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DA 96-2182 Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) Telecom New Zealand Limited ) File No. I-T-C-96-097 ) Application for Authority under ) Section 214 of the Communications ) Act of 1934, as amended, to Acquire ) and Operate Facilities to Provide ) International Services Between the ) United States and New Zealand ) ORDER, AUTHORIZATION AND CERTIFICATE Adopted: December 17, 1996 Released: December 31, 1996 By the Chief, International Bureau: I. INTRODUCTION 1. In this Order, we grant Telecom New Zealand Limited (TNZL) authority pursuant to Section 214 of the Communications Act of 1934, to acquire and operate facilities for the provision of switched, private line, and other authorized services between the United States and New Zealand, subject to certain conditions described below. We also find that TNZL should be regulated as a dominant carrier on the U.S.-New Zealand route. II. BACKGROUND 2. TNZL, a New Zealand corporation, is a wholly owned subsidiary of Telecom Corporation of New Zealand Limited (TCNZ), also a New Zealand corporation. TNZL is the wireline operating subsidiary for TCNZ. Among other things, TNZL operates the New Zealand "half" of facilities on international routes, including the U.S.-New Zealand route. TCNZ negotiates interconnection arrangements with competing carriers for local and "inter-city" (also referred to as "toll") services in New Zealand. 3. On February 6, 1996, TNZL filed an application to obtain Section 214 authority to acquire U.S. half-circuits in transoceanic cables and satellite capacity through COMSAT and other authorized operators, in order to provide services between the United States and New Zealand. This authority would allow TNZL to provide "full" circuits on the U.S.-New Zealand route, enabling it to provide "end-to-end" service to end users in both countries. TNZL proposes to terminate its facilities at a point of interconnection on the West Coast of the United States, outside the geographic areas served by the local exchange telephone companies of Bell Atlantic Corporation and Ameritech Corporation, which hold indirect minority ownership interests in TNZL. Among other things, TNZL proposes to provide carriage for calls from the United States to New Zealand (and points beyond) on nondiscriminatory terms and conditions to all interexchange carriers seeking to purchase such carriage from TNZL. 4. AT&T, Sprint, and MCI filed petitions to deny TNZL's application, which TNZL opposed. AT&T, MCI, and Sprint filed replies to TNZL's opposition. Communication TeleSystems International (CTS) filed comments neither opposing nor supporting TNZL's application, but recommending that no action be taken on that application until the Commission makes the necessary equivalency finding for New Zealand to enable CTS and other eligible U.S. international carriers to provide switched basic services via resold private lines between the United States and New Zealand. Although TNZL strongly opposes CTS' request, this issue is moot because in a companion order adopted today we find that New Zealand offers U.S.-based carriers equivalent opportunities to resell private lines for the provision of switched services between the United States and New Zealand. III. DISCUSSION A. TNZL's Application to Provide Facilities-Based International Service. 5. Because TNZL is a foreign carrier within the meaning of Section 63.18(h)(1)(ii) of the Commission's Rules, we must examine TNZL's application under the framework established in the Foreign Carrier Entry Order. In that order, the Commission determined that foreign carriers seeking to provide U.S. international services to destination countries in which they have market power must demonstrate that such destination countries offer "effective competitive opportunities" ("ECO") for U.S. carriers to offer like services. The Commission stated that it would apply the ECO analysis only to Section 214 applications from foreign carriers, or certain affiliates of foreign carriers, with market power in destination countries that potentially can be leveraged to the detriment of unaffiliated U.S. carriers providing service to those countries. The Commission also determined that it would continue to consider other public interest factors that may weigh in favor of, or against, granting the application. a. Analysis of TNZL's Market Power. 6. The Foreign Carrier Entry Order defines "market power" as "the ability of the carrier to act anticompetitively against unaffiliated U.S. carriers through the control of bottleneck services or facilities on the foreign end." Bottleneck services or facilities are "those that are necessary for the provision of international services, including inter-city or local access facilities on the foreign end." We examine first TNZL's and its parent TCNZ's market power in the local and inter-city facilities markets for terminating international private line and switched services in New Zealand, as a U.S. carrier ultimately relies upon a facilities-based carrier operating in those markets to reach the New Zealand end user. A carrier controlling bottleneck facilities and services in the domestic local or inter-city markets could discriminate in favor of an affiliate competing in the private line or switched services markets by offering its affiliate superior technical quality, faster provisioning or preferential rates. 7. TNZL claims that neither it nor TCNZ has the ability to discriminate against unaffiliated U.S. carriers in the provision of local or inter-city services or facilities because New Zealand is open to competition and TNZL faces significant competition from facilities-based and non- facilities-based carriers. TNZL states that TCNZ is required to provide interconnection for local termination to its domestic toll competitors (who are in turn free to resell termination service to TCNZ's and TNZL's rivals). AT&T and Sprint disagree. AT&T claims that TCNZ controls virtually all inter-city infrastructure and local access facilities and, unchecked by a dedicated telecommunications regulator in New Zealand, has sole discretion to set the costs of market entry by potential competitors. TNZL responds that it is precluded by New Zealand law from discriminating unreasonably against foreign carriers, and the New Zealand government has the ability to intervene if necessary, including the power to set prices. Further, TNZL asserts that international carrier bypass of TCNZ is now confirmed in TCNZ's new interconnection agreement with MCI-affiliate Clear Communications Ltd., in which Clear has "back-to-back" rights allowing it to sell its contract rights to other carriers for terminating calls to any New Zealand phone. AT&T replies by asserting that, although TCNZ says it cannot refuse to negotiate, it has no obligation to actually enter into nondiscriminatory agreements. Sprint contends that TCNZ has the ability to control whether its services are available for resale by other carriers and that this right, in and of itself, confers substantial market power. 8. To assess TNZL's and TCNZ's market power in the local access and inter-city facilities markets, we apply traditional antitrust principles to examine: (1) TNZL's market share; (2) the supply elasticity of the market; (3) the demand elasticity of TNZL's customers; and (4) TNZL's cost structure, size and resources. Based on an examination of these factors, we find that TNZL has market power in the local access market. TNZL did not submit for the record market share information for the domestic local services market. TNZL does not dispute, however, that it has the only ubiquitous facilities-based local exchange network in New Zealand. While Clear is constructing local access facilities, these facilities are located primarily in business districts, and we do not believe they constitute a viable bypass alternative at the present time. Given this finding, it is unnecessary to make particular findings with respect to supply elasticity, demand elasticity, or TNZL's cost structure, size and resources. 