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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 Re Application of ) ) KDD America, Inc. ) File No. ITC-97-096 ) Application for Authority under ) Section 214 of the Communications ) Act of 1934, as amended, to ) Provide Resale Services to ) Specified Points ) ORDER, AUTHORIZATION AND CERTIFICATE Adopted: October 3, 1997 Released: October 3, 1997 By the Chief, Telecommunications Division: I. INTRODUCTION 1. In this Order, we grant KDD America, Inc. ("KDD") authority pursuant to Section 214 of the Communications Act of 1934 to provide resold switched services to Belgium, France, Hong Kong, Mongolia and Russia. II. BACKGROUND AND PLEADINGS 2. KDD is a wholly-owned subsidiary of Kokusai Denshin Denwa Co., Ltd. ("KDD- Japan"). KDD-Japan is a Japanese corporation that provides international telecommunications services in Japan. KDD is currently authorized to resell non-interconnected private lines between the United States and the United Kingdom, Germany, Japan, Belgium, France and Hong Kong and to resell international public switched services to all permissible international points, except Japan, Belgium, France, Hong Kong, Mongolia and Russia. 3. KDD requests Section 214 authority to provide international resold switched services between the United States and Belgium, France, Hong Kong, Mongolia and Russia. KDD certifies that it is affiliated within the meaning of Section 63.18(h)(1) with foreign carriers in each of the countries in which it proposes to provide service. KDD is affiliated with KDD Belgium S.A./N.V. ("KDD Belgium"), KDD France S.A.S. ("KDD France") and KDD Hong Kong Ltd. ("KDD HK") because KDD Belgium, KDD France and KDD HK are wholly-owned subsidiaries of KDD Japan. KDD America is affiliated with MobiCom Corporation in Mongolia ("MobiCom"), a joint venture in which KDD Japan holds a 44.4% interest. KDD America is affiliated with Vostok Telecom Co., Ltd ("Vostok") in Russia as a result of KDD-Japan's ownership interest in Vostok. 4. KDD's application was put on public notice on February 26, 1997. On March 7, 1997, the Office of the U.S. Trade Representative and the Departments of Commerce and State requested a delay of any action on the application while they conducted a review of trade policy concerns raised by the application. On September 8, 1997, these agencies informed the Commission that they no longer have any objections to Commission consideration of the application. No other comments were received. III. DISCUSSION 5. The Commission determined in the Foreign Carrier Entry Order that carriers seeking to provide international services to countries in which they have an affiliate with market power must demonstrate that the destination country offers "effective competitive opportunities" ("ECO") for U.S. carriers to offer like services. If an applicant's foreign affiliate does not have market power, we do not conduct an ECO analysis. 6. We conclude that none of KDD's affiliates have market power in the destination market. The Foreign Carrier Entry Order defines market power as "the ability of the carrier to act anticompetitively against unaffiliated U.S. carriers through the control of bottleneck services or facilities on the foreign end." KDD Belgium, KDD France and KDD HK own no facilities and are new entrants in their respective markets. MobiCom provides only mobile services and has only 1,000 subscribers. While Vostok owns limited facilities, the network cannot be interconnected to the existing public switched network and Vostok has only 1% of the international telephone service market in Russia. 7. We find that the present and future public convenience and necessity will be served by the grant of KDD's application to provide international services between the United States and Belgium, France, Hong Kong, Mongolia and Russia. We therefore grant KDD's application and will treat KDD as non-dominant in its provision of switched resale services on routes between the United States and Belgium, France, Hong Kong, Mongolia and Russia. IV. ORDERING CLAUSES 8. Accordingly, IT IS ORDERED that application File ITC-97-096 IS GRANTED and KDD America, Inc. is authorized to resell switched services between the United States and Belgium, France, Hong Kong, Mongolia and Russia. 9. It is FURTHER ORDERED that KDD America, Inc., as a non-dominant carrier in the provision of resold switched services between the United States and Belgium, France, Hong Kong, Mongolia and Russia, shall comply with the requirements specified in Sections 43.82, 63.15(b) and 63.21 of the Commission's rules. 10. 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 the public notice of this Order. FEDERAL COMMUNICATIONS COMMISSION Diane J. Cornell Chief, Telecommunications Division International Bureau