Attachment FCC 99-167

FCC 99-167

ORDER

FCC 99-167

1999-07-09

This document pretains to SCL-LIC-19981117-00025 for License on a Submarine Cable Landing filing.

IBFS_SCLLIC1998111700025_643695

1999 WL 476819 (F.C.C.), 14 F.C.C.R. 13,066, 14 FCC Rcd. 13,066
(Cite as: 1999 WL 476819 (F.C.C.), 14 FCC Rcd. 13066)




                            Federal Communications Commission (F.C.C.)

                                          Cable Landing License

                                    *1 IN THE MATTER OF AT&T CORP.

                                 COM TECH INTERNATIONAL CORPORATION

                              FRONTIER COMMUNICATIONS SERVICES, INC.

                           GTE HAWAIIAN TEL INTERNATIONAL INCORPORATED

                         GTE INTELLIGENT NETWORK SERVICES INCORPORATED

                                INTERNATIONAL EXCHANGE NETWORKS LTD.

                                       LEVEL 3 INTERNATIONAL, LLC

                                            MCI WORLDCOM, INC.

                                        PCI COMMUNICATIONS, INC.

                             PACIFIC GATEWAY EXCHANGE (BERMUDA), LTD.

                                   PRIMUS TELECOMMUNICATIONS, INC.

                                                PSINET, INC.

                                   QWEST COMMUNICATIONS CORPORATION

                                           RSL COM U.S.A., INC.

                                      SBCI-PACIFIC NETWORKS, INC.

                                 SPRINT COMMUNICATIONS COMPANY L.P.

                                            TELEGLOBE USA INC.

                                              TELEGROUP, INC.

                                                 VIATEL INC.




                     © 2008 Thomson/West. No Claim to Orig. US Gov. Works.


1999 WL 476819 (F.C.C.), 14 F.C.C.R. 13,066, 14 FCC Rcd. 13,066
(Cite as: 1999 WL 476819 (F.C.C.), 14 FCC Rcd. 13066)




   Joint Application for a License to Land and Operate a Submarine Cable Network
                        Between the United States and Japan
                          File No. SCL-LIC-19981117-00025

                                               FCC 99-167
                                         Adopted: July 8, 1999
                                         Released: July 9, 1999

**13067 By the Commission: Commissioner Furchtgott-Roth not participating.

                                              I. Introduction

  1. In this Order, we grant the joint application [FN1] of the parties listed in
the caption (collectively "Applicants" or "JUS") under the Cable Landing License
Act [FN2] for authority to land and operate a non-common carrier submarine fiber
optic cable system to be called the Japan-U.S. Cable Network **13068 ("Japan-US
CN"). The Japan-US CN will extend between three landing points in the United
States and three landing points in Japan.

  2. Global Crossing Ltd. filed a "Petition to Defer" challenging the structure of
the Japan-US CN as anticompetitive. Subsequent to the initial filing of the JUS
application, the Applicants notified the Commission that they had amended the con-
struction and maintenance agreement ("C&MA") for the Japan-US CN to reduce the
risk that the Japan-US CN will facilitate the exercise of market power by some or
all of its owners. In light of these amendments, we find that grant of the JUS ap-
plication to land and operate the Japan-US CN subject to the routine conditions
listed below would, on balance, serve the public interest. We do not, in this or-
der, dismiss Global Crossing's claims that consortium cable systems may slow the
growth of competition in international telecommunications. Instead, we intend to
commence a broader proceeding to examine how our policies regarding licensing sub-
marine cables might best promote competition and benefit consumers. [FN3]

                                               II. Background

A. Procedural Background

  3. The International Bureau issued public notice of the Japan-US CN application
on December 4, 1998. Pursuant to Section 1.767(b) of the Commission's rules, [FN4]
the Cable Landing License Act, and Executive Order No. 10,530, [FN5] we informed
the Department of State of the application. [FN6] On January 4, 1999, Global
Crossing filed a Petition to Defer, asking that the Commission resolve important
issues of competition policy raised by the application before granting this li-
cense. The Applicants opposed Global Crossing's petition, and Global Crossing
replied. On March 1, 1999, the Bureau issued a public notice seeking additional
comment on issues raised in Global Crossing's Reply of January 26. [FN7]




                     © 2008 Thomson/West. No Claim to Orig. US Gov. Works.


1999 WL 476819 (F.C.C.), 14 F.C.C.R. 13,066, 14 FCC Rcd. 13,066
(Cite as: 1999 WL 476819 (F.C.C.), 14 FCC Rcd. 13066)




  *2 **13069 4. On July 7, 1999, the Department of State, after coordinating with
the Department of Defense and the National Telecommunications and Information Ad-
ministration, notified the Commission that it approves grant of this cable landing
license. [FN8]

B. The Applicants

  5. The Application identifies 32 owners of the Japan-US CN. AT&T and PSINet are
corporations organized and existing under the laws of New York. Com Tech is a cor-
poration organized and existing under the laws of the state of Washington. Fronti-
er is a corporation organized and existing under the laws of Michigan. GTE HTI,
GTE INS, IXnet, Level 3, PRIMUS, Qwest, RSL U.S.A., SBCI, Teleglobe, and Viatel
are corporations organized and existing under the laws of Delaware. MCI WorldCom
is a corporation organized and existing under the laws of Georgia. PGE is a cor-
poration organized and existing under the laws of Bermuda. PCI is a corporation
organized and existing under the laws of Guam. Sprint is a limited partnership or-
ganized and existing under the laws of Delaware. The Applicants and other carriers
will own the Japan-US CN in the approximate proportions specified in the applica-
tion. [FN9] In addition to the Applicants, the owners of the Japan-US CN include
BT, C&W, CHT-I, DDI, Global One, IDC, JT, KDD, KPN, NTT, SINGTEL, TM, Telstra, and
VSNL.

C. Description of the Proposed Cable System

  6. The Japan-US CN will consist of four optical fiber pairs equipped to operate
at 40 Gbps. The capacity of each fiber pair is equivalent to 256 x 155- Mbps Basic
System Payload Modules (BSPM), with each BSPM containing 63 minimum investment
units (MIUs), for a total capacity, on each fiber pair, of 16,128 MIUs. The system
will extend between six landing points, three of which are in the United States
and three of which are in Japan. In the United States, the cable system will ex-
tend from landing points at San Luis Obispo, California; Point Arena, California;
and Makaha, Hawaii. In Japan, the cable system will extend from Shima, Ki-
taibaraki, and Maruyama. The landing stations at Point Arena, San Luis Obispo,
Makaha, and Shima will have four fiber pairs; the landing stations at Maruyama and
Kitaibaraki will have two fiber pairs. The Japan-US CN will be connected to suit-
able facilities providing access to the domestic networks in each country or ter-
ritory. It will also be extended to the terminals of other communications systems,
including other cable terminals and satellite earth stations. This configuration
will enable the Japan-US CN to be used for services between and among the contin-
ental United States, Hawaii, Japan, and points beyond. The Applicants intend to
place the Japan-US CN in commercial service no later than June 30, 2000, with two
fiber pairs operating at 40 Gbps per fiber pair for initial service operation.