9. We agree with MCI that the market power analysis required under the Foreign Carrier Entry Order does not turn on whether legal barriers to entry have been removed or whether international services competition exists, as TNZL argues, but on whether an applicant in fact controls bottleneck facilities through which it can discriminate against unaffiliated US carriers. We find that TNZL has such ability through its control of the only ubiquitous local exchange network in New Zealand. Because we find TNZL has market power in the local access market, a further examination of the New Zealand telecommunications market is not required to determine whether the ECO analysis is warranted. A finding that an applicant controls facilities "necessary for the provision of international services" -- here, local access facilities -- is sufficient to trigger application of that analysis under the framework adopted in the Foreign Carrier Entry Order. b. Public Interest Analysis. 10. Under the ECO test for facilities-based entry, we examine first the legal, or de jure, ability of U.S. carriers to enter the destination foreign country and provide international facilities- based service. Next, we focus on the actual conditions of entry, including the terms and conditions of interconnection, competitive safeguards, and the regulatory framework. We focus on the overall effect of these four elements on the opportunities for viable operation as a facilities-based carrier in the foreign market. If, however, any of the factors of the effective competitive opportunities test are completely absent, we will deny authority to provide facilities-based service on that route, unless other public interest factors warrant a different result. We also consider as relevant any evidence of existing competition in international facilities-based services. 11. Legal ability to enter. We agree with the parties that there are no legal barriers to entry in the New Zealand market for international telecommunications services. Applicants seeking to provide international service in New Zealand must register with the Communications Division of the Ministry of Commerce ("Ministry"), in circumstances where the applicant (other than a "call- back" operator) proposes to interconnect international facilities to the public switched network. Applicants register by filing a letter with the Ministry describing the applicant and existing and proposed services to be offered, as well as existing and proposed traffic routes and agreements with non-New Zealand operators. Applicants must also pay a $1000 (N.Z.) (approximately $712 (U.S.)) application filing fee. At the time of registration and each year thereafter, the applicant must pay an additional $10,000 (N.Z.) (approximately $7,120 (U.S.)). Registration requirements in New Zealand are the same for foreign- and New Zealand-based applicants, and with the exception of TCNZ -- which by law cannot be more than 49.9 percent owned by a single foreign entity -- New Zealand has no foreign ownership restrictions as well. 12. Presently, ten companies have registered as international service operators in New Zealand: TNZL, Clear, Sprint Telecommunications (NZ) Ltd. (now part of the Global One venture), Telstra (NZ) Ltd., Pacific Gateway Exchange New Zealand Ltd., BellSouth NZ, Asia Pacific Telecom (NZ) Ltd., Optus Networks Pty Ltd., WorldxChange Ltd, and New Zealand Teleport Holdings Ltd. Five registrants are facilities-based -- TNZL, Clear, Sprint NZ, WorldxChange, and Telstra. To date, no applicant has been denied registration as an international service operator. 13. Terms and conditions of interconnection. The second factor we examine as part of the ECO test is whether reasonable and nondiscriminatory charges, terms and conditions exist for interconnection to a foreign carrier's domestic facilities for termination and origination of international services, and whether adequate means exist to monitor and enforce these conditions (e.g., published charges). TNZL argues that four factors combine to ensure reasonable access and interconnection to TNZL's local network: (a) TCNZ may not refuse to enter into interconnection agreements with competing carriers if such refusal would violate the Commerce Act 1986, New Zealand's general competition law. In addition, TCNZ cannot refuse to negotiate similar concessions with all carriers. The Commerce Act 1986 also allows public and private enforcement of its provisions. (b) TCNZ is required by the Telecommunications (Disclosure) Regulations 1990 to publish interconnection agreements on a quarterly basis in the New Zealand Government Gazette. (c) The Ministry monitors interconnect negotiations and the New Zealand government can intervene to encourage resolution of interconnection disputes. (d) There are no legal restrictions on local or inter-city facilities-based competition in New Zealand. The existence of facilities-based competitors in the domestic local and inter-city services markets reduces TCNZ's incentives and ability to impede interconnection because international carriers can negotiate interconnection with other domestic carriers. Entry is fully viable as a practical matter, as evidenced by the fact that Sprint NZ and Clear are already operating, and Clear now has 23% of both the international toll and domestic toll markets. TNZL faces multiple competitors in the domestic toll services market, as well as competition in the local services market. 14. AT&T, MCI and Sprint reject the claim that there are reasonable and nondiscriminatory terms for interconnection in New Zealand. They argue that: (a) TCNZ does not offer interconnection on a nondiscriminatory basis. The level of Sprint NZ's interconnection charges was not negotiable. Further, the rates were unreasonably high -- not only higher than those paid by Clear but also higher than the retail rates TCNZ charges its business customers, despite the fact that the services being provided are virtually identical. Although TNZL states TCNZ cannot refuse to negotiate with other carriers, it has no obligation to actually enter into nondiscriminatory agreements. (b) Publication of interconnection agreements on a quarterly basis does not inhibit TCNZ from discriminating against U.S. carriers because carriers have no bargaining power relative to TCNZ. The New Zealand interconnection regime, characterized by AT&T as "self-policing," provides significant opportunity for TCNZ to manipulate disclosure requirements, especially the terms of interconnection agreements. (c) There is no satisfactory check on TCNZ's power in the absence of an independent regulatory authority in New Zealand empowered to enforce interconnection requirements and resolve interconnection impasses. The New Zealand government's limited role of encouraging resolution of, rather than intervening in, interconnection disputes, and parties' sole recourse to New Zealand's general commercial laws and courts, are insufficient to guard against TCNZ's abuse of its dominant position. (d) TCNZ uses New Zealand's "interconnection by negotiation" regime to delay and restrict the benefits of competition. One of the interconnection agreements between Clear and TCNZ was concluded only after four years of litigation. Although petitioners acknowledge that the dispute centered on access for the provision of local services, they contend it highlights the inherent flaws of the New Zealand interconnection regime for international and domestic toll services. U.S. carriers have no leverage in negotiating interconnection with TCNZ because they have no bypass alternatives -- they must interconnect with TNZL because it has the only ubiquitous local distribution network. This imbalance in bargaining power also means there are no impediments to TCNZ offering TNZL technically and economically superior interconnection arrangements. 