DA 97-2289

                           Before the
               FEDERAL COMMUNICATIONS COMMISSION
                      Washington, DC 20554


In the Matter of                )
                                )
Telmex/Sprint Communications, L.L.C.)
                                )
Application for Authority under )       File No. ITC-97-127
Section 214 of the Communications)
Act for Global Authority to Operate as an  )
International Switched Resale Carrier)
Between the United States and   )
International Points, Including Mexico)
     
              ORDER, AUTHORIZATION AND CERTIFICATE

     Adopted:  October 29, 1997         Released: October 30, 1997
                                
By the Chief, International Bureau:
                                
                        I.  INTRODUCTION

     1.   In this Order, we grant Telmex/Sprint Communications, L.L.C. (TSC) authority,
pursuant to Section 214 of the Communications Act of 1934, to provide international switched
resale services to all points, including Mexico, subject to certain conditions described below.  

     2.   We find that the public interest supports conditional grant of this application. 
U.S.-affiliated facilities-based carriers are already competing in Mexico.  These carriers have, in
a relatively short period of time, succeeded in gaining a significant share of the Mexican long-
distance and international markets by providing service on both a facilities and switched resale
basis.  Indeed, as a result of procompetitive legislative and regulatory initiatives undertaken by
the Mexican government, new entrants have captured up to 30 percent of the markets in areas
where presubscription has been introduced in less than a year.  In addition, we expect that
Mexico will offer all U.S. carriers effective competitive opportunities to provide international
switched resale services in the near future.    

     3.   Through the course of this proceeding, Tel‚fonos de M‚xico, S.A. de C.V.
(Telmex) has also made a number of procompetitive commitments that we find to be in the
public interest.  First, Telmex has committed to reduce its settlement rate with U.S. carriers to the
benchmark rate of 19 cents by January 1, 2000, which is the date required under the
Commission's recent Benchmarks Order.  Telmex is by far the largest recipient of settlement
outpayments by U.S. carriers, having received more than $875 million in net settlement
payments in 1996.  In making the commitment to reduce its settlement rate, Telmex
demonstrates that it supports the Commission's settlement rate reform goals as articulated in the
Commission's August 1997 Benchmarks Order.  Indeed, Telmex recognizes that it will benefit,
along with U.S. carriers and U.S. consumers, by the stimulated call volumes that will flow from
lower settlement rates.  Telmex has also agreed to accept significant reductions in the U.S.-
Mexico settlement rate for 1998 and 1999.

     4.   As a result of these commitments, U.S. carriers and U.S. consumers will save
hundreds of millions of dollars over the next three years.  Moreover, we expect that, as a result of
Telmex's settlement rate reductions, the volume of calls on the U.S.-Mexico route will increase
significantly, benefitting U.S. and Mexican consumers and carriers.  Telmex's settlement rate
commitments should significantly lower the prices U.S. consumers pay for international services
on the U.S.-Mexico route.  

     5.   Second, Telmex has undertaken, or committed to undertake, a number of actions
to resolve allegations made by parties in this proceeding that Telmex discriminates against U.S.
carriers and their Mexican affiliates.  Nevertheless, in this Order we impose certain conditions
and safeguards on TSC's authorization to help eliminate the potential for anticompetitive conduct
on the U.S.-Mexico route that could arise as a result of TSC's affiliation with Telmex.  In
particular, we regulate TSC as dominant on the U.S.-Mexico route.  We also condition this grant
on TSC not offering its service at an average price that is below the average price at which TSC
obtains those services from underlying carriers.  In addition, we reserve the right to impose
additional conditions or safeguards in the future in the event that we find that TSC is able to
distort competition in the U.S. market.

     6.   In light of its commitments to reduce settlement rates and address anticompetitive
conduct, we find TSC's entry into the U.S. market to be in the public interest.  TSC's entry into
the U.S. international services market will provide a new source of price and service quality
competition, particularly on the U.S.-Mexico route.  U.S. consumers will realize benefits from
this increased competition in the form of lower prices and greater service choice and innovation. 
Under these circumstances, we find that conditional grant of this application is in the public
interest.

                        II.  BACKGROUND

     7.   TSC, a limited liability company organized under the laws of Delaware, is a joint
venture between an indirect subsidiary of Telmex, a Mexican corporation, and an indirect
subsidiary of the Sprint Corporation (Sprint), a U.S. corporation.  Telmex and Sprint each holds a
50 percent ownership interest in TSC.  Because of Telmex's 50 percent interest in TSC, TSC has
an "affiliation," as defined in Section 63.18(h)(1)(i) of the Commission's rules, with a foreign
carrier.  In addition, because of Sprint's 50 percent interest in TSC, TSC has an affiliation, as
defined in Section 63.18(h)(1)(i) of the Commission's rules, with a U.S. carrier.  

     8.   On February 27, 1997, TSC filed an application to obtain Section 214 authority to
provide international switched resale services between the United States and all international
points, including Mexico.  TSC proposes to resell Sprint's facilities-based services.  AmericaTel,
AT&T, MCI and WorldCom filed petitions to deny TSC's application.  The City of Laredo,
Texas filed a petition to condition grant of TSC's application.  Frontier filed comments
generally supporting the grant of TSC's application.  TSC filed a Consolidated Opposition in
response to the petitions and comment.  AmericaTel, AT&T, MCI and WorldCom filed replies
to TSC's opposition.

     9.   On June 16, 1997, the International Bureau convened a status conference on
TSC's application.  Representatives of all of the petitioners and commenters, as well as the
applicant, were present.  The purpose of the status conference was to attempt to narrow the
factual questions at issue in the TSC application.  These issues, described in greater detail below,
concern petitioners' allegations that: 1) TSC's Mexican affiliate, Telmex, engages in various
forms of discriminatory conduct; 2) Telmex does not offer reasonable and nondiscriminatory
charges, terms and conditions for interconnection to its network; 3) Telmex does not abide by
Mexican proportionate return rules; 4) the settlement rate for U.S.-Mexico traffic is significantly
above cost and subsidizes Telmex's operations in Mexico; and 5) Mexico regulations do not
allow non-facilities-based U.S. carriers to provide international switched resale services from
Mexico.  On July 16, 1997, TSC submitted a letter in response to many of the issues raised at the
status conference.  On October 28, 1997, Telmex submitted a letter specifying the conditions
that it is willing to accept as part of the TSC Section 214 authorization.

                        III.  DISCUSSION

     A.  Application of Current Market Entry Rules

     10.  The Commission has proposed to eliminate the current effective competitive
opportunities (ECO) test for U.S. market entry for WTO Member countries such as Mexico as
part of our Foreign Participation proceeding.  Under the proposed rules, we would not examine
whether Mexico offers U.S. switched resellers the ability to compete in Mexico.  Until final rules
are adopted, however, we must continue to apply our existing Foreign Carrier Entry Order
framework.  We therefore examine TSC's entry into the U.S. market under our current rules. 

     11.  TSC's affiliation with a foreign carrier requires us to review its application under
the framework established in the Commission's Foreign Carrier Entry Order.  In that order, the
Commission stated that carriers seeking to provide international services to countries in which
they have an affiliate with control of bottleneck services or facilities must demonstrate that the
affiliated market offers effective competitive opportunities for U.S. carriers seeking to offer like
services.  The Commission stated that it would apply the ECO analysis only to Section 214
applications from foreign carriers, or affiliates of foreign carriers, that have the ability to
discriminate against unaffiliated U.S. carriers through the control of bottleneck services or
facilities that potentially can be leveraged to the detriment of unaffiliated U.S. carriers providing
service to those countries.  The Commission also stated that it will continue to consider other
public interest factors that may weigh in favor of, or against, granting the application.  These
factors include the general significance of the proposed entry to the promotion of competition in
the U.S. communications market; any national security, law enforcement, foreign policy, or trade
concerns raised by the Executive Branch; and the presence of cost-based accounting rates.

     12.  We accordingly consider first whether TSC's affiliate, Telmex, possesses
bottleneck control of services or facilities in the market TSC seeks to serve.  If we find that
Telmex has such control in the relevant destination market (in this case, Mexico), TSC must
demonstrate whether Mexico offers U.S. carriers effective competitive opportunities to provide
international services via switched resale.

     B.   Analysis of Telmex's Control of Bottleneck Services or Facilities

     13.  The Foreign Carrier Entry Order requires us to consider whether Telmex has the
ability to act anticompetitively against unaffiliated U.S. carriers through control of bottleneck
services or facilities in Mexico.  Bottleneck services or facilities are "those that are necessary
for the provision of international services, including inter-city or local access facilities on the
foreign end."  We therefore examine whether TSC's affiliate, Telmex, has bottleneck control
over local or inter-city facilities markets for terminating international switched services in
Mexico, as a U.S. carrier ultimately relies upon a facilities-based carrier operating in those
markets to reach the Mexican end user.  A carrier controlling bottleneck facilities and services in
the domestic local or inter-city markets could discriminate in favor of an affiliate competing in
the switched services markets by offering its affiliate superior technical quality, faster
provisioning, or preferential rates.

     14.  Telmex was the state-owned monopoly provider of telecommunications services
in Mexico until 1990.  That year, the Mexican Government privatized Telmex and amended its
concession to authorize Telmex to operate a public switched local and long distance telephone
network throughout Mexico.  The concession gave Telmex the exclusive right to provide
domestic and international long-distance services until August 11, 1996.  The concession further
required Telmex to interconnect with other public switched long distance networks beginning
January 1, 1997.  Although Telmex has been subject to increasing competition since January of
1997, it continues to maintain the only ubiquitous local and inter-city networks in Mexico.  TSC
has not argued or sought to demonstrate that Telmex lacks control over bottleneck services or
facilities in Mexico.  Given Telmex's status in Mexico's telecommunications market and the
absence of any showing otherwise, we assume for purposes of this decision that TSC's affiliate,
Telmex, has the ability to discriminate against unaffiliated U.S. international carriers terminating
traffic in Mexico through its bottleneck control over facilities for terminating U.S. international
switched services in Mexico.

