Public Notice SCL00202

Action Taken Public Notice

Submarine Cable Landing

2017-08-11

FCC.report > IB > Public Notices > SCL00202

Filings Included

File Number	Service
SCL-LIC-20160330-00011	Submarine Cable Landing

IBFS_PN_1259952

SCL-LIC-20160330-00011 E Telxius Cable USA, Inc.
Submarine Cable Landing License
Grant of Authority Date of Action: 08/04/2017

Acceptability for Filing Public Notice: Application filed by Telxius Cable USA, Inc., Telxius Cable Puerto Rico, Inc., and Telefonica
International Wholesale Services America, S.A. (together, the "Applicants") for a license to land and operate a non-common carrier fiber-optic
submarine cable network connecting Virginia Beach, Virginia; San Juan, Puerto Rico; and Fortaleza and Rio de Janeiro, Brazil (BRUSA cable
system). The Application was placed on Public Notice on May 31, 2016. File No. SCL-LIC-20160330-00011, Public Notice, Streamlined
Submarine Cable Landing License Applications Accepted for Filing, Report No. SCL-00182S (IB, May 31, 2016). On July 1, 2016, Telefónica
International Wholesale Services USA, Inc. notified the Commission of its name change to Telxius Cable USA, Inc. On July 8, 2016, Telefónica
International Wholesale Services Puerto Rico, Inc. notified the Commission of its name change to Telxius Cable Puerto Rico, Inc. On September
21, 2016, the Applicants filed a Landing Point Notification with location details and a map regarding the Virginia Beach, Virginia cable landing
station and beach landing points for the BRUSA cable system. Applicants filed a Supplement to the Application on April 20, 2017, clarifying
ownership, control, and operation of the Virginia Beach cable landing station. Applicants were granted Special Temporary Authority (STA) to
construct, connect the end points, and test at their own risk those portions of the BRUSA cable system in U.S. territory prior to receiving
Commission authorization. File No. SCL-STA-20170712-00017.

The Application has been coordinated with the Department of State and other Executive Branch agencies pursuant to section 1.767(b) of the
Commission's rules, 47 C.F.R. §1.767(b), and consistent with procedures established with the Department of State. See Review of Commission
Consideration of Applications under the Cable Landing License Act, IB Docket No. 00-106, Report and Order, 16 FCC Rcd 22167, 22192-93,
paras. 51-52 (2001) (Submarine Cable Landing License Report and Order); Streamlined Procedures for Executive Branch Review of Submarine
Cable Landing License Requests, State Department Media Note (Revised) (rel. Dec. 20, 2001) available at
http://www.state.gov/r/pa/prs/ps/2001/6951.htm. The Department of Homeland Security (DHS), with the concurrence of the Department of
Justice and the Department of Defense (DOD; collectively, the "Agencies"), filed a Petition to Adopt Conditions to Authorizations and Licenses
on August 4, 2017 (dated Aug. 3, 2017). The Agencies have no objection to the Commission approving authority to construct, land, and operate
the BRUSA cable system, provided that the Commission conditions its approval on the commitment of Telxius Cable USA, Inc. to abide by the
undertakings set forth in the July 30, 2017, "Letter of Assurances" from Telxius Cable USA, Inc. to DHS and DOD.

Actions Taken: (1) Grant of Cable Landing License to Telxius Cable USA, Inc., et al. for the purpose of constructing, landing and operating a
private fiber-optic submarine cable network, the BRUSA cable system, connecting Virginia Beach, Virginia; San Juan, Puerto Rico; and Fortaleza
and Rio de Janeiro, Brazil, and (2) grant of the Petition to Adopt Conditions to Authorizations and Licenses filed on August 3, 2017, by the
Department of Homeland Security, with the concurrence of the Department of Justice and the Department of Defense Agencies.

Licensee Information: The Applicants for the cable landing license for the BRUSA cable system are the following: (1) Telxius Cable USA, Inc.
(Telxius Cable USA), (2) Telxius Cable Puerto Rico, Inc. (Telxius Cable Puerto Rico), and (3) Telefonica International Wholesale Services
America, S.A. (TIWS America).

Telxius Cable USA, a Florida company, and Telxius Cable Puerto Rico, a Puerto Rico company, are direct wholly-owned subsidiaries of TIWS
America, a Uruguay company. The Applicants, in turn, are wholly-owned, on an indirect basis, by Telefonica, S.A., a Spanish company whose
shares are traded publicly on the Madrid Stock Exchange. No other person or entity has a 10% or greater direct or indirect equity or voting
interest in any of the Applicants.

