******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. 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 ) INTERICE LTD. ) ) Applications for authority, pursuant to Section 214 of ) File No. ITC-214-1990225-00118 the Communications Act of 1934, as amended, to ) provide switched services using international private ) lines interconnected with the public switched network ) at one or both ends between the United States and ) Iceland ) ORDER AND AUTHORIZATION Adopted: May 13, 1999 Released: May 17, 1999 By the Chief, Telecommunications Division: I. INTRODUCTION 1. With this order, we add Iceland to the list of countries for which U.S. carriers may provide switched, basic telecommunications services over their authorized international private lines ("ISR"). We find that U.S. carriers' settlement rate for Iceland is at or below the Commission's benchmark settlement rate. We therefore conclude that the public interest in cost-based telecommunications services would be served by permitting the above-referenced applicant, and other authorized private line carriers, to interconnect their private lines between the United States and Iceland, a World Trade Organization Member country, for the provision of switched, basic services. Our action today will permit U.S. carriers to route traffic between the United States and Iceland outside the traditional settlements system, enabling them to offer U.S. international service at reduced rates. We expect that such activity will, in turn, exert increased pressure to lower settlement rates further and reduce consumer prices. II. BACKGROUND 2. InterIce Ltd. (InterIce) filed an application requesting Section 214 authority to provide switched, basic telecommunications services using their authorized international private lines between the United States and Iceland. We placed InterIce's application on public notice, and no party opposed it or submitted comments. III. DISCUSSION 3. InterIce, a wholly-owned subsidiary of Iceland Telecom Ltd. (Iceland Telecom), is an authorized facilities-based private line carrier on the route covered by its application. Iceland Telecom is owned by the Republic of Iceland. InterIce certifies that it is not affiliated with any other foreign carrier. Iceland is a Member of the World Trade Organization ("WTO"). InterIce was classified by the Commission as a dominant carrier on the U.S.-Iceland route in File No. ITC-214-19980713-00475 and has agreed to be subject to dominant carrier regulation on the U.S.-Iceland route, but reserves its right to request modification of its classification, at a later date, from dominant to non-dominant on the U.S.- Iceland route. 4. Section 63.18(e)(4) of the Commission's rules permits InterIce to use its authorized private lines for the provision of switched services between the United States and Iceland subject to the condition that the settlement rate for at least 50 percent of the settled U.S.-billed traffic between the United States and Iceland is at or below the benchmark settlement rate adopted in the Benchmarks Order. 5. The Commission's benchmark settlement rate for Iceland is 15 cents. Accounting Rate Agreements, effective January 1, 1999, between Iceland Telecom and AT&T Corp., MCI (USA), and Sprint Communications Company L.P. set an accounting rate of 0.20 SDR for services on the U.S.-Iceland route. Employing the exchange rate on January 1, 1999, InterIce states that an accounting rate of 0.20 SDR equates to an accounting rate of 29.6 cents and a settlement rate of 14.8 cents. Because AT&T Corp., MCI (USA), and Sprint Communications Company L.P. collectively handle more than 50 percent of U.S. filled traffic on the U.S.-Iceland route, we find that the settlement rate for Iceland is at or below the relevant benchmark settlement rate and that Iceland satisfies the benchmark condition for ISR. Accordingly, we grant InterIce's application and authorize it to provide switched services using its international private lines between the United States and Iceland. We will also add Iceland to the list of countries for which U.S. carriers may provide switched services over their authorized facilities-based or resold private lines. IV. ORDERING CLAUSES 6. Accordingly, IT IS ORDERED that the application of InterIce, File No. ITC-214- 19990225-00118 IS GRANTED, and InterIce is authorized, pursuant to Section 63.18(e)(4) of the Commission's Rules, 47 C.F.R.  63.18(e)(4), to provide switched, basic telecommunications services using their authorized international private lines interconnected to the public switched network at one or both ends between the United States and Iceland. 7. IT IS FURTHER ORDERED that the authority granted herein to provide switched, basic telecommunications services using international private lines between the United States and Iceland for the provision of switched services is limited to the provision of such services between the United States and Iceland. This restriction is subject to the following exceptions: (a) the applicant may engage in "switched hubbing" through the countries for which they are authorized herein consistent with Section 63.17 of the Commission's Rules, 47 C.F.R.  63.17; and (b) the applicant may provide U.S. inbound or outbound switched, basic services over their authorized private lines extending between the United States and Iceland, as well as the United Kingdom, Sweden, New Zealand, Australia, the Netherlands, Luxembourg, Norway, Denmark, France, Germany, Belgium, Austria, Switzerland, Japan, Italy, Ireland, Spain, and Hong Kong, provided the applicant is authorized to provide switched services over private lines between the United States and those countries. 8. IT IS FURTHER ORDERED that, until such time as InterIce may request modification of its classification from dominant to non-dominant on the U.S.-Iceland route in accordance with Section 63.13 of the Commission's Rules, 47 C.F.R.  63.13, InterIce will be regulated as a dominant carrier on the U.S.-Iceland route, pursuant to Section 214 of the Act, 47 U.S.C.  214, and Section 63.10 of the Commission's rules, 47 C.F.R.  63.10, and will comply with the requirements of paragraph (c) of that section. The quarterly traffic reports filed pursuant to Section 63.10(c) must include the information required by Section 43.61 of the Commission's rules, 47 C.F.R. 43.61, for "facilities resale" on the U.S.- Iceland route; 9. IT IS FURTHER ORDERED that InterIce shall comply with Section 63.21 of the Commission's Rules, 47 C.F.R. 63.21. 10. This Order is issued under Section 0.261 of the Commission's Rules and is effective upon adoption. Petitions for reconsideration under Section 1.106 or applications for review under Section 1.115 of the Commission's Rules may be filed within 30 days of the date of public notice of this Order (see Section 1.4(b)(2)). FEDERAL COMMUNICATIONS COMMISSION Rebecca Arbogast Chief, Telecommunications Division International Bureau