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MorganPhyllis M. Morgan Default Paragraph FoDefault Paragraph Font footnote referencefootnote reference 2}K jKZ#"i~'^:DPddDDDdp4D48dddddddddd88pppX|pDL|pp||D8D\dDsjjscZss6=scssZsjZcssssc`(`lD4l\DDD4DDDDDDdDd8XXXXXX|X|X|X|XD8D8D8D8ddddddddddXdbdddpdXXXXXlX~|X|X|X|XdddldldD8DdDDDdplld|8|P|D|D|8dvddddDDDpLpLpLpl|T|8|\ddddddl|X|X|Xd|DdpL|Dd~4ddC$CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxH\dDXddddd8@d<@d<DDXXdDDxddxHxxHvppDXd<"dxtldpxxd"i~'^:DpddȨDDDdp4D48ddddddddddDDpppd|Ld|pȐD8DtdDdpXpXDdp8Dp8pdppXLDpdddXP,PhD4htDDD4DDDDDDdDp8dddddȐXXXXXJ8J8J8J8pddddppppddpddddzpdddXXhXXXXXdddhdptL8LpLDLpphhp8ZDP8pppddƐXXXpLpLpLphfDtppppppȐhXXXpDppLDd4ddC6CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxHjdDddddddtraffic."). Instead, the Commission explained that "the rules we adopt here apply only to the  x settlement rates that carriers subject to our jurisdiction may pay for termination of U.S.-originated  X2 xtraffic." Id. Since neither the statute nor legislative history makes clear whether the Commission  xregulates domestic or foreign carriers when it prescribes settlement rates, we must sustain the  xCommission's view as long as the Order reasonably represents an exercise of its statutory  X2 xpauthority to regulate domestic carriers engaged in foreign telecommunications. See Chevron  Xz2U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 84243 (1984).  xWe recognize that regulating what domestic carriers may pay and regulating what foreign carriers  xmay charge appear to be opposite sides of the same coin. But by focusing only on the Order's  xeffects on foreign carriers, petitioners overlook the crucial economic reality that makes the  xCommission's position that it is only regulating domestic carriers reasonable: Because domestic  xcarriers operate in a competitive market, they face a serious dilemma when they bargain with  x$monopolist foreign carriers. As a group, U.S. carriers would be best off if each decided not to  x>accept settlement rates higher than FCC benchmarks. But if one U.S. carrier maintained this  xposition to the point of impasse in negotiations with a foreign carrier, a competing U.S. carrier  xVwould make the foreign carrier a higher offer. As the intervenors on behalf of the FCC explain,  xthe Order "requir[es] domestic carriers to take 'a unified bargaining position,' and thereby  xprevent[s] each carrier from acting in its own self-interest." Intervenors' Br. at 15 (quoting  XQ2 x~Atlantic TeleNetwork, Inc. v. FCC, 59 F.3d 1384, 1386 (D.C. Cir. 1995)). Indeed, contrary to  xpetitioners' claim that the enforcement scheme targets foreign carriers, the Order authorizes  X%2 x"enforcement measures ... to ensure that no U.S. carrier pays that foreign correspondent an  xamount exceeding the lawful settlement rate benchmark." 12 F.C.C.R. at 19,894  186 (emphasis added).  x$Far from threatening foreign carriers with enforcement actions, the Order at most states that the  xZFCC will contact "responsible [foreign] government authorities" to "seek their support in lowering  X2 xHsettlement rates." Id. at 19,893  185. Given the structure of the global telecommunications  xindustry and its resulting incentives, we find reasonable the Commission's view that the Order regulates domestic carriers, not foreign carriers.  xTo be sure, the practical effect of the Order will be to reduce settlement rates charged by foreign  xcarriers. But the Commission does not exceed its authority simply because a regulatory action  X2 xhas extraterritorial consequences. See Radio Television S.A. de C.V. v. FCC, 130 F.3d 1078,  X2 x1082 (D.C. Cir. 1997); R.C.A. Communications, Inc. v. United States, 43 F. Supp. 851, 85455  X2 x(S.D.N.Y. 1942); In re Mackay Radio & Telegraph Co., 2 F.C.C. 592, 59899 (1936). Indeed,  x\no canon of administrative law requires us to view the regulatory scope of agency actions in  x~terms of their practical or even foreseeable effects. Otherwise, we would have to conclude, for  xexample, that the Environmental Protection Agency regulates the automobile industry when it  xrequires states and localities to comply with national ambient air quality standards, or that the  xDepartment of Commerce regulates foreign manufacturers when it collects tariffs on foreign-made goods. "L&0*((aa$"Ԍ xWe thus hold that the Commission's Order does not regulate foreign carriers or foreign  xtelecommunications services and therefore does not violate the Communications Act. For the  xHsame reason, we reject petitioners' claim that the Order violates the doctrine of "half-circuit  xjurisdiction," which allows the Commission to exercise jurisdiction over international calls only  xfrom a point within the United States to the midpoint between the United States and the foreign  x.country. By capping the amount that U.S. carriers may pay for foreign termination services, the Commission has not thereby regulated those services.  