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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 In the Matter of ) MCI TELECOMMUNICATIONS CORPORATION ) ) Application for authority, pursuant to Section 214 of ) File No. ITC-214-19980805-000541 the Communications Act of 1934, as amended, to ) provide switched services using international private ) lines interconnected with the public switched network ) at one or both ends between the United States, on the ) one hand, and Italy, on the other hand. ) ORDER AND AUTHORIZATION Adopted: September 17, 1998 Released: September 21, 1998 By the Chief, Telecommunications Division: I. INTRODUCTION 1. With this order, we add Italy to the list of countries for which U.S. carriers may provide switched, basic telecommunications services over their authorized international private lines ("ISR"). We find that the U.S. carriers' settlement rate for Italy is at or below the Commission's benchmark settlement rate. We therefore conclude that the public interest in cost-based telecommunications services would be served by permitting the above-referenced applicant, and other authorized private line carriers, to interconnect their private lines between the United States and Italy, a World Trade Organization Member country, for the provision of switched, basic services. Our action today will permit U.S. carriers to route traffic between the United States and Italy outside the traditional settlements system, enabling them to offer U.S. international service at reduced rates. We expect that such activity will, in turn, exert increased pressure to lower settlement rates further and reduce consumer prices. II. BACKGROUND 2. MCI Telecommunications Corporation (MCI) filed an application requesting Section 214 authority to provide switched, basic telecommunications services using its authorized international private lines between the United States, on the one hand, and Italy, on the other hand. We placed MCI's application on public notice, and no party opposed it or submitted comments. III. DISCUSSION 3. MCI is an authorized facilities-based private line carrier between the United States and Italy. MCI certifies that it is not affiliated with any foreign carrier in Italy, which is a Member of the World Trade Organization ("WTO"). In these circumstances, Section 63.18(e)(4) of the Commission's rules permits MCI to use its authorized private lines for the provision of switched services between the United States and Italy subject to the condition that the settlement rate for at least 50 percent of the settled U.S.-billed traffic between the United States and Italy is at or below the benchmark settlement rate adopted in the Benchmarks Order. MCI submitted information in its application to demonstrate that Italy satisfies the benchmark condition for ISR. 4. The Commission's benchmark settlement rate for Italy is 15 cents. Currently, U.S. carriers' settlement rate for Italy is 0.08 SDR or approximately 10.5 cents. Thus, we find that the settlement rate for Italy is at or below the relevant benchmark settlement rate and that Italy satisfies the benchmark condition for ISR. Accordingly, we grant MCI's application and authorize it to provide switched services using its international private lines between the United States and Italy. We will also add Italy to the list of countries for which U.S. carriers may provide switched services over their authorized facilities-based or resold private lines. IV. ORDERING CLAUSES 5. Accordingly, IT IS ORDERED that the application of MCI, File No. ITC-214- 19980805-000541 (formerly ITC-98-587) IS GRANTED, and MCI is authorized to provide switched, basic telecommunications services using its authorized international private lines interconnected to the public switched network at one or both ends between the United States, on the one hand, and Italy, on the other hand. 6. IT IS FURTHER ORDERED that the authority granted herein to provide switched, basic telecommunications services using international private lines between the United States and Italy for the provision of switched services is limited to the provision of such services between the United States and Italy. This restriction is subject to the following exceptions: (a) the applicant may engage in "switched hubbing" through the countries for which they are authorized herein consistent with Section 63.17 of the Commission's Rules, 47 C.F.R.  63.17; and (b) the applicant may provide U.S. inbound or outbound switched, basic services over its authorized private lines extending between the United States and Italy, as well as the United Kingdom, Sweden, New Zealand, Australia, the Netherlands, Luxembourg, Norway, Denmark, France, Germany, Belgium, Switzerland, Austria and Japan, provided the applicant is authorized to provide switched services over private lines between the United States and those countries. 7. IT IS FURTHER ORDERED that applicant shall comply with Section 63.21 of the Commission's Rules, 47 C.F.R. 63.21. 8. 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)). FEDERAL COMMUNICATIONS COMMISSION Diane J. Cornell Chief, Telecommunications Division International Bureau