     C.  Effective Competitive Opportunities Analysis

          1.  Introduction

     15.  As the Commission noted in the Foreign Carrier Entry Order, our approach in
applying the ECO analysis to a switched resale application differs from the approach we apply in
the context of a facilities-based application.  In the context of a switched resale application, the
analysis focuses on whether effective competitive opportunities exist to provide switched resale
(as opposed to facilities-based) international service in the destination market of a carrier with
market power.  The ECO test, as applied to switched resale applications, was intended primarily
to encourage the opening of foreign markets on an incremental (i.e., service-by-service) basis. 
The Commission did not consider ECO in this context necessary to prevent anticompetitive
conduct because "[t]he ability to provide service via resale does not offer as great a potential for
anticompetitive conduct as does facilities-based entry."  

     16.  Under the ECO test for switched resale entry, we first consider the legal, or de
jure, ability of U.S. carriers to provide switched resale services in the destination country where
the applicant possesses market power.  Next, we consider practical barriers to entry, including the
existence of reasonable and nondiscriminatory charges, terms and conditions for the provision of
such resale service, competitive safeguards to protect against anticompetitive and discriminatory
practices affecting resale, fair and transparent regulatory procedures, and separation between the
regulator and operator of international services.  As in the context of facilities-based
applications, we focus on the overall effect of these elements on the opportunities to provide
switched resale services in the foreign market.  If, however, any of the ECO factors are
completely absent, we will deny authority to provide international switched resale services to the
destination country where the applicant possesses market power, unless other public interest
factors warrant a different result.

     17.  All parties in this proceeding raise issues and arguments that extend beyond the
scope of the ECO analysis for switched resale entry.  Because these issues bear on the state of
competition in the Mexican long distance and international market, and are relevant to our
overall public interest analysis, we also address them at appropriate points below.
     
          2.  Switched Resale Entry in Mexico

     18.  We first consider whether U.S. carriers have the legal ability to provide switched
resale services in Mexico.  TSC states that the Federal Telecommunications Law (FTL), enacted
by the Mexican Legislature in 1995, specifically permits the resale of domestic and
international long distance services pursuant to Mexican Government regulations.  TSC
acknowledges, however, that the Mexican telecommunications regulatory agency, Comisi˘n
Federal de Telecomunicaciones (Cofetel), has not issued resale regulations or permits to "pure"
(i.e., non-facilities based or "stand alone") resale carriers.  TSC claims that Cofetel's President
has advised Telmex's representatives that Cofetel intends to issue its resale regulations in the
near future and Cofetel expects pure resale to commence in Mexico soon.  

     19.  TSC further indicates that facilities-based carriers operating in Mexico are
currently authorized to provide service via both their own facilities and/or the resale of other
carriers' services.  TSC points out that at least six facilities-based carriers competing with Telmex
in Mexico are affiliated with U.S. partners, and that some of them are relying entirely on the
resale of Telmex's services in order to provide domestic and international switched long distance
services in Mexico.  TSC concludes that U.S.-affiliated carriers have the legal ability to
compete in the resale of international switched services in Mexico, as evidenced by the fact that
such carriers are already providing those services there.

     20.  AT&T, MCI and WorldCom argue that U.S. carriers do not have the legal ability
to provide switched resale services in Mexico.  These petitioners each note that pure resale of
Telmex's services for the provision of international switched resale is not permitted in Mexico. 
Rather, resale is only permitted by those carriers that also provide facilities-based services in
Mexico.  WorldCom states that it understands that the Mexican Government intends to delay
the issuance of regulations and resale permits for at least 18 months to two years in order to
allow the facilities-based carriers a head start in the Mexican market.  In addition, AT&T and
WorldCom also state that Mexico limits foreign ownership of the carriers currently allowed to
provide switched resale services to 49 percent.  Although the FTL authorizes 100 percent
foreign ownership of pure resale carriers, no such permits have yet been issued.  As a result,
petitioners argue that Mexican carriers currently allowed to provide resale services are effectively
limited to 49 percent non-Mexican ownership.  WorldCom requests that any grant of Section 214
authorization to TSC be conditioned on a future showing by TSC that the Mexican government
has published the necessary resale regulations and issued resale permits.

     21.  TSC replies that Mexico satisfies the de jure prong of the ECO test because U.S.-
affiliated facilities-based carriers and others are already reselling domestic and international
switched long distance services, and that pure resale is expected to commence in Mexico in the
very near future.  TSC states that it understands Cofetel will issue resale regulations and award
resale permits by the end of 1997.  TSC states further that this time frame is assured
independently by Mexico's WTO commitments, which specifically include a commitment to
allow competition in all market segments of public telecommunications services, on both
facilities and resale bases, by January 1, 1998.  TSC also argues that AT&T's and MCI's
arguments on this point are disingenuous.  According to TSC, AT&T's and MCI's affiliates in
Mexico, Alestra and Avantel, respectively, have urged Cofetel to postpone the issuance of resale
authorizations until they solidify their competitive position in Mexico.  Finally, TSC argues that
WorldCom's claim that Mexico imposes an effective 49 percent foreign ownership limitation on
resellers is erroneous.  Despite the fact that pure resellers are not allowed to operate in Mexico
now, TSC asserts that Mexican law imposes no foreign ownership limitations on stand-alone
resellers.  TSC concludes that Mexico imposes no barriers to competition from U.S.-affiliated
carriers.

     22.  In response, AT&T states that TSC's "understanding" concerning Cofetel's
intentions to issue resale permits in the "near future" does not provide the reasonable certainty
required by the Foreign Carrier Entry Order that resale opportunities must be available to U.S.
carriers.  MCI states that in fact there is no scheduled date for the implementation of regulations
or issuance of the permits necessary to provide pure switched resale in Mexico.  MCI also states
that the competitive carriers (i.e., Alestra and Avantel) did not ask the Mexican government for a
delay in the implementation of resale regulations.  According to MCI, Telmex's competitors
believed that implementation by the Mexican government of other issues such as equal access
were more important than resale.  As a result, Telmex's competitors simply requested that other
issues such as equal access be granted priority over implementation of resale regulations. 

     23.  We agree with petitioners that, at present, U.S. carriers may not provide the same
service in Mexico that Telmex's affiliate, TSC, now seeks to provide in the United States.  That
is, U.S. carriers who have not entered the Mexican market on a facilities basis are not able to
provide "pure" switched resale services in Mexico.  Although the FTL permits switched resale
competition, regulations governing the provision of "pure" switched resale have not yet been
published and Cofetel has not yet issued any resale permits.  We understand that this is due in
part to the Mexican Government's policy of promoting competitive infrastructure during the
period in which competition is being first introduced to the incumbent carrier.  We nevertheless
anticipate, based on the record, that Mexico will publish the relevant regulations and issue resale
permits in the near future.  First, as the applicant demonstrates, the FTL specifically permits the
resale of domestic and international long distance services pursuant to regulations and permits to
be issued by Cofetel.  Second, Mexico specifically committed in its WTO commitments to
open its market to allow resale services effective January 1, 1998.  Third, current Mexican
regulations have permitted at least six U.S.-affiliated, facilities-based carriers to compete through
resale of Telmex's domestic and international switched long distance services.  

     24.  Thus, although Mexico does not currently offer non-facilities-based U.S. carriers
the ability to provide "pure" switched resale services, several facilities-based affiliates of U.S.
carriers are currently providing resale services and TSC has demonstrated that regulations are
likely to be published, and resale permits granted, in the near future.  Consequently, we find
that Mexico can be reasonably expected to allow the provision of "pure" switched resale services
in the near future.  In the event that Mexico does not take the necessary actions to permit "pure"
switched resellers to operate in the near future, we reserve the right to revisit this issue to
determine whether TSC's authorization should be revoked or, alternatively, whether TSC's
authorization should be subject to additional conditions and/or safeguards.

          3.  Practical Barriers to Entry

     25.  We now consider practical barriers to entry, including the existence of reasonable
and nondiscriminatory charges, terms and conditions for the provision of resale service,
competitive safeguards to protect against anticompetitive and discriminatory practices affecting
resale, fair and transparent regulatory procedures, and separation between the regulator and
operator of international services.  

               a.  Resale charges, terms and conditions

     26.  TSC maintains that Mexican rules and procedures ensure the existence of
reasonable and nondiscriminatory charges, terms and conditions for the resale of Telmex's
domestic and international switched long distance services.  In addition, TSC indicates that the
Mexican Government's policies ensure that there is an effective means to monitor and enforce
these charges, terms and conditions.

     27.  More specifically, TSC states that Telmex sells its domestic and international long
distance services to its facilities-based competitors under its "Plan Lada Operadores" (Plan),
which is uniformly available on the same terms and conditions to all long distance service
providers.  According to TSC, all entities subscribing to this Plan, including Telmex's
competitors offering resale services, receive an identical 38 percent discount off of Telmex's
publicly filed tariffs for domestic and international long distance services, resulting in a charge of
approximately 18 cents per minute.  TSC also indicates that there is an effective means to
monitor and enforce the terms for the resale of Telmex's services.  Mexican law requires Telmex
to register with Cofetel its tariffs for providing long distance services and Cofetel must maintain
this information in its publicly available National Telecommunications Registry.  Finally, TSC
states that Telmex's concession prohibits it from granting preferential treatment to any person
and Mexican law prohibits all operators from applying tariffs in a discriminatory manner.