x|Nor does the Order violate the International Telecommunications Union treaty regime,  xInternational Telecommunications Regulations, S. Treaty Doc. 10213 (Melbourne 1988).  xlAlthough the treaty provides that carriers "shall by mutual agreement establish and revise  X 2 xaccounting rates to be applied between them," id.  6.2.1; see id.  1.5 (same), a separate  xbprovision "recognize[s] the right of any member, subject to national law ... to require that  x\administrations and private operating agencies, which operate in its territory and provide an  X 2 xinternational telecommunication service to the public, be authorized by that member," id.  1.7(a).  xHWe agree with the Commission that "[t]he right to authorize a carrier to provide service in a  xgiven country necessarily includes the right to attach reasonable conditions to such authorization"  x*to safeguard the public interest. 12 F.C.C.R. at 19,950  311. Indeed, the treaty's preamble  xmakes clear that "it is the sovereign right of each country to regulate its telecommunications." ITU Regulations (preamble).  x Petitioners contend that the Order frustrates international comity because it subjects foreign  xcarriers to conflicting obligations if their governments prescribe minimum settlement rates that  xexceed the maximum rates allowed by the FCC. But since no foreign carrier in this litigation has  xcomplained that it actually faces such a predicament, we see no need to decide whether the Order  xwould be valid in such circumstances. In any event, we note that during the rulemaking process,  xLboth the U.S. Department of State and the U.S. Trade Representative filed comments supporting the Order. III  x\Having concluded that the Order regulates domestic carriers, not foreign carriers, we turn to  xpetitioners' alternative claim that the Commission lacks authority to set the prices that U.S.  xcarriers may pay to foreign carriers for termination services. According to petitioners, the  xCommunications Act allows the Commission to regulate only the terms on which U.S. carriers  x offer telecommunication services to the public (including retail rates), not the prices U.S. carriers pay to non-FCC-regulated entities for goods and services. We disagree.  xAt least three provisions of the Communications Act authorize the FCC to regulate the settlement rates that U.S. carriers pay to foreign carriers. First, section 201 provides:  ` XX` ` (a) It shall be the duty of every common carrier engaged in  ` Binterstate or foreign communication by wire or radio to furnish such communication service upon reasonable request therefor; ....x` "''0*((aa$"Ԍ ` XX` ` (b) All charges, practices, classifications, and regulations for and in  ` $connection with such communication service, shall be just and  ` \reasonable, and any such charge, practice, classification, or  ` regulation that is unjust or unreasonable is declared to be  ` 4unlawful.... The Commission may prescribe such rules and  `  regulations as may be necessary in the public interest to carry out the provisions of this chapter.x`  x~47 U.S.C.  201 (1994). "Foreign communication" means "communication or transmission from  X12 xor to any place in the United States to or from a foreign country...." Id.  153(17). Petitioners  xsay that section 201(b), when read together with section 201(a), covers only the rates, terms, and  xconditions on which U.S. carriers furnish foreign communication service to their customers. We  xdiscern no such limitation in the statute's text. The statute nowhere defines the "practices ... in  xconnection with" foreign communication service covered by section 201(b), and the Commission  xhas interpreted such "practices" to encompass negotiation and payment of settlement rates by U.S.  X 2 xcarriers. See 12 F.C.C.R. at 19,937  283. Because the Commission's interpretation is  X2reasonable, we uphold it under Chevron's second step. See 467 U.S. at 843. The second relevant provision of the statute, section 205(a), provides:  ` XX` ` Whenever, after full opportunity for a hearing, upon a complaint or  ` Xunder an order for investigation and hearing made by the  ` Commission on its own initiative, the Commission shall be of  ` opinion that any charge, classification, regulation, or practice of  ` any carrier or carriers is or will be in violation of [the Act], the  ` fCommission is authorized and empowered to determine and  ` pprescribe what will be the just and reasonable charge or the  ` maximum or minimum, or maximum and minimum, charge or  ` charges to be thereafter observed, and what classification,  ` regulation, or practice is or will be just, fair, and reasonable, to be thereafter followed....x`  x\47 U.S.C.  205(a). The Commission may declare a practice unlawful upon finding that it is  X2 x"unjust, unreasonable, unduly discriminatory, or preferential." Western Union Telegraph Co. v.  