  **13070 7. The San Luis Obispo landing station will be provided and owned by MCI
WorldCom and will be located at 1101 Los Olivos Ave., Los Osos, California, 35°
18' 45.71" N, 120° 49' 53.71" W. The Makaha landing station will be provided and




                     © 2008 Thomson/West. No Claim to Orig. US Gov. Works.


1999 WL 476819 (F.C.C.), 14 F.C.C.R. 13,066, 14 FCC Rcd. 13,066
(Cite as: 1999 WL 476819 (F.C.C.), 14 FCC Rcd. 13066)




owned by AT&T [FN10] and will be located at 21°>> 28.73' N, 158° 13.37' W. The
Point Arena landing station will be provided and owned by AT&T and will be located
at 38° 58.87' N, 123° 42.24' W. In Japan, the Shima landing station will be
provided and owned by KDD, the Maruyama landing station will be provided and owned
by Japan Telecom, and the Kitaibaraki landing station will be provided and owned
by NTT-WN.

  *3 8. The Applicants intend to operate the Japan-US CN on a non-common carrier
basis, and they request that the Commission license the system as a non-common
carrier cable system. They have therefore not filed an accompanying Section 214
application for the construction and operation of new common carrier lines.

D. Allegations of Anticompetitive Effects

  9. Global Crossing's filings allege that the purpose and effect of the proposed
structure of the JUS consortium is to slow the development of competition in in-
ternational telecommunications services on the U.S.-Japan route. [FN11] The major
participants in the international telecommunications services market are all mem-
bers of the JUS consortium, and, Global Crossing alleges, the Japan-US CN would
enhance their ability to impede the development of competition. Global Crossing
states that those major carriers have market power over important inputs [FN12]
necessary for the provision of international telecommunications services, and the
consortium structure facilitates their coordination of pricing and other access
policies. Global Crossing also argues that, through control of cable landing sta-
tions, the landing parties have the incentive and ability to harm competition and
raise prices, such as by delaying provisioning of competitors' circuits.

  10. Global Crossing asserts that competing carriers could overcome the major
carriers' efforts if there were competing cables for carrying traffic, but compet-
ing cables are unable to duplicate the key inputs controlled by those major carri-
ers. Thus, according to Global Crossing, carriers will cluster onto the consortium
cable system, which makes entry by competing cable systems less attractive. This
ultimately discourages additional capacity from being constructed, Global Crossing
contends.

  11. One of the inputs over which Global Crossing claims the major carriers have
market power is access to cable landing stations. KDD controls all of the Japanese
landing stations for all **13071 other significant Japan-bound cable systems, in-
cluding TPC-5, TPC-4, China-U.S., and HAW-4/TPC-3, with the exception of one of
the landing stations of the China-U.S. cable system, which NTT controls. AT&T and
MCI WorldCom control the U.S. landing stations of those four cable systems and are
participants in the Japan-U.S. CN. Global Crossing contends that having a critical
mass of competitors as landing station operators on a single cable makes it more
likely that these landing parties can use the management structure of the cable to
coordinate their actions with regard to cable station access. According to Global
Crossing, landing parties have the incentive, and together the ability, to impose




                     © 2008 Thomson/West. No Claim to Orig. US Gov. Works.


1999 WL 476819 (F.C.C.), 14 F.C.C.R. 13,066, 14 FCC Rcd. 13,066
(Cite as: 1999 WL 476819 (F.C.C.), 14 FCC Rcd. 13066)




costs on other carriers by charging supracompetitive rates for backhaul, transit,
collocation, and cross-connection and their ability to control the timing of cir-
cuit activation. [FN13]

  12. Global Crossing further alleges that the consortium structure will increase
the ability and incentive of the five landing parties to collude and discriminate
against carriers that use competing cable systems. [FN14] Global Crossing asserts
that this ability to collude and discriminate is enhanced by provisions of the
C&MA [FN15] that state that collocation space at the Japanese cable stations will
be provided only "if available" and that collocation rights will be granted to in-
dividual parties only for the purpose of servicing their own capacity. This could
prevent non-landing parties from achieving economies of scale as backhaul pro-
viders. [FN16] JUS responds that these claims are inconsistent with Global Cross-
ing's own experience in successfully constructing a terrestrial fiber optic net-
work in Japan to provide backhaul for its transpacific cable, PC-1. [FN17] JUS
also asserts that any owner can choose to terminate its capacity at any of the
three independently owned landing stations in Japan; any owner has the right to
collocate equipment in those landing stations "at rates that reflect a cost-
recovery basis"; and any owner can self-provide backhaul or obtain backhaul from a
third party. [FN18]

  *4 **13072 13. Another alleged source of market power is operating agreements by
which carriers agree to exchange traffic with correspondent carriers in other
countries. According to Global Crossing, in order to obtain an operating agree-
ment, a carrier must of physical necessity own circuits on the same cable as a
correspondent. Global Crossing states that JUS members "can use their control over
correspondent relations to reduce competition from private cables by not entering
into correspondent relations with carriers that choose private cables, or by re-
fusing to purchase circuits to implement the correspondent relationship." [FN19]
Global Crossing contends that operating agreements are an essential input in part
because they are still a common and desirable way of providing voice services. JUS
counters that operating agreements are an increasingly unnecessary and irrelevant
input to the provision of international telecommunications services. JUS contends
that carriers are able to obtain whole circuits and provide service outside the
traditional correspondent system, and that they prefer to do so. [FN20]

  14. Global Crossing also contends that NTT, the incumbent local carrier and the
only provider of terminating access services in Japan, will have the ability and
incentive to discriminate in providing interconnection. Global Crossing asserts
that NTT benefits from carriers' purchases of capacity on the Japan-US CN because
NTT owns capacity on the cable system and because it controls a landing station
and earns supracompetitive profits from the provision of backhaul from its landing
station in Japan. In response, JUS contends that NTT has no ability to discrimin-
ate because it cannot determine the source of traffic it terminates and because
other carriers have intercity transport and switching facilities, and because high
volumes of traffic can be carried to and from large business customers without us-




                     © 2008 Thomson/West. No Claim to Orig. US Gov. Works.


1999 WL 476819 (F.C.C.), 14 F.C.C.R. 13,066, 14 FCC Rcd. 13,066
(Cite as: 1999 WL 476819 (F.C.C.), 14 FCC Rcd. 13066)




ing NTT's facilities. JUS also claims that NTT will have no incentive to discrim-
inate because it owns only 4.4 percent of the cable system.