15. TNZL counters that interconnection is available at reasonable rates, as evidenced by the fact that those rates have facilitated competition. Further, TNZL contends that interconnection for completion of international calls is not a TCNZ monopoly: in an interconnection agreement concluded between Clear and TCNZ this year, Clear is afforded "back to back" rights that allow it to sell the contracted services to other carriers for the purpose of terminating calls to any telephone in New Zealand. Thus, according to TNZL, carriers can bypass TCNZ entirely by obtaining interconnection from Clear. Finally, TNZL points out that the difference in interconnection rates paid by Sprint NZ and Clear for toll call origination and termination result from the fact that Clear's traffic volumes are approximately 250 times larger than those of Sprint. 16. Sprint argues that there is no evidence in the TCNZ/Clear interconnection agreement that TCNZ uses a volume-based methodology in arriving at Clear's interconnection rates. Even if there was, Sprint argues, TCNZ has refused to work with Sprint NZ to get a comparable volume- based interconnection agreement and insisted that the Sprint NZ-specific rates apply until March 1998. Further, under the Sprint NZ agreement, TCNZ has the sole discretion to determine what rate methodology is employed, i.e., TCNZ is not required to give Sprint NZ the same deal it gave Clear. Thus, Sprint asserts, the New Zealand disclosure requirement is meaningless -- there is no assurance TCNZ will grant comparable provisions to competing carriers. Also with respect to TNZL's volume pricing justification, AT&T contends that we should reject TNZL's argument because volume pricing of bottleneck facilities which is not based on costs inhibits competition by granting discounts only to large carriers able to take advantage of such a pricing scheme. Finally, MCI notes that Clear's "back to back rights" do not mean competing carriers can bypass TNZL. Because TCNZ controls underlying local distribution facilities, it controls the scope, type, and pricing of any resold services. By offering interconnection at the same price as Clear, MCI asserts, TCNZ can make it impossible for Clear to compete as a local distribution reseller because, in addition to recovering TCNZ's costs, Clear would also have to recover its own costs. True bypass of TNZL's local distribution network only occurs, posits MCI, when TCNZ's and TNZL's competitors are able to carry traffic originating and terminating at the customer's premises exclusively or predominately over their own facilities. 17. While the New Zealand interconnection regime may not be designed as we prefer, it appears at the present time that -- based on existing laws and regulations, the existence of multiple international facilities-based carriers (including one with 23 percent market share), and most importantly on favorable toll interconnection rates -- U.S. carriers have the opportunity to obtain interconnection on reasonable and nondiscriminatory terms for the provision of international facilities- based service. We are concerned that New Zealand does not have standard rates for toll interconnection, accompanied by a pricing methodology that enables carriers seeking such interconnection to determine whether prices are cost-based. Other aspects of New Zealand's regulatory regime and market performance, however, weigh in favor of finding that New Zealand satisfies this aspect of our ECO test. 18. As an initial matter, we take this opportunity to review the basic legal and regulatory framework governing the telecommunications market in New Zealand. New Zealand relies primarily on the Commerce Act 1986 -- its general competition law -- to regulate telecommunications. In particular, Section 36 of the statute prohibits entities with a dominant position in a market from using their position to restrict or eliminate competition. In addition, New Zealand has issued some sector- specific legislation. The primary sector-specific statute is the Telecommunications Act 1987, which, along with subsequent amendments, liberalized the provision of telecommunications services, authorized the government to regulate international services and required TCNZ to disclose financial and interconnection information. The New Zealand government, in turn, has published several sets of regulations, the most important of which for purposes of our ECO analysis are: (1) the Telecommunications (Disclosure) Regulations 1990 [requiring TCNZ to disclose the full text of all interconnection agreements, certain financial information for itself and TNZL, and prices, terms and conditions for certain prescribed services including access to the public switched network, leased circuits, and national and international toll services]; and (2) the Telecommunications (International Services) Regulations 1994 [requiring the registration of certain international service operators]. 19. Interconnection arrangements in New Zealand are negotiated on a private contractual basis. However, several factors help protect against discriminatory conduct, including: (1) the legal requirement that TCNZ provide interconnection on terms that are not unreasonably discriminatory; (2) public and private remedies for anticompetitive conduct, and the apparent willingness of the New Zealand government to utilize such public remedies; (3) the requirement that relevant prescribed services and all TCNZ interconnection agreements be published on a quarterly basis; and (4) emerging competition in the New Zealand local exchange market. 20. We believe that competition in the New Zealand telecommunications market would be better served if the government played a more direct role in overseeing interconnection arrangements. Indeed, while the relevant issue in this proceeding is the availability of interconnection for the provision of international services and not local exchange services, the protracted interconnection dispute between TCNZ and Clear for the provision of local service raises the serious concern that other competing carriers could encounter similar difficulties in negotiating toll interconnection arrangements. We also are concerned with the apparent lack of a transparent pricing methodology for TCNZ's toll interconnection arrangements and the provision in Sprint NZ's toll interconnection agreement that accords TCNZ discretion as to which charging principles form the basis of negotiations. At the same time, Sprint NZ's interconnection agreement provides the carrier with the automatic right to the lowest interconnection rate paid by any other competing toll service provider when Sprint NZ's total annual interconnection charges paid to TCNZ reach $15 million (N.Z.), which is approximately one quarter of Clear's total interconnection charges. 21. The growth of international and domestic service competition to TNZL provides some evidence that New Zealand today affords U.S. carriers the opportunity to obtain interconnection arrangements at rates that permit commercially viable operations, including access to necessary inter- city facilities and services. TCNZ has reached interconnection agreements with Clear, Telstra, Sprint NZ, WorldxChange, and BellSouth NZ for international and domestic toll services, and presently competes with these carriers in both toll markets. TNZL has also submitted information from TCNZ's principal interconnection contract (with Clear), which establishes that rates for interconnection of all toll traffic to TNZL's local network are approximately 2 cents (U.S.) peak, and 1 cent (U.S.) off-peak. We also note that Sprint NZ's toll interconnection rate with TCNZ is approximately 2.5 cents (U.S.). We further note that Clear may, without restriction, resell its toll interconnection arrangement with TCNZ and the discounted short-haul toll service that TCNZ provides to Clear. While MCI contends that TCNZ can offer interconnection at a price that Clear cannot match, Clear's ability to resell its toll access to TNZL's network has the beneficial effect of reducing TCNZ's ability to charge other carriers a higher rate for toll access than it charges Clear. 