X2 xFCC, 815 F.2d 1495, 1501 n.2 (D.C. Cir. 1987). Here, because the Commission determined that  x"it would be an unjust and unreasonable 'practice' ... for a U.S. international carrier to pay  xsettlement rates above the relevant benchmark rate," 12 F.C.C.R. at 19,941  291, it set  xenforceable benchmark rates. Deferring to the Commission's determinations of what practices  X"2 xare "just" or "unjust," "reasonable" or "unreasonable," see Capital Network System, Inc. v. FCC,  x28 F.3d 201, 204 (D.C. Cir. 1994), we hold that the Commission, in capping settlement rates, lawfully exercised its broad powers under section 205(a).  xFinally, section 211(a) also gives the Commission authority to regulate settlement rates. It  xrequires "[e]very carrier subject to this chapter [to] file with the Commission copies of all"/'0*((aa$"  xcontracts, agreements, or arrangements ... with common carriers not subject to the [Act]." 47  xU.S.C.  211(a). For all contracts filed with the FCC, it is well-established that "the Commission  xhas the power to prescribe a change in contract rates when it finds them to be unlawful and to  X2 xnmodify other provisions of private contracts when necessary to serve the public interest." Western  X2 x~Union, 815 F.2d at 1501 (citing Federal Power Comm'n v. Sierra Pacific Power Co., 350 U.S.  X2 xZ348, 35355 (1956), and United Gas Pipe Line Co. v. Mobile Gas Serv. Corp., 350 U.S. 332, 344  x(1956)). According to petitioners, section 211(a)'s filing requirement for agreements with  x"common carriers not subject to the [Act]" applies only to agreements between U.S.  xjtelecommunications companies and other U.S. carriers not engaged in telecommunications, such  X72 xas railroads. But neither the statute nor any of the legislative history cited by petitioners, see  X" 2 xH.R. Rep. No. 731850, at 5 (1934), indicates that Congress intended the phrase "common  X 2 xFcarriers not subject to the [Act]" to refer just to other domestic carriers. Instead, the statute leaves  xthis phrase open to interpretation, and in our view, the Commission has reasonably construed  xBsection 211(a) to apply to settlement rate agreements between U.S. and foreign carriers. Under  X 2 x~the Sierra-Mobile doctrine, the Commission may modify such agreements as it deems necessary  X 2 xto serve the public interest. See 12 F.C.C.R. at 19,939  286 (finding settlement rates exceeding  X2 xfthe benchmarks "not in the public interest"). Giving Chevron deference to the Commission's  xinterpretation of section 211(a) and "substantial deference" to its judgments regarding the public  Xr2 xinterest, Mobile Communications Corp. of America v. FCC, 77 F.3d 1399, 1406 (D.C. Cir. 1996),  xwe hold that the Commission had ample authority under section 211(a) to limit settlement rates paid by U.S. carriers.  X2 xPetitioners cite various authorities, see R.C.A., 43 F. Supp. at 85455; Separation of Costs of  X2 xRegulated Telephone Service from Costs of Nonregulated Activities, 2 F.C.C.R. 1298, 1312 (1987)  X2 x(report & order); AT&T Charges for Interstate Telephone Service, 64 F.C.C.2d 1, 80 (1977)  x(final decision & order), for the proposition that the FCC cannot set prices that U.S. carriers pay  xPto non-FCC-regulated suppliers of goods and services. To be sure, in those cases the Commission  x~sought to lower prices paid by U.S. carriers for goods or services not by regulating those prices  xdirectly, but by regulating retail rates ultimately paid by consumers. But nothing in those cases  xsuggests that the Commission lacked authority to regulate such prices directly; they simply never  xaddressed the issue. Given the expansive powers delegated to the Commission under sections  x201(b), 205(a), and 211(a), we have no doubt that the Commission has authority to prescribe maximum settlement rates. IV  xWe next consider petitioners' claim that the Commission's settlement rate prescriptions violate  x.the Administrative Procedure Act, 5 U.S.C.  706 (1994). Using a "tariffed components price"  x("TCP") methodology, the Commission calculated its benchmark rates by summing the estimated  xprices for three services"international transmission, international switching, and national  X$2 xfextension"necessary for terminating an international long-distance call. See 12 F.C.C.R. at  x$19,82730  4550. Arguing that the TCP methodology fails to produce cost-based settlement  xrates because it does not use data on the actual cost of foreign termination services, petitioners"T& 0*((aa$"  x$claim that the calculated rates undercompensate foreign carriers. Petitioners further allege that in making its calculations, the Commission relied on non-record data. Again, we disagree.  