  15. Global Crossing further asserts that the JUS consortium is overinclusive in
that it includes more parties than is necessary to construct and operate the
project. It argues that the overinclusiveness of the consortium cable structure
causes a "cluster effect" that is self-perpetuating: Because carriers need either
correspondent relationships or non-discriminatory interconnection agreements, car-
riers have a strong incentive to use circuits on the same cable as the largest
carriers on the other end. Because U.S. carriers have to use the Japan-US CN in
order to obtain necessary inputs from Japanese carriers, and Japanese carriers
have to use the Japan-US CN in order to obtain necessary inputs from U.S. carri-
ers, entry by competing cable systems is less attractive. JUS responds that its
structure is "the most open and pro-competitive ownership structure of any cable
system in the world" because, it claims, "any service provider could (and still
can) acquire an ownership interest in JUS-CN capacity at a shared cost of con-
structing the cable network" and later compete with each other to sell capacity in
the Japan-US CN. JUS claims that any owner can choose to terminate its capacity
with one of three independently owned cable landing stations in Japan, to colloc-
ate **13073 equipment in those cable landing stations at cost-based rates, and to
self-provide backhaul or obtain backhaul from a third party. [FN21] Furthermore,
JUS claims that the Japan-US CN was designed to be as open as possible in response
to the Applicants' perception of current Commission policies. [FN22]

  *5 16. Global Crossing asserts that these anticompetitive effects of consortium
cable systems are not offset by any pro-competitive benefits. Although it may have
been necessary in the past to use consortia, Global Crossing argues, it is now
possible for individual carriers and companies to build cable systems and to sell
capacity in those cable systems to other carriers. U S WEST adds that "the Americ-
an carriers that would be most willing and able to build their own transpacific
cables are precisely the carriers that are combining forces to build JUS. Instead
of building two or maybe three competing undersea cables, the leading long dis-
tance carriers are building one together." [FN23] JUS responds that cable con-
struction remains a high-risk and high-cost venture, and the only way for smaller
carriers to obtain ownership interests in a cable system is to join a consortium.

  17. Global Crossing argues that "the Commission should not grant this license
without taking measures to respond to the competition issues" it raises. [FN24] It
argues that common carrier regulations, such as requiring tariffs, would not suf-
ficiently resolve those issues, but that it would be "administratively simpler,
and ultimately better for market performance, if the Commission directly addressed
the heart of the problem - a Club ownership structure that creates a joint venture
among the parties with control over essential inputs into the market." [FN25]

  18. To remedy the problems that it alleges, Global Crossing states that the Com-
mission should impose conditions on this license. Those conditions, Global Cross-




                     © 2008 Thomson/West. No Claim to Orig. US Gov. Works.


1999 WL 476819 (F.C.C.), 14 F.C.C.R. 13,066, 14 FCC Rcd. 13,066
(Cite as: 1999 WL 476819 (F.C.C.), 14 FCC Rcd. 13066)




ing argues, should address "what percentage of the market the owners of JUS can
control on each end of this cable." [FN26] Global Crossing also proposes that we
condition the license on the establishment of a "fair marketing period" during
which "parties on JUS can choose a trans-Pacific cable based on economics instead
of perceptions of market power." [FN27] Global Crossing also proposes that the
Commission should initiate a rulemaking proceeding to determine the proper level
of concentration of "market power" on consortium cable systems in the future.

                                         **13074 III. Discussion

A. Legal Authority

  19. The Commission's authority to grant, withhold, or condition cable landing
license derives from the Cable Landing License Act [FN28] and Executive Order No.
10,530. The relevant portion of the statute provides that "the President may with-
hold or revoke such license when he shall be satisfied after due notice and hear-
ing that such action will assist in securing rights for the landing or operation
of cables in foreign countries, or in maintaining the rights or interests of the
United States or of its citizens in foreign countries, or will promote the secur-
ity of the United States, or may grant such license upon such terms as shall be
necessary to assure just and reasonable rates and service in the operation and use
of cables so licensed." [FN29] The President's authority under that statute has
been delegated to the Commission, provided that "no such license shall be granted
or revoked by the Commission except after obtaining approval of the Secretary of
State and such advice from any executive department or establishment of the Gov-
ernment as the Commission may deem necessary." [FN30]

  *6 20. In our Foreign Participation Order, in a section entitled "Foreign Own-
ership under the Submarine Cable Landing License Act," we discussed how we would
analyze foreign involvement in the context of an application for a cable landing
license. [FN31] Previously, the Commission had evaluated cable landing license ap-
plications filed by foreign-owned companies under an analysis similar to its "ef-
fective competitive opportunities" test. [FN32] In the Foreign Participation Or-
der, we announced that, instead of undertaking a detailed, fact-intensive inquiry
of foreign markets, in instances where the foreign ownership is held by an entity
from a country that is a member of the World Trade Organization (WTO), we would
evaluate that ownership under a strong presumption that the application should be
granted. [FN33] We found that, because of the implementation of the WTO agreement
on basic telecommunications services, foreign carriers from WTO member countries
would rarely be able to harm competition in the U.S. market by acting anticompet-
itively. We further noted that, consistent with how we review international Sec-
tion 214 applications, "[e]ven if a particular **13075 application presents unusu-
al risks to competition, most potential problems can be addressed by imposing con-
ditions on the license," [FN34] and we discussed examples of the kinds of rules
that we have imposed on cable landing licenses. For example, the International
Bureau has imposed recordkeeping requirements on a licensee where it was deemed




                     © 2008 Thomson/West. No Claim to Orig. US Gov. Works.


1999 WL 476819 (F.C.C.), 14 F.C.C.R. 13,066, 14 FCC Rcd. 13,066
(Cite as: 1999 WL 476819 (F.C.C.), 14 FCC Rcd. 13066)




necessary to address anticompetitive concerns specific to one proposed submarine
cable system. [FN35]

  21. Here, because Japan is a member of the WTO, the Foreign Participation Or-
der's presumption applies. That is, to the extent that the allegations of anticom-
petitive effects relate to the ability of Japanese carriers to harm competition in
the U.S. market by acting anticompetitively, we evaluate that risk under a strong
presumption that this application should be granted. As we stated in the Foreign
Participation Order, if we find that this application presents unusual risks to
competition, we can impose conditions on the license. [FN36]

B. Sufficiency of the JUS Application

  22. Each of the Applicants has complied with paragraph 6 of Section 1.767 of the
Commission's rules by listing its 10-percent-or-greater shareholders and has sub-
mitted all of the certifications required by Section 1.767. [FN37]

  23. The Applicants have also provided a specific description of the U.S. cable
landing stations sufficient to comply with Section 1.767(a)(5) of the Commission's
rules. [FN38] With respect to the Japanese cable landing stations, the Applicants
have provided only a general geographic description. Pursuant to Section
1.767(a)(5), the Applicants must file a specific description of the Japanese land-
ing points, including a map, no later than 90 days prior to construction. The Com-
mission will give public notice of the filing of the description, and grant of
this license will be considered final unless the Commission notifies the Applic-
ants to the contrary no later than 60 days after receipt of the specific descrip-
tion of the landing points.

