become effective.  {O-See Streamlining Order, Appendix A.=  XK-x9.` ` NYNEX LD requests authorization under Section 214 of the Act to resell the international switched services of unaffiliated U.S. international carriers for the "provision of international switched services originating in the contiguous United States, Hawaii, Puerto Rico, and the U.S. Virgin Islands, except the inregion states served by the NYNEX telephone  X-operating companies, T ]& {O#-ԍxNYNEX LD Application at 1 (filed Feb. 23, 1996); id. (stating that its "inregion" states are New York, Massachusetts, Maine, New Hampshire, Vermont, Connecticut, and Rhode Island). and terminating at all international points except Gibraltar."n!]& {ON&-ԍxId. at 2 (footnote added and NYNEX's footnote deleted).n NYNEX LD states that it is a whollyowned subsidiary of NYNEX Corp. (NYNEX), a provider of"@!0*((" telecommunications services in the United States and internationally, and that both companies  X-are incorporated in Delaware.:"]& {Ob-ԍxId.: NYNEX LD claims that it qualifies for nondominant treatment on all routes for which it seeks authorization under Section 63.10(a)(1) of the rules,  X-with the exception of the U.S.U.K. route where it has foreign carrier affiliates.U#ZZ]& {O-ԍxId. at 2, 7 and 9 (certifying that its only foreign carrier affiliates in the destination markets it seeks to serve are NYNEX CableComms Group PLC and NYNEX CableComms Group Inc., which jointly provide cable television and telephony services through subsidiaries in the United Kingdom).U NYNEX LD contends that it qualifies for nondominant treatment on the U.S.U.K. route under Section 63.10(a)(3) of the rules because its foreign carrier affiliates in the United Kingdom have no  Xv-control over bottleneck services or facilities.$v|]& {O -ԍxId. at 9; id. at 8 (asserting that NYNEX CableComms Group PLC and NYNEX CableComms Group Inc. provide telecommunications services in the United Kingdom, in competition with BT (the dominant U.K. carrier and former monopoly provider in the U.K.) and other carriers, to approximately 240,000 lines out of a total of 26 million lines in the U.K, and that their combined share of the market for telephone services is approximately 1 percent).  XH-x 10.` ` ACI requests authority under Section 214 of the Act to resell international switched services of unaffiliated U.S. international carriers originating from U.S. points outside the five states in which its parent corporation, Ameritech Corporation (Ameritech),  X -provides wireline local exchange services and terminating at all international points.% . ]& {O-ԍxACI Application at 12 (filed Apr. 8, 1996); id. at 2 (Ameritech's inregion states are Illinois, Indiana, Michigan, Ohio, and Wisconsin). ACI  X -states that it is whollyowed by Ameritech and that both are Delaware corporations.@& ]& {O%-ԍxId. at 2.@ ACI asserts that it is presumptively nondominant on all routes for which it seeks authorization  X -under Section 63.10(a)(4) of the rules.S' ]& {O-ԍxId.; id. at 23, n.2. S ACI contends that, although it "owns 33.5 percent of MATAV, a Hungarian company providing local, long distance, and cellular service in Hungary, this affiliation should not alter ACI's nondominant status on the United States/Hungary route, since ACI will be providing service to Hungary through the resale of  Xb-switched international services of unaffiliated U.S. carriers[.]"G(b]& {O!-ԍxId. at 23, n.2.G  X4-x 11.` ` BACI requests Section 214 authority to resell international switched services of unaffiliated common carriers to provide international switched services originating from U.S. points that are outside the states in which Bell Atlantic Corporation's (Bell Atlantic) local">(0*((("  X-telephone company subsidiaries are authorized to provide services.)Z]& {Oy-ԍxBACI Application at 13, 9 (filed Mar. 12, 1996); id. at 2, n.1 (Bell Atlantic's local telephone company subsidiaries operate in Delaware, Washington, D.C., Maryland, Pennsylvania, New Jersey, Virginia, and West Virginia). BACI states that it is a  X-whollyowned subsidiary of Bell Atlantic and that it is incorporated in Delaware.@*]& {O-ԍxId. at 1.@ BACI asserts that it is presumptively nondominant on all routes for which it seeks authority under Section 63.10(a)(4) of the rules, except for the U.S.Mexico and U.S.Chile routes where it is  X-affiliated with foreign carriers.-+|]& {O -ԍxId. at 4, and 89 (stating that Bell Atlantic indirectly owns approximately 42 percent of Grupo Iusacell, S.A. de C.V. (Iusacell), a foreign carrier registered to provide domestic cellular telecommunications service and to resell international telecommunications service in Mexico; also stating that Iusacell owns approximately a 51 percent interest in Iusatel Chile, S.A. de C.V. (Iusatel), a foreign carrier registered to provide domestic and international telecommunications service in Chile).- BACI maintains that it is eligible for nondominant  X-regulation on the U.S.Mexico and the U.S.Chile routes under Section 63.10(a)(3) of the rules because neither Iusacell nor Iusatel has the ability to discriminate against unaffiliated  X_-U.S. international carriers through control of bottleneck services or facilities.K,_. ]& {O>-ԍxId. at 45, and 89.K  X1-x 12.