xAs we read the record of these proceedings, the Commission meticulously documented and  X2 xcarefully considered a wide range of public comments concerning the TCP methodology. See  X2 xid. at 19,83050  5189. The final Order contains several passages explaining why the method  Xz2 xmore than fully compensates foreign carriers. See, e.g., id. at 19,84041  70 (noting that TCP  xmethod includes costs, such as "uncollectible billings, general overhead expenses associated with  x retail service, and marketing and commercial expenses," that would not be included in cost-based  X72 xsettlement rates); id. at 19,841  71 (noting that data used to price international switching "is  X" 2 xXsubstantially above cost"); id. at 19,845  80 (noting that benchmark rates assume higher  xswitching costs for developing countries, despite lack of evidence that such costs are actually higher in developing countries).  xThroughout the rulemaking process, moreover, petitioners withheld the very cost data that would  x have enabled the Commission to establish precise, cost-based rates. In its published notice  xproposing the TCP methodology, the Commission repeatedly invited commenters to suggest  X2 x\alternative methods for calculating settlement rates. See International Settlement Rates, 12  xF.C.C.R. 6184, 620007  39, 43, 44, 4650, 5256 (1996) (notice of proposed rulemaking). At  xone point, agreeing with petitioners' view that "the appropriate cost standard for establishing  X@2 xbenchmark settlement rates is the incremental cost of terminating international traffic," id. at 6204  x` 50, the Commission explicitly stated: "We encourage foreign and U.S. carriers to submit data  X2 xon their costs." Id. at 6205  52. Yet in its final rule, the Commission reported that "no  xlcommenter has provided cost data in the record about the costs of providing international  X2 xtermination services." 12 F.C.C.R. at 19,827  42; see id. at 19,83031  51 (noting "the  xdilemma ... that, on the one hand, settlement agreements should contain settlement rates that are  xcost-based, but on the other, the data necessary to calculate costs for each foreign carrier are not  xavailable"). Since petitioners refused to let the Commission see their cost data, and since the  xCommission thoroughly explained why "the TCP methodology provides a reasonable basis for  Xw2 xestablishing settlement rate benchmarks in the absence of carrier-specific cost data," id. at 19,839  x 66, we have no firm basis for accepting petitioners' claim that the benchmark rates are not fully compensatory.  xPetitioners allege that some foreign countries did provide data showing that the prescribed rates  xVwould be below cost, citing Hong Kong as an example. The Commission's Order assigns Hong  xKong's international carrier, HKTI, a settlement rate of $0.15 per minute"a rate which,  xaccording to petitioners, cannot possibly compensate HKTI for the $0.29 per minute  xRgovernment-mandated charge that it must pay Hong Kong's local carrier for terminating each  xincoming international call. But, according to the intervenors on behalf of the FCC, HKTI is a  xwholly owned subsidiary of Hong Kong Telecom, and Hong Kong Telecom owns Hong Kong  x*Telephone Company, the monopoly provider of local service in Hong Kong. The $0.29 per  xdminute charge is therefore simply a "left pocket-right pocket" transaction between two subsidiaries  xVof the same company. Intervenors' Br. at 31. Asked about this at oral argument, petitioners had no response. "7' 0*((aa$"Ԍ x\ԙIn any case, if HKTI or another foreign carrier could credibly show that the benchmark rates  xRprohibit it from fully recovering its termination costs, the Order [specifically] allows such a  X2 xcarrier to ask the Commission to adjust the relevant rate to better reflect actual costs. See 12  x$F.C.C.R. at 19,842  74, 19,848  85, 19,84950  8889. Recognizing the proprietary nature  xof foreign carrier cost data, the Order makes clear that "under the Commission's rules, a party  xmay request confidential treatment of any cost data it submits to justify a different settlement rate  Xx2 x benchmark." Id. at 19,850  89 (citing 47 C.F.R.  0.459 (1997)). In the absence of record  Xc2 xevidence showing that the benchmark rates systematically undercompensate foreign carriers, we  xthink the Commission's regulatory approach"prescribing general rules while allowing for exceptions"is not arbitrary or capricious.  x>Turning to petitioners' claim that the Commission used non-record data to set the benchmark  xjrates, we first consider their allegation that the Commission used U.S. outgoing call distribution  xFdata provided by AT&T on a confidential basis to calculate country-by-country prices for national  xextension services (one of the three TCP components) and then returned the data to AT&T  xwithout affording the parties an opportunity to review it. The record shows, however, that the  x(Commission made summaries of the AT&T data available under seal for a two-week period prior  xto issuing its final Order, that it refused to lengthen the comment period on the grounds that the  xdata was concise and easy to understand, and that at least one party submitted comments  XQ2 xcriticizing the Commission's reliance on the data. See id. at 19,84647  8384 & nn.13843.  