  *7 24. We find that the information submitted by the Applicants is sufficient
under our rules to allow us to evaluate the application under the Cable Landing
License Act and Executive Order 10,530. [FN39]

**13076 C. Analysis of Anticompetitive Effects

  25. We believe that the public interest is best served by promoting the rapid
expansion of capacity in order to promote facilities-based competition that will
result in innovation and lower prices to consumers of international telecommunica-
tions services. In order to carry out our responsibilities under the Cable Landing
License Act, including the responsibility to "grant such license upon such terms
as shall be necessary to assure just and reasonable rates and service in the oper-
ation and use of cables so licensed," we intend to pursue policies that best pro-
mote expansion of capacity and to make decisions on individual applications that
will best serve this purpose. Global Crossing raises serious issues about the con-
trol of necessary inputs by entities with incentives to raise the costs of other
carriers and deter construction of additional capacity. The result, according to
Global Crossing, is that other carriers perceive a need to use capacity on consor-
tium cables. Global Crossing also asserts that there are no efficiency benefits to




                     © 2008 Thomson/West. No Claim to Orig. US Gov. Works.


1999 WL 476819 (F.C.C.), 14 F.C.C.R. 13,066, 14 FCC Rcd. 13,066
(Cite as: 1999 WL 476819 (F.C.C.), 14 FCC Rcd. 13066)




offset the competitive harm. On the basis of the record in this proceeding, we
cannot conclude that Global Crossing's theories of harm are without merit.

  26. In response to the concerns raised by Global Crossing and examined by Com-
mission staff, the JUS Applicants amended the C&MA to provide for a more pro-
competitive balance among the parties to that agreement. [FN40] The two amendments
address the major carriers' ability to earn supra-competitive profits, which would
ultimately result in higher prices for consumers, by controlling backhaul and the
timing of the final capacity upgrade of the cable system.

  27. Provisions of the original C&MA provided that the landing parties - AT&T,
MCI WorldCom, Japan Telecom, KDD, and NTT - would provide "suitable space" at the
landing stations to other consortium members "for operating and technical control
purposes relating to capacity allocated, or to be allocated, to them in the Net-
work." [FN41] These provisions could have been interpreted to allow the landing
parties to deny other consortium members the space necessary to collocate equip-
ment in order to provide backhaul for other members, thus limiting backhaul com-
petition and providing an opportunity for the landing parties to earn supracompet-
itive profits from providing backhaul. With respect to the Japanese landing sta-
tions (but not the U.S. landing stations), the original C&MA also stated that
suitable space would be provided "if available."

  28. JUS has amended the C&MA to provide explicitly that sufficient space at all
landing stations in the United States and Japan will be made available to any oth-
er owner for the purpose of collocating equipment to provide backhaul. The amended
C&MA also provides that all owners may use such space "for the provision by them
of backhaul services to others." The phrase "if available," which limited the
right to space for collocation at the landing stations in Japan, was removed as
well. Consequently, if insufficient space exists at a landing station, the landing
party may provide such space in a separate building adjacent to the landing sta-
tion. Furthermore, the owner desiring collocation may "establish a separate facil-
ity near the landing station property which shall be **13077 connected to the Net-
work by the Terminal Party." The amendments also provide that "[s]pace, connection
facilities and necessary services shall be provided promptly and without discrim-
ination." [FN42]

  *8 29. The amended provision will facilitate the provision of competing backhaul
services on the Japan-US CN. [FN43] This improves the likelihood that backhaul
prices will reflect competitive levels, which could help lower prices to consumers
of telecommunications services. Also, by reducing the ability of the landing
parties to extract supracompetitive profits from providing backhaul services on
the Japan-US CN, the amended provision may reduce those parties' incentive to in-
duce clustering on the Japan-US CN.

  30. Another provision of the original C&MA provided that the final upgrade of
the cable's capacity from 400 Gbps ("interim equipped capacity") to 640 Gbps




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1999 WL 476819 (F.C.C.), 14 F.C.C.R. 13,066, 14 FCC Rcd. 13,066
(Cite as: 1999 WL 476819 (F.C.C.), 14 FCC Rcd. 13066)




("design capacity") would be approved only with the affirmative vote of members of
the Management Committee representing at least two-thirds of the total voting in-
terests. [FN44] This upgrade would provide a 60 percent increase in capacity. As a
result of the larger voting interests in the Japan-US CN held by the landing
parties and a few other major carriers, a very small group of carriers could have
prevented this upgrade even if a large majority of owners desired to increase ca-
pacity. [FN45] This provision could have enhanced the ability of a few major car-
riers to slow the growth of capacity on the U.S.- Japan route.

  31. JUS has amended the C&MA to provide that a vote of only half of the total
voting interests is necessary to approve the final upgrade of capacity. [FN46]
This reduction of the voting requirement reduces the likelihood of a delay in the
upgrade by increasing the number of major carriers required to block an upgrade
decision. As a result, this capacity increase may be deployed sooner, which could
help lower prices to consumers.

  32. Together, these two amendments reduce certain potential competitive harms
arising from the structure of the Japan-US CN. Because they reduce the landing
parties' incentive to induce clustering, the amendments address, to some extent,
Global Crossing's allegations that the consortium structure deters the construc-
tion and use of competing cable systems. The amendments also could have the effect
of lowering retail prices by introducing more competition into the backhaul mar-
kets and ensuring that the upgrade to design capacity is not delayed.

  **13078 33. We also find it significant that, in recent meetings between the
governments of Japan and the United States, the government of Japan made commit-
ments that elaborate on or supplement its WTO basic telecommunications commit-
ments. [FN47] For example, Japan's Ministry of Posts and Telecommunications (MPT)
will ensure that NTT cannot hinder local competition by the way it prices inter-
connection relative to retail rates. MPT also has committed to arbitrate disputes
concerning access to cable landing stations, including collocation of equipment in
those landing stations, in the context of interconnection arrangements. These com-
mitments are encouraging because they provide further evidence that the government
of Japan will take steps to introduce more competition into its telecommunications
markets. If these commitments are implemented, there is likely to be a more favor-
able environment in Japan for the participation of independent submarine cable
systems and for carriers that use capacity on those cable systems. We also note
that the government of Japan is bound by the Reference Paper on Regulatory Prin-
ciples, which it included in its WTO commitment. If its commitments are not imple-
mented, the United States could seek remedies in a WTO dispute resolution proceed-
ing.

  *9 34. Furthermore, our regulatory safeguards should reduce the risk that grant
of this license will have anticompetitive effects. In particular, our rules pro-
hibit any U.S. carrier from accepting exclusive arrangements from any carrier with
market power in Japan where those arrangements involve services, facilities, or




                     © 2008 Thomson/West. No Claim to Orig. US Gov. Works.


