PUBLIC NOTICE Federal Communications Commission 1919 M St., N.W. Washington, D.C. 20554 DA 97-1075 May 16, 1997 EXPLANATION OF FILING PROCEDURES FOR OPERATING AND ACCOUNTING RATE AGREEMENTS BETWEEN U.S. AND FOREIGN CARRIERS The International Bureau has received numerous inquiries as to how the implementation of the recently adopted Fourth Report and Order, CC Docket 90-337 (Phase II) concerning the International Settlements Policy affects existing and future filing requirements. This public notice is intended to give carriers guidance in deciding what agreements need to be filed and in what manner. All operating agreements, notifications, modifications and petitions for a declaratory ruling should be filed with the Acting Secretary at the above address. Below is an explanation of the filing procedures for operating and accounting rate agreements between U.S. and foreign carriers.  Operating Agreement: Under Section 43.51 of the Commission's rules, 47 C.F.R.  43.51, all U.S. carriers are required to file with the Commission any operating agreements (International Telecommunications Service Agreements) they have with foreign carriers. The operating agreement should include all terms, conditions, provisions, exclusions and obligations of the contractual arrangement. Any other terms subject to confidential treatment should be redacted in the agreement that is submitted for public inspection. A non-redacted version of the operating agreement containing the confidential information should be filed separately with a request for confidential treatment pursuant to Section 0.457(d) of the Commission's Rules, 47 C.F. R.  0.457(d). If an operating agreement also specifies a settlement arrangement and division of revenue, the carrier must also file either a notification, modification or petition for declaratory ruling as outlined below.  Notification Letter: A carrier must file a notification letter pursuant to Section 64.1001(b) of the Commission's rules, 47 C.F.R.  64.1001(b), anytime it enters into an accounting rate arrangement and the proposed accounting rate is lower than any other carrier's rate in effect to the same international point. For both new and existing carriers, a notification letter is appropriate if it covers a prospective accounting rate arrangement that proposes a simple reduction with no other changes in the terms and conditions of the other existing carrier's agreement. A notification letter may also be filed when it concerns a retroactive change that matches a notification letter filed by another carrier. A notification letter becomes effective the day it is filed with the Commission, provided that it satisfies the necessary criteria listed in the rule.  Modification: A carrier must file a modification pursuant to Section 64.1001(d) of the Commission's rules, 47 C.F.R.  64.1001(d), anytime it enters into an accounting rate arrangement and the proposed accounting rate does not satisfy the criteria for a notification letter or a petition for a declaratory ruling. For example, a modification must be filed if the accounting rate is either the same or higher than the rate in effect, or it changes the terms and conditions of an existing carrier's agreement. In addition, carriers with arrangements already in effect must file a modification for any proposal that is not prospective, is not a simple reduction, or changes the terms and conditions of the agreement. If there are no objections filed and the Commission finds that the modification satisfies the requirements listed in Section 64.1001, the modification will go into effect 21 days after being filed with the Commission.  Petition For a Declaratory Ruling: Under Section 64.1002 of the Commission's rules, 47 C.F.R.  64.1002, a carrier must file a petition for a declaratory ruling when the proposed settlement arrangement departs from the Commission's International Settlements Policy. The petition must contain the following information: (a) A demonstration that either the effective competitive opportunities test (ECO) in Section 63.18(h)(6)(i), 47 C.F.R.  63.18(h)(6)(i), is or has been satisfied on the route covered by the alternative settlement arrangement; or that the alternative arrangement is in the public interest by demonstrating that deviation from the ISP will promote market-oriented pricing and competition, while precluding abuse of market power by the foreign correspondent. (b) Certification as to whether 25 percent of the outbound or inbound traffic corresponding to the alternative arrangement is affected. (c) Certification as to whether the parties are affiliated, or involved in a non-equity joint venture affecting the provision of basic services on the corresponding route. (d) If the alternative arrangement affects more than 25 percent of outbound or inbound traffic, or the parties are affiliates or are engaged in a non-equity joint venture, then they must provide a copy of the alternative settlement arrangement. (e) If the alternative arrangement does not affect more than 25 percent of outbound or inbound traffic, or the parties are not affiliates nor are engaged in a non-equity joint venture, then a summary of the terms and conditions of the agreement must be provided. (f) A copy of the petition must be provided to all carriers providing similar service with the foreign administration identified in the petition on the same day it is filed, in the same manner as modifications and notification letters. Once the Commission finds that the petition is complete, it will be placed on public notice and interested parties may file a formal opposition within 21 days of the date of public notice. The petition will be deemed granted 21 days after the public notice is released, and the carrier may implement the alternative settlement arrangement on the 28th day, unless the application is formally opposed or the Commission finds that implementation of the proposed alternative settlement arrangement must await formal action on the petition. For further information, contact Ken Stanley, Telecommunications Division, International Bureau, (202) 418-1486 or Natalie Rodriguez, (202) 418-1624.