xzDuring the rulemaking proceeding, moreover, petitioners never challenged the Commission's  xpconfidential treatment of the data, nor did they contest the Commission's refusal to extend the  xcomment period. Complaining only that the summary data contained no underlying figures or  xassumptions, they argued that it was impossible to verify the national extension prices calculated  x8by the Commission. The Commission disagreed, stating in its Order that "the data is complete"  x8and that "[t]here is no further data that the [FCC] relied upon to calculate the national extension  X2 xTCPs that is not in the record." Id. at 19,847  84. Instead of summoning and sorting through  xBAT&T's confidential data to resolve this issue, we simply note that foreign carriers had in their  x^hands all the incoming call distribution data they needed to contest the accuracy of the  xCommission's calculated price for national extension services. In other words, even if the  xRCommission's handling of the AT&T data was less than ideal, it did not impair the ability of foreign carriers to challenge the national extension component of the benchmark rates.  xWe think the same logic refutes petitioners' claim that in calculating international switching costs,  xthe Commission unreasonably relied on a study published by the International  xTelecommunications Union (the TEUREM study) without examining its underlying data and  xassumptions. Although the data was unavailable to the Commission and the public, foreign  xjcarriers had access to data about their own switching costs and therefore did not lack the means  x|to challenge the switching costs calculated by the Commission. Furthermore, as far as  xcompensating foreign carriers is concerned, we believe the Commission reasonably relied on the  xTEUREM study in light of the fact that the Commission had other evidence indicating that the  X[%2study substantially overestimated switching costs. See id. at 19,845  80. V"/' 0*((aa$"Ԍ xԙNext, we consider petitioners' objections to the conditions imposed on new entrants into the U.S.  xtelecommunications market that have a 25% equity affiliation with a foreign carrier. To deter  x price squeeze behavior, the Order requires foreign-affiliated U.S. carriers to comply immediately  x:with the benchmark settlement rates in order to obtain section 214 permission to provide  X2 xzinternational service to the affiliated country. See id. at 19,901  207. In contrast, the Order  x8gives non-foreign-affiliated U.S. carriers a transition period of one to four years (depending on  Xx2the per capita income of the foreign country) to achieve compliance. See id. at 19,885  165.  x~According to petitioners, the section 214 conditions represent an inadequately explained change  xin the Commission's regulatory policy. While it is true that the Commission in 1995 declined  X 2 xto impose similar conditions on foreign-affiliated carriers seeking to enter the U.S. market, see  X 2 xMarket Entry and Regulation of ForeignAffiliated Entities, 11 F.C.C.R. 3873, 389899  6570  x(1995) (report & order), we think the Commission adequately justified its policy shift in the 1997  xOrder. In 1995, the Commission believed that section 214 conditions were unnecessary because  xthe "effective competitive opportunities" test, which requires foreign-affiliated market entrants to  xshow that the foreign country has taken sufficient steps to create a competitive international  X2 x.market, served to reduce the monopolist leverage essential for price squeeze behavior. See id.  xat 388194  1955. By 1997, the Commission observed, at least two things had changed. First,  xbecause the United States had committed to allowing foreign competitors freer entry into the U.S.  x.market pursuant to the World Trade Organization Basic Telecom Agreement of February 1997,  X>2 xthe Commission had proposed eliminating the effective competitive opportunities test. See 12  X)2 xF.C.C.R. at 19,905  218, 19,908  223 (citing Foreign Participation in the U.S.  X2 xTelecommunications Market, 12 F.C.C.R. 7847, 7861  32 (1997) (order & notice of proposed  x$rulemaking)). Second, despite the Commission's expectation that increased global competition  X2 x`would drive rates toward cost-based levels, see id. at 19,905  217; 11 F.C.C.R. at 3899  71,  x"settlement rates remain[ed] far above cost-based levels," 12 F.C.C.R. at 19,905  218. In light  xof these changed conditions, we think the Commission reasonably adopted its current section 214 authorization policy to deal with the heightened risk of price squeeze behavior.  