22. Despite Sprint's contention that the toll interconnection rates TCNZ provides Sprint NZ are unreasonably high, there is no indication in the record that the interconnection rates TCNZ provides Clear, Sprint NZ, or other international service competitors are precluding entry. We note that TCNZ's toll interconnection rates compare favorably with rates in the United States for similar services. Further, recent developments in New Zealand's telecommunications market suggest that New Zealand's interconnection regime is conducive to entry. In addition to Clear and Sprint, Telstra recently completed interconnection agreements with TCNZ (and also with Clear), and Telstra has initiated facilities-based service from New Zealand. Our finding that New Zealand satisfies the interconnection factor of the ECO test is based in significant measure on the availability of favorable toll interconnection rates as well as the actual entry of multiple facilities-based international carriers into the New Zealand market, including one (Clear) which has achieved 23 percent market share. 23. We do not find unreasonable per se TCNZ's offer of a volume-based discount for local access, including ANI. However, we are concerned about the ability of Sprint NZ and other similarly situated carriers to obtain interconnection on the same basis as TCNZ has provided Clear. We make the prompt provision of reasonable and nondiscriminatory interconnection for international carriers -- including nondiscriminatory access to volume-based discounts -- a specific condition of today's grant of TNZL's application. If we obtain evidence that TNZL or TCNZ is violating this condition, we will revisit the issue of whether the public interest continues to be served by today's grant of TNZL's application, or any future applications by TNZL to add facilities on the U.S.-New Zealand route. 24. Competitive safeguards. The third factor we examine in our ECO analysis is whether safeguards exist in the foreign country to protect against anticompetitive practices. The safeguards we consider important include: (1) existence of cost-allocation rules to prevent cross-subsidization; (2) timely and nondiscriminatory disclosure of technical information needed to use, or interconnect with, carriers' facilities; and (3) protection of carrier and customer proprietary information. 25. AT&T and MCI contend that adequate competitive safeguards do not exist. AT&T points to the lack of cost allocation procedures in New Zealand, alleging that interconnection charges provide a ripe opportunity for harvesting monopoly rents to help TCNZ satisfy its obligations to certain residential customers pursuant to the "Kiwi" Share. MCI also objects to the absence of cost allocation rules, or to an obligation on the part of TCNZ to publish technical information. TNZL argues that competitive safeguards are not lacking. It points to specific provisions such as the New Zealand Commerce Act's prohibition on anticompetitive behavior, its information disclosure requirements (including the requirement that TCNZ publish all interconnection agreements, which include the technical information needed to interconnect), the prohibition on refusing to negotiate any previously agreed to interconnection concessions with other carriers, and the threat of government intervention and price controls by administrative order. TNZL contends that cost-allocation rules are not necessary where there is no "cost-plus" regulation of service rates. Finally, TNZL points out that, under New Zealand law and its interconnection agreements, TCNZ must safeguard proprietary information. MCI replies that TNZL's point that cost allocation rules have no purpose (because TCNZ's rates are not regulated) underscores TCNZ's total freedom to engage in a variety of pricing and bundling schemes. MCI also states that TCNZ's provision of technical information and its obligations to protect proprietary information are entirely a function of TCNZ's willingness to provide such items in an interconnection agreement. 26. Improper allocation of costs is of concern to the extent it could allow TNZL to recover costs from subscribers to its local exchange and exchange access services that were incurred by TNZL in providing international services. Such a practice can distort price signals in the New Zealand international services market and may give TNZL an unfair advantage over its competitors. New Zealand does not have specific cost allocation rules to address this concern. It relies instead on competition to restrain prices and on Section 36 of the Commerce Act 1986, which prohibits entities with a dominant position in a market from using their positions to restrict or eliminate competition. The Act prohibits exclusionary practices, price fixing, and resale price maintenance. The Commerce Act 1986 also provides the Commerce Commission with the ability to initiate a price control inquiry or, if circumstances warrant, to impose price controls directly. 27. Although generally we believe cost allocation rules are important, we do not find the absence of such rules to preclude an ECO finding in this case. First, the record suggests the Government has the ability and the apparent intent to monitor and enforce its pro-competitive policies. Second, the Government's "Kiwi" Share in TCNZ ensures that standard residential rates for phone line rentals do not increase faster than movements in the Consumer Price Index, unless the profits of TCNZ are unreasonably impaired. This service pledge provides some protection against the potential for TCNZ improperly to shift international service costs to local service customers. Third, with respect to potential misallocation of costs to TNZL's toll service competitors, who purchase exchange access, and in some cases, domestic toll services from TCNZ or TNZL, the record supports a finding that U.S. carriers today have the opportunity to obtain interconnection to TNZL's domestic facilities at reasonable rates. Finally, facilities-based competition in the inter-city market, and the absence of resale restrictions in New Zealand, should help ensure that rates for inter- city services remain reasonable. While it has been our experience that cost allocation rules are a necessary safeguard for the development of an effectively competitive market in countries where one carrier is dominant, competition has developed in the context of New Zealand's market conditions without such rules. We conclude on the basis of these findings that the absence of cost allocation rules does not preclude an ECO finding for New Zealand. We reiterate, however, that the prompt provision of reasonable and nondiscriminatory interconnection for international carriers is a specific condition of today's grant of TNZL's application. 28. The record suggests that carriers are receiving the technical network information necessary to interconnect with TNZL through their interconnection agreements. The publication of TCNZ's interconnection agreements provides at least some technical information needed to use or interconnect with TNZL's facilities. Furthermore, no party has offered specific evidence that any carrier has been denied the technical information needed to operate a telecommunications network service in New Zealand. The record indicates that withholding essential technical information by TCNZ or TNZL also is actionable under the Commerce Act as anticompetitive conduct. 