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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) WorldCom, Inc., Transferor ) ) and ) ) Stratos Wireless, Inc., Transferee ) File No. ISP-PDR-19981002-00011 ) (Previous File No. ITC-97-234-TC) Application for Authority, Pursuant to ) Section 214 of the Communications ) Act of 1934, as Amended, to Transfer ) Control of an Authorized International Carrier ) ORDER Adopted: August 12, 1999 Released: August 12, 1999 By the Chief, Telecommunications Division: 1. On October 2, 1998, Stratos Mobile Networks (USA), LLC (Stratos USA) filed a petition for declaratory ruling asking that the Commission remove the conditions imposed by the International Bureau's Telecommunications Division (Division) on IDB Mobile Communications, Inc. (IDB Mobile), as a condition to the Division's approval of WorldCom Inc.'s transfer of its 50 percent interest in IDB Mobile to Stratos Wireless, Inc. (Stratos Wireless). The Order approving the transfer of control and imposing the conditions on IDB Mobile noted that, as a result of the transfer, Stratos Wireless owned 50 percent of IDB Mobile's capital stock and that Teleglobe, Inc. (Teleglobe), owned 30 percent of Stratos Wireless' capital stock. Thus, the transfer of control resulted in an affiliation between Teleglobe and IDB Mobile through Telegobe's indirect ownership of 30 percent of IDB Mobile's capital stock. 1. The Division noted that, with respect to IDB Mobile's provision of mobile satellite services (MSS), IDB Mobile's affiliation with a foreign carrier possessing market power would not necessarily present it with an opportunity to discriminate. The Division noted that, unlike with international message telephone service (IMTS), with MSS, distribution in foreign markets will not necessarily be accomplished through a monopoly carrier. The Division referred to an authorization granted to Cruisephone in which the Bureau stated that the company's affiliation with the monopoly carrier did not provide it with an opportunity to discriminate against other U.S. carriers because it was not using any of the facilities of the foreign monopoly carrier. The requirements the Division imposed on IDB Mobile were, therefore, with respect to any non-MSS services it provides. The Division required that IDB Mobile: (1) file with the Commission any written or oral agreements entered into with Teleglobe relating to the routing of U.S. traffic through Teleglobe's facilities; and (2) purchase or obtain Teleglobe's services at published rates. 2. In its petition for declaratory ruling, Stratos USA asserts that, because it currently holds the Commission authorizations formerly held by IDB Mobile, pursuant to a pro forma transfer of control, the conditions imposed on IDB Mobile are now binding on Stratos USA. Stratos USA argues that because, on September 11, 1998, Stratos Global Corporation (Stratos Global), the parent company of Stratos Wireless, repurchased the interest of Teleglobe in Stratos Wireless (with Stratos Global acquiring 100 percent ownership of its previously non-wholly owned subsidiary), Stratos USA and Teleglobe are no longer affiliated and there is no longer any basis for the conditions imposed on IDB Mobile. 3. Since the Division imposed the conditions on IDB Mobile, there has been a change in the relationship between Stratos USA/IDB Mobile and Teleglobe. Because Teleglobe is no longer affiliated with Stratos USA, we are not concerned about anticompetitive conduct based on that affiliation. The Division previously has acknowledged this change with respect to the conditions that are the subject of Stratos USA's petition for declaratory ruling. Specifically, the Division has stated that, because Teleglobe is no longer a shareholder in Stratos Wireless, these conditions may no longer be necessary, and noted that Stratos Wireless may seek review of the conditions, if it chooses. With the instant petition for declaratory ruling, Stratos USA has sought review of these conditions. We conclude that the requirements that IDB Mobile, with respect to any non-MSS services it provides, must file with the Commission any written or oral agreements entered into with Teleglobe relating to the routing of U.S. traffic through Teleglobe's facilities, and must purchase or obtain Teleglobe's services at published rates, are no longer necessary and we remove them. 4. We note that, notwithstanding our decision to remove these restrictions with respect to Stratos USA's relationship with Teleglobe, Stratos USA remains dominant on the U.S.-Canada route. Thus, it must file advance notice of tariffs, maintain a limited form of structural separation, submit quarterly traffic and revenue reports, provide a quarterly report summarizing the provisioning and maintenance services provided by foreign affiliates, and provide a quarterly circuit status report. As the Division noted previously with regards to Stratos USA, there are other generally applicable conditions that will prevent anticompetitive activities. For example, as a non-dominant carrier on all routes, other than Canada, Stratos will be subject to regulation under Title II of the Act. Specifically, Title II requires carriers to offer international services under rates, terms and conditions that are just, reasonable, and not unduly discriminatory (Sections 201 and 202), and Title II carriers are subject to the Commission's complaint process (Sections 206-209). Title II carriers also are required to file tariffs pursuant to our streamlined tariffing procedures (Sections 203 and 205). 5. Accordingly, IT IS ORDERED that Stratos Mobile Networks (USA), LLC 's request, File No. ISP-PDR-19981002-00011 (previous File No. ITC-97-234-TC), IS GRANTED. 6. IT IS FURTHER ORDERED that all conditions imposed on IDB Mobile as a result of Teleglobe's indirect ownership of 30 percent of IDB Mobile's capital stock, as specified in WorldCom/Stratos Order, 12 FCC Rcd 8340 at para. 8, are removed. 7. This Order is issued under Section 0.261 of the Commission's rules, 47 C.F.R.  0.261, and is effective upon release. Petitions for reconsideration under Section 1.106 or applications for review under Section 1.115 of the Commission's rules, 47 C.F.R.  1.106, 1.115, may be filed within 30 days of the date of public notice of this order (see 47 C.F.R.  1.4(b)(2)). FEDERAL COMMUNICATIONS COMMISSION Rebecca Arbogast Chief, Telecommunications Division International Bureau