Attachment Security Agreement

This document pretains to SCL-LIC-20070621-00009 for License on a Submarine Cable Landing filing.

IBFS_SCLLIC2007062100009_579452

                                        Before the
                     FEDERAL COMMUNICATIONS COMMISSION
                            Washington, D.C. 2055@@@?3

In the Matter of
                                                            Telecom Omision
                                                                    L/
REACH LTD.                                                 intemationeal Bursett        %
Application for Authority Pursuant to
Section 214 of the Communications                    File No. ITC—214—20001228—00771
Act of 1934, as amended, for Global
Authority to Provide Facilities—Based
And Resold Services Between the                                             J {     a   & ,i;\
United States and All Authorized                                           ;{E%, t 4s
International Points, Except Kiribati                                      $wmw




                              Petition To Adopt Conditions
                             To Section 214 Authorization


      The United States Department of Justice (°DOJ") and the Federal Bureau of

Investigation   ("FBI")   respectfully submit this Petition to Adopt Conditions to

Authorization ("Petition") pursuant to 47 C.F.R. § 1.41.

       Through this Petition, the DOJ and the FBI hereby advise the Federal

Communications Commission ("FCC" or "Commission") that the DOJ and the FBI have

no objection to FCC grant of the above—referenced application for authority to provide

international common carrier services under Section 214 of the Communications Act,

as amended, provided that the Commission conditions the grant on compliance with

the terms of the Agreement (attached hereto as Exhibit 1) between Reach Ltd.

(*Reach"), Telstra Corporation Limited ("Telstra") and Pacific Century CyberWorks

Limited {"PCCW"), on the one hand, and the DOJ and the FBI, on the other.


       Reach, the applicant in this docket,! is a Bermuda corporation that is indirectly

owned: 50% by Telstra, an Australian corporation, itself 50.1% owned by the Federal

Government of Australia; and 50% by PCCW, a Hong Kong Corporation in which the

largest investors are companies owned or controlled by Richard Li, a Hong Kong

citizen.

       As the Commission is aware, the DOJ and the FBI have previously noted that

their ability to satisfy their obligations to protect the national security, to enforce the

laws and preserve the safety of the pubic can be significantly impacted by transactions

in which foreign entities will offer communication service in the United States.            In

such cases, the DOJ and the FBI have stated that foreign involvement in the provision

of U.S. communications must not be permitted to impair the U.S. government‘s ability

to satisfy its obligations to U.S. citizens to: (1) carry out lawfully authorized electronic

surveillance of domestic U.S. calls or calls that originate or terminate in the United

States; (2) prevent and detect foreign—based espionage and electronic surveillance of

U.S. communications, which would jeopardize the security and privacy of such

communications and could foreclose prosecution of individuals involved in such

activities;     and (3) satisfy the National Emergency Preparedness Act and U.S.

infrastructure protection requirements. To address these concerns, the DOJ and the

FBI    have      negotiated   agreements   to   ensure   their   ability   to   fulfill   their

responsibilities to protect the national security, to enforce the laws and

preserve the public safety in the event that the proposed underlying mergers,

 transactions and ventures were successfully concluded. The agreements reached

 in the past have been filed by stipulation among the parties with the Commission, and


           The applicant «
 name to Reach Ltd. See
 Secretan


                                                3


the Commission has conditioned its grants of approval on compliance with the terms

of the agreements.2

       The application at issue here was originally filed on December 28, 2000, and

was accepted for filing by the FCC on a non-strcamlined basis on January 26, 2001.3

Subsequently, the DOJ and the FBI requested that the Commission defer the grant of

the application pending the resolution by Reach, Telstra, PCCW, the DOJ and the FBI

of those aspects of the application that could give rise to national security, law

enforcement and public safety concerns.            When this request was made, the parties

were engaged in negotiations to reach an agreement that would ensure that national

security, law enforcement and public safety concerns were adequately addressed.