29. With regard to carrier and customer proprietary information, there is no information in the record suggesting that TNZL cannot use the customer proprietary network information ("CPNI") of TNZL's local service customers to market international services. However, it appears that TCNZ and TNZL have affirmative obligations under New Zealand law and individual interconnection agreements to protect carrier and customer proprietary information. The Ministry has also informed us that New Zealand carriers are currently finalizing a privacy code that will, among other things, protect customer information held by one entity from being sold to another entity for marketing purposes without the customer's permission. Our expectation is that specific safeguards in this area will be developed, as necessary, initially by the carriers themselves. We also find no basis to question TNZL's claim in this proceeding that TCNZ's interconnection agreements safeguard proprietary information. 30. In sum, given the extent of competition in the New Zealand facilities-based market and the availability of favorable interconnection rates, New Zealand's general competition laws and regulations appear to be providing sufficient protection against anticompetitive practices, including cross-subsidization and the unauthorized disclosure of proprietary information. Also, New Zealand regulatory institutions have sufficient authority to intervene (as explained in the next section) to protect competition. Further, the record suggests that TCNZ provides carriers with the technical information necessary to interconnect, and that its interconnection agreements protect against the unauthorized disclosure of proprietary information. The number of international operators that have entered into interconnection agreements with TCNZ and that are operating in New Zealand today suggests that the New Zealand regulatory environment, including its competitive safeguards, is conducive to competitive entry by U.S. carriers. 31. Regulatory framework. The fourth factor to be reviewed under the ECO analysis is whether there is an effective regulatory framework in New Zealand to develop, implement and enforce legal requirements, interconnection arrangements and other competitive safeguards. The focus is on whether there is separation between the foreign regulator and the operator of international facilities-based services, and whether there are fair and transparent regulatory procedures in the destination market. Sufficient separation between the operator and the regulator is necessary to ensure that the regulator is independent, empowered, and does not have a conflict of interest in regulating the operator. Without sufficient separation, there is little reason to believe that the regulator will not favor the operator. Transparent procedures allow competitors to know precisely what obligations are required of the incumbent dominant carrier and what rights they have to seek enforcement of such obligations. 32. AT&T, MCI and Sprint complain of the lack of an industry-specific regulator. They argue that litigation under New Zealand's general antitrust statute is too costly and time-consuming to be a plausible option, and in addition may not prove wholly effective in solving disputes. In the end, according to this line of reasoning, competitors have no choice but to resolve interconnection and other disputes on TCNZ's terms. TNZL replies that the Commission's ECO analysis is predicated in part on the existence of an "effective regulatory framework," which need not necessarily mirror the U.S. regulatory regime, and that the New Zealand regulatory framework has produced a high degree of competition which underscores its effectiveness. AT&T, MCI and Sprint reply that they are not arguing for a U.S.-like regulatory regime in New Zealand, but for an effective regulatory framework that protects against anticompetitive behavior. 33. Although we have concerns about the effectiveness of the New Zealand regulatory regime, we nevertheless conclude that on balance there is sufficient regulatory oversight to protect and promote competition in the New Zealand telecommunications market. As an initial matter, we note that the Commission's ECO test does not require a regulatory regime exactly patterned on that which exists in the United States. While New Zealand does not have an FCC counterpart, three institutions oversee telecommunications in New Zealand -- the Commerce Commission, the Ministry, and the court system. We recognize that reliance on private negotiations and the courts may be problematic, as the courts may not have the expertise to make accurate, predictable, and efficient declarations consistently. However, parties may request intervention from the Ministry and from the Commerce Commission before going to the courts. Further, the New Zealand government has demonstrated its willingness to intervene in disputes between competing carriers. Thus, there are alternative complaint procedures. 34. While we believe competition would be better assured if the Ministry took a more active regulatory approach, we conclude there is adequate regulatory oversight in New Zealand, particularly when considered in combination with the expanding list of competitors in the New Zealand international telecommunications market. Further, we note that the New Zealand regulatory regime is legally distinct from TCNZ and TNZL, and the record indicates that it operates impartially. In this regard, the Kiwi Share -- the New Zealand government's specialized interest in TCNZ -- does not present concerns to us regarding the government's independence. The Kiwi Share is designed to allow the government to control the maximum shareholding of any single foreign party in TCNZ, and to ensure TCNZ's compliance with certain residential service pledges. The New Zealand government does not receive the financial benefits normally accruing to equity ownership as a result of the Kiwi Share, nor does TCNZ possess any special influence in relation to New Zealand regulatory and policy matters due to the Kiwi Share. Finally, as detailed previously, the record indicates that sufficient regulatory transparency exists in New Zealand to allow competitors to know what mechanisms exist to redress perceived violations of the law by TCNZ or TNZL. 35. In summary, we find that ECO exists for international facilities-based operators in New Zealand. There are no de jure barriers to entry, and foreign ownership of international providers is unrestricted. U.S. carriers appear in practice to have the opportunity to obtain reasonable and nondiscriminatory terms to interconnect for the origination and termination of international calls. Competitive safeguards and an independent regulatory framework provide checks on the potential for abuse of market power. Finally, the fact that there are ten registered international service operators in New Zealand, at least five of which are presently providing service, is evidence that New Zealand in fact offers U.S. carriers effective competitive opportunities to compete as international facilities-based carriers in that country today. However, because we have some concerns about the effectiveness of the New Zealand interconnection regime, we specifically condition this Section 214 authorization on the prompt provision of reasonable and nondiscriminatory interconnection for international carriers in New Zealand. 36. Other Public Interest Factors. The additional factors we consider relevant to Section 214 public interest analyses include: the general significance of the proposed entry to the promotion of competition in the U.S. communications market; any national security, law enforcement, foreign policy, or trade concerns raised by the Executive Branch; and the presence of cost-based accounting rates. 37. AT&T, MCI and Sprint argue that grant of TNZL's application is not in the public interest. They argue that accounting rates on the U.S.