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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ****************************************************** DA 97-699 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) PrimeCo Personal Communications, L.P. ) ) Application for Authorization Pursuant to ) ITC-96-635 Section 214 of the Communications Act of ) 1934, as Amended, to Resell International ) Communications Services to Gibraltar, ) Lithuania, and Russia ) ORDER, AUTHORIZATION AND CERTIFICATE Adopted: April 8, 1997 Released: April 10, 1997 By the Chief, Telecommunications Division I. Introduction 1. PrimeCo Personal Communications, L.P. (PrimeCo), on behalf of itself and the Texas MTA Partnerships (collectively, the Applicant), requests authority pursuant to Section 214 of the Communications Act of 1934, to resell international switched telecommunications services originating from the Applicant's service areas and terminating in Gibraltar, Lithuania, and Russia. The Applicant seeks classification as a non-dominant reseller of international switched services on the requested routes. No party opposed the Applicant's Section 214 application. 2. We find that a grant of this application will serve the public interest under Section 214 of the Act. We also find that the Applicant's provision of resold switched services on the U.S.- Gibraltar, U.S.-Lithuania, and U.S.-Russia routes should be subject to non-dominant carrier regulation. II. Background 3. PrimeCo, a Delaware corporation, holds broadband PCS licenses in eight Major Trading Area (MTA) markets. PrimeCo is indirectly owned by AirTouch Communications, Inc., Bell Atlantic Corporation, NYNEX Corporation, and U S WEST, Inc. Because Bell Atlantic Corporation, NYNEX Corporation, and U S WEST, Inc. each own more than 10 percent of PrimeCo, the Applicant is under common ownership, and thereby is affiliated with, three Bell Operating Companies (BOCs): the Bell Atlantic Telephone Companies, the NYNEX Telephone Companies, and U S WEST Communications, Inc. The Texas MTA Partnerships consist of three broadband PCS licensees that are organized under the laws of Delaware and provide service in Texas. PrimeCo controls and manages the Texas MTA Partnerships. 4. We previously granted a streamlined Section 214 application filed by PrimeCo, on behalf of itself and the Texas MTA Partnerships, for authority to resell switched services to all international points except Gibraltar, Lithuania, and Russia. The instant application is not subject to streamlined processing because such processing is not available to an applicant seeking authority to provide service to a market in which it is affiliated with a foreign carrier and the Commission has not yet made a determination as to whether that foreign carrier possesses market power in that destination market. III. Discussion 5. The Applicant maintains that a grant of the instant application will allow its subscribers to use their wireless telephones to complete calls to Gibraltar, Lithuania, and Russia, thereby "enhancing competition . . . by providing customers with additional carrier choices." Because the Applicant is a BOC affiliate, we must initially determine whether service restrictions imposed on BOCs and their affiliates prevent the Applicant from providing the requested service. Next, we consider whether the Applicant should be subject to non- dominant carrier regulation in the provision of resold switched services along the U.S.-Gibraltar, U.S.-Lithuania, and U.S.-Russia routes. A. Provision of Incidental InterLATA Services under Section 271(b)(3) 6. The Telecommunications Act of 1996 (1996 Act) permits a BOC or a BOC affiliate to "provide incidental interLATA [i.e., local access and transport area] services . . . originating in any State[.]" The 1996 Act defines "incidental interLATA services" to include "the interLATA provision by a Bell operating company or its affiliate . . . of commercial mobile services in accordance with section 332(c) of th[e] Act[.]" 7. The Applicant states that, "[a]s a broadband PCS licensee, . . . [it] provides commercial mobile services in accordance with section 332(c) of the [Act.]" The Applicant certifies, therefore, that the "authority it seeks in the instant application is associated solely with its provision of incidental interLATA services, as that term is defined in Section 271(g) of the Act." We find that the resale of international switched services on the U.S.-Gibraltar, U.S.-Lithuania, and U.S.-Russia routes by the Applicant to its commercial mobile services customers is permitted under Section 271(b)(3) of the Act. We also find that a grant of the instant application will serve the public interest under Section 214 of the Act by facilitating the efficient and rapid provision of international services. B. Foreign Carrier Affiliations 8. The Applicant certifies that it is affiliated with foreign carriers in the destination countries under Section 63.18(h)(1) of the Commission's rules. The Applicant maintains that it is presumptively non-dominant on these three routes despite these affiliations. 9. The Commission regulates U.S. international carriers as dominant on routes where an affiliated foreign carrier has the ability to discriminate in favor of its U.S. affiliate through control of bottleneck services or facilities in the destination market. Under this framework, a U.S. international carrier that serves a destination market solely through the resale of the switched services of an unaffiliated U.S. facilities-based carrier is presumptively non- dominant for that route -- "regardless of any foreign affiliations." The Commission has found that the resale of an unaffiliated U.S. facilities-based carrier's switched services "presents no substantial possibility of anticompetitive effects in the U.S. international service market, because the reseller's foreign affiliate is negotiating the terms and conditions of access to the destination market with an unaffiliated carrier on the U.S. end." 10. The Applicant certifies that it is affiliated within the meaning of Section 63.18(h)(1) of the Commission's rules with Gibraltar NYNEX Communications Ltd. (GNCL). GNCL is fifty percent owned by NYNEX Network Systems Company and fifty percent owned by the Government of Gibraltar. GNCL is the only carrier authorized to provide domestic wireline telecommunications services in Gibraltar and telecommunications services between Gibraltar and Spain. The Applicant states that GNCL must terminate international calls at a point of interconnection with Gibraltar Telecommunications International Ltd. (Gibtel), which presently is Gibraltar's only carrier authorized to handle international switched voice traffic between Gibraltar and foreign countries other than Spain. The Applicant maintains that Gibtel enters into all contractual operating arrangements with U.S. international carriers for the transmission of traffic between the United States and Gibraltar. The Applicant pledges to serve the U.S.