       The DOJ and the FBI have now entered into an Agreement with Reach, Telstra

and PCCW.       The Agreement is intended to ensure that the DOJ, the FBI and other

entities with responsibility for enforcing the law, protecting the national security and

preserving public safety can proceed in a legal, secure and confidential manner to

satisfy these responsibilities.      Accordingly, the DOJ and the FBI hereby advise the

Commission that the DOJ and the FBI have no objection to the FCC granting the

above—referenced Section 214 application of Reach, provided that the Commission

conditions its grant on compliance with the terms of the afore—described Agreement.




 2       See, e.g., Memorandum Opinion and Order, Merger of MCI Communications Corp. and British
 Telecommunications, pic, 12 FCC Red 15,351 (1997) (agreement adopted by the Commission, but the
 merger did not take place) Memorandum Opinion and Order, AirTouch Communications, Inc. and
 Vodafone Group, ple, DA No. 99—1200, 1999 WL 413237 (rel. June 22, 1999); Memorandum Opinion and
 Order, AT&T Corp., British Telecommunications, plc, VLT Co. LLC., Vielet License Co., LLC and TNV
 [Bahamas}, 14 FCC Red (Oct. 29, 1999); Memorandum Opinion and Order, Vodafone AirTouch PLC and
 Beil Atlantic Corp., DA No. 99—2415, 2000 WL 332670 ({rel. Mar. 30, 2000}; Memorandum Opinion and
 Order, Aerial Communications, Inc. and VoiceStream Wireless Holding Corp., 15 FCC Red 10,089 {2000};
     orandum Opinien and Order       GiPH PCS, Inc. and Eliska Wireless Ventures License Subsidiary 1,
                                    2000); Memorandum Opinion and Order, VoiceStream Wireless
                                1. and Deutsche Telekom AG, IB Docket No.00—187, 2001 WL 431689

                                                       , rel. January 26, 2001.
                                                  to


      In addition, the DOJ and the FBI also would have no objection if the FCC chose

to grant the Reach Section 214 application by issuing a Public Notice rather than a

formal written opinion, provided said Notice clearly states that the authorization

granted to. Reach is conditioned upon compliance with the terms of the afore—described

Agreement.

      Finally, The DOJ and the FBI are authorized to state that Reach, Telstra and

PCCW do not object to the grant of this Petition.

Respectfully submitted,




    he4 204.                                             ATohee———
   m Maie
John G. Malcolm
                                                     U
                                                Larry R. Parkinson
Deputy Assistant Attorney General               General Counsel
Criminal Division                               Federal Bureau of Investigation
950 Pennsylvania Avenue, N.W.                   935 Pennsylvania Avenue, N.W.
Washington, D.C. 20530                          Washington, D.C. 20532
(202) 616—3928                                  (202) 324—6229

November     24 _, 2001
                                           4e


                                      Certificate of Service

       I, Myla R. Saldivar—Trotter, Federal Bureau of Investigation, hereby certify that on this
30th day of November 2001, I caused a true and correct copy of the foregoing PETITION TO
ADOPT CONDITIONS TO SECTION 214 AUTHORIZATIONS to be served via hand
delivery (indicated by *) or by mail to the following parties:


Rebecca Arbogast*                                    Lauren Kravetz*
Chief                                                Special Counsel
Telecommunication Division                           Commercial Wireless Division
International Bureau                                 Wireless Telecommunications Bureau
Federal Communications Commission                    Federal Communications Commission
445 Twelfth Street, S.W., Rm. 6—A746                 445 Twelfth Street, SW. , Rm. 4—A163
Washington, D.C. 20554                               Washington, D.C. 20554

Claudia Fox*                                         James Bird*
Chief                                                 Senior Counsel
Telecommunications Division                          Office of General Counsel
International Bureau                                 Federal Communications Commission
Federal Communications Commission                    445 Tweifth Street, S.W., Rm. 6—B724
445 Twelfth Street, SW., Rm. 6—A848                  Washington, D.C. 20554
Washington, D.C. 20554

Anna Gomez*                                          Linda Haller**
Deputy Chief                                         Assistant Chief
International Bureau                                 International Bureau
Federal Communications Commission                    Federal Communications Commission
445 Twelfth Street, S.W., Rm. 6—C745                 445 Twelfth Street, SW., Rm. 6—€746
Washington, D.C. 20554                                Washington, D.C. 20554