1999 WL 476819 (F.C.C.), 14 F.C.C.R. 13,066, 14 FCC Rcd. 13,066
(Cite as: 1999 WL 476819 (F.C.C.), 14 FCC Rcd. 13066)




functions in Japan that are necessary for the provision of basic telecommunica-
tions services. [FN48] Any U.S. carrier that, for example, accepts interconnection
from NTT or operating agreements from KDD on terms more favorable than those
offered to other similarly situated carriers would be in violation of this rule
unless it submits information sufficient to demonstrate that the foreign carrier
lacks sufficient market power to affect competition adversely in the U.S. market.
Merely bringing traffic into Japan on a different cable system does not qualify a
carrier as other than "similarly situated."

  35. This application requires us to decide whether, and on what terms, to au-
thorize the landing and operation of the Japan-US CN. We believe that the amend-
ments to the C&MA, the Japanese government's commitments, and our regulatory safe-
guards reduce the risk that the Japan-US CN will cause competitive harm. Global
Crossing proposes policies that, going forward, would be intended to promote a
more competitive market for undersea cable capacity by encouraging the construc-
tion of new cable systems. In this proceeding, however, some of the remedies pro-
posed by Global Crossing would have the effect of creating regulatory uncertainty
and possibly delaying the deployment or use of the new capacity represented by the
Japan-US CN. In part, we are persuaded by **13079 the strong statements filed by
several applicants [FN49] that any further regulatory delay would harm the plans
of carriers to commence service using the Japan-US CN. We therefore conclude that,
in this particular instance, the possible pro-competitive benefits of requiring
divestiture of one or more parties, prohibiting discriminatory pricing, [FN50] or
mandating a "fair marketing" or "fresh look" period would be outweighed by the
public interest harms of creating regulatory uncertainty about the deployment of
the Japan-US CN capacity. The Applicants claim they formed the JUS joint venture
in light of what they believed to be Commission policies encouraging carriers to
form open consortia for the construction and operation of submarine cable systems.
In view of these considerations, we decline, in this proceeding, to adopt the con-
ditions proposed by Global Crossing.

  36. We do not find that all potential competitive problems have been solved by
the recent amendments to the C&MA; rather, we find that, given those amendments
and the need for more capacity on the U.S.-Japan route, the benefits of licensing
this cable system in this case outweigh the risk that doing so will have anticom-
petitive effects. We do not, in this proceeding, dismiss the claims that consorti-
um cable systems may slow the growth of competition in international telecommunic-
ations, nor do we address whether there are any efficiency benefits to consortium
cable systems. We believe that these issues are more appropriately addressed in a
broader proceeding. We therefore intend to commence such a proceeding in the near
future to examine how our policies regarding licensing submarine cables might best
promote competition and benefit consumers.

D. Non-Common Carrier Status

  *10 37. The Applicants submit that the Japan-US CN should be licensed as a non-




                     © 2008 Thomson/West. No Claim to Orig. US Gov. Works.


1999 WL 476819 (F.C.C.), 14 F.C.C.R. 13,066, 14 FCC Rcd. 13,066
(Cite as: 1999 WL 476819 (F.C.C.), 14 FCC Rcd. 13066)




common carrier cable network. As a non-common carrier cable system, the Japan-US
CN would not be required to make its capacity available indifferently to the user
public. The cable system would be permitted to offer bulk capacity to a specific
class of eligible users, including common carriers, on the basis of original own-
ership, [FN51] indefeasible rights of user (IRU), or leases of capacity.

  **13080 38. The Commission's private submarine cable policy is intended to pro-
mote competition in the provision of international transmission facilities. [FN52]
Pursuant to this policy, the Commission has authorized non-common carrier cables
where: (1) there is no legal compulsion to serve the public indifferently and (2)
there are no reasons implicit in the nature of the operations to expect an indif-
ferent holding-out to the eligible user public. [FN53] This two-part test is de-
rived from a court decision known as NARUC I. [FN54]

  39. The first part of the NARUC I test directs us to consider whether there is
any legal compulsion to serve the public indifferently. In applying this prong of
the test to submarine cable authorizations, the Commission has stated that there
will be no legal compulsion to serve the public indifferently where there is no
public interest reason to require the facilities to be offered on a common carrier
basis. Although this public interest analysis has generally focused on the avail-
ability of alternative facilities, [FN55] we are not limited to that reasoning. In
this case, we find that competing facilities [FN56] will at least partially con-
strain the operations of the Japan-US CN so that it will not become a bottleneck
facility. Moreover, the Applicants have amended provisions of the original C&MA in
ways that will both reduce the costs of inputs necessary to the provision of in-
ternational telecommunications services and reduce the ability and incentives of
the major carriers on the route to constrain capacity. We also concluded, above,
that any public interest benefits of imposing additional burdensome regulation in
this case would be outweighed by the benefits of promoting the certainty that the
Japan-US CN will be deployed as scheduled. In these circumstances, our authority
under the Cable Landing License Act is sufficient to ensure that operation of the
Japan-US CN will serve the public interest, and common carrier regulation is not
necessary. Therefore, we find that there is no public interest reason to require
the facilities to be offered on a common carrier basis. Accordingly, pursuant to
the first prong of the NARUC I test, we conclude that there is no legal compulsion
for the Japan-US CN to serve the public indifferently.

  40. We note, however, that we always have the ability to impose common carrier
or common-carrier-like obligations on the operations of this or any other submar-
ine cable system if the public interest so requires. Furthermore, we have always
maintained the authority to classify facilities **13081 as common carrier facilit-
ies subject to Title II of the Communications Act if the public interest requires
that the facilities be offered to the public indifferently. [FN57] As noted above,
in the near future, we will consider a broader proceeding to examine how the Com-
mission's submarine-cable policies may most benefit consumers of telecommunica-
tions services. It is possible that, in such a proceeding, we would impose rules




                     © 2008 Thomson/West. No Claim to Orig. US Gov. Works.


1999 WL 476819 (F.C.C.), 14 F.C.C.R. 13,066, 14 FCC Rcd. 13,066
(Cite as: 1999 WL 476819 (F.C.C.), 14 FCC Rcd. 13066)




on the operations of already-licensed cable systems, including the Japan-US CN. As
has consistently been our practice, we will grant this license "subject to all
rules and regulations of the Federal Communications Commission [and] any action by
the Commission or the Congress of the United States rescinding, changing, modify-
ing or amending any rights accruing to any person hereunder." [FN58]

  *11 41. The second prong of the NARUC I test directs us to consider whether
there is reason to expect an indifferent holding-out to the eligible user public.
The Applicants have requested a non-common carrier cable landing license, and the
terms of the JUS C&MA, which the Applicants submitted with the application, reveal
that, after the network is fully funded, any party may sell its allocated capa-
city. The C&MA also provides that the network administrator is authorized to ex-
ecute agreements to sell unused capacity on an IRU basis. Because there are no re-
strictions on the ability of the network administrator or the individual owners of
the Japan-US CN to sell capacity, it appears that there will be competition in the
sale of Japan-US CN capacity after the network is fully funded. It is reasonable
to conclude that that competition will require parties selling capacity to make
flexible offers and not to offer capacity indifferently. Accordingly, pursuant to
the second prong of the NARUC I test, we conclude that there is no reason to ex-
pect an indifferent holding-out to the eligible user public.