-New Zealand route will not decrease if we grant TNZL's application. They claim that, if the application is granted, TNZL will have no motivation to reduce its rates because TNZL will be effectively self-corresponding, and therefore would be immune from the impact that above-cost accounting rates have on competing U.S. carriers. AT&T suggests that the Commission should require TNZL to file a plan to further reduce accounting rates towards cost-based rates before granting its application. MCI also argues that grant of TNZL's application is not in the public interest because competition already exists on the U.S.- New Zealand route. 38. TNZL responds by asserting that U.S. carriers operating full circuits on the U.S.-New Zealand route ensure that carriers have a cost-based alternative if settlement rates with a correspondent exceed cost. It argues that denying TNZL reciprocal full circuit opportunities due to the level of accounting rates is in reality intended to guarantee petitioners a private commercial advantage. TNZL objects to AT&T's suggestion that it should be required to file a plan to reduce accounting rates as a condition of approval, as was required in the BTNA Order. TNZL's situation is different than BTNA in that its parent BT sought 20 percent of the second-largest U.S. interexchange carrier. By contrast, TNZL is seeking to operate as a new entrant with zero market share in the U.S. international services market. Finally, TNZL argues that the Commission does not require cost-based accounting rates as a precondition for foreign carrier entry. AT&T, MCI and Sprint reply that, while granting TNZL's application will give it the opportunity to avoid current above-cost accounting rates, U.S. carriers have no practical ability to avoid TNZL's settlement and interconnection charges to gain the same advantages due to TNZL's control on local termination (Clear's network notwithstanding because most if not all of Clear's traffic must be handed off to TNZL for termination). 39. We conclude that the public interest supports grant of TNZL's application. First, the Executive Branch has not raised with us any concerns about TNZL's application. Second, we disagree with MCI's suggestion that competition on the U.S.-New Zealand route would not benefit from the entry of an additional global competitor. We believe that additional competition on this route will result in lower prices and enhanced service options for U.S. consumers. Third, several parties focus on the fact that accounting rates on the U.S.-New Zealand route remain above-cost. In the Foreign Carrier Entry Order, the Commission noted that even where accounting rates are not cost-based, the additional price and service competition that results from further market entry in the United States should increase U.S.-outbound demand. Increased U.S.-outbound traffic should make foreign carriers more amenable to further reducing accounting rates in that they will experience less of a loss in net settlement revenues, thus reducing the per-minute settlement burden on U.S. consumers. We believe it is not necessary at this time to require TNZL to submit a plan to reduce accounting rates to cost-based levels, as AT&T suggests. We note that the settlement rate for TNZL is $0.215 (U.S.) for international message telephone service (IMTS), and for Clear is $0.18 (U.S.) for IMTS. These rates are within the Commission's current benchmarks. In addition, these rates are the lowest for any foreign country in Asia and are among the lowest in the world. Significantly, TNZL has demonstrated a commitment to cost-based, nondiscriminatory and transparent accounting rates by voluntarily acting to make public its accounting rates with foreign carrier correspondents on all international routes. This step will help ensure that more information is made public about accounting rate levels in Asia; further, this additional transparency is also a useful step toward further reform of the accounting rate system. 40. We emphasize, however, the importance of bringing accounting rates on the U.S.- New Zealand route closer to cost-based levels. We accordingly require that TNZL, as a licensed U.S. international service provider, abide by all present and future accounting rate and international settlement policies, and continue to make progress toward cost-based rates. B. Regulatory Status. 41. TNZL requests non-dominant treatment based on its belief that: (a) New Zealand affords open entry in both the domestic and international services markets; (b) TNZL faces competition in both market segments from multiple competing carriers with significant market share; and (c) the legal requirement that TCNZ provide interconnection and disclose interconnection agreements, which prevents TCNZ and TNZL from discriminating against unaffiliated U.S. carriers. Sprint, MCI, and CTS argue that TNZL should be subject to dominant carrier regulation because TNZL controls essential bottleneck facilities needed by U.S. carriers and retains substantial market power which it can exploit for anticompetitive purposes. 42. Under the Commission's rules, in order to be regulated as non-dominant an applicant must show that its foreign affiliate lacks the ability to discriminate against unaffiliated U.S. carriers through control of bottleneck services or facilities in the destination country. In deciding that TNZL was subject to our ECO analysis, supra, we found that TNZL had the ability to discriminate against unaffiliated U.S. carriers because TNZL controlled the only ubiquitous local network in New Zealand. Consistent with that finding, we will regulate TNZL as dominant on the U.S.-New Zealand route. C. Request for "Points Beyond" Authority. 43. TNZL requests authority for carriage of traffic from the United States to New Zealand and points beyond on nondiscriminatory terms and conditions. AT&T argues that granting TNZL such authority would give TNZL a unique ability to engage in the refile of U.S. traffic via New Zealand. Because TNZL alone has facilities arrangements between New Zealand and non-U.S. markets, TNZL can gain a settlement cost advantage vis-a-vis other U.S. carriers by routing U.S.- outbound traffic through New Zealand to third countries. Conversely, by offering a price to non-U.S. correspondents that is lower than the accounting rate to the United States applicable on the third- country route, AT&T posits that TCNZ and TNZL would readily attract third countries to refile U.S.-bound traffic. Sprint argues that the Commission's precedent involving international private line (IPL) service (which it argues is analogous to full circuit service in being outside the settlement process) limited authority strictly to service between the United States and a particular destination country (with two minor exceptions). TNZL counters that these arguments are unavailing given the fact that AT&T and Sprint can operate in the same manner in New Zealand. 44. Given our finding that New Zealand satisfies the ECO standard, we find no reason to prohibit TNZL from routing U.S. inbound or outbound traffic through New Zealand, provided TNZL complies with relevant Commission rules and policies for the routing of traffic that originates or terminates in the United States. This includes our International Settlements Policy, which applies to the routing of U.S. traffic on a direct or indirect, switched transit basis. This policy prevents foreign carriers from discriminating against U.S. carriers in the settlements process and requires: (1) the equal division of accounting rates; (2) nondiscriminatory treatment of U.S. carriers; and (3) proportionate return of inbound traffic. This policy applies to U.S. traffic carried by TNZL on a direct facilities basis between the United States and New Zealand unless and until TNZL requests and receives approval to enter into an alternative settlement arrangement in accordance with the Commission's Flexibility Order. This policy also applies to U.S. traffic that TNZL routes to a third country through New Zealand on an indirect, switched transit basis. 