-Gibraltar route only through the resale of unaffiliated, non-dominant U.S. carrier services. "NYNEX and PrimeCo have no ability to influence or affect the operating decisions of Gibtel," the Applicant states, "and therefore, lack the ability to discriminate against unaffiliated U.S. international carriers." 11. The Applicant also certifies that it is affiliated within the meaning of Section 63.18(h)(1) with Lintel, "an international gateway operator in Lithuania." The Applicant states that "Lintel does not control inter-city or local access facilities in Lithuania, and does not provide resale service in Lithuania." The Applicant maintains that it "lacks the ability to directly or indirectly influence Lintel's interconnection and related interconnection agreements with international carriers, and U S WEST has neither participated in nor influenced such agreements." 12. The Applicant also certifies that it is affiliated within the meaning of Section 63.18(h)(1) with Westelcom, Delta Telecom, BaykalWestcom, AKOS, UralWestcom, Nizhegorodskaya Cellular Communications (NCC), Moscow Cellular Communications (MCC), and Dontelecom in Russia. According to the Applicant, Westelcom is "a joint venture which operates three international gateway switches (and extensions thereof) in Russia." The Applicant also states that the other carriers, Delta Telecom, BaykalWestcom, AKOS, UralWestcom, NCC, MCC, and Dontelecom, provide cellular services in various parts of Russia. BaykalWestcom also provides intercity exchange service in Irkuktsk. The Applicant avers that BaykalWestcom, AKOS, UralWestcom, NCC, and Dontelecom are "relatively" new market entrants, and that they each have less than 2000 subscribers, with the exception of AKOS and UralWestcom, which have fewer than 4000 and 1000 subscribers, respectively. The Applicant states that Westelcom, Delta Telecom, BaykalWestcom, AKOS, UralWestcom, NCC, MCC, and Dontelecom "hold[] no ownership interest in international facilities and lack[] authority to route international traffic or otherwise negotiate the terms of interconnection agreements with U.S. international carriers." The Applicant avers that it will serve the U.S.-Russia route only through the resale of unaffiliated, non-dominant U.S. carrier services. 13. The Applicant states that the Texas MTA Partnerships have no additional foreign carrier affiliations. 14. Under the framework adopted in International Services and Section 63.10(a)(4) of the Commission's rules, we first find that, because the Applicant will provide services on these affiliated routes solely through the resale of unaffiliated U.S. facilities- based carriers' switched services, it is entitled to a presumption that it be classified as non-dominant on these routes. Second, we find that the Applicant's foreign carrier affiliations do not give us any reason to overcome this presumption. No party filed an opposition to the Applicant's Section 214 application or requests that the Applicant be classified as a dominant carrier. We therefore find no basis at this time to regulate the Applicant as a dominant carrier in the resale of international switched services on the U.S.-Gibraltar, U.S.-Lithuania, and U.S.-Russia routes. 15. As a non-dominant reseller of international switched services, the Applicant will be allowed to file tariffs on no less than one days' notice, without economic or cost support, and the tariffs will be presumed lawful. It also will be subject to the Section 214 requirements of non-dominant U.S. international carriers. 16. As a non-dominant carrier, the Applicant 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). Non-dominant U.S. international switched resellers also are subject to the requirements of Sections 43.51, 43.61, 63.14 and 63.19 of the Commission's rules. III. Ordering Clauses 17. Upon consideration of the application and in view of the foregoing, IT IS HEREBY CERTIFIED that the present and future public convenience and necessity require the resale of international switched services by PrimeCo Personal Communications, L.P. (PrimeCo) and the Dallas MTA, L.P., the Houston MTA, L.P., and the San Antonio MTA, L.P. (collectively, the Texas MTA Partnerships). 18. Accordingly, IT IS HEREBY ORDERED that application File No. ITC-96-635 filed by PrimeCo IS GRANTED and PrimeCo and the Texas MTA Partnerships are authorized to resell on a non-dominant carrier basis international switched services of unaffiliated U.S. international carriers for the provision of international switched services originating from U.S. points served by PrimeCo and the Texas MTA Partnerships and terminating in Gibraltar, Lithuania, and Russia. 19. IT IS FURTHER ORDERED that PrimeCo and the Texas MTA Partnerships shall comply with the requirements specified in Section 63.21 of the Commission's rules, 47 C.F.R.  63.21. 20. This order is issued under Section 0.261 of the Commission's rules and is effective upon adoption. Petitions for reconsideration under Section 1.106 or applications for review under Section 1.115 of the Commission's rules may be filed within 30 days of the date of the public notice of this order (see Section 1.4(b)(2)). FEDERAL COMMUNICATIONS COMMISSION Diane J. Cornell Chief, Telecommunications Division International Bureau