  42. Based on the above analysis, we conclude that the Applicants will not offer
capacity in the Japan-US CN to the public on a common carrier basis and that the
public interest does not require that they do so. Accordingly, we conclude that it
is appropriate to license the Japan-US CN on a non-common carrier basis.

E. Environmental Effects

  43. The Commission has found that the construction of new submarine cable sys-
tems, individually and cumulatively, will not have a significant effect on the en-
vironment and therefore should be expressly excluded from our procedures imple-
menting the National Environmental Policy **13082 Act of 1969. [FN59] Therefore,
the Applicants are not required to submit an environmental assessment, and this
application is categorically excluded from environmental processing.

                                               IV. Conclusion

  44. Accordingly, we conclude that the public interest under the Cable License
Landing Act will be served by grant of the license to the Joint Applicants to land
and operate the Japan-US CN, subject to the conditions listed below.

                                            V. Ordering Clauses

  45. Consistent with the foregoing, we hereby GRANT AND ISSUE the Applicants a
license to land and operate an optical fiber submarine cable system (consisting of
four working fiber pairs initially operating at 40 Gbps per fiber pair in a self-




                     © 2008 Thomson/West. No Claim to Orig. US Gov. Works.


1999 WL 476819 (F.C.C.), 14 F.C.C.R. 13,066, 14 FCC Rcd. 13,066
(Cite as: 1999 WL 476819 (F.C.C.), 14 FCC Rcd. 13066)




healing ring configuration, expandable to 160 Gbps per fiber pair, for a total
design capacity of 640 Gbps) extending between landing points at cable stations in
San Luis Obispo and Point Arena, California; Makaha, Hawaii; Shima, Japan;
Maruyama, Japan; and Kitaibaraki, Japan, under the provisions of the Cable Landing
License Act and Executive Order 10,530. This grant is subject to all rules and
regulations of the Federal Communications Commission; any treaties or conventions
relating to communications to which the United States is or may hereafter become a
party; any action by the Commission or the Congress of the United States rescind-
ing, changing, modifying or amending any rights accruing to any person hereunder;
and the following conditions:
     *12 (1) The location of the cable system within the territorial waters of the
United States of America, its territories and possessions, and upon its shore
shall be in conformity with plans approved by the Secretary of the Army, and the
cable shall be moved or shifted by the Licensees at their expense upon the request
of the Secretary of the Army, whenever he or she considers such course necessary
in the public interest, for reasons of national defense, or for the maintenance or
improvement of harbors for navigational purposes;
     (2) The Licensees shall at all times comply with any requirements of United
States government authorities regarding the location and concealment of the cable
facilities, buildings, and apparatus for the purpose of protecting and safeguard-
ing the cables from injury or destruction by enemies of the United States of Amer-
ica;
     (3) The Licensees or any persons or companies controlling them, controlled by
them, or under direct or indirect common control with them do not enjoy and shall
not acquire any right to handle traffic to or from the United States, its territ-
ories, or its possessions unless such service be authorized by the Commission pur-
suant to Section 214 of the Communications Act, as amended;
     **13083 (4) The Licensees or any persons or companies controlling them, con-
trolled by them, or under direct or indirect common control with them shall not
acquire or enjoy any right to land, connect, or operate submarine cables that is
denied to any other United States company by reason of any concession, contract,
understanding or working arrangement to which the Licensees or any persons con-
trolling them, controlled by them, or under direct or indirect common control with
them are parties;
     (5) Neither this license nor the rights granted herein shall be transferred,
assigned, or in any manner either voluntarily or involuntarily disposed of or dis-
posed of indirectly by transfer of control of the Licensees to any persons, unless
the Federal Communications Commission shall give prior consent in writing;
     (6) The Licensees shall notify the Commission in writing of the precise loca-
tions at which the cable will land in Japan. Such notification with respect to any
given landing location shall occur no later than ninety days prior to commencing
construction at that landing location. The Commission will give public notice of
the filing of each description, and grant of this license will be considered final
with respect to that landing location unless the Commission issues a notice to the
contrary no later than sixty days after receipt of the specific description;




                     © 2008 Thomson/West. No Claim to Orig. US Gov. Works.


1999 WL 476819 (F.C.C.), 14 F.C.C.R. 13,066, 14 FCC Rcd. 13,066
(Cite as: 1999 WL 476819 (F.C.C.), 14 FCC Rcd. 13066)




    (7) The Commission reserves the right to require the Licensees to file an en-
vironmental assessment or environmental impact statement should it determine that
the landing of the cables at those locations and construction of necessary cable
landing stations would significantly affect the environment within the meaning of
Section 1.1307 of the Commission's procedures implementing the National Environ-
mental Policy Act of 1969; this license is subject to modification by the Commis-
sion upon its review of any environmental assessment or environmental impact
statement that it may require pursuant to its rules;
    *13 (8) Pursuant to Section 2 of the Cable Landing License Act, 47 U.S.C. §
35; Executive Order No. 10,530, as amended; and Section 214 of the Communications
Act of 1934, as amended, 47 U.S.C. § 214, the Commission reserves the right to im-
pose common carrier regulation or other regulation consistent with the Cable Land-
ing License Act on the operations of the cable system if it finds that the public
interest so requires;
    (9) The Licensees shall maintain de jure and de facto control of the U.S. por-
tion of the cable system, including the cable landing stations in the United
States, sufficient to comply with the requirements of this license;
    (10) This license is revocable by the Commission after due notice and oppor-
tunity for hearing pursuant to section 2 of "An Act Relating to the Landing and
Operation of Submarine Cables in the United States," 47 U.S.C. § 35, or for fail-
ure to comply with the terms of the authorizations;
    (11) The Licensees shall notify the Commission in writing of the date on which
the cable is placed in service, and this license shall expire 25 years from such
date, unless renewed or **13084 extended upon proper application, and, upon expir-
ation of this license, all rights granted under it shall be terminated; and
    (12) The terms and conditions upon which this license is given shall be accep-
ted by the Licensees by filing a letter with the Secretary, Federal Communications
Commission, Washington, D.C. 20554 within 30 days of the release of the cable
landing license.