45. Additionally, our rules require that TNZL file with the Commission any contracts or other agreements (including oral agreements) that it enters into with TCNZ for the routing of U.S. traffic through TCNZ's facilities. To the extent TNZL uses any of its, or TCNZ's, New Zealand facilities or services for the routing of U.S. inbound or outbound traffic to third countries, we specifically condition this authorization to require that it use such facilities or services pursuant to rates that are published in New Zealand or publicly filed with this Commission. This requirement is consistent with our rule that prohibits U.S. carriers such as TNZL from agreeing to accept special concessions from foreign carriers. It also is consistent with our "switched hubbing" rule. This rule permits authorized U.S. carriers to route U.S.-outbound switched traffic over international private lines that terminate in an equivalent country (such as New Zealand), and then to forward the traffic to a third, non-equivalent country by taking at published rates and reselling the IMTS of a carrier in the equivalent country. These safeguards should ensure that TNZL does not engage in discriminatory routing practices to the benefit of its affiliated operations in the United States. D. Other issues. a. Origination of Calls in Bell Atlantic & Ameritech Regions. 46. Sprint and CTS argue that the Commission must prohibit TNZL from carrying U.S.- New Zealand calls which originate from the regions of Ameritech and Bell Atlantic, its U.S. carrier affiliates within the meaning of new Section 271 of the Telecommunications Act of 1996. They argue that this prohibition is necessary because TNZL failed to demonstrate that Ameritech and Bell Atlantic have met the conditions imposed by Section 271 for gaining authority to provide interLATA services originating within their regions. TNZL opposes such a prohibition, arguing that Sprint's sole purpose in seeking a condition barring origination of calls from the Bell Atlantic and Ameritech regions is to create additional impediments to competition in the interLATA services market. TNZL points out that AT&T, MCI and Sprint ultimately will oppose in-region relief, and that this would be the appropriate time to argue for special restrictions on New Zealand-U.S. route. 47. Under the Telecommunications Act of 1996, a more than 10% equity interest results in affiliation for purposes of the Section 271 limitation on BOC provision of in-region interLATA services. Because Bell Atlantic and Ameritech each own just under 25% of TCNZ (TNZL's parent), their operating companies are affiliates of TNZL for purposes of Section 271. TNZL therefore is prohibited from providing any international telecommunications services originating in Bell Atlantic's or Ameritech's in-region states until and only to the extent the Commission grants each of their respective operating companies' applications to provide in-region interLATA services pursuant to Section 271 of the Act. 48. In view of the fact that Bell Atlantic and NYNEX Corporation have announced plans to merge their operations, we also require that TNZL not initiate international service originating in NYNEX's in-region states until the Bureau issues an order determining the regulatory treatment of such international services. If Bell Atlantic and NYNEX decide not to consummate the announced merger, and TNZL seeks to provide out-of-region international service originating from NYNEX's in- region territory, it may do so upon the filing of a letter by Bell Atlantic with the Commission stating Bell Atlantic's decision not to consummate the announced merger and provided TNZL complies with all other requirements of this order. The International Bureau imposed this same condition in its recent authorization to subsidiaries of NYNEX, Bell Atlantic and Ameritech to resell out-of-region the international switched services of unaffiliated U.S. carriers on a non-dominant carrier basis. In the NYNEX LD et al. Order, the International Bureau imposed on these BOC affiliates the same interim safeguards and conditions that the Commission adopted for non-dominant treatment of the BOC's provision of out-of-region, domestic interstate, interexchange services in the Out-of-Region Order. The Commission adopted these interim safeguards to "facilitate the BOCs' prompt provision of out-of- region, domestic, interstate, interexchange services." 49. Because we find that TNZL is affiliated with the Bell Atlantic and Ameritech operating companies for purposes of Section 271 of the Act, and that the relevant facts underlying this application are virtually the same as those underlying the BOC applications in the NYNEX LD et al. proceeding, we find it necessary to impose on TNZL's authorization the same interim safeguards and conditions that we imposed in that proceeding. We find these interim safeguards and conditions to be equally relevant in the context of a BOC affiliate's application to provide international service as a non-dominant carrier on a facilities, as opposed to a resale, basis. In brief, we require that TNZL: (1) maintain separate books of account from any affiliated local exchange company ("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 applicable tariff. In addition, we require that TNZL be treated as a nonregulated affiliate for purposes of BOC accounting under the Commission's joint cost and affiliate transaction rules. 50. These interim separation safeguards will remain in place pending the Commission's resolution of the out-of-region issues raised in the Interexchange proceeding. We reserve the right to modify the conditions of TNZL's authorization, as necessary, upon adoption of final rules for the BOCs' provision of out-of-region domestic, interstate, interexchange services. We note that TNZL will be subject to the dominant carrier requirements of Section 63.10(c) of our rules on the U.S.-New Zealand route, under our separate 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 in the destination market. b. Out-of-Region Resale of Bell Atlantic Services. 51. As previously noted, the International Bureau recently granted a Bell Atlantic subsidiary (Bell Atlantic Communications, Inc. ("BACI")) Section 214 authority to resell international switched services of unaffiliated U.S. international carriers originating from U.S. points except the in- region states served by Bell Atlantic. MCI argued in that proceeding that we should scrutinize the Bell Atlantic interest in TCNZ and TNZL for its potential impact on competition. In the NYNEX LD et al. Order, we said we would address the issue of Bell Atlantic's relationship with TCNZ and TNZL in the context of this proceeding. We also transferred the record to this proceeding. 52. MCI specifically requested that we prohibit BACI from reselling TNZL's services between the United States and New Zealand, because TNZL, TCNZ and BACI can engage in a variety of practices that would give BACI preferential access to the New Zealand market. If the Commission decides to grant BACI authority to resell TNZL's services, MCI requested that we impose on BACI conditions analogous to those the Commission imposed on MCI in approving BT's 20 percent investment in that carrier. 53. MCI recognizes that BACI is not affiliated with TNZL under the definition of affiliation adopted in the Foreign Carrier Entry Order. Nonetheless, MCI requests that we scrutinize Bell Atlantic's ownership interest in TNZL on the basis that the interest presents a "significant potential impact on competition in the U.S. market for international telecommunications services." MCI has not demonstrated any such potential impact from BACI reselling the switched services of TNZL on the U.S.