     28.  Petitioners argue that Telmex fails to provide reasonable and nondiscriminatory
charges, terms and conditions for the provision of resale service.  AT&T states that in addition
to the Plan rate, carriers reselling Telmex's services must pay Telmex the interconnection charges
required under Mexico's Domestic Interconnection Order, or approximately $0.025 per minute. 
AT&T maintains that because Telmex customers under this Plan do not pay access charges,
Telmex is in effect double-recovering the interconnection charge from its competitors and
imposing on them an additional expense.  MCI complains that the 38 percent discount is
restricted to traffic over interconnection facilities purchased from Telmex and to traffic
originating from only those cities that have converted to equal access.  

     29.  TSC disagrees that Telmex is allowed to double recover originating access
charges.  TSC further states that because resale charges are entirely unregulated in Mexico, the
Mexican competitors, including AT&T's affiliate, Alestra, negotiated with Telmex and agreed to
the 38 percent discount.  In addition, TSC claims that the competitors rejected a greater 50
percent discount on the ground that resale of their own facilities would not be profitable at such a
deep discount.  TSC also argues that MCI's complaint is meritless because Telmex's
competitors cannot provide service to customers in a particular city until that city has at least
begun the process of converting to equal access.

     30.  MCI replies that the 38 percent discount Plan was more favorable than the 50
percent discount Plan initially offered by Telmex because it applies to both peak and off-peak
rate levels.  MCI also states that the geographical limitations of the Plan discriminate against
Telmex competitors.  While the competitors can offer resale only in those cities that are
converting to equal access, Telmex continues to offer the same plan to its business customers
throughout Mexico.  In addition, MCI complains that, because Telmex offers the same rate to its
business customers, Telmex's competitors are left with no margin to compete with Telmex. 
AT&T also asserts that Telmex's failure to offer its competitors a wholesale rate that is lower
than the retail rate Telmex offers its large business customers is discriminatory.  According to
AT&T, Telmex's resale plan offered to large business customers is below cost and, prior to
intervention by the Mexican regulator, contained an anticompetitive clause requiring the
customer to rely exclusively on Telmex for all telecommunications services.

     31.  We find that petitioners have not provided sufficient evidence that the charges,
terms and conditions under which Telmex provides resale services are unreasonable or
discriminatory.  First, Telmex's new competitors have rapidly been able to gain a substantial
share of the Mexican long-distance market, much of it through reselling Telmex's services. 
According to the Mexican Government and TSC, the new entrants have, in less than a year,
captured up to 30 percent of the Mexican long-distance market in the 60 cities (representing over
75% of the total access lines in Mexico) in which carrier presubscription has been introduced. 
In addition, according to Telmex estimates, approximately half of Alestra's and Avantel's long
distance services, and the majority of some of the new competitors' long-distance services,
currently are provided over resold Telmex facilities.  Thus, although petitioners may prefer that
Telmex's resale services be made available on more favorable terms, it does not appear that such
terms are so unreasonable or discriminatory as to prevent the Mexican competitors from taking
substantial market share away from Telmex via resale of Telmex's services.  

     32.  Second, we do not find that AT&T or MCI has demonstrated that the Telmex Plan
is unreasonable or discriminatory.  The fact that Telmex may offer the Plan to its own customers
at the same rate that it offers it to Avantel does not, by itself, indicate that Telmex discriminates
against its competitors.  MCI has not shown that Telmex provides Avantel with a worse rate than
Telmex charges its own customers and AT&T has not presented any evidence that Telmex's
business offering is below cost.  In addition, MCI has not demonstrated that Avantel lacks the
ability to negotiate a better rate, or that it cannot provide competitive service at the Plan rate by
providing innovative service offerings, such as improved billing.  We also note that Telmex's
competitors are not limited to competing against Telmex through resale of Telmex's services. 
Rather, carriers such as Avantel may provide, and are providing, service by building out facilities
to their customers.  Finally, we find that the Mexican regulators bear primary responsibility to
determine whether the rates, terms and conditions of Telmex's resale plans are discriminatory or
anticompetitive.  We will nevertheless monitor this issue to determine whether Telmex's
international switched resale plans have an anticompetitive effect on U.S.-international markets. 
At present, however, we find that the petitioners have failed to demonstrate that the charges,
terms and conditions under which Telmex provides resale services are unreasonable or
discriminatory.  
                              
               b.  Competitive safeguards

     33.  We now examine whether Mexico provides competitive safeguards to protect
against anticompetitive and discriminatory practices affecting resale and facilities-based services. 
The safeguards we consider important include:  (1) existence of cost-allocation rules to prevent
cross-subsidization; (2) timely and nondiscriminatory disclosure of technical information needed
to use, or interconnect with, carriers' facilities; and (3) protection of carrier and customer
proprietary information.  In its application, TSC states that Mexico has significant safeguards in
place to protect against anticompetitive activities by Telmex.  For example, TSC indicates that
Mexico has rules to prevent cross-subsidization, provisions for timely and nondiscriminatory
disclosure of technical information among competitors, and protections for carrier and customer
proprietary information.  Generally, petitioners disagree that Mexico has adopted sufficient
competitive safeguards to prevent Telmex from discriminating against unaffiliated carriers.  

                    i)  Cross-subsidization regulations
 
     34.  TSC states that Telmex's concession and the FTL expressly prohibit Telmex from
cross-subsidizing any competitive services.  TSC also states that Telmex is required to maintain
and provide the Mexican regulator with accounting records that show all transactions for services
between Telmex and its subsidiaries and affiliates.  In addition, TSC indicates that Cofetel is
currently considering whether to impose additional cost-allocation requirements that will address
the allocation of costs between local and long distance services.  

     35.  Petitioners concede that general prohibitions against cross-subsidization exist, but
assert that these general prohibitions are insufficient.  For example, AmericaTel states that there
are no procedures in place for the separation of local service costs from international switched
service costs or the allocation of specific costs to each service, nor are there provisions for
implementation and enforcement, reporting, record keeping or auditing.  AT&T asserts that
because no mandatory accounting separation process exists in Mexico, Telmex has the ability to
cross-subsidize its international long-distance services and price these services at below cost. 
TSC argues that in addition to the specific prohibitions against Telmex engaging in cross-
subsidization, Telmex has submitted to the Mexican regulator financial statements audited by
Ernst & Young that provide an allocation of costs between local and long distance services. 
Telmex plans to make these financial statements public in its next annual report.  In addition,
TSC reiterates that Cofetel is expected to issue detailed cost allocation rules applicable to Telmex
in the near future.

     36.  Although the absence of detailed cost-allocation rules may be problematic, we
note that none of the petitioners has demonstrated that Telmex has engaged in any cross-
subsidization of its competitive services.  The fact that Telmex's Concession and the FTL
expressly prohibit Telmex from cross-subsidizing any competitive services provides some
protection against such anticompetitive behavior.  These existing prohibitions, combined with
the anticipated implementation of new cost-allocation rules, should provide sufficient safeguards
against cross-subsidization.  We emphasize, however, that we continue to be concerned about
the potential for cross-subsidization which could affect competition in the U.S. market.  If, in the
future, we find evidence of such activity, we reserve the right to subject TSC's authorization to
additional conditions and/or safeguards.  

                    ii)  Disclosure of technical network information

     37.  TSC states that Cofetel has ensured timely and nondiscriminatory disclosure of
technical information that competitors need to use or interconnect with Telmex's network.  As
evidence of the sufficiency of Mexican requirements, TSC notes that Telmex has entered into
more than 50 agreements with its competitors providing them sufficient technical information to
allow them to interconnect with Telmex's network.  In addition, TSC states that under Cofetel's
oversight, and with the advice of Bellcore, numerous industry committees composed of
representatives from all the Mexican carriers implement numbering, signaling and other technical
plans, further ensuring the interoperability of competing networks.  

     38.  Petitioners disagree that Mexican regulations ensure timely and nondiscriminatory
disclosure of technical information concerning Telmex's network. AmericaTel argues that TSC
fails to describe any regulations or Cofetel-prescribed procedures that specifically require
Telmex to disclose necessary technical information on a timely and nondiscriminatory basis. 
Similarly, MCI alleges that it understands that Telmex has failed to produce technical
information in a timely manner.  In response, TSC argues that the petitioners' arguments are
meritless since they do not include a single example of a failure by Telmex to provide sufficient
technical information to Telmex's competitors.  TSC states that Telmex has not only entered
into over 50 separate agreements with competitors, but has also established a separate entity
staffed by over 230 people to attend solely to the operational, technical, marketing and other
needs of its competitors.