  46. This Order is effective upon release. Petitions for reconsideration under
Section 1.106 of the Commission's rules, 47 C.F.R. §§ 1.106, 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

Magalie Roman Salas

Secretary

FN1. AT&T Corp. et al., Joint Application for a License to Land and Operate a Sub-
marine Cable Network Between the United States and Japan, File No. SCL-
LIC-19981117-00025, filed Nov. 17, 1998 (Application). A list of the applicants
and the short-form names used in this Order is included in Appendix A.

FN2. An Act Relating to the Landing and Operation of Submarine Cables in the




                     © 2008 Thomson/West. No Claim to Orig. US Gov. Works.


1999 WL 476819 (F.C.C.), 14 F.C.C.R. 13,066, 14 FCC Rcd. 13,066
(Cite as: 1999 WL 476819 (F.C.C.), 14 FCC Rcd. 13066)




United States, 47 U.S.C. §§ 34-39 (1994) (Cable Landing License Act).

FN3. See infra para. 36.

FN4. 47 C.F.R. § 1.767(b) (1998).

FN5. Exec. Ord. No. 10,530, reprinted as amended in 3 U.S.C. § 301           (1994).

FN6. Letter from Diane J. Cornell, Chief, Telecommunications Division, Interna-
tional Bureau, Federal Communications Commission, to Steven W. Lett, Deputy U.S.
Coordinator, Office of International Communications and Information Policy, U.S.
Department of State (Dec. 7, 1998).

FN7. See Public Notice, International Bureau Issues Supplemental Comment Schedule
for Application to Obtain Japan-US Submarine Cable Landing License, DA 99-419
(Mar. 1, 1999).

FN8. Letter from Steven W. Lett, Deputy United States Coordinator, International
Communications and Information Policy, U.S. Department of State, to Donald Abel-
son, Chief, International Bureau, Federal Communications Commission (July 7,
1999).

FN9. See infra Appendix B.

FN10. Attachment A to the application, a general route sketch of the Japan-US CN,
indicates that the Hawaii landing station will be provided by AT&T. The C&MA filed
with the application indicates that the landing station in Hawaii will be provided
by GTE HTI. On June 23, 1999, the Applicants submitted a letter clarifying that
the Hawaii landing station will be in Makaha and operated by AT&T. See JUS ex
parte letter (June 23).

FN11. See Global Crossing Statement of Position (filed Apr. 15).

FN12. An "input market" is the market for a facility or service necessary for the
provision of another ("downstream") service. In this case, some of the relevant
inputs for the provision of international telecommunications services are cable
landing stations, backhaul, operating agreements, and interconnection.

FN13. See Global Crossing Response (Mar. 15) at 22-24. "Backhaul" refers to the
provision of transport from a cable landing station to a carrier's international
switch or point of presence. "Transit" refers to a service that allows traffic to
be routed through one country or cable landing station to other cable systems and
other countries. "Collocation" refers to the ability to install in a landing sta-
tion equipment that may be necessary to service a carrier's capacity or to provide
backhaul for that capacity. "Cross-connection" is the act of physically connecting
a circuit in the cable system to a particular carrier's equipment within the cable
landing station.




                     © 2008 Thomson/West. No Claim to Orig. US Gov. Works.


1999 WL 476819 (F.C.C.), 14 F.C.C.R. 13,066, 14 FCC Rcd. 13,066
(Cite as: 1999 WL 476819 (F.C.C.), 14 FCC Rcd. 13066)




FN14. See also Comments of U S WEST, Inc. (Mar. 8) at 3-4 (stating that the con-
sortium structure requires consortium members to exchange information, and that
"such exchanges are conducive to both tacit and explicit collusion that can negat-
ively impact carriers left out of the loop and that can leave consumers facing
higher prices and less competitive terms than might otherwise be the case").

FN15. The "Construction and Maintenance Agreement," or "C&MA," is an agreement
among the owners of a submarine cable system. It governs the terms of construction
and operation of the cable system, including the ownership shares and governance
rights of each owner. See Application Attachment D, Japan-US Cable Network Con-
struction & Maintenance Agreement (July 31, 1998) (C&MA).

FN16. See C&MA ¶¶ 7.2, 7.3; Joskow Affidavit at 30, in Global Crossing Response
(Mar. 15).

FN17. JUS Supplemental Comments (Mar. 8) at 21.

FN18. JUS ex parte letter (Apr. 8) at 3.

FN19. Global Crossing Response (Mar. 15) at 14.

FN20. JUS ex parte letter (April 8) at 4-5; see also Reply. Comments of KDD Cor-
poration (Mar. 15) at 4-5 (stating that any U.S. carrier that desires to enter in-
to an operating agreement with a facilities-based Japanese carrier will have more
than ten to choose from, that carriers can terminate their own traffic in Japan,
and that carriers can enter into termination arrangements or provide their own
termination).

FN21. See JUS letter (Apr. 8) at 3.

FN22. See id. at 3 & n.4.

FN23. Comments of U S WEST, Inc. (Mar. 8) at 4.

FN24. Global Crossing Response (Mar. 15) at 55.

FN25. Id.

FN26. Global Crossing, "Suggested Remedies for JUS" (undated).

FN27. Id.

FN28. 47 U.S.C. §§ 34-39.

FN29. 47 U.S.C. § 35.

FN30. See Exec. Ord. No. 10,530 § 5(a).

FN31. Rules and Policies on Foreign Participation in the U.S. Telecommunications




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1999 WL 476819 (F.C.C.), 14 F.C.C.R. 13,066, 14 FCC Rcd. 13,066
(Cite as: 1999 WL 476819 (F.C.C.), 14 FCC Rcd. 13066)




Market, Report and Order and Order on Reconsideration, 12 FCC Rcd 23,891,
23,932-35 ¶¶ 87-96 (1997), recon. pending (Foreign Participation Order).

FN32. See Telefonica Larga Distancia de Puerto Rico, Inc., Memorandum Opinion and
Order, 12 FCC Rcd 5173 (1997); Cable & Wireless, plc, Cable Landing License, 12
FCC Rcd 8516 (1997). The "effective competitive opportunities" analysis was de-
veloped and discussed in the Foreign Carrier Entry Order. See Market Entry and
Regulation of Foreign-Affiliated Entities, Report and Order, 11 FCC Rcd 3873
(1995).

FN33. Foreign Participation Order, 12 FCC Rcd at 23,933-35 ¶¶ 93-96.

FN34. Id. at 23,934 ¶ 94.

FN35. See id. at 23,934 ¶ 95 & n. 188.

FN36. See id. at 23,934 ¶¶ 94-95.

FN37. See Application Attachment C.

FN38. See 47 C.F.R. § 1.767(a)(5) (as amended 1999).

FN39. See 47 C.F.R. § 1.767(a)(1)-(7) (as amended 1999).

FN40. See JUS ex parte letter (June 18).

FN41. C&MA ¶ 7.3.

FN42. See JUS ex parte letter (June 18).

FN43. We note that even non-owners could presumably provide backhaul services by
contracting with an owner of the Japan-US CN to provide space for equipment col-
location.