` ` NYNEX LD, ACI, and BACI each assert that a grant of their respective Section 214 applications will further the public interest, convenience, and necessity by  X -increasing the competition in international services, expanding the range of new and innovative services, reducing the prices for international services, and allowing for the more  X -efficient use of existing international telecommunications facilities.- ]& yOF-ԍxNYNEX LD Application at 3; ACI Application at 3; BACI Application at 3, and 67. NYNEX LD and BACI  X -state that they will comply with any requirements adopted in the BOC OutofRegion Order as  X -a condition for a grant of their application.~. P ]& {O-ԍxNYNEX LD Application at 4; BACI Application at 4, n.2; BACI Reply at 4.~  X-  X{-x 13.` ` No pleadings were filed in response to NYNEX LD's application. MCI  Xd-Telecommunications Corporation (MCI) filed comments in response to BACI's application, to  XM-which BACI filed a response.v/M]& yO!-ԍxMCI Comments (filed Apr. 22, 1996); BACI Reply (filed Apr. 30, 1996).v MCI also filed a petition to deny ACI's application, to which  X6-ACI filed a response.06r]& yOY$-ԍxMCI Petition to Deny (filed June 13, 1996) (MCI Petition); ACI Opposition to Petition to Deny (filed June 24, 1996) (ACI Opposition).  X-  III. Discussion" 00*((F"Ԍ X-Tԙ P xA.` ` Definition of Dominant Carrier and Interim Safeguards  X-x 14.` ` Under the Commission's rules, a dominant carrier is defined as "a carrier found  X-by the Commission to have market power (i.e., the power to control prices").1(]& {O4-ԍx47 C.F.R.  61.3(o). In International Competitive Carrier, the Commission followed the standard set  {O-forth in the domestic Competitive Carrier proceedings to define dominance that is, it would consider a firm to  {O-be dominant if that firm had the "power to control prices or exclude competition." International Competitive  {O-Carrier at  22.  A non X-dominant carrier is defined as "[a] carrier not found to be dominant."I2]& {O -ԍx Id.  61.3(u).I As discussed above,  X-the Commission in International Competitive Carrier held that, in applying the dominant/nondominant regulatory scheme for international services, every destination country constituted a  Xc-separate geographic market.f3cJ]& {O^-ԍxInternational Competitive Carrier at  37. f With the possible exception of the routes where the applicants are affiliated with foreign carriers, we believe that there are no critical distinctions on the basis of NYNEX LD's, ACI's and BACI's market shares, their respective sizes and resources, demand and supply elasticities, or conditions of entry from one destination country to another  X -which would require a routebyroute analysis of these carriers' market positions.|4 ]& {O-ԍxSee, e.g., AT&T International NonDominance Order at  3136. | As new applicants in the international services market, NYNEX LD, ACI, and BACI currently have no shares in the international services market. Further, the Commission has recently determined that there is no evidence to "suggest[] that entry barriers vary substantially among  X -geographic markets."F5 n ]& {O-ԍxId. at  35.F Thus, we conclude that BACI, ACI, and NYNEX LD's market position does not differ among routes and that we need not generally make specific routeby X}-route findings with the exception of the specific affiliated routes identified above.6} ]& {O.-ԍxSee id. at  3236 (finding that, with the possible exception of routes where AT&T is the sole facilitiesbased provider or where it corresponds with affiliated or allied carriers and could potentially derive market power from those relationships, there were no critical distinctions on the basis of AT&T's market share, demand and supply elasticities, conditions of entry, or AT&T's size and resources which would require a routebyroute analysis).  XO- x15. ` ` In applying the Commission's standard principles of antitrust analysis to determine whether a carrier possesses market power, it is clear that NYNEX LD, BACI, and ACI as proposed new entrants do not possess any share in the market for international services. The Commission recently found that customers in the international services market  X-are highly demandelastic and will switch carriers in order to obtain price reductions and  X-desired services.G7]& {O?'-ԍx Id. at  47.G The Commission also found that the elasticities of supply in the" D70*(("  X-international services market are high.8$]& {Oy-ԍxId. at  4865; id. at  50 ("although barriers to entry exist, they are not so great as to bar effective  {OC-competition"); id. at  35 (finding that U.S. facilitiesbased suppliers may enter markets much more easily today than a decade ago, whether through direct operating agreements, indirect transit arrangements, or "switched hubbing" via U.S. international private lines). Further, we do not envision that NYNEX LD's, BACI's, and ACI's cost structure, size, and resources will allow them to control prices or exclude competition insofar as they are new entrants into the international services market and will face a number of large, wellfinanced competitors, including MCI, Sprint, and AT&T.  X-x16.` ` Nevertheless, the instant applications raise the question of whether NYNEX LD, BACI, and ACI may be able to leverage the market power of their LEC affiliates in their inregion states in the provision of local exchange and exchange access services to gain market power in the provision of international service originating from outofregion states.  