     39.  In the International Bureau's TNZL Order, we stated that a dominant carrier is
likely providing competitors with adequate technical information to interconnect if parties do not
present any specific evidence to the contrary.  We also found that evidence that competitors have
achieved significant shares of the international and long distance toll markets provide further
assurance that competitors are able to obtain sufficient information to interconnect.  In this
proceeding, none of the petitioners has provided any evidence that Telmex's competitors have
been unable to obtain sufficient technical information to interconnect with Telmex's network. 
For example, MCI provides no examples of instances in which Telmex failed to produce
technical information in a timely manner.  In addition, the Mexican Government and the
applicant have demonstrated, and petitioners have not refuted, that Telmex's competitors have
succeeded in obtaining a significant share of the Mexican long-distance and international toll
markets.  Absent evidence to the contrary, the ability of Telmex's competitors to obtain a
significant share of the Mexican telecommunications market provides us with a reasonable basis
to conclude that facilities-based competitors in Mexico have access to adequate technical
information to interconnect with Telmex's network.  

                    iii)  Carrier and customer proprietary information
  
     40.  TSC states that Mexican law provides adequate protection of carrier and customer
proprietary information.  Specifically, TSC indicates that Telmex is barred from obtaining access
to its competitors' proprietary information because all of the carriers submit such information
directly to a jointly selected, neutral, third-party database administrator.  With respect to
customer proprietary information, TSC states that Telmex's Concession prohibits Telmex from
disclosing such information without a customer's prior consent.  The FTL further requires
concessionaires to act on a nondiscriminatory basis in disclosing customer information to
affiliates, subsidiaries, and third parties.  Finally, TSC states that the FTL also requires Telmex to
provide competitors sufficient information to enable them to compile their own telephone
directories, and Telmex is subject to sanctions if there are errors in its directory user database
information.

     41.  AmericaTel and AT&T disagree that Mexican law provides adequate protection
of carrier and customer proprietary information, but do not provide any specific evidence of any
actual or potential abuses by Telmex.  In response, TSC states that, in addition to complying
with the requirements of Telmex's concession and the FTL, Telmex has put in place specific
internal procedures to protect proprietary information, and agreements executed among the
Mexican carriers contain further provisions prohibiting Telmex from misusing any customer or
carrier proprietary information.  

     42.  It appears that Telmex has affirmative obligations under its concession and
Mexican law to protect carrier and customer proprietary information.  Specifically, Telmex's
Concession prohibits Telmex from disclosing customer proprietary information.  The FTL
requires concessionaires to act on a nondiscriminatory basis in disclosing customer information
to affiliates, subsidiaries and third parties.  In addition, we find no basis in this proceeding to
question TSC's claim that Telmex's agreements with its competitors safeguard proprietary
information.  None of the petitioners has identified any instances of abuse by Telmex of
customer or carrier proprietary information.  Thus, consistent with our findings in the TNZL
Order, we find that sufficient safeguards protect against Telmex disclosure of carrier and
customer proprietary information.
 
     43.  In sum, it appears that Mexico provides, or in the near future will provide,
sufficient competitive safeguards to protect against anticompetitive and discriminatory practices
affecting resale and facilities-based services.  Specifically, existing prohibitions against cross-
subsidization, combined with the anticipated implementation of new cost-allocation rules, appear
to provide sufficient safeguards against Telmex engaging in cross-subsidization.  In addition,
facilities-based competitors in Mexico appear to have access to adequate technical information to
interconnect with Telmex's network.  Finally, it appears that sufficient safeguards protect against
Telmex disclosure of carrier and customer proprietary information.  We reiterate, however, that
we remain concerned about any anticompetitive and discriminatory practices that have an
adverse effect on the U.S. international service markets.  If, in the future, we find evidence of
such practices, we reserve the right to subject TSC's authorization to additional conditions and/or
safeguards.  
               
               c.  Regulatory framework

     44.  The fourth factor to be reviewed under our ECO analysis is whether there is an
effective regulatory framework in Mexico to develop legal requirements, interconnection
arrangements and other competitive safeguards.  The focus of this prong of the analysis is on
whether there is separation between the foreign regulator and the operator of international
services, and whether there are fair and transparent regulatory procedures in the destination
market.  Sufficient separation between the operator and the regulator is necessary to ensure that
the regulator is independent, empowered, and does not have a conflict of interest in regulating
the operator.  Without sufficient separation, there is little reason to believe that the regulator will
not favor the operator.  Transparent procedures allow competitors to know precisely what
obligations are required of the incumbent dominant carrier and what rights they have to seek
enforcement of such obligations.  

     45.  In its application, TSC states that Mexico has fair and transparent regulatory
procedures administered by a regulatory body that is separate and independent from Telmex and
any other telecommunications provider.  More specifically, TSC explains that Telmex has been
independent from the Mexican government since it was privatized in 1990.  Currently, regulation
of telecommunications is divided between the Secretariat of Communications and Transport
(SCT) and Cofetel.  The SCT is a government ministry that, among other things, is responsible
for issuing concessions and permits.  Cofetel, a telecommunications regulatory commission,
reports to the SCT's newly organized Subsecretariat of Communications and is responsible for
most of the day-to-day regulatory duties relating to telecommunications.  TSC maintains that
Cofetel operates under fair and transparent procedures.  It notes that the FTL establishes
guidelines for the conduct of regulatory proceedings, including licensing procedures and the
mediation of interconnection disputes.  TSC also argues that the FTL requirement that Cofetel
maintain a publicly available National Telecommunications Registry ensures transparency of
decisionmaking.  Finally, TSC states that in order to ensure fair decisionmaking, the FTL
makes clear that actions such as revoking concessions and imposing sanctions must be taken in
accordance with Mexico's Federal Law of Administrative Procedure.

     46.  Petitioners disagree that Mexico provides fair and transparent regulatory
procedures.  For example, AT&T and AmericaTel argue that Mexico fails to provide for
sufficient public input into its regulatory procedures because Mexican regulatory bodies are not
required to seek or take account of public comment.  AmericaTel also argues that Cofetel is an
inexperienced regulatory body that lacks authority to act on many regulatory matters.  It points
out that the SCT, to which Cofetel reports, is the same organization that oversaw Telmex's
government-owned operations until 1990.  AmericaTel concludes that the SCT "may" continue
to bestow an unfair advantage on Telmex, thereby thwarting the development of effective
competitive opportunities.

     47.  In response, TSC argues that petitioners' arguments are baseless.  Specifically,
TSC notes that AT&T does not state what types of procedures are lacking to ensure public input. 
In addition, TSC points out that AmericaTel does not offer a single example of favoritism that
the SCT has or could bestow upon Telmex.  While acknowledging that the SCT and Cofetel are
not carbon copies of the FCC, TSC maintains that Mexico has established a sound, fair
regulatory regime.

     48.  We find that petitioners fail to demonstrate that Mexico lacks sufficient regulatory
oversight to protect and promote competition in the Mexican telecommunications market.  First,
we note that the SCT and Cofetel are legally distinct from Telmex and all other carriers, and that
the record does not provide any evidence that either body fails to operate impartially.  Second,
the SCT and Cofetel have implemented several procompetitive measures that have provided
significant opportunities for U.S.-affiliated carriers to compete. The SCT has granted a number
of concessions to facilities-based carriers, many of which are affiliated with U.S. firms.  The
SCT and Cofetel have also demonstrated they are committed to implementing fair and
transparent regulatory procedures.  These bodies have solicited public comment and involved all
of the carriers in major rulemakings and dispute resolutions.  Moreover, actions such as revoking
concessions and imposing sanctions must be taken in accordance with Mexico's Federal Law of
Administrative Procedure.  The SCT and Cofetel have also overseen a rapid rollout of equal
access and carrier presubscription throughout Mexico.  As a result, competing carriers have been
able to capture a significant share of the Mexican long distance and international markets.  In
light of the expanding list of competitors in the Mexican long distance and international service
markets, and the apparent success of at least some of these competitors in taking away substantial
market share from Telmex, we conclude that there is adequate regulatory oversight in Mexico. 

     49.  Over the past year, Cofetel and the SCT have taken a leadership role in
introducing competition in the Mexican telecommunications market.  These independent
regulatory bodies have taken significant steps to introduce competition into a
telecommunications market that was, until recently, a monopoly.  Until August 11, 1996, Telmex
retained the exclusive right to provide long-distance and international services.  Competitors to
Telmex were not allowed to interconnect with Telmex's network until January 1, 1997.  Since
then, Telmex competitors have, through Cofetel's and the SCT's oversight, captured between 25
and 30 percent of the Mexican long-distance and international services market where
presubscription has been introduced.  In addition, Cofetel and SCT have overseen an aggressive
implementation of equal access and presubscription throughout Mexico in 1997.  In the first four
months of this year, presubscription was introduced in Mexico's 22 largest cities.  To date, the
SCT and Cofetel have overseen the introduction of equal access into Mexico's 60 largest cities,
accounting for more than 75 percent of Mexico's total access lines.  In short, Cofetel and the SCT
have taken dramatic, concrete steps to facilitate the introduction of competition in Mexico. 

          4.  Conclusion

     50.  In summary, we find that effective competitive opportunities exist for U.S.
carriers to provide international services in Mexico.  U.S.-affiliated carriers have, in a relatively
short period of time, captured a significant share of the Mexican long-distance and international
markets by providing service on both a facilities and switched resale basis.  Although Mexico
does not currently offer non-facilities-based U.S. carriers the ability to provide switched resale
services, the record indicates, and we expect, that U.S. carriers will be able to offer such services
in the near future.  In addition, there do not appear to be practical barriers which prevent the
provision of international services in Mexico.  The charges, terms and conditions under which
Telmex provides resale services to its competitors do not appear to be unreasonable or
discriminatory.  Finally, competitive safeguards and an independent regulatory framework
provide checks on the potential for anticompetitive conduct by Telmex in favor of its affiliate,
TSC.  

          5.  Other public interest factors
               
     51.  The additional factors we consider relevant to Section 214 public interest analyses
include:  the general significance of the proposed entry to the promotion of competition in the
U.S. communications market; any national security, law enforcement, foreign policy, or trade
concerns raised by the Executive Branch; and the presence of cost-based accounting rates.