FN44. See C&MA ¶ 14.1.

FN45. For example, the five landing parties, AT&T, MCI WorldCom, KDD, NTT, and JT,
together will have over 37 percent of the voting rights. Similarly, the combina-
tion of AT&T, MCI WorldCom, and BT together will have over 37 percent of the vot-
ing rights. See infra Appendix B. Under the original C&MA, either of those two
collections of carriers would have been able to block the upgrade.

FN46. See JUS ex parte letter (June 18).

FN47. See Office of the United States Trade Representative, Executive Office of
the President, Second Joint Status Report under the U.S.-Japan Enhanced Initiative
on Deregulation and Competition Policy (May 3, 1999), available at < ht-
tp://www.ustr.gov/releases/1999/05/drgagr.pdf>.




                     © 2008 Thomson/West. No Claim to Orig. US Gov. Works.


1999 WL 476819 (F.C.C.), 14 F.C.C.R. 13,066, 14 FCC Rcd. 13,066
(Cite as: 1999 WL 476819 (F.C.C.), 14 FCC Rcd. 13066)




FN48. See 47 C.F.R. § 63.14 (as amended 1999).

FN49. See, e.g., Reply Comments of MCI WorldCom, Inc. (Mar. 15) at 3; Supplemental
Reply Comments of PSINet (Mar. 15) at 2-3; Comments of Qwest Communications Cor-
poration (Mar. 8) at 5-6; Reply Comments of SBCI-Pacific Networks, Inc. (Mar. 15)
at 5; Supplemental Comments of Viatel, Inc. (Mar. 8); see also CompTel letter
(Apr. 20).

FN50. As Global Crossing notes, "pricing" in the context of a consortium cable ac-
tually refers to sharing of capital costs among the consortium members. See Joskow
Affidavit at 42, in Global Crossing Response (Mar. 15). Volume-discount pricing
allocates more capacity per investment unit to consortium members that make great-
er investments in the cable system.

FN51. Acquisition of capacity on the U.S. end of the cable system on an original
ownership basis would require modification of this license.

FN52. See Tel-Optik, Ltd., Memorandum Opinion and Order, 100 F.C.C.2d 1033,
1040-42, 1046-48 (1985); see also Cable & Wireless, plc, Cable Landing License, 12
FCC Rcd 8516 (1997).

FN53. See Cable & Wireless, 12 FCC Rcd at 8520-23 ¶¶ 11-17; see also         Optel Commu-
nications, Inc., 8 FCC Rcd 2267 (1993) (conditional license).

FN54. National Association of Regulatory Utility Commissioners v. FCC, 525 F.2d
630, 642 (D.C. Cir.) (NARUC I), cert. denied, 425 U.S. 992 (1976).

FN55. See, e.g., Cable & Wireless; Tel-Optik; Optel Communications.

FN56. The U.S.-Japan route is also served by a number of existing and planned
fiber optic cable systems, including NPC, TPC-5, China-US, PC-1, and Project Oxy-
gen, as well as by satellite capacity over Intelsat and other satellite systems.
U.S.-Japan traffic can also be carried indirectly over alternative cable systems
such as FLAG, which connects Japan to the United Kingdom.

FN57. See, e.g., Foreign Participation Order, 12 FCC Rcd at 23,934 ¶ 95; Cable &
Wireless, 12 FCC Rcd at 8530 ¶ 39; AT&T Corp. et al., Cable Landing License, 13
FCC Rcd 16,232, 16,237 ¶ 15 (Int'l Bur. 1998) (China-US Cable Landing License).

FN58. See infra para. 45; see also, e.g., Cable & Wireless, 12 FCC Rcd at 8531 ¶
43; China-US Cable Landing License, 13 FCC Rcd at 16,240 ¶ 24; PC Landing Corp.,
Cable Landing License, 13 FCC Rcd 23,384, 23,389 ¶ 19 (1998) (PC-1 Cable Landing
License).

FN59. See 47 C.F.R. § 1.1306 Note 1 (as amended 1999); 1998 Biennial Regulatory
Review - Review of International Common Carrier Regulations, IB Docket No. 98-118,
Report and Order, FCC 99-51, ¶¶ 67-69 (rel. Mar. 23, 1999).




                     © 2008 Thomson/West. No Claim to Orig. US Gov. Works.


1999 WL 476819 (F.C.C.), 14 F.C.C.R. 13,066, 14 FCC Rcd. 13,066
(Cite as: 1999 WL 476819 (F.C.C.), 14 FCC Rcd. 13066)




                                            **13085 Appendix A

                                List of Parties and Short-Form Names

Applicants

  *14 AT&T Corp. ("AT&T")

  Com Tech International Corporation ("Com Tech")

  Frontier Communications Services, Inc. ("Frontier")

  GTE Hawaiian Tel International Incorporated ("GTE HTI")

  GTE Intelligent Network Services Incorporated ("GTE INS")

  International Exchange Networks Ltd. ("IXnet")

  Level 3 International, LLC ("Level 3")

  MCI WorldCom, Inc. ("MCI WorldCom")

  PCI Communications, Inc. ("PCI")

  Pacific Gateway Exchange (Bermuda), Ltd. ("PGE")

  PRIMUS Telecommunications, Inc. ("PRIMUS")

  PSINet, Inc. ("PSINet")

  Qwest Communications Corporation ("Qwest")

  RSL COM U.S.A., Inc. ("RSL USA")

  SBCI-Pacific Networks, Inc. ("SBCI")

  Sprint Communications Company L.P. ("Sprint")

  Teleglobe USA Inc. ("Teleglobe")

  Telegroup, Inc. ("Telegroup")

  VIATEL Inc. ("VIATEL")

Other parties

  Cignal Global Communications, Inc. ("Cignal")

  Competitive Telecommunications Association, International Communications Commit-
tee ("CompTel")




                     © 2008 Thomson/West. No Claim to Orig. US Gov. Works.


1999 WL 476819 (F.C.C.), 14 F.C.C.R. 13,066, 14 FCC Rcd. 13,066
(Cite as: 1999 WL 476819 (F.C.C.), 14 FCC Rcd. 13066)




  Computer and Communications Industry Association ("CCIA")

  Global Crossing Ltd. ("Global Crossing")

  KDD Corporation ("KDD")

  USA Global Link, Inc. ("USA Global Link")

  U S WEST, Inc. ("U S WEST")

                                            **13086 Appendix B

  Schedules B, C, E, and F and Annex 5 of the Japan-US Cable Network Construction
                             and Maintenance Agreement

 1999 WL 476819 (F.C.C.), 14 F.C.C.R. 13,066, 14 FCC Rcd. 13,066

END OF DOCUMENT




                     © 2008 Thomson/West. No Claim to Orig. US Gov. Works.



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Document Modified: 2008-05-22 17:19:56

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