X1-The Commission raised substantially the same issue in the BOC Domestic OutofRegion  X -Order in considering the appropriate treatment of the BOCs' provision of outofregion,  X -domestic interstate, interexchange services, i.e., "whether a firm with market power in one relevant market (the local exchange and exchange access market) can leverage that power to  X -gain market power or an unfair advantage in another, related market (the interexchange  X -market)."g9 ]& {O)-ԍxSee BOC Domestic OutofRegion Order at  17.g In order to provide some protection against "costshifting and anticompetitive  X -conduct," the Commission adopted interim safeguards.: F]& {O-ԍxId. at  19 (citing Fifth Report and Order, 98 FCC 2d at 1198). The Commission adopted these minimum safeguards as an interim measure pending a further comprehensive analysis of the  X-interexchange services of both BOCs and independent LECs in the Interexchange  Xj-proceeding.:;j]& {O-ԍxId.:  X<-x17.` ` We believe that application of the interim safeguards adopted in the BOC  X'-Domestic OutofRegion Order as a condition of our granting the instant applications provides necessary and sufficient interim protection against potential abuses by NYNEX LD, ACI, and BACI in their provision of solely outofregion international switched resale services. We find no practical distinctions between a BOC's ability and incentive to improperly allocate costs, discriminate against, or otherwise disadvantage unaffiliated domestic interexchange as opposed to international service competitors. We also believe that the application of the interim safeguards will not impose an unreasonable burden on the applicants in their provision  X-of outofregion international services. The conditional safeguards will remain in place at  Xq-least until completion of the Interexchange proceeding. We therefore reserve the right to modify the conditions of the applicants' authorizations, as necessary, upon adoption of final rules for the BOCs' provision of outofregion domestic interstate, interexchange services. In the meantime, it is our view that granting the instant Section 214 applications subject to the safeguards as set forth below will facilitate the efficient and rapid provision of outofregion" j ;0*((y" international services by NYNEX LD, ACI, and BACI, as contemplated by the 1996 Act, while still protecting ratepayers and competition in the U.S. international services market.  X- x 18.` ` Specifically, we grant NYNEX LD's, ACI's and BACI's Section 214  X-applications to resell international switched services of unaffiliated U.S. carriers on a nondominant basis subject to the condition that they (1) maintain separate books of account from the LEC; (2) not jointly own transmission or switching facilities with the LEC; and (3) take any tariffed services from the affiliated LEC pursuant to the terms and conditions of the  XH-LEC's generally applicable tariff.v<ZH]& yO -ԍxThis provision applies only to services for which the BOC is required to file a tariff, not to detariffed services such as billing and collection. The provision also only applies when the affiliate obtains tariffed  {OQ -services from its affiliated BOC. See BOC Domestic OutofRegion Order at  23.v Except for the ban on joint ownership of transmission and  X1-switching facilities, we will permit NYNEX LD, ACI, and BACI and their respective  X -affiliated LECs to share personnel and other resources or assets.L= ]& {O-ԍxSee id. at  22. L Further, although we require NYNEX LD, ACI, and BACI to maintain their corporate structures as separate legal entities from their LEC affiliates, we do not require that these international service affiliates'  X -separate books of account comply with our Part 32 rules.> |]& {O-ԍxSee id. at  23. Books of account refer to the financial accounting system a company uses to record, in monetary terms, the basic transactions of a company. These books of account reflect the company's assets, liabilities, and equity, and the revenues and expenses from operations. Each company has its own separate books of account. The Commission's Part 32 rules, the Uniform System of Accounts (USOA), prescribe the books of account for the telephone companies. The Part 32 USOA, however, is not required to be kept by affiliates of a  {O-telephone company. These affiliates maintain their own separate books of account. Id. at  23, n.62.    X -  X - x 19.` ` In addition, we will require NYNEX LD, ACI, and BACI to be treated as nonregulated affiliates for purposes of BOC accounting under the Commission's joint cost and  Xy-affiliate transactions rules.?y ]& {O"-ԍx47 C.F.R.  32.27, 64.901904; see also BOC Domestic OutofRegion Order at  22, and 3540. The Commission's existing accounting safeguards for affiliate  Xb-transactions were developed in the Joint Cost Order and are codified in Parts 32 and 64 of  XM-our Rules.?@(M ]& {O-ԍxSeparation of Costs of Regulated Telephone Service from Costs of Nonregulated Activities, Report and  {OR -Order, CC Docket No. 86111, 2 FCC Rcd 1298 (1987) (Joint Cost Order), recon., 2 FCC Rcd 6283 (1987)  {O!-(Joint Cost Reconsideration Order), further recon., 3 FCC Rcd 6701 (1988), aff'd sub nom. Southwestern Bell  {O!