     52.  As noted above, we conclude that TSC's entry will promote competition in the
U.S. market, offering significant benefits to consumers.  We also note that the Executive Branch
has not raised any concerns with respect to this application.

     53.  Currently, the per-minute settlement rate used to calculate net settlement
payments for imbalanced minutes on the U.S.-Mexican route for traffic terminated by Telmex is
$0.395.  This rate is effective through December 31, 1997.  In a letter to the Commission dated
October 28, Telmex committed to reduce its settlement rate with U.S. carriers to $0.19, effective
January 1, 2000.  On October 28, 1997, Sprint filed with the International Bureau a request for
a new, significantly reduced settlement rate with Telmex beginning January 1, 1998. 
Specifically, the request provides for combined average settlement rates of $0.375 in 1998,
$0.345 in 1999, and $0.19 in 2000.  

     54.  TSC argues that as part of the introduction of competition in Mexico, both the
Mexican Government and Telmex have committed to significant accounting rate reductions. 
Specifically, TSC notes that over the past decade, Telmex has reduced the average settlement
rate per minute that it pays U.S. correspondents by almost 60 percent, from $0.98 to $0.395, and
it has increased the per minute rate it pays U.S. carriers by almost 36 percent, from $0.291 to
parity at $0.395.  TSC further asserts that its entry would increase competition on the U.S.-
Mexican route and thereby drive settlement rates down even more.  TSC acknowledges,
however, that Telmex now receives "sizable" net settlement payments (more than $875 million in
1996) and will continue to receive substantial payments for the foreseeable future.  Nevertheless,
TSC asserts that these payments are now "trending down."  
     55.  Petitioners argue that TSC's entry into the U.S. market cannot be deemed
consistent with the public interest as long as Telmex maintains excessively large, above-cost
settlement rates with U.S. correspondents.  Instead, petitioners contend that any grant of
authorization should be conditioned on Telmex having reduced its settlement rates with U.S.
carriers to no more than the applicable benchmark.  Absent such a safeguard, petitioners argue
that TSC will be able to price its services on the U.S.-Mexican route at or below cost while, at
the same time, generating substantial profits for Telmex in the form of increased settlements
payments received as a result of stimulated southbound traffic.  In short, petitioners argue that
absent a commitment by Telmex to reduce its settlement rate immediately to the benchmark,
TSC will be able to engage in a "price squeeze" of competing U.S. carriers.  Under this price
squeeze scenario, petitioners allege that TSC will be able to offer service at or below the actual
cost of providing service and thereby drive U.S. carriers out of the U.S-Mexico market. 
According to the petitioners, TSC could profitably engage in such predatory behavior because
TSC's affiliate, Telmex, would receive increased settlement payments from U.S. carriers as a
result of the additional traffic stimulated by reduced prices for U.S.-Mexico calls.

     56.  TSC replies that a condition that requires Telmex to reduce its settlement rate to
the benchmark is not appropriate.  TSC points out that in the past, the Commission has found
unpersuasive the petitioners' price squeeze argument.  Moreover, TSC argues that in light of the
fact that TSC will resell the services of Sprint, which holds half the capital stock of TSC, TSC
would not have the ability or incentive to engage in a price squeeze.  Rather, Sprint's ownership
restricts TSC's ability to price its resold services on the U.S.-Mexico route at or below cost.  In
addition, in its October 28, 1997 letter, Telmex commits that TSC will not offer its service at an
average price that is below the average price at which TSC obtains those services from
underlying carriers.

     57.  We find that Telmex's commitment to reduce its settlement rates with U.S.
correspondents to the benchmark rate of $0.19 by January 1, 2000 to be a significant public
interest factor weighing in favor of grant of TSC's application.  As part of our ongoing effort to
move accounting rates to more cost-based levels, we recently established caps on the settlement
rates that U.S. international carriers may pay foreign carriers for the termination of switched
traffic from the United States to other countries.  As of January 1, 2000, a U.S. international
carrier may pay no more than a settlement rate of $0.19 to a carrier in Mexico.  Thus, Telmex's
commitment to reduce the U.S.-Mexican settlement rate to the applicable benchmark rate by
January 1, 2000, is consistent with the Commission's Benchmarks Order.  In making this
commitment, Telmex demonstrably furthers the Commission's goals with respect to accounting
rate reform.  Moreover, Telmex explicitly recognizes the public interest benefits that flow from
significant reductions in settlement rates, including stimulating call volumes.  

     58.  We particularly welcome Telmex's willingness to commit so far in advance of,
indeed, even before the effective date of the Benchmarks Order, to reach the benchmark rate. 
Telmex's commitment to lower its settlement rates with U.S. correspondents will allow U.S. and
Mexican consumers to receive higher quality service, more service options, and lower prices. 
Telmex's commitment will also benefit all U.S. and Mexican carriers providing international
service by stimulating growth of those services.  As settlement rates, and in turn calling prices,
are reduced, demand for international services on the U.S.-Mexico route will be stimulated.   

     59.  We note, however, that Telmex's commitments do not result in strict
proportionate annual settlement rate reductions in 1998 and 1999.  The Commission has stated
that a settlement rate agreement reached prior to January 1, 1998, the effective date of the
Benchmark Order, could be found to be in the public interest even if it does not strictly comply
with the Benchmark Order's call for proportionate annual reductions.  Telmex has, prior to the
effective date of the Commission's Benchmarks Order, committed to enter into agreements with
U.S. carriers that reach the benchmark rate by the end of the specified transition period and in
accordance with other terms of the Benchmarks Order, with significant reductions during the
interim years.  We accordingly find Telmex's commitment to reduce its settlement rate to the
applicable benchmark in a timely manner to be a public interest factor weighing in favor of grant
of TSC's application.

     60.  To put these commitments in context, Telmex has received substantial settlement
payments from U.S. carriers as a result of the high settlement rates on the U.S.-Mexico route.  In
fact, Mexico is by far the largest recipient of U.S. settlement payments,  having received more
than $875 million in net settlement payments in 1996.  Although we commend Telmex for
reducing its settlement rates as much as it has over the past few years, Telmex's latest
commitment should bring even greater benefits to U.S. consumers in the form of lower prices.  

     61.  We disagree with petitioners that grant of this application should be conditioned
on Telmex reducing its settlement rate to benchmark or cost-based rates immediately.  As TSC
points out, the Commission rejected the petitioners' price squeeze argument in the Foreign
Carrier Entry Order and declined to impose cost-based accounting rates as a condition of
entry.  Thus, under our current rules, we do not condition switched resale authorizations to
serve an affiliated market (in this case, Mexico) on the affiliated carrier (in this case, Telmex)
offering U.S. international carriers a cost-based settlement rate.  However, in the Foreign
Participation proceeding, the Commission is currently considering whether a benchmark
condition should apply to authorizations to provide switched resale service on affiliated routes. 
Any final rules adopted in the Commission's Foreign Participation proceeding regarding
switched resale service will apply to TSC's authorization to provide service to Mexico.  

     62.  Finally, we accept TSC's commitment that it will not offer its service at an
average price that is below the average price at which TSC obtains those services from
underlying carriers.  This commitment provides additional assurance that TSC will not engage in
behavior that could distort the market for U.S.-Mexico international services.  We will thus 
specifically condition grant of this application on TSC not offering its service at an average price
that is below the average price at which TSC obtains those services from underlying carriers. 

     63.  We conclude that the public interest supports grant of TSC's application.  First,
the Executive Branch has not raised with us any concerns about TSC's application.  Second, we
believe that U.S. consumers will benefit from the additional competition on the U.S.-Mexico
route.  Finally, Telmex's commitment to reduce its settlement rates with U.S. correspondents to
the benchmark rate of $0.19 by January 1, 2000, and to accept significant reductions in the
interim, provides substantial support for finding that grant of TSC's application is in the public
interest.

          6.  Regulatory treatment

     64.  Under the Commission' rules, switched resellers are presumed nondominant on
routes where they are affiliated with a foreign carrier that controls bottleneck services or facilities
in the destination country, provided they resell only the switched services of unaffiliated U.S.
facilities-based carriers.  TSC proposes, however, to resell the switched services of its affiliate
Sprint (a U.S. facilities-based carrier) to all points, including Mexico.  As we found above, TSC's
affiliate, Telmex, has bottleneck control over local and inter-city facilities in Mexico. 
Therefore, TSC is not entitled to the presumption of nondominance for international services to
Mexico.  Moreover, TSC states in its application that it is not seeking nondominant regulatory
status at this time.  We must therefore regulate TSC as dominant on the U.S.-Mexico route
because the applicant has not attempted to demonstrate that its affiliate lacks the ability to affect
adversely competition in the U.S. market by discriminating against unaffiliated U.S. international
carriers through control of bottleneck services or facilities in Mexico.  

     65.  As a dominant carrier on the U.S.-Mexico route, TSC will be required to do the
following:  (1) file tariffs on no less than 14-days notice; (2) maintain complete records of
provisioning and maintenance of basic network facilities and services procured from the foreign
carrier affiliate; (3) obtain Commission approval pursuant to 47 C.F.R.  63.18 before adding or
discontinuing circuits; and (4) file quarterly traffic and revenue reports of messages and number
of minutes of both originating and terminating traffic.  Because TSC has no other affiliations
with foreign carriers as defined by Section 63.18(h)(1)(i) of the Commission's rules, we will
regulate TSC as nondominant on all other routes.

