******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect or Word to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. 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 WORLD ACCESS, INC. AND STAR TELECOMMUNICATIONS, INC. Application for Transfer of Control of International Section 214 Authority Application for Transfer of Control of Submarine Cable Landing Licenses ) ) ) ) ) ) ) ) ) ) ) ITC-T/C-20000412-00225 SCL-T/C-20000412-00014 MEMORANDUM OPINION AND ORDER Adopted: September 7, 2000 Released: September 8, 2000 By the Chief, Telecommunications Division, International Bureau: i.Introduction 1. In this Order, we grant the joint applications of World Access Inc. (World Access) and STAR Telecommunications, Inc. (STAR and together "Applicants") seeking authority to transfer to World Access control of international Section 214 authorizations, as well as interests in certain submarine cable landing licenses held by STAR, in connection with the proposed merger of World Access and STAR. II.BACKGROUND 2. World Access is a publicly held Delaware corporation headquartered in Georgia. Through its subsidiaries, World Access is authorized to provide international long distance voice and data services in the global telecommunications markets. World Access's network is capable of supporting voice and data services, including frame relay, Internet protocol, and asynchronous transfer mode services. 3. STAR, a publicly traded Delaware corporation headquartered in Santa Barbara, California, has Section 214 authority to provide facilities-based and resold international and domestic telecommunications service in the United States, Europe, and Asia. STAR has switching facilities throughout North America and Europe. Through either itself or its subsidiaries, STAR is authorized to provide telecommunications services in the United States, Japan, Germany, the United Kingdom, and Canada. In addition to its Section 214 authority, STAR has an interest in several submarine cable landing licenses. 4. World Access and STAR have entered into an agreement whereby World Access would acquire STAR through the exchange of shares of stock. Upon completion of the merger, STAR and its subsidiaries will become subsidiaries of World Access. Through the acquisition of STAR, World Access will acquire control of STAR's subsidiaries AS Telecommunications, Inc., which is authorized to provide international resale services; CEO California Telecommunications, Inc., which is authorized to provide international facilities-based and resale services; and CEO Telecommunications, Inc., which is authorized to provide international resale services. In addition, World Access will acquire STAR's interest in the following cable landing licenses: AMERICAS II, COLUMBUS-III, TAT-14, and MAYA-1. III.DISCUSSION 5. On April 12, 2000, the Applicants submitted the above-captioned applications requesting authority to transfer control of the international Section 214 authorizations and the various cable landing licenses held by STAR. We placed the applications on public notice on April 26, 2000. We received no comments. 6. Pursuant to Section 1.767(b) of the Commission's rules, the Cable Landing License Act, and Executive Order No. 10530, we informed the Department of State of the Word Access/STAR application to transfer control of the submarine cable landing licenses from STAR to World Access. After coordinating with the National Telecommunications and Information Administration and the Department of Defense, the Department of State stated that it has no objection to transferring control of the submarine cable landing licenses held by STAR to World Access. 7. Under Section 1.767(a)(8) of the Commission's rules, World Access is required to disclose its affiliations with foreign carriers. According to the applications, World Access is affiliated with non- dominant foreign carriers in Austria, Belgium, Denmark, El Salvador, Finland, France, Germany, Guatemala, Hong Kong, Italy, Japan, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. Because all of these countries are members of the World Trade Organization, we presume that World Access' affiliations with these carriers do not pose concerns that would justify denying these applications. Moreover, the foreign carrier affiliates of World Access do not have market power in their respective markets or the ability to discriminate against unaffiliated U.S. carriers on the foreign end of routes through the control of bottleneck facilities or services. 8. The Applicants state that approval of the transactions will serve the public interest by providing a wider choice of services to both wholesale and retail users. Specifically, Applicants assert that the merger will create economies of sale, cost savings, and synergies that will enable them to compete effectively in the global communications marketplace. We agree that approval of this transaction will result in public interest benefits by providing customers with a broader range of services for consumers while reducing transaction costs for end-users of submarine cable capacity. 