-Corp. v. FCC, 896 F.2d 1378 (D.C.Cir. 1990); 47 C.F.R. Parts 32 and 64.? The Part 64 cost allocation rules prescribe how carriers separate the costs of regulated activities from the costs of nonregulated activities, where the nonregulated activities  X-are performed directly by the carrier rather than through an affiliate.]Az]& {OJ%-ԍxSee 47 C.F.R.  64.901.] The Part 32 affiliate  X-transactions rules prescribe the way costs are recorded, for Title II accounting purposes, when" A0*(( "  X-a regulated carrier does business with its nonregulated affiliates.dB]& {Oy-ԍXxSee 47 C.F.R.  32.27.(#d These rules are designed to  X-prevent local exchange carriers from imposing the costs and risks of their competitive ventures on local telephone ratepayers. These rules do not require carriers or their affiliates to charge any particular prices for assets transferred or services provided; rather, they require carriers to use certain specified valuation methods in determining the amounts to record in  X-their Part 32 accounts, regardless of the prices charged.mCZ]& {O-ԍXxSee Joint Cost Order, 2 FCC Rcd at 1313.(#m  Xv-   X_-x20.` ` Because the cost allocation and affiliate transactions rules are an important  XH-component of our accounting safeguards, we find, as did the Commission in the BOC  X3-Domestic OutofRegion Order, that these rules should apply to NYNEX LD's, ACI's, and BACI's provision of outofregion international switched resale services. Even though NYNEX LD's, ACI's, and BACI's provision of outofregion international switched resale  X -services are services regulated under Title II, we will require these carriers to be treated for BOC accounting purposes as nonregulated affiliates and therefore subject to our cost allocation and affiliate transaction rules. The fact that international switched resale services are regulated services in and of itself does not eliminate the potential for improper allocation of costs between the carriers' competitive (international) and noncompetitive (local exchange and exchange access) services. Thus, we believe that application of our cost allocation and affiliate transaction rules is necessary to minimize the possibility that NYNEX LD, ACI, or BACI could improperly shift the costs of their international switched resale operations to their  X8-regulated local exchange and exchange access ratepayers.D"8]& {O-ԍx See BOC Domestic OutofRegion Order at  39 (adopting the requirement that BOCs treat affiliates providing outofregion services as nonregulated for exchange carrier accounting purposes and noting that this requirement is consistent with the current practice of independent LECs that treat their affiliates providing interexchange services as nonregulated for exchange carrier accounting purposes).   X -x21.` ` We find that requiring the applicants to treat affiliates providing outofregion services as nonregulated will not be unduly burdensome. All the BOCs currently have  X-systems in place to account for transactions between their nonregulated affiliates (e.g., for transactions between a BOC and any of its information services which are not regulated under Title II). Such a requirement will not entail extensive modification of existing company  X-procedures because, prior to the passage of the 1996 Act, BOCs were prohibited from providing international services.  Xk-  XT-xB.` ` Proposed Merger Between Bell Atlantic and NYNEX  X&- x 22.` ` Noting that a number of BOCs had recently announced plans to merge  X-(including Bell Atlantic and NYNEX), the Commission expressed concern in the BOC  X-Domestic OutofRegion Order that, in the period prior to a merger's consummation, a partner" D0*((<" to the merger might act in ways to favor those outofregion services of its merger partner  X-that originate in the first partner's service territory.GE]& {Ob-ԍxId. at  33. G Stating its belief that the record before  X-it provided an inadequate basis on which to address the specific concerns raised by the pending mergers, the Commission excluded from the services covered by the interim rules  X-adopted in the BOC Domestic OutofRegion Order those outofregion services that originate in the inregion states of a merger partner during the period prior to the consummation of a  Xx-merger.:FxZ]& {O -ԍxId.: Potential merging parties that seek to provide outofregion services originating in  Xa-their respective partners' service territories are required to request the Commission, on an individual case basis, for a determination of whether such services can be provided on a non X3-dominant basis.:G3]& {O -ԍxId.: The Commission also determined that if an announced merger is not  X -consummated, then the interim rules established in the BOC Domestic OutofRegion Order  X -would apply to all outofregion services provided by the parties to the proposed merger. H  ~]& {O6-ԍxId. On July 2, 1996, NYNEX and Bell Atlantic amended their original merger agreement.  See NYNEX Corporation, Transferor, and Bell Atlantic Corporation, Transferee, Application for Transfer of Control at 2 (filed July 5, 1996) (Transfer of Control Application) (requesting authority pursuant to Sections 214 and 310(d) of the Act to transfer control of NYNEX's Section 214 authorizations and its interest in various radio  {OX-station authorizations to Bell Atlantic); see also id., Attachment 1 at 1 (Application for Transfer of Control of Section 214 Authorizations) (requesting that NYNEX LD's pending international Section 214 application "be encompassed within the Commission's ruling on this [transfer of control] application"). Under the terms of the original merger agreement, NYNEX and Bell Atlantic would have combined their respective businesses under a new holding company. Under the terms of the amended merger agreement, "Bell Atlantic will form a new  {OB-subsidiary, which subsidiary will then merge into NYNEX."  