     66.  Carriers such as TSC must also comply with certain reporting requirements.  As
we discuss below, TSC's affiliate, Sprint, has not complied with some of these reporting
requirements with respect to agreements it has entered with TSC's other affiliate, Telmex. 
Consequently, we find it necessary to reiterate the reporting requirements applicable to TSC and
its affiliates under the Commission's rules and condition TSC's authorization on compliance with
these requirements.  As we explain below, we also condition grant of this application on TSC
filing with the Commission copies of any contracts (or adequate summaries) that it enters into
with any carrier under which TSC resells that carrier's service.

     67.  In its application, TSC proposes to resell Sprint's facilities-based services. 
Consistent with Section 43.51 of the Commission's rules, TSC must file with the Commission
copies of all contracts, agreements and arrangements, whether written or oral, with any other
carrier, including Telmex, Sprint, and any of their respective affiliates, relating to services and
traffic on all routes, including the U.S.-Mexico route.  In addition, if TSC resells another carrier's
service pursuant to a contract, or if any carrier resells TSC's service, the underlying carrier (i.e.,
the carrier whose services are being resold) must file publicly with the Commission a copy of
that contract or an adequate contract summary.  The underlying carrier must also make the
services provided to the reseller pursuant to a contract generally available to similarly situated
customers at the same terms, conditions and rates.  Thus, if TSC resells Sprint's facilities as
proposed in TSC's application, Sprint must file with the Commission a copy (or adequate
summary) of the relevant contract.  In addition, other similarly situated customers (e.g.,other
carriers or business customers) must be able to obtain the same services on the same terms and
conditions, and at the same rates, that Sprint provides to TSC.

     68.  We specifically condition TSC's authorization on compliance with the reporting
requirements specified under Section 43.51 of the Commission's rules by TSC and its
affiliates.  We also condition the grant on TSC filing with the Commission copies of any
contracts or contract summaries under which any other carrier resells TSC's services.  In order
to monitor whether TSC is engaging  in market-distorting behavior in the U.S.-international
services market, we also condition grant of this application on TSC filing with the
Commission copies of any contracts (or adequate summaries) that it enters into with any carrier
under which TSC resells that carrier's service.    We find that this condition is also appropriate in
light of the fact that TSC's affiliate, Sprint, has not consistently complied with its reporting
requirements regarding service agreements it has entered into with TSC's other affiliate,
Telmex.

     69.   As an authorized U.S. carrier, TSC will also be subject to our "no special
concessions" requirement. That is, TSC will be prohibited from agreeing to accept "special
concessions" from any foreign carrier (including Telmex).  We currently define "special
concessions" as "any arrangement that affects traffic or revenue flows to or from the United
States that is offered exclusively by a foreign carrier or administration to a particular U.S.
international carrier and not also to similarly situated U.S. international carriers authorized to
serve a particular route."  We note that in our Foreign Participation Notice, we propose to give
greater specificity to our "no special concessions" requirement by delineating the types of
conduct that we consider to be prohibited by this requirement.  Any rules adopted in this
proceeding regarding the "no special concessions" requirements will apply to TSC.

     70.  Finally, we reiterate that TSC, and its affiliate, Sprint, will be subject to the
Commission's international settlements policy.  This policy, which prevents foreign monopolies
from using their market power to obtain discriminatory rate concessions from competing U.S.
carriers (i.e.,"whipsawing") requires:  (1) equal division of accounting rates; (2)
nondiscriminatory treatment of U.S. carriers; and (3) proportionate return of inbound traffic.     
 

     D.  Other Issues

     71.  Petitioners have raised other issues related to the status of competition in the
Mexican telecommunications market.  More specifically, certain petitioners have raised
arguments concerning: 1) Telmex's provisioning of circuits to competitors; 2) the 58 percent
settlement rate surcharge that competitors must pay Telmex to terminate international traffic on
Telmex's network; 3) the method by which proportionate return obligations are calculated among
the various carriers on the U.S.-Mexican route; 4) Mexican regulation of accounting rate
negotiations; 5) the ability of unaffiliated carriers to enter into cross-border service agreements
with Telmex; and 6) allegations that Telmex acted anticompetitively by unlawfully cutting a
competitor's cross-border cable.  Although these issues fall outside of the scope of the ECO
analysis for switched resale services, we address the petitioners' concerns as they bear generally
on competition along the U.S.-Mexico route.


          1.  Telmex provisioning of circuits to competitors

     72.  MCI and AT&T allege that Telmex has discriminated against its Mexican
competitors (namely, AT&T's and MCI's affiliates, Alestra and Avantel, respectively) by failing
to provide interconnection and private (or direct access) circuits and private lines to the
competitors in a reasonable and timely fashion.  More specifically, MCI asserts that Telmex
increased its rates exorbitantly for these facilities to coincide with the entry of competitors in the
Mexican long distance market.  AT&T asserts that Telmex is able to restrict competition by
charging rates that are above economic costs for these facilities and does not make them
available in increments that are small enough to serve small and medium-size business
customers.  MCI also asserts that Telmex has hampered the ability of its competitors to
compete against Telmex by imposing significant installation delays for the Telmex facilities they
need for their operations.  In fact, MCI contends that Telmex has failed to meet its obligations
under its concession to provide these facilities in 35 days.  

     73.  TSC replies that, since January 1, 1997, Telmex has undertaken a major effort to
install competitors' orders for interconnection and private circuits.  With respect to the
interconnection circuits, TSC explains that the provision of these circuits is governed by the
Mexican carriers' negotiated schedule for the implementation of presubscription throughout
Mexico.  TSC maintains that Telmex fulfilled its obligation to provide interconnection circuits
on a timely basis in all 60 cities scheduled to undergo presubscription.  TSC notes, however, that
Telmex received additional requests from Mexican competitors which required additional
installation time.  TSC states that Telmex has put forth its best effort to reduce the delays
resulting from these additional, unexpected orders and that Telmex is now on schedule to fulfill
these additional orders.  MCI does not appear to contest that Telmex is now complying with its
obligations to provide interconnection circuits.

     74.  With respect to private circuit provisioning, TSC maintains that the installation of
these circuits is governed by Telmex's concession and is actively overseen by Cofetel. 
According to TSC, Condition 4-1 and Annex 1 of Telmex's Concession require Telmex to install
80 percent of long distance private circuits within 30 days and 97 percent within 45 days,
provided that facilities are available on Telmex's network and the party requesting circuits has
executed a contract with Telmex, paid the installation costs, and prepared its premises for
installation.  Also, TSC states that Telmex is complying with Condition 7-3 of its Concession
and a July 27, 1995 letter from the SCT requiring it to submit monthly reports to Cofetel
detailing its compliance with these deadlines.  In addition, TSC states that Cofetel requested on
April 18, 1997 that Telmex provide it with additional specific information relating to the
provision of all private circuits during the 1996-97 period, which Telmex provided on May 7,
1997.  Finally, TSC states that Telmex is now "on schedule" in delivering direct connection
circuits to its competitors.  In reply, MCI disagrees that Telmex is now "on schedule" in
provisioning private line circuits.  Rather, MCI states that delivery of DSO, EO and E1 circuits
has been delayed by 60 to 250 days beyond the specified delivery times, and that of the 1573
DSO circuits requested, Telmex has installed just over 500.

     75.  In its commitment letter, Telmex indicates that it has fulfilled all of its
competitors' orders on backlog for interconnection and private circuits.  Telmex also states that
it will continue to comply with the circuit provisioning deadlines set forth in its concession and
its obligation to report to Cofetel on a monthly basis on its compliance with these deadlines. 
Finally, Telmex states that on October 10, 1997, Telmex and Avantel executed an agreement
governing the terms and conditions, including the timing, under which Telmex will provide
private line circuits to Avantel.  Among other things, the agreement contains a binding
facilities-installation schedule that applies to Telmex, as long as it has the requested facilities
available for installation.  The agreement also requires Telmex to pay Avantel specified
contractual damages in the event that it fails to comply with the installation schedule.  Finally,
Telmex commits to enter into substantially the same agreements with other carriers as well.

     76.  Telmex's agreement with Avantel and its willingness to enter into substantially
the same agreements with other Mexican competitors should enhance the ability of U.S.-
affiliated carriers operating in Mexico to compete in both the Mexican long distance and
international telecommunications markets.  In the absence of such agreements, we would be
concerned that Telmex would have the ability and incentive to discriminate against its
competitors serving the U.S.-Mexico route.  That is, Telmex could fulfill its own circuit orders
while delaying the delivery and installation of private circuits to its competitors.  By engaging in
this form of discriminatory conduct, Telmex could stifle competition along the U.S.-Mexico
route.  These commitments help assure that Telmex will no longer be able to favor its own long
distance affiliate over its competitors in the provisioning of circuits.  In addition, these
commitments should allow for increased competition on the U.S.-Mexican route, leading in turn
to lower prices for U.S. and Mexican consumers.  Consequently, we find that Telmex's
agreement with Avantel to offer circuit provisioning in a consistent, timely and
nondiscriminatory fashion to be an indication that Mexico affords reasonable and
nondiscriminatory charges, terms and conditions for the provision of resale and facilities-based
services in Mexico.  We also find that these commitments are a positive public interest factor
weighing in favor of grant of this application.

          2.  58 percent settlement rate surcharge

     77.  Petitioners state that under Mexico's domestic interconnection regulations,
Telmex's competitors must pay Telmex 58 percent of the settlement rate (or approximately $0.23
per minute) on all inbound international traffic that is terminated on the Telmex network, in
addition to domestic interconnection charges of approximately $0.025 per minute.  Petitioners
argue that this charge is a discriminatory inbound access charge that subsidizes Telmex's
operations at the expense of its competitors.  They further argue that this charge restricts the
ability of the new carriers to compete with Telmex in the provision of international services. 
Petitioners argue that any grant of authority to TSC should be conditioned on the elimination of
the 58 percent surcharge.