9. Upon consideration of the applications and in view of the foregoing, we conclude that this transfer of control does not raise any of the concerns listed in the Cable Landing License Act, and that consent to transfer control of STAR's interest in the above-mentioned cables to World Access will serve the public interest, convenience and necessity. We therefore grant Applicants' requests for authority to transfer control of the international Section 214 authorizations held by STAR as well as the AMERICAS- II, COLUMBUS-III, TAT-14, and MAYA-1 cable landing licenses. 10. We conclude that grant of the application would be consistent with the Cable Landing License Act. We therefore consent to the transfer of control of STAR to World Access. We modify the initial authorizations to reflect this transfer of control. We do not modify the initial authorizations in any other respect. IV.ORDERING CLAUSES 11. Consistent with the foregoing and pursuant to the Cable Landing License Act, Section 214 of the Communications Act, as amended, and Executive Order 10530, IT IS ORDERED that the Applications, File Nos. ITC-T/C-20000412-00225 and SCL-T/C-20000412-00014, ARE GRANTED, and that the Applicants are authorized to transfer control of STAR to World Access and that the transfer of control of the international Section 214 authorizations held by STAR is authorized and that the transfer of control of the interests of STAR in the AMERICAS-II, COLUMBUS-III, TAT-14, and MAYA-I cables is authorized. The Cable Landing Licenses of the AMERICAS-II cable, File Nos. SCL-98-003 and SCL-98-003A; COLUMBUS-III cable, File No. SCL-98-005; TAT-14 cable, File No. SCL-LIC- 19990303-00004; and MAYA-1 cable, File No. SCL-LIC-19990325-00006 ARE MODIFIED to reflect this transfer of control. 12. This Order is issued under Section 0.261 of the Commission's rules, 47 C.F.R.  0.261, 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, 47 C.F.R.  1.106, 1.115, may be filed within 30 days of the date of public notice of this order. FEDERAL COMMUNICATIONS COMMISSION Rebecca Arbogast Chief, Telecommunications Division International Bureau APPENDIX A CABLE LANDING LICENSES FOR STAR TELECOMMUNICATIONS, INC. LICENSEE FCC FILE NUMBER DESCRIPTION STAR SCL-98-003* SCL-98-003A AMERICAS-II Cable Landing License STAR SCL-98-005* COLUMBUS-III Cable Landing License STAR SCL-LIC-19990303-00004* TAT-14 Cable Landing License STAR SCL-LIC-19990325-00006* MAYA-I Cable Landing License * These licenses were acquired by group applications filed by AT&T and others. APPENDIX B SECTION 214 AUTHORIZATIONS FOR STAR TELECOMMUNICATIONS, INC. AND ITS SUBSIDIARIES LICENSEE FCC FILE NUMBER DESCRIPTION STAR ITC-96-358 Authority to provide international facilities- based and resale services. STAR ITC-96-152 Authority to acquire, on an indefeasible right of use basis, and operate a circuit in the CANUS-1 Cable System and to use this circuit to provide international services between the U.S. and Canada. STAR ITC-95-340 Authority to provide global resale service and to resell private lines between the U.S. and Canada and the U.S. and U.K. STAR ITC-95-501 Authority to acquire and operate satellite facilities to various overseas points STAR ITC-97-139-TC Transfer of control to STAR of Star Vending Inc. authorizations STAR ITC-97-106-TC Transfer of control of STAR from Christopher Edgecomb to stockholders STAR ITC-97-721-TC Authority for STAR to acquire LD Services (CEO Telecommunications, Inc.) STAR ITC-98-142-TC Authority for STAR to acquire T-ONE Communications Corp. STAR ITC-98-389-TC Authority for STAR to acquire authorizations of United Digital Network, Inc. STAR ITC-98-342 and ITC-98-342A Authority for STAR to operate the AMERICAS-II submarine cable system on a common carrier basis STAR ITC-ASG-19990312-00125 ITC-ASG-19990312-00126 Authority to STAR to assign the authorizations held by United Digital to AS Telecommunications STAR ITC-98-437 Authority to operate the COLUMBUS-III submarine cable system on a common carrier basis STAR ITC-214-19990325-00153 Authority to operate the MAYA-I submarine cable system on a common carrier basis AS Telecommunications ITC-92-239 and ITC-ASG-19990312-00125 Authority for CTN to provide international resale services and reassignment of authority to AS AS Telecommunications ITC-94-098 ITC-ASG-19990312-00126 Authority to Answer-Net to provide international resale services and reassignment of authorization to AS CEO California Telecommunications, Inc. ITC-214-19990125-00036 Authority to operate as an international facilities-based and resale carrier CEO Telecommunications, Inc. ITC-92-226 Authority for LD Services (renamed CEO) to operate as an international resale carrier.