Transfer of Control Application at 1. After the  {O -proposed merger, NYNEX would become a whollyowned subsidiary of Bell Atlantic.  Id., Exhibit A at 2 (Amended and Restated Agreement and Plan of Merger). We will refer to the transaction proposed under the July 2, 1996 amended agreement as a merger, as does NYNEX and Bell Atlantic in their Transfer of Control  yOf-Application.   X - x 23.` ` We believe that the Commission's concerns regarding a BOC's provision of outofregion, domestic interstate, interexchange services in a merger partner's territory are equally relevant in the international context. We also believe that these concerns are relevant not only with respect to merger agreements, but also with respect to acquisition agreements among and between the BOCs. For example, with the signing of the merger agreement, Bell Atlantic may favor NYNEX's international services operations originating in Bell Atlantic's territory because Bell Atlantic may eventually share in NYNEX's profits. We have no record basis or guidance from the Commission to address the specific concerns raised by the pending Bell Atlantic and NYNEX merger. We therefore defer a decision on what conditions should apply to any outofregion international services provided by BACI or NYNEX LD that originate in each other's respective service territories. We will consider under what conditions they may initiate such services upon the filing by BACI or NYNEX LD of a letter">H0*((" stating their desire to provide these services. We will endeavor to act upon such a request expeditiously. Given that the safeguards adopted in this order are subject to modification  X-upon final action in the Interexchange proceeding and the fact that we are not aware of plans by BACI and NYNEX LD to provide such services, we believe that this approach likely will not impose any burdens on BACI and NYNEX LD.  Xx- x 24.` ` We therefore grant BACI's and NYNEX LD's applications to provide outofregion international switched services subject to the condition that they do not initiate service originating from each other's territory until we issue an order determining the regulatory treatment of such services. We similarly reserve the right to impose additional conditions on the provision of service by ACI should it enter into a merger or acquisition agreement with another BOC. If Bell Atlantic and NYNEX decide not to consummate the announced merger and seek to provide outofregion international switched services originating from each other's territory, they may do so upon the filing of a letter with the Commission stating their decision not to consummate the announced merger and provided BACI and NYNEX LD comply with the safeguards established in this authorization.  X-  X{-xC.` ` Foreign Carrier Affiliations  Xd-  XM- x 25.` ` In 1992, the Commission modified its 1985 policy that treated U.S. foreignowned common carriers as dominant in their provision of all international services to all foreign markets. Specifically, the Commission adopted a framework for regulating U.S. international carriers as dominant on routes where an affiliated foreign carrier has the ability to discriminate in favor of its U.S. affiliate through control of bottleneck services or facilities  X-in the destination market.IJ]& {OS-ԍxRegulation of International Common Carrier Services, 7 FCC Rcd 7331, 7334 (1992) (International  {O-Services); see also Market Entry and Regulation of Foreignaffiliated Entities, Report and Order, IB Docket No.  {O-9522, 11 FCC Rcd 3873,  24555 (1995) (Foreign Carrier Entry Order) (reaffirming the basic framework for classifying and regulating a carrier as dominant based upon its foreign carrier affiliations as set forth in  {Oy-International Services). The Commission considers to be "foreignaffiliated" those U.S. carriers with a greater than 25 percent interest or controlling interest at any level held by a foreign carrier, as well as those U.S. carriers  {O -with interests of more than 25 percent in, or control of, a foreign carrier. Foreign Carrier Entry Order at  7892, and 24551.  Under this framework, a U.S. international carrier that serves a destination market solely through the resale of the switched services of a U.S. facilitiesbased carrier with which the reseller is not affiliated is presumptively nondominant for that route  X-"regardless of any foreign affiliations." J]& {O "-ԍxInternational Services at 7335; 47 C.F.R.  63.10(a)(4); see Streamlining Order at  77, 8081;  {O"-International Competitive Carrier at  7677.  