     78.  TSC disagrees that Telmex's interconnection charges are unreasonable or
discriminatory.  TSC explains that Mexican regulators, after working closely with all of the
Mexican carriers, determined in 1996 that the per-minute interconnection charge generally
should fall within the $0.05-$0.055 range.  Accordingly, the SCT decided in its April 1996 Rate
Order to allocate that amount between $0.023-$0.024 per minute interconnection charge and
an amount equal to 58 percent of the per minute settlement payment that Mexican carriers
receive for terminating international traffic in Mexico.  TSC states that the two charges result in a
weighted average interconnection charge of $0.0563 per minute, which is more than the Mexican
competitors sought but less than Telmex sought.  In its commitment letter, Telmex explains
that the interconnection charges are scheduled to decrease to $0.041 in 1998 and $0.031 in 1999. 
Telmex asserts that the level of the 58 percent component will rapidly decrease because as
settlement payments decrease, the 58 percent payment will also decrease.  TSC also points out
that Telmex Long Distance must also pay the 58 percent charge, as well as other interconnection
charges, to Telmex Local or to any other local service concessionaire to interconnect
international switched calls to a local network.

     79.  We share petitioners' concerns that the 58 percent surcharge discriminates against
the new facilities-based international carriers operating in Mexico.  In essence, it results in
Telmex paying itself 58 percent of the settlement rate for each minute of inbound international
traffic, while competitors must turn over that 58 percent to Telmex.  The result is a
disproportionate percentage of interconnection charges being recovered from international traffic,
which has a discriminatory impact on Telmex's competitors providing international services.  We
note, however, that the 1996 Rate Order imposes the 58 percent surcharge only for 1997 and
1998, and requires the surcharge to be paid to any local carrier terminating an international call
(not just Telmex).  In addition, as Telmex observes, the level of the 58 percent component will
decrease as settlement payments decrease during 1998, and we expect it to be phased out by
January 1, 1999.

     80.  Under these circumstances, although we find this measure to have a
discriminatory impact on carriers providing international service on the U.S.-Mexico route, our
expectation that it will be phased out and soon eliminated allows us to find that grant of TSC's
application is in the public interest.  In the event that Mexico does not does not eliminate the 58
percent surcharge in the near future, we reserve the right to revisit this issue to determine whether
TSC's authorization should be revoked or, alternatively, whether TSC's authorization should be
subject to additional conditions and/or safeguards.

          3.  Methodology for calculating proportionate return

     81.  Petitioners have criticized the method by which proportionate return obligations
are calculated among the various carriers on the U.S.-Mexican route under the current operating
agreements.  More specifically, MCI alleges that current operating agreements between U.S.
and Mexican carriers require the carriers to adjust the percentage of return traffic every four
months ("4/4/4 methodology") while Mexican regulations require such an adjustment among
competing Mexican carriers on a monthly basis ("1/1/1 methodology").  MCI and AT&T allege
that Telmex has refused to amend its operating agreements with U.S. carriers to incorporate the
1/1/1 methodology and, as a result, is able to discriminate against the new Mexican entrants. 
This discrimination allegedly occurs through Telmex's ability to delay apportioning return traffic
to the new carriers, resulting in losses in traffic and revenue for the new carriers.  The petitioners
raised this issue with TSC at the June 17, 1997, status conference.  

     82.  In response, TSC explains that the current operating agreements between Telmex
and its U.S. correspondents require that, in order to allocate traffic between U.S. carrier switches
and Mexican carrier switches, the carriers must adjust each other's percentage of return traffic
once every four months.  At the same time, Mexican regulations require Mexican carriers to
readjust incoming call attempts among each other on a monthly basis.  In its letter following the
status conference, TSC stated that Telmex is willing to amend its agreements with its U.S.
correspondents to establish a 1/1/1 methodology for the distribution of traffic.  As for complying
with the 1/1/1 methodology within Mexico, TSC states that Cofetel is currently in the process of
clarifying the procedures and methodology for carriers to implement 1/1/1.  Once Cofetel makes
a final determination, TSC states that Telmex will implement the 1/1/1 methodology.  Finally,
in its commitment letter, Telmex states that it is willing to amend its operating agreements with
U.S. carriers to implement the 1/1/1 methodology.  Telmex also agrees to comply with the
Mexican proportionate return regulations under which Mexican carriers must readjust incoming
southbound call attempts among each other on a monthly basis.

     83.  We find that Telmex's offer to amend its operating agreements with U.S. carriers
to implement a more effective calculation of proportionate return obligations should help foster
greater competition on the U.S.-Mexican route.  In addition, Telmex's commitment to comply
with Mexican proportionate return regulations should also enable the new Mexican competitors
to compete more effectively.  Combined, these measures should benefit U.S. and Mexican
consumers through the lower prices resulting from greater competition along the U.S.-Mexico
route.  We find that these commitments are a positive public interest factor weighing in favor of
grant of this application.  To ensure the realization of these public interest benefits, we
specifically condition the grant of this application on a demonstration by TSC that Telmex has
offered to amend its operating agreements with U.S. carriers to implement the 1/1/1
methodology.  TSC's authorization will not be effective until TSC makes this demonstration.  We
do not find it necessary to impose any specific conditions concerning Telmex compliance with
Mexican proportionate return regulations.  We have no reason to doubt that the Mexican
regulators will ensure that Telmex complies with its commitment to abide by these Mexican
regulations.

          4.  Mexican regulation of accounting rate negotiations 

     84.  According to petitioners, Mexican international interconnection regulations
require that only the carrier that holds the largest outgoing long-distance market share during the
past six months with a specific country shall be the one to negotiate accounting rates with
correspondents from that country.  In addition, all international carriers in Mexico are required to
maintain the same accounting rates.  Thus, petitioners state that these regulations effectively
permit only Telmex to negotiate accounting rates with foreign correspondents.  As a result,
petitioners argue that the new competitors in Mexico cannot exert any pressure on Telmex to
reduce the accounting rate on the U.S.-Mexico route.  Instead, these regulations prevent U.S.
carriers and the new Mexican competitors from providing effective competition on the U.S.-
Mexican route, while assuring Telmex the ability to continue to receive above-cost accounting
rates.  Petitioners conclude that the existence of these rules prohibit a public interest finding that
Telmex should be permitted to enter the U.S. market.

     85.  TSC does not disagree with petitioners' interpretations of these Mexican
regulations.  Instead, TSC asserts that the requirement that only the carrier holding the largest
share of the international long distance market may negotiate accounting rates is "nothing more
than a reflection of reality."  TSC argues that in the United States, AT&T, as the carrier with
the largest share of U.S.-Mexico traffic, is effectively the sole negotiator for all U.S. carriers. 
TSC further asserts that the Mexican requirement that all other carriers maintain the same
accounting rates is no different than the nondiscrimination requirements that apply under the
Commission's International Settlements Policy.  

     86.  In response, AT&T states that there is no comparison between the roles of Telmex
and AT&T in accounting rate negotiations.  First, AT&T points out that all U.S. carriers can and
do negotiate accounting rates independently.  Second, although the nondiscrimination
requirements of the Commission's International Settlements Policy allow U.S. carriers to take
advantage of rates negotiated by other carriers, any U.S. carrier may always seek to negotiate a
more favorable rate.  In contrast, in Mexico, only the carrier with the largest amount of traffic is
permitted to negotiate with U.S. correspondents.

     87.  We agree with petitioners that these Mexican regulations inhibit competition on
the U.S.-Mexico route.  If all competitors were authorized to negotiate accounting rates
independently, it is likely that market forces would drive settlement rates closer to the actual cost
of terminating traffic.  We find that the inability of carriers other than Telmex to negotiate
accounting rates impacts negatively on the development of competition on the U.S.-Mexican
route.  We would prefer that the regulations be modified so as to allow all carriers to negotiate
their own accounting rates (subject to nondiscrimination requirements).  In the absence of
Telmex's commitments to lower its settlement rates with U.S. correspondents, we would find that
these regulations weighed against grant of the TSC application.  Because Telmex has committed
to reducing its settlement rates to the benchmark rate by January 1, 2000, and because
modification of Mexican regulations is beyond Telmex's control, we find that, on balance, these
regulations do not prevent us from finding that the grant of the TSC authorization is in the public
interest.  
     
          5.  Cross-border service agreements

     88.  Petitioners argue that Telmex discriminates against unaffiliated carriers through
its refusal to enter into certain cross-border service agreements that it now has with its affiliate
Sprint.  More specifically, MCI asserts that Telmex has discriminated in favor of Sprint by
giving it the exclusive ability to offer its customers services that other U.S. carriers are not
allowed to offer.  For example, MCI states that it has been unsuccessful in obtaining from
Telmex the same "Paid-800" service agreement Telmex has with Sprint to provide access to U.S.
toll-free numbers from points in Mexico.  In addition, MCI states that it has tried unsuccessfully
to enter into the same "one-stop shopping" agreement for correspondent, cross-border private line
services with Telmex, despite the fact that Telmex has such an agreement with Sprint.

