Before the
               Federal Communications Commission
                      Washington, D.C. 20554

In the Matter of              )
                         )
AT&T Corp.                    )         ARC-MOD-19990115-00011 & 00012
                         )         ARC-MOD-19990115-00013 & 00014
                         )         ARC-MOD-19990217-00032
                         )
MCI WorldCom, Inc.            )         ARC-MOD-19990108-00007
                         )
Petitions for Modification of the  )
Accounting Rates for Switched )
Voice Service with Singapore,      )
Switched Voice and Switched        )
Digital Service with Taiwan, and   )
Switched Voice Service with Brunei )

                              ORDER 

     Adopted:  March 2, 1999                      Released:   March 3, 1999
              
By the Chief, Telecommunications Division: 

                           Introduction

     1.   In this Order we approve in part the petitions of AT&T Corp. ("AT&T") and MCI
WorldCom, Inc., ("MCI") to decrease their accounting rates for international switched voice and
switched digital service with Singapore, and of AT&T to decrease its accounting rates for international
switched voice service with Brunei and Taiwan.  The International Bureau had previously suspended the
modification requests because the rates, which have no expiration date, exceed the relevant settlement
rate adopted by the Commission in its Benchmarks Order.  

     2.   In the Benchmarks Order the Commission adopted benchmark settlement rates and a
schedule of effective dates for these rates based primarily on country income levels.  For the upper
income category, which includes Brunei, Singapore, and Taiwan, the benchmark settlement rate is 15›
per minute.  The Commission required U.S. carriers to negotiate settlement rates with foreign carriers in
the upper income category so that service is settled at or below 15› per minute beginning on January 1,
1999.  If the petitions are approved in their entirety, the settlement rates would violate the Benchmarks
Order because the rates would remain in effect after January 1, 1999.  To enforce the Benchmarks Order,
we approve the modification requests of AT&T and MCI for service with Brunei, Singapore, and Taiwan
for the period prior to January 1, 1999.  We do not approve the settlement rates for traffic exchanged
after the beginning of the year.  We direct all U.S. carriers to negotiate settlement rates with carriers in
Brunei, Singapore, Taiwan, and other carriers that provide service in upper income countries, that satisfy
the requirements of the Benchmarks Order.

                            Background

     3.   AT&T Corp. (on behalf of itself, AT&T Alascom, AT&T Puerto Rico, and AT&T
Virgin Islands) and MCI filed petitions to reduce their accounting rates for service with Singapore
Telecom International Limited ("ST") from 0.5 SDR (about 70›) per minute to 0.38 SDR (about 53›) per
minute for IMTS and from 0.62 SDR (about 87›) per minute to 0.38 SDR (about 53›) per minute for
ISDN on December 1, 1998. AT&T Corp. (on behalf of itself, AT&T Alascom, AT&T Puerto Rico, and
AT&T Virgin Islands) also filed a petition to reduce the accounting rate for service with Jabatan
Telekom Brunei ("JTB") from 0.6 SDR (about 84›) per minute to 0.45 SDR (about 63›) per minute for
IMTS on December 1, 1998.  Finally, AT&T Corp. (on behalf of itself and AT&T Alascom) filed
petitions to reduce the accounting rate for service with Chunghwa Telecom Company Limited ("CHT-I")
from 65› per minute to 45› per minute for IMTS and ISDN on December 15, 1998. 

     4.   The International Bureau suspended the modification requests of MCI and AT&T
because there are no expiration dates for the proposed settlement rates and the rates exceed the
benchmark rate by considerable margins.  

                            Discussion

     5.   The Commission's benchmarks policy is well-known: it requires U.S. carriers to
negotiate settlement rates at or below benchmark levels by specific dates.  Although the modification
requests under consideration would move the accounting rates between the U.S. carriers and JTB, ST,
and CHT-I in the right direction by reducing the U.S. carriers' rates for service with Brunei, Singapore,
and Taiwan, we note that in all three cases, the rates still significantly exceed the benchmark settlement
rate of 15›.  Moreover, in each case, the rates would go into effect shortly before the benchmark rate
deadline of January 1, 1999.  For Brunei and Singapore, there is only one month between the effective
date proposed by AT&T and MCI and the deadline.  As for Taiwan, there is even less time--two weeks. 
Because these modification requests do not have expiration dates, they would violate the Benchmarks
Order if they were allowed to remain in effect after December 31, 1998.

     6.   The carriers have had sufficient time to implement benchmark rates.  The Commission
initially proposed the benchmark rates in 1996.  After receiving comments from a wide range of
interested parties, including ST and CHT-I, the Commission adopted the Benchmarks Order on August
7, 1997. In the Order, the Commission stated clearly that it "will ensure compliance with our settlement
rate benchmarks."  The Commission has made clear that it will enforce the Benchmarks Order in order
to reduce settlement rates to levels closer to rates that would exist in a competitive market for the
termination of international services. 

     7.     To enforce the Commission's benchmarks policy, we approve the modification requests
of AT&T and MCI for the accounting rate of 0.38 SDR per minute with ST solely for the period
December 1, 1998, through December 31, 1998.  We also approve AT&T's modification requests for
accounting rates of 45› per minute with CHT-I solely for the period December 15, 1998, through
December 31, 1998, and 0.45 SDR per minute with JTB solely for the period December 1, 1998, through
December 31, 1998.  In short, we grant the modification requests to reduce the accounting rates with
CHT-I, JTB, and ST but set an expiration date of December 31, 1998 on these rates.  For traffic
exchanged after December 31, 1998, we direct all U.S. carriers to negotiate settlement rates with JTB,
ST, and CHT-I that comply with the Benchmarks Order.

                         Ordering Clauses

     8.   Accordingly, IT IS ORDERED that the modification requests of MCI and AT&T for an
accounting rate with ST of 0.38 SDR per minute with an effective date of December 1, 1998, ARE
APPROVED through December 31, 1998.

     9.   IT IS FURTHER ORDERED that AT&T's modification request for an accounting rate
with CHT-I of 45› per minute with an effective date of December 15, 1998, IS APPROVED through
December 31, 1998.
     
     10.  IT IS FURTHER ORDERED that AT&T's modification request for an accounting rate
with JTB of 0.45 SDR per minute with an effective date of December 1, 1998, IS APPROVED through
December 31, 1998. 

     11.  IT IS FURTHER ORDERED that U.S. carriers negotiate rates with JTB, ST, and CHT-I
that comply with the Benchmarks Order.

     12.  This order 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 C.F.R. Section 1.4(b)(2)).


                         FEDERAL COMMUNICATIONS COMMISSION



                         Rebecca Arbogast
                         Chief, Telecommunications Division
                         International Bureau