The Commission has found that the resale of an unaffiliated U.S. facilitiesbased carrier's switched services "presents no substantial possibility  Xg-of anticompetitive effects in the U.S. international service market, because the reseller's foreign affiliate is negotiating the terms and conditions of access to the destination market"P6 J0*(("  X-with an unaffiliated carrier on the U.S. end[.]"K"]& {Oy-ԍxInternational Services at 7335; see also Foreign Carrier Market Entry Order at  143 (rejecting GTE's proposal that the Commission regulate affiliated switched service resellers as dominant, stating that "[w]e continue to consider it unlikely that a foreign carrier reseller would engage in discriminatory conduct under such circumstances"). NYNEX LD, ACI and BACI request Section 214 authorization to resell the services of other unaffiliated U.S. international carriers to  X-provide international switched telecommunications services between outofregion points in  X-the United States and international points. Under the framework adopted in International  X-Services and Section 63.10(a)(4) of the rules, we find that NYNEX LD, ACI, and BACI qualify as nondominant resellers of international switched services on all routes for which they seek Section 214 authorization, including those routes where they are affiliated with, or have ownership interests in, foreign carriers.  X5-x26.` ` MCI contends that ACI "mistakenly claims it is 'presumptively nondominant' under Section 63.10 of the Rules on the U.SHungary route [where it is affiliated with  X -MATAV.]"CL ]& yOj-ԍxMCI Petition at 2.C MCI asserts that, pursuant to the Commission's recent decision in the  X -Streamlining Order, ACI must be presumed dominant on the U.S.Hungary route because "the  X -Commission has made no finding concerning MATAV's market power."hM B]& {O-ԍxId. (citing Streamlining Order at  25).h MCI avers that MATAV "has no local exchange competition in Hungary, and [that] long distance and  X -international service competition in that country is incipient at best."@N ]& {O4-ԍxId. at 4.@ MCI maintains that ACI has submitted no evidence to overcome the heavy burden of presumption that it should  X-be regulated as a dominant carrier on the U.S.Hungary route.@Of ]& {O-ԍxId. at 4.@  XS-x27.` ` MCI's assertion that, pursuant to the Commission's recent decision in the  X<-Streamlining Order, ACI must be presumed dominant on the U.S.Hungary route because "the  X'-Commission has made no finding concerning MATAV's market power"CP' ]& yO-ԍxMCI Petition at 2.C is without merit. In  X-the Streamlining Order, the Commission decided not to streamline process applications for  X-Section 214 resale authority if the applicant has an affiliation with a foreign carrier in a destination country and the Commission had not already determined the carrier's market  X-power in the destination country.UQ ]& {O%-ԍxStreamlining Order at  25.U That decision, however, did not shift the burden of proof"Q0*(("  X-in Section 63.10(b) of the rules from MCI to ACI.RRZ]& {Oy-ԍxSee Section 63.10(b) of the rules, 47 C.F.R.  63.10(b) ("[a]ny party that seeks to defeat the presumption [of nondominance] in paragraph[] . . . (a)(4) of this section shall bear the burden of proof upon any issue it raises as to the proper classification of the U.S. carrier").R Nor did it modify the presumption of non X-dominance accorded ACI under Section 63.10(a)(4) of the rules.US]& {O-ԍxStreamlining Order at  25.U MCI offers no credible evidence to defeat the presumption that ACI should be classified as nondominant on the U.S.Hungary route. We therefore deny MCI's request on this issue.  X-x28.` ` MCI also recommends that, if the Commission grants BACI's application, conditions be imposed on the authorization to ensure that BACI is not afforded preferential  X_-treatment by Telecom Corporation of New Zealand Limited (TCNZ) T_|]& yO -ԍxBell Atlantic indirectly owns 24.82 percent of TCNZ, a foreign carrier registered to provide  {OT-international and domestic telecommunications services in New Zealand.  See BACI Application at 8.  and its whollyowned  XH-subsidiary Telecom New Zealand International (TNZI).UH]& {O-ԍxMCI Comments at 1; id. at 5 (recommending, inter alia, that the Commission condition any grant of the BACI application "on the requirement that BACI not resell any authorized TNZI services between the U.S. and New Zealand"). TNZI, a whollyowned subsidiary of TCNZ, has filed a Section 214 application to provide  {O)-facilitiesbased services between the United States and New Zealand.  See Telecom New Zealand International Limited, File No. ITC96097. MCI states that, although Bell Atlantic's ownership interest in TCNZ is less than the 25 percent standard of "affiliation" defined in the rules, the Commission has indicated it would scrutinize such ownership interests if discriminatory practices are likely or if a situation presents a significant potential  X -impact on competition.IV ]& yO'-ԍxMCI Comments at 5.I  X -x29.` ` MCI claims that there is no regulatory framework in New Zealand to deter TCNZ from engaging in anticompetitive practices favoring TNZI and discriminating against  X-unaffiliated U.S. carriers.AW]& {O[-ԍxId. at 2. A MCI asserts that the absence of regulatory constraints would allow TCNZ and TNZI to "afford BACI unfair, preferential access to the New Zealand  Xb-market[.]"BXb]& {O!-ԍxId. at 13.B Although MCI acknowledges that TNZI does not have Section 214 authority to provide facilitiesbased international telecommunications service between the United States and New Zealand and that BACI does not here request authorization to resell TNZI's  X-services,~Y>]& {O &-ԍxId. at 3 (citing BACI Application at 9); see also id. at 4.~ MCI asserts that the Commission must "address the anticompetitive implications raised by the possibility of such resale" in the context of this proceeding because "once"Y0*((F" authorized to engage in resale, BACI could resell TNZI's international services without  X-obtaining further authority[.]"mZ]& {Ob-ԍxId. at 4 (citing Streamlining Order at  25).m  X-x30.