xvPetitioners' remaining challenges require little discussion. They claim that the immediate  xcompliance requirement discriminates against foreign-affiliated U.S. carriers compared to  xjnon-foreign-affiliated carriers, but we see no grounds for disturbing the Commission's informed  xBjudgment that the risk of price squeeze behavior presents a timely problem requiring immediate  X2 xpreventive measures. See id. at 19,905  218. Nor is there merit to petitioners' claim that a 25%  xequity affiliation does not indicate common control and is therefore an arbitrary proxy for  xanti-competitive threats. Not only did petitioners fail to raise this issue during the rulemaking  xprocess, but the Commission has reasonably adhered to its established view that "a  xtless-than-controlling [ownership] interest can provide a carrier with the incentive and ability to engage in anticompetitive conduct," 11 F.C.C.R. at 3903  80.  x<Finally, petitioners challenge the Order's penalty provision under which foreign-affiliated carriers  xfound to engage in price squeeze behavior may be required to lower their settlement rates on the  xaffiliated routes to the "best practice rate," i.e., the lowest settlement rate between the United  X7'2 xStates and any foreign country (currently $0.08 per minute). See 12 F.C.C.R. at 19,908  224. "7' 0*((aa$"  xpAccording to petitioners, this provision discriminates against foreign-affiliated U.S. carriers  xbecause it does not apply to non-foreign-affiliated carriers that fail to comply with the benchmark  xrates. But the penalty's purpose is to deter anti-competitive conduct, and nothing in the record  xsuggests that non-foreign-affiliated carriers have an incentive to engage in anti-competitive  xconduct. Petitioners' further claim that the "best practice rate" undercompensates foreign carriers  xlikewise misses the mark. Because the penalty rate is meant to deter and punish anti-competitive conduct, we find it neither surprising nor unreasonable that it undercompensates foreign carriers. VI  xjThis brings us finally to petitioner Telstra's claim that, in the course of prescribing international  xsettlement rates, the Commission should have set rates for Internet-related telecommunication  xLservices. An Australian carrier, Telstra exchanges both telephone and Internet traffic with U.S.  xcarriers. Although it receives net payments from U.S. carriers for terminating telephone calls  xXfrom the United States to Australia, it makes net payments to U.S. carriers for terminating  xInternet traffic from Australia to the United States. Telstra alleges that U.S. carriers charge  xabove-cost rates for terminating Internet traffic and that the Commission ignored its comments  xurging a reduction in these rates. Claiming that the Commission had invited comments during  xVthe rulemaking process and that its comments were directly relevant to the issues decided in the  xfinal Order, Telstra accuses the Commission of violating the Administrative Procedure Act, 5 U.S.C.  553(c). We disagree.  x The Commission's notice of proposed rulemaking gives no indication that the agency sought  xcomments on Internet-related issues. The paragraph cited by Telstra in support of its position reads:  ` (XX` ` We invite interested parties to submit comments on our proposals  ` for revising the benchmark settlement rates, including the  ` methodology for calculating the rates and our proposal for periodic  ` .revisions to the rates. We also invite comments on our plan to  ` Pimplement the revised benchmark settlement rates in a manner that  ` Jwill promote our goal of achieving the cost-oriented,  ` nondiscriminatory, transparent settlement rates necessary for the  ` development of competition in the global telecommunications services market.x`  xx12 F.C.C.R. at 6195  29. Although it may be true, as Telstra says, that "the global  xtelecommunications services market" includes Internet services, the Commission's request for  xcomments occurred in the context of a notice that"from the very first paragraph"declares its  X#2 xsubject to be "benchmark settlement rates for international message telephone service (IMTS)  Xj$2 xbetween the United States and other countries." Id. at 6185  1 (emphasis added). The notice  xmade clear that the Commission sought to regulate the provision of ordinary telephone service  X>&2 x`under "the traditional accounting rate system," id., and that Internet traffic "is exchanged outside  X)'2 xpof the traditional accounting rate system," id. at 6189  13. The mere fact that Internet traffic")' 0*((aa$"  x and international voice traffic are becoming increasingly interconnected does not oblige the Commission to regulate both spheres of telecommunications services simultaneously. `VII We deny the petition for review and affirm the Commission's Order in all respects. So ordered.