Cable Design and Capacity: The BRUSA cable system will consist of eight fiber pairs with a total design capacity of 108 terabits per second
(Tbps), or 13.5 Tbps per fiber pair, and will have a total length (trunk plus spurs) of approximately 11,200 kilometers. The main trunk of the
cable system will consist of four "express route" fiber pairs connecting the newly constructed cable landing station located at Virginia Beach,
Virginia to an existing cable landing station located at Rio de Janeiro, Brazil. Two more fiber pairs will connect the new Virginia Beach,
Virginia, cable landing station to the existing cable landing stations located at San Juan, Puerto Rico and Rio de Janeiro, Brazil. The remaining
two fiber pairs will connect the new Virginia Beach, Virginia cable landing station to the existing cable landing stations at Fortaleza and Rio de
Janeiro, Brazil. Each fiber pair will have an initial capacity of 1 Tbps per fiber pair.

Ownership of the Cable System and Landing Points: (1) Telxius Cable USA will own and control the new cable landing station located at
Virginia Beach, Virginia, and the portion of the BRUSA wet segment in the U.S. territorial sea extending from Virginia Beach, Virginia, (2)
Telxius Cable Puerto Rico will own and control the existing cable landing station located at San Juan, Puerto Rico, and will own that portion of
the BRUSA wet segment in the U.S. territorial sea extending from San Juan, Puerto Rico, (3) Telefonica International Wholesale Services Brasil
Limitada (TIWS Brazil), a Brazil company, will own and control the existing cable landing stations located at Fortaleza and Rio de Janeiro,
Brazil, and will own those portions of the BRUSA wet segment in the Brazilian territorial sea extending from Fortaleza and Rio de Janeiro,
Brazil, and (4) TIWS America will own those portions of the BRUSA wet segment in international waters, beyond the U.S. and Brazilian
territorial seas.

Regulatory Status of the Cable: The Applicants propose to operate the BRUSA cable system on a non-common carrier basis. They state that
BRUSA's new landing point in Virginia will increase route diversity and minimize the risk that a single natural disaster or other event will disrupt
all communications on U.S.-South American routes, since other cables land in Florida or New Jersey. Further, the Applicants claim that BRUSA
will compete with the planned Seabras-1 and Monet cable systems, and will provide low latency connectivity on a route where capacity demand is
increasing each year and existing systems, such as the SAM-1, South American Crossing, and Americas-II, are nearing the end of their useful
lives. Application at 2. The Applicants state that they will sell bulk capacity to particular enterprise and government customers pursuant to
individually-negotiated indefeasible rights-of-use (IRUs) and capacity leases, the terms of which will vary depending on the characteristics and
needs of the particular capacity purchaser. Application at 1-2.

Applicants have provided information and demonstrated that the proposed operation of the cable on a non-common carrier basis satisfies the
requirements set forth in National Association of Regulatory Utility Commissioners v. FCC, 525 F.2d 630, 642 (D.C. Cir. 1976) (NARUC I), cert.
denied, 425 U.S. 992 (1976). See also Submarine Cable Landing License Report and Order, 16 FCC Rcd at 22202-22203, paras. 69-70; Review
of Commission Consideration or Applications under the Cable Landing License Act, IB Docket No. 00-106, Notice of Proposed Rulemaking, 15
FCC Rcd 20789, 20815-20818, paras. 62-67 (2000).

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Conditions and Requirements: Applicants will comply with the routine conditions set out in 1.767(g)(1)-(14) of the Commission rules, 47 C.F.R.
§ 1.767 (g)(1)-(14), and with the requirements of section 1.768 of the Commission's rules, § 1.768 (Notification by and prior approval for
submarine cable landing licensees that are or propose to become affiliated with a foreign carrier).

Telxius Cable USA, Telxius Cable Puerto Rico, and TIWS America are affiliated with a foreign carrier that is presumed to have market power in
Brazil. Telxius Cable USA, Telxius Cable Puerto Rico, and TIWS America each agree to accept and abide by the reporting requirements in
section 1.767(l), 47 C.F.R. § 1.767(l), for the U.S.-Brazil route.

We grant the Petition to Adopt Conditions to Authorizations and Licenses (Petition) filed in this proceeding on August 4, 2017 (dated Aug, 3,
2017) by the Department of Homeland Security (DHS), with the concurrence of the Department of Justice and the Department of Defense (DOD.
Accordingly, we condition grant of the application on Telxius Cable USA, Inc. abiding by the commitments and undertakings contained in the
July 30, 2017 letter from Guillermo Cañete, President, Telxius Cable USA, Inc., to the Assistant Secretary for Policy, DHS, Department of
Defense Chief Information Officer, and the General Counsel, Defense Information Systems Agency (2017 LOA). A failure to comply and/or
remain in compliance with any of these commitments and undertakings shall constitute a failure to meet a condition of the cable landing license
and thus grounds for declaring license terminated without further action on the part of the Commission. Failure to meet a condition of the license
may also result in monetary sanctions or other enforcement action by the Commission. A copy of the Petition and the 2017 LOA are publicly
available and may be viewed on the FCC website through the International Bureau Filing System (IBFS) by searching for
SCL-LIC-20160330-00011 and accessing "Other filings related to this application" from the Document Viewing area.

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Document Created: 2017-08-10 17:32:32
Document Modified: 2017-08-10 17:32:32

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