` ` In response, BACI argues that because Bell Atlantic's ownership interest in TCNZ is less than 25 percent, Bell Atlantic is presumed nondominant in the provision of  X-international services on the U.S.New Zealand route under the Commission's rules.A[Z]& yO-ԍxBACI Reply at 2.A BACI further argues that "MCI's arguments must fail because they relate only to potential harms  X_-from U.S. facilitiesbased international carriers."U\_]& {O -ԍxId. at 34 (emphasis deleted).U  XH-  X1-x 31.` ` The concerns raised by MCI that TNZI and TCNZ might engage in unfair discriminatory and anticompetitive activity in favor of BACI in the event the Commission grants TNZI's pending application to provide facilitiesbased international telecommunications service between the United States and New Zealand are not appropriately considered in the context of this proceeding. Because TNZI is not authorized to provide international telecommunications services between the United States and New Zealand under Section 214 of the Act, consideration of the issues raised by MCI is premature. The issues raised by MCI, however, are appropriately considered in the context of assessing whether, and under what conditions, the public interest would benefit from a grant of TNZI's pending application under Section 214 of the Act. Because the issues raised by MCI are relevant to our review of TNZI's pending application, we will incorporate MCI's comments and BACI's reply in this proceeding as part of the record in considering TNZI's application to provide facilitiesbased international telecommunications service between the United States and New Zealand.  X- x 32.` ` We therefore find no basis at this time to regulate NYNEX LD, BACI, or ACI as a dominant carrier on any U.S. international route where they are affiliated with a foreign carrier in the destination market.  X-   IV. Conclusion ĐTP  Xe- x  33.` ` In light of the above, we find that a grant of NYNEX LD's, BACI's, and ACI's applications, subject to the conditions and restrictions set forth above, will serve the public interest under Section 214 of the Act by increasing competition in international services, expanding the range of new and innovative services, and allowing for the more efficient use of existing international telecommunications facilities. We also find that NYNEX LD, BACI, and ACI qualify for nondominant carrier regulation on the routes for which they request authority to provide international service. We therefore grant NYNEX LD's, BACI's, and ACI's applications for authority to resell the switched services of other common carriers to provide international switched telecommunications services between the"!|\0*(( " United States and international points. The conditions we attach to our grant of the instant Section 214 applications will remain in place pending the outcome of the Commission's  X-Interexchange NPRM. We reserve the right to modify the conditions of the authorizations granted in this order, as necessary, upon the Commission's adoption of final rules for BOC outofregion, domestic interstate, interexchange services. We defer a decision regarding the regulatory treatment of and the conditions that should apply to NYNEX LD's provision of international switched resale services originating from Bell Atlantic's inregion states and BACI's provision of international switched resale services originating from NYNEX's inregion states to such time as these applicants inform the Commission in writing of their intention to provide such services.  X -x!34.` ` As nondominant resellers of international switched services, NYNEX LD, ACI, and BACI will be allowed to file tariffs on no less than one days' notice, without economic or cost support, and the tariffs will be presumed lawful. They also will be subject to the Section 214 requirements of nondominant U.S. international carriers.  X-x"35.` ` As nondominant carriers, NYNEX LD, ACI, and BACI will be subject to regulation under Title II of the Act. Specifically, Title II requires carriers to offer international services under rates, terms and conditions that are just, reasonable and not unduly discriminatory (Sections 201 and 202), and Title II carriers are subject to the Commission's complaint process (Sections 206209). Title II carriers also are required to file tariffs pursuant to our streamlined tariffing procedures (Sections 203 and 205). Nondominant U.S. international switched resellers also are subject to the requirements of Sections  X-43.51, 43.61, 63.14 and 63.19 of the Commission's rules.]]& {Oj-ԍxSee 47 C.F.R.  43.51 (requiring common carriers engaged in foreign communications to file with the Commission certain contracts, agreements, concessions, licenses, authorizations, and other arrangements); 47 C.F.R.  43.61 (requiring common carriers engaged in the provision of international telecommunications service between the U.S. and foreign destinations to file reports containing annual traffic and revenue data); 47 C.F.R.  63.14 (prohibiting U.S carriers authorized to provide international communications service from agreeing to accept special concessions directly or indirectly from any foreign carrier or administration with respect to traffic or revenue flows between the United States and any foreign country for which the U.S. carrier is authorized to provide service); 47 C.F.R.  63.19 (requiring nondominant international carriers to "notify all affected customers of the planned discontinuance, reduction or impairment [of service] at least 60 days prior to. . . [the] planned action[;]" notification of such action must be in writing to each affected customer, unless otherwise authorized in advance by the Commission, and a copy of such notification must be filed with the Commission).  