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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 DA 97-317 In the Matter of ) ) BT North America Inc. ) File No. ITC 96-491 ) Application for authority to provide ) facilities-based services between the ) United States and France ) ORDER, AUTHORIZATION AND CERTIFICATE Adopted: February 10, 1997 Released: February 11, 1997 By the Chief, Telecommunications Division: I. INTRODUCTION 1. In this Order, we grant BT North America Inc. (BTNA) authority, pursuant to Section 214 of the Communications Act of 1934, as amended, to acquire and operate facilities for the provision of international switched and private line services between the United States and France. In addition, we grant BTNA's request to be regulated as a non-dominant carrier on the U.S.-France route. II. BACKGROUND 2. On September 9, 1996, BTNA filed its application for authority to provide facilities- based international switched and private line services between the United States and France. In its application, BTNA also requested that it be regulated as a non-dominant carrier on the U.S.- France route. BTNA's application was placed on public notice on September 13, 1996. No comments were received. 3. BTNA is a wholly-owned subsidiary of British Telecommunications plc (BT), a company organized under the laws of England and Wales. BTNA is currently authorized to provide international switched, non-interconnected private line, and international simple resale services on various international routes. In addition, BTNA has an application pending before the Commission to provide facilities-based service on the U.S.-U.K route. Finally, on December 2, 1996, BT and MCI Communications Corp. (MCI) filed applications requesting Commission approval of the transfer of control of MCI's licenses and authorizations to BT. The proposed merger which would result in a single telecommunications company named Concert plc (Concert). BT and MCI (and their subsidiaries, including BTNA) would become wholly-owned subsidiaries of Concert. 4. BTNA certifies that it is affiliated with several foreign carriers within the meaning of Section 63.18(h)(1)(ii) of the Commission's Rules. In France, BTNA is affiliated with BT France, which, according to BTNA, provides public data and corporate voice services over lines and facilities leased from France Telecom, the dominant provider of telecommunications services in France. BT France also provides data services via satellite earth station facilities. BTNA states that the earth station facilities are the only facilities that BT France owns and operates in France. BTNA asserts that, in light of France Telecom's dominant market position and BT France's limited facilities-based operations, BT France cannot discriminate against unaffiliated U.S. carriers through control of bottleneck services or facilities in France. III. DISCUSSION 5. BTNA's affiliation with BT France requires us to review its application to provide facilities-based services on the U.S.-France route under the framework established in the Commission's Foreign Carrier Entry Order. In that Order, the Commission stated that carriers seeking to provide international services to countries in which they have an affiliate with market power must demonstrate that effective competitive opportunities (ECO) exist for U.S. carriers seeking to offer like services in the destination market. The Commission indicated that it would not conduct an ECO analysis if the applicant can demonstrate that its foreign affiliate lacks market power in the destination market. The Commission also stated in the Foreign Carrier Entry Order that it will continue to consider other public interest factors that may weigh in favor of, or against, granting the application. 6. After reviewing the record, we conclude that BTNA's affiliate in France lacks the ability to discriminate against unaffiliated U.S. carriers providing service to France. We agree with BTNA that its French affiliate, BT France, lacks market power. BTNA correctly points out that the Commission has previously recognized that France Telecom is the dominant carrier in France for virtually all public telecommunications services. In addition, BT France operates primarily as a reseller of France Telecom's facilities. While BT France owns and operates satellite earth stations to provide data services, we see no evidence to suggest that BTNA's affiliate can use these facilities to discriminate against unaffiliated U.S. carriers. Under the Foreign Carrier Entry Order, we apply an ECO analysis only to applications from affiliates of foreign carriers that have market power in the destination markets they seek to serve. Because BT France lacks market power in France, there is no regulatory need to engage in an analysis of whether or not effective opportunities exist on the U.S.-France route. We also note that the Executive Branch has not raised any concerns with respect to the grant of this application. 7. We conclude that grant of BTNA's application is in the public interest because it will increase competition in the United States and thus benefit U.S. consumers. We also conclude that because BT France does not have the ability to favor BTNA through control of bottleneck services or facilities in France, we will treat BTNA as non-dominant for the U.S.-France route pursuant to Section 63.18(h)(8) of the Commission's Rules. IV. ORDERING CLAUSES 8. 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. ITC 96-491 is granted, and BTNA is authorized to provide international facilities-based switched and private line services between the United States and France. 9. IT IS FURTHER ORDERED that the facilities for which authority is granted in this order shall be used to provide service between the United States and France only, except that: (1) BTNA may use these facilities in conjunction with previously authorized facilities or services to route through the United States traffic that originates and terminates in third countries; (2) BTNA may use the facilities to route U.S. traffic on an indirect, switched transit or switched hubbing basis to countries where BTNA does not have an affiliation with a foreign carrier, and to countries where it does have an affiliation with a foreign carrier provided it has received a grant of specific authorization under the Communications Act of 1934, as amended, 47 U.S.C.  214. 10. BTNA may not -- and BTNA's tariffs must state that its customers may not -- connect private lines provided over these facilities to the public switched network at either the U.S. or foreign end or both, for the provision of international switched basic services, except as provided in Section 63.18(e)(4)(ii) of the Commission's Rules, unless authorized to do so by the Commission upon finding that France affords resale opportunities equivalent to those available under U.S. law, in accordance with Regulation of International Accounting Rates, Phase II, First Report and Order, 7 FCC Rcd 559 (1991), Order on Reconsideration and Third Further Notice of Proposed Rulemaking, 7 FCC Rcd 7927 (1992), Third Report and Order and Order on Reconsideration, FCC 96-160, rel. May 20, 1996. See also Foreign Carrier Entry Order at  133-138. 11. IT IS FURTHER ORDERED that BTNA shall be regulated as a non-dominant carrier for the provision of all its authorized international switched and private line services between the United States and France. 12. IT IS FURTHER ORDERED that, as a non-dominant carrier on the U.S. France route, BTNA shall comply with Sections 43.82, 63.21 and 63.15 of the Commission's Rules. 13. This order is issued under Section 0.261 of the Commission's Rules and is effective upon adoption. Petitions for reconsideration under Section 1.106 or applications for review under Section 1.115 of the Commission's Rules may be filed within 30 days of the public notice of this order (see Section 1.4(b)(2)). FEDERAL COMMUNICATIONS COMMISSION Diane J. Cornell Chief, Telecommunications Division International Bureau