     89.  At the July 16, 1997, status conference, the parties discussed the petitioners'
allegations concerning Telmex's refusal to enter into the same Paid-800 and one-stop-shopping
agreements that Telmex now has with Sprint.  In TSC's follow-up letter to the status conference,
TSC states first that neither of the agreements that Telmex has with Sprint is exclusive.  TSC
also asserts that Telmex has not discriminated against MCI and AT&T by entering into these
agreements with Sprint (and not AT&T and MCI) because "those carriers are free to enter into
similar agreements with their own Mexican affiliates, Alestra and Avantel."  Nevertheless,
TSC committed, in its follow-up letter, to offer AT&T and MCI these same service agreements
on terms and conditions identical to those offered to Sprint.  In response, MCI states that it has
been negotiating final agreements with Telmex but the process has been slow.  MCI requests that
any grant of operating authority to TSC be conditioned on MCI and Telmex entering into binding
agreements for one-stop-shopping and Paid-800 services.

     90.  We disagree with TSC that Telmex has not discriminated against unaffiliated U.S.
carriers through its refusal to enter into similar service agreements with unaffiliated carriers that
it has with Sprint.  Although the agreements with Sprint may not have been explicitly exclusive,
Telmex's apparent refusal to enter into these agreements with AT&T and MCI makes it appear
that Telmex granted Sprint certain "special concessions," in violation of our rules.  In its
commitment letter, Telmex states that it either has made or will make available to all U.S.
carriers Paid-800 and one-stop shopping agreements on the same terms and conditions as it has
made such agreements available to Sprint.  Moreover, Telmex acknowledges that, consistent
with our no special concessions rule, Telmex is required to make these agreements available to
U.S. carriers on a nondiscriminatory basis.   

     91.  We find this commitment to be a public interest factor favoring grant of this
application.  To ensure the realization of these public interest benefits, we specifically condition
the grant of the TSC application on a demonstration by TSC that Telmex has offered to other
carriers with which it has operating agreements the identical Paid-800 and one-stop shopping
agreements that it has entered into with Sprint.  TSC's authorization will not be effective until
TSC has made this demonstration.  

          6.  City of Laredo

     92.  The City of Laredo (Laredo) filed a petition to condition any TSC authorization to
prohibit Telmex/Sprint from engaging in anticompetitive conduct as proscribed by applicable
U.S. law or policy.  Laredo indicates that such a condition is required in light of alleged
anticompetitive conduct by Telmex.  Specifically, Laredo states that it owns the U.S.-half of the
Juarez-Lincoln bridge which connects Laredo, Texas to Mexico.  Laredo states that it owns six
telecommunications conduits that it leases to carriers, including AT&T's affiliate, Alestra. 
According to Laredo, in early March 1997, Alestra notified Laredo that Telmex employees had
cut Alestra's cable running through the Juarez-Lincoln conduits and welded closed access to the
conduits on the Mexican side of the river.  Laredo further states that, in order to continue
operating these circuits, Alestra was forced to fabricate a temporary installation to restore its
telephone circuits.  Laredo reported this incident to the FCC and spoke with Telmex's
Washington, DC counsel.  Laredo states that on March 27, 1997, Telmex's counsel assured
Laredo that Telmex would not again cut a competitor's cable without first receiving authorization
from Cofetel.  Nevertheless, Laredo argues that absent a conditional grant of TSC's application,
Telmex will continue to be able to engage in this form of anticompetitive behavior in the
future.

     93.  In response, TSC indicates that Telmex has admitted that its representative cut an
Alestra cable.  TSC also states, however, that Telmex took this action because it found that
Alestra had installed its cable illegally and damaged Telmex's property.  TSC further indicates
that Telmex has reinstalled Alestra's cable and implemented a stringent procedure to ensure that
Telmex does not cut any competitor's cable in the future without proper authorization from a
court or competent regulatory authority.  TSC also argues that the proper forum for Laredo
(and other interested parties) to raise these complaints is before the Mexican regulatory bodies. 
Finally, on August 11, 1997, TSC submitted to the FCC copies of a circular signed by Telmex's
Director General, Jaime Chico Pardo, and distributed to all directors and divisional subdirectors,
relating to Laredo's concerns.  Among other things, the circular expressly prohibits any cutting of
competing carriers' cables and charges Telmex's Subdirector of Legal and Regulatory Affairs
with the responsibility for carrying out this policy.

     94.  From the record, it appears that Telmex engaged in anticompetitive conduct by
cutting of Alestra's cable.  Although we do not condone such behavior, even if taken in response
to an allegedly illegal act by a competitor, it appears that Telmex has taken sufficient measures to
ensure that such actions are not taken in the future.  In addition, we have no reason to doubt that
the SCT and Cofetel are better able to address the merits of Alestra's complaint.  Consequently,
we do not find it necessary to impose any additional conditions that would specifically address
this incident.  

                        IV.  CONCLUSION

     95.  We conclude that the public interest supports grant of TSC's application to
provide international switched resale services to all points, including Mexico, subject to the
conditions described above.  We find that U.S. carriers have effective competitive opportunities
to provide international services in Mexico.  Indeed, the record indicates that Telmex's
competitors have made substantial gains in the market in a short period of time, having captured
up to 30 percent of the markets in areas where presubscription has been introduced in less than a
year.  Although Mexico does not currently offer non-facilities-based U.S. carriers the ability to
provide switched resale services, we expect that U.S. carriers will be able to offer such services
in the near future.  Competitive safeguards and an independent regulatory framework provide
adequate checks on the potential for abuse of market power by Telmex.  Finally, TSC's entry will
provide additional competition in the U.S. international service market, particularly on the U.S.-
Mexico route.  More specifically, TSC's entry should significantly lower the prices that U.S.
consumers pay for calls from the United States to Mexico.

     96.  Other commitments made by Telmex during the course of this proceeding provide
additional support for finding that grant of TSC's application is in the public interest. 
Specifically, Telmex's commitment to reduce its settlement rates with U.S. carriers to the
applicable benchmark rate of 19 cents by January 1, 2000 provides significant public interest
benefits.  That commitment, in conjunction with Telmex's commitment to significant reductions
in settlement rates during the years 1998 and 1999, should bring immediate benefits to U.S.
consumers in the form of lower prices for calls on the U.S.-Mexico route.  In addition, Telmex's
recent private circuit and private line provisioning agreement with Avantel, and its commitment
to offer the same agreement to all other Mexican carriers, are in the public interest.  Telmex's
commitment to amend its operating agreements with U.S. carriers to implement a more effective
calculation of proportionate return obligations should help foster greater competition on the U.S.-
Mexican route.  Also, Telmex's commitment to distribute southbound traffic according to the
1/1/1 methodology required under Mexican regulation should enable the new Mexican
competitors to compete more effectively, which again should help bring prices that U.S.
consumers pay to a more competitive level.  Finally, Telmex's commitment to offer all U.S.
carriers substantially the same cross-border service agreements that it has entered into with
Sprint should further promote competition on the U.S.-Mexico route.  
               
                      V.  ORDERING CLAUSES

     97.  Accordingly, IT IS HEREBY CERTIFIED that the present and future public
interest, convenience and necessity require a grant of the present application and IT IS
ORDERED that application File No. ITC 97-127 is granted, and TSC is authorized to provide
international switched resale services between the United States and all international points,
including Mexico.

     98.  IT IS FURTHER ORDERED that TSC shall be regulated as a dominant carrier on
the U.S.-Mexico route pursuant to Section 63.10 of the Commission's rules, 47 C.F.R.  63.10,
and TSC shall comply with the requirements of paragraph (c) of that section.

     99.  IT IS FURTHER ORDERED that grant of this authorization will be conditioned
on Telmex complying with its October 10, 1997, agreement with Avantel concerning private
circuit and private line provisioning (attached to TSC's commitment letter).  IT IS FURTHER
ORDERED that this authorization will be conditioned on Telmex offering similar agreements to
other Mexican competitors.

     100. IT IS FURTHER ORDERED that grant of this authorization WILL BE
EFFECTIVE after TSC demonstrates that Telmex has offered to amend its operating agreements
with U.S. carriers to implement the 1/1/1 proportionate return methodology for the redistribution
of southbound traffic.  

     101. IT IS FURTHER ORDERED that grant of this authorization WILL BE
EFFECTIVE after TSC demonstrates that Telmex has offered other U.S. carriers the Paid-800
and one-stop shopping agreements on the same terms and conditions as it has made such
agreements available to Sprint.

     102. IT IS FURTHER ORDERED that grant of this authorization is conditioned on
TSC not offering its service at an average price that is below the average price at which TSC
obtains those services from underlying carriers. 

     103. IT IS FURTHER ORDERED that we may impose additional conditions or
safeguards on TSC's authorization if we find TSC is able to distort competition in the U.S.
market.

     104. IT IS FURTHER ORDERED that TSC will be subject to all applicable rules
adopted in the Commission's Foreign Participation Proceeding, IB Docket No. 97-142.  

     105. IT IS FURTHER ORDERED that grant of this authorization is conditioned upon
compliance with the reporting requirements specified under Section 43.51 of the Commission's
rules, 47 C.F.R.  43.51, by TSC and its affiliates.  IT IS FURTHER ORDERED that grant of
this authorization is conditioned upon TSC filing with the Commission copies of any contracts or
contract summaries under which any other carrier resells TSC's services.  IT IS FURTHER
ORDERED that grant of this authorization is conditioned upon TSC also filing with the
Commission copies of any contracts (or adequate summaries) that it enters into with any carrier
under which TSC resells that carrier's service.
     
     106. IT IS FURTHER ORDERED that the Petitions to Deny of AmericaTel, AT&T,
MCI and WorldCom ARE DENIED.

     107. 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 public
notice of this order (see Section 1.4(b)(2)).
     
          
                         FEDERAL COMMUNICATIONS COMMISSION


     

                         Regina M. Keeney
                         Chief, International Bureau