X- x #36. This Order will be effective upon its adoption. "* ]0*(("  X-  V. Ordering Clauses ĐTP  X-x$37.` ` Upon consideration of the applications and in view of the foregoing, IT IS HEREBY CERTIFIED that the present and future public convenience and necessity require the provision of resale of international switched services by the applicants subject to the conditions set forth below.  XH-x%38.` ` Accordingly, IT IS HEREBY ORDERED that application File No. ITC96125 filed by NYNEX Long Distance Co. (NYNEX LD) IS GRANTED and NYNEX LD is authorized to resell on a nondominant carrier basis international switched services of unaffiliated U.S. international carriers for the provision of international switched services originating from U.S. points except the inregion states served by the NYNEX telephone operating companies and terminating at all international points except Gibraltar.  X -x&39.` ` IT IS FURTHER ORDERED that application File No. ITC96272 filed by Ameritech Communications, Inc. (ACI) IS GRANTED and ACI is authorized to resell on a nondominant carrier basis international switched services of unaffiliated U.S. international carriers for the provision of international switched services originating from U.S. points except the inregion states served by the Ameritech telephone operating companies and terminating at all international points.  X-x'40.` ` IT IS FURTHER ORDERED that application File No. ITC96181 filed by Bell Atlantic Communications, Inc. (BACI) IS GRANTED and BACI is authorized to resell on a nondominant carrier basis international switched services of unaffiliated U.S. international carriers originating from U.S. points except the inregion states served by the Bell Atlantic telephone operating companies and terminating at all international points.  X|-x(41.` ` IT IS FURTHER ORDERED that NYNEX LD, ACI, and BACI shall (1) maintain separate books of account from any affiliated local exchange carrier (LEC); (2) not  Ei# "e]0*((}"  Ei# jointly own transmission or switching facilities with any affiliated LEC; and (3) take any tariffed services from the affiliated LEC pursuant to the terms and conditions of the LEC's generally applicable tariff.  X-x)42.` ` IT IS FURTHER ORDERED that these authorizations are subject to the condition that NYNEX LD, ACI, and BACI be treated as nonregulated affiliates for purposes of Bell Operating Company (BOC) accounting under the Commission's joint cost and affiliate transactions rules as set forth in Parts 32 and 64 of the Commission's rules.  X1-x*43.` ` IT IS FURTHER ORDERED that the conditions that attach to the grant of NYNEX LD's, ACI's, and BACI's applications as set forth in paragraphs 41 and 42 of this  X -order will remain in place pending the outcome of the Commission's decision in Policy and Rules Concerning the Interstate, Interexchange Marketplace and Implementation of Section 254(g) of the Communications Act of 1934, CC Docket No. 9661, FCC 96123 (released  X -Mar. 25, 1996). The International Bureau reserves the right to modify the conditions of the authorizations granted in this order, as necessary, upon the Commission's adoption of final rules for BOC outofregion, domestic interstate, interexchange services.  Xd-x+44.` ` IT IS FURTHER ORDERED that BACI may not initiate international switched resale service originating in NYNEX Corporation's (NYNEX) inregion territory and that NYNEX LD may not initiate international switched resale service originating in Bell Atlantic Corporation's (Bell Atlantic) inregion territory until BACI and NYNEX LD inform the Commission in writing of their intention to provide such services and an order is issued determining the regulatory treatment of such services.  X-x,45.` ` IT IS FURTHER ORDERED that, if Bell Atlantic and NYNEX decide not to consummate their announced merger and they seek to provide outofregion international switched services originating from each other's territory, they may do so upon the filing of a letter with the Commission stating their decision not to consummate the announced merger and provided BACI and NYNEX LD comply with the conditions set forth in paragraghs 41, 42, and 47 of this order in the provision of such services. "9]0*((?"  X-x-46.` ` IT IS FURTHER ORDERED that the Commission reserves the right to impose additional conditions on the provision of service by ACI as authorized in this order should ACI reach an agreement with another BOC to merge their operations.  X-x.47.` ` IT IS FURTHER ORDERED that the applicants shall comply with the requirements specified in Section 63.21 of the Commission's rules, 47 C.F.R.  63.21.  XH-x/48.` ` This order is issued under Section 0.261 of the Commission's rules and is  X1-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 date  X -of the public notice of this order (see Section 1.4(b)(2)). x x` `  hh@FEDERAL COMMUNICATIONS COMMISSION x` `  hh@Donald H. Gips x` `  hh@Acting Chief, International Bureau