-New Zealand route. BACI currently is authorized only to resell switched services on the U.S.-New Zealand route. We find that MCI has not shown how the potential collusive behavior it describes is financially and technically feasible where BACI is merely reselling TNZL's switched services. While MCI also expresses concern that TNZL could provide switched service to BACI on preferential terms and conditions, any such offering is prohibited by Section 202 of the Act and Section 63.14 of the Rules. Moreover, even if we were to conclude that we should scrutinize BACI's relationship with TNZL under the "significant potential impact" standard, the Commission found no basis in the Foreign Carrier Entry Order to prohibit resale by U.S. carriers with investments in dominant foreign carriers. 54. For the reasons stated above, we also find that BACI's resale of TNZL's switched services on the U.S.-New Zealand route does not present a substantial risk of anticompetitive conduct. We therefore find it unnecessary to impose dominant carrier regulation on BACI's provision of such service, or any of the safeguards applied to MCI in the MCI/BT Order that do not already apply to TNZL by Commission rule. IV. CONCLUSION 55. We conclude that grant of TNZL's application for facilities-based service on the U.S.- New Zealand route is in the public interest. We find that U.S. carriers have effective competitive opportunities to provide international facilities-based service in New Zealand. There are no legal barriers to entry or ownership of international service providers. Ten companies are currently registered to operate as international service providers in New Zealand, and five presently operate on a facilities-basis, suggesting the absence of practical barriers to entry. New Zealand's competition laws and regulations, its independent regulatory institutions, and current market conditions (particularly favorable toll interconnection rates) appear to provide adequate assurance of reasonable and nondiscriminatory interconnection at this time. However, we are sufficiently concerned about New Zealand's regime that we condition today's grant on the prompt provision of reasonable and nondiscriminatory interconnection to TCNZ's and TNZL's network for international carriers. If we obtain evidence that such interconnection is not available, we will revisit the issue of whether the public interest continues to be served by grant of this application or any future applications by TNZL to add facilities on the U.S.-New Zealand route. We also grant TNZL's request for "points-beyond" authority. However, due to Bell Atlantic's and Ameritech's investments in TNZL's parent, TCNZ, TNZL is prohibited from providing international services that originate in the Ameritech and Bell Atlantic in-region states until the relevant requirements for such service under the Telecommunications Act of 1996 are satisfied. Further, because TNZL controls the only ubiquitous local network in New Zealand, we will regulate TNZL as a dominant carrier. V. ORDERING CLAUSES 56. Accordingly, IT IS HEREBY CERTIFIED that the present and future public interest, convenience, and necessity require a grant of the present application, and IT IS ORDERED that application File No. I-T-C-96-097 IS GRANTED, and Telecom New Zealand Limited (TNZL) is authorized to acquire and operate the following facilities for the provision of switched, private line, and other authorized services between the United States and New Zealand: 20 E-1s on the PacRim East undersea cable, 20 E-1s on the Hawaii-5 cable, 10 E-1s on the Tasman 2 cable, 10 E-1s on the PacRim West cable, 10 E-1s on the TPC-5CN cable, up to 200 voice grade circuits (64 kps per circuit) from COMSAT, and up to 200 voice grade circuits (64 kps per circuit) from other authorized satellite operators. 57. IT IS FURTHER ORDERED that TNZL and its parent Telecom Corporation of New Zealand Limited (TCNZ) are required promptly to provide reasonable and nondiscriminatory interconnection to their facilities in New Zealand for international carriers for the origination and termination of international services. 58. IT IS FURTHER ORDERED that TNZL shall be regulated as a dominant carrier on the U.S.-New Zealand route pursuant to Section 63.10 of the Commission's rules, 47 C.F.R.  63.10 and shall comply with the requirements of paragraph (c) of that section. 59. IT IS FURTHER ORDERED that TNZL shall comply with Sections 43.51, 43.61, and 43.82 of the Commission's rules, 47 C.F.R.  43.51, 43.61 & 43.82. 60. IT IS FURTHER ORDERED that TNZL's authorization to provide private line service is limited to the provision of private line service only between the United States and New Zealand, that is, private lines that originate in the United States and terminate in New Zealand or that originate in New Zealand and terminate in the United States. In addition, TNZL may not connect private lines between the United States and New Zealand to the public switched network at either the U.S. or New Zealand end, or both, for the provision of international switched basic services, unless authorized to do so by the Commission in accordance with paragraphs (e)(4) and (e)(6) of Section 63.18 of the Commission's rules, 47 C.F.R.  63.18(e)(4) & (6) or except as provided in paragraph (e)(4)(ii) of Section 63.18, 47 C.F.R.  63.18(e)(4)(ii). 61. IT IS FURTHER ORDERED that, to the extent TNZL uses any of its or TCNZ's New Zealand facilities or services for the routing of U.S. inbound or outbound traffic to third countries, it shall do so only pursuant to rates that are published in New Zealand or publicly filed with the Commission. 62. IT IS FURTHER ORDERED that TNZL shall (1) maintain separate books of account from any affiliated local exchange carrier (LEC); (2) not 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. 63. IT IS FURTHER ORDERED that this authorization is subject to the condition that TNZL be treated as a nonregulated affiliate 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. 64. IT IS FURTHER ORDERED that the conditions that attach to the grant of this application as set forth in paragraphs 62 and 63 of this 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, Notice of Proposed Rulemaking, CC Docket No. 96-61, 11 FCC Rcd 7141 (1996). The International Bureau reserves the right to modify the conditions of this authorization, as necessary, upon the Commission's adoption of final rules for BOC out-of-region domestic interstate, interexchange services. 65. IT IS FURTHER ORDERED that TNZL is prohibited from providing any international services originating in Bell Atlantic Corporation's or Ameritech Corporation's in-region territories until and only to the extent the Commission grants each of their respective operating companies' applications to provide in-region interLATA services pursuant to new section 271 of the Communications Act of 1934, as amended. 66. IT IS FURTHER ORDERED that TNZL is prohibited from providing any authorized international services originating in NYNEX Corporation's (NYNEX) in-region territory until TNZL informs the Commission in writing of its intention to provide such services and an order is issued determining the regulatory treatment of such services. 67. IT IS FURTHER ORDERED that, if Bell Atlantic and NYNEX decide not to consummate their announced merger and TNZL seeks to provide its authorized international services originating in NYNEX's in-region territory, it may do so upon the filing of a letter by Bell Atlantic stating its decision not to consummate the announced merger and provided TNZL complies with all other conditions of this Order in the provision of such services. 68. 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 date of public notice of this Order. See Section 1.4(b)(2) of the Commission's Rules, 47 C.F.R.  1.4(b)(2). FEDERAL COMMUNICATIONS COMMISSION Donald H. Gips Chief, International Bureau