Chris Murphy*                                         Robert M. Bromery*
Senior Legal Advisor                                  Chief
International Bureau                                  Electromagnetic Compatibility Division
Federal Communications Commission                     Office of Engineering and Technology
445 Twelfth Street, S.W., Rm. 6—€767                  Federal Communications Commission
Washington, D.C. 20554                                445 Twelfth Street, SW ., Rm. 7—A224
                                                      Washington, D.C. 20554

 Telstra Corporations Limited                         Reach Ltd.
 Level 26                                             Secretary
 242 Exhibition Street                                Clarendon House
      ourne. Victoria 3000                            Two Church Street
                                                      Hamilton HM11
                                                      Bermuda


Pacific Century CyberWorks Limited   Gregory C. Staple
38th Floor                           Vinson & Elkins
Citibank Tower                       1455 Pennsylvania Avenue, N.W.
Citibank Plaza                       Washington, D.C. 20004—1008
3 Garden Road
Central

Robert J. Aamoth
Hong Kong
Kelley Drye & Warren LLP
1200 Nineteenth Street, NW
Washington, D.C. 20036—2423




                                     Mylafi. SaZivar-Trotter


                                               AGREEMENT

This AGREEMENT is made as of the date of the last signature affixed hereto, by and between
Reach Ltd. ("Reach"), Telstra Corporation Limited ACN 051 775 556 ("Telstra"), and Pacific
Century CyberWorks Limited ("PCCW"), on the one hand, and the Federal Bureau of
Investigation ("FBI") and the U.S. Department of Justice ("DOJ"), on the other (referred to
individually as a "Party" and collectively as the "Parties").

                                                RECITALS

      WHEREAS, U.S. communication systems are essential to the ability of the U.S.
government to fulfill its responsibilities to the public to preserve the national security of the
United States, to enforce the laws, and to maintain the safety of the public;

         WHEREAS, the U.S. government has an obligation to the public to ensure that U.S.
communications and related information are secure in order to protect the privacy ofU.S.
persons and to enforce the laws of the United States;

         WHEREAS, it is critical to the well being of the nation and its citizens to maintain the
viability, integrity, and security of the communications systems of the United States (see, eg.,
Presidential Decision Directive 63 on Critical Infrastructure Protection);

         WHEREAS, protection of Classified, Controlled Unclassified, and Sensitive Information
 is also critical to U.S. national security;

        WHEREAS, Reach has filed with the Federal Communications Commission ("FCC") an
 application (FCC File Number ITC—214—20001228—00771) under Section 214 of the
 Cormunications Act of 1934, as amended, to provide facilities—based and resale
 telecommunications services between the United States and all authorized international points,
 except Kiribati;

          WHEREAS, as disclosed to the FCC, Reach is a joint venture that is indirectly owned
 50% by Telstra, an Australian corporation, and 50% by PCCW, a Hong Kong corporation, and
 Telstra, in turn, is 50.1% owned by the Federal Government of Australia, while the foreign
 government ownership of PCCW, if any, is not greater than 10%;

          WHEREAS, upon FCC grant of the application in FCC File Number ITC—214—20001228—
 00771, Reach proposes to acquire 100% of the stock of Telstra Wholesale Trading, Inc.
 ("TWT"), an indirect wholly owned subsidiary of Telstra;

          WHEREAS, the FCC‘s grant of the application in FCC File Number ITC—214—20001228—
  00771 may be made subject to conditions relating to national security, law enforcement, and
  public safety, and whereas Reach, Telstra, and PCCW have each agreed to enter into this
  Agreement with the FBI and the DOJ to address issues raised by the FBI and the DOJ, and to
  request that the FCC condition the authorizations and licenses granted by the FCC on their
  compliance with this Agreement;


  DCOL/GRIFJ/161757.1


        WHEREAS, by Executive Order 12661, the President, pursuant to Section 721 of the
Defense Production Act, as amended, authorized the Committee on Foreign Investment in the
United States ("CFIUS") to review, for national security purposes, foreign acquisitions of U.S.
companies;

       WHEREAS, Telstra and PCCW intend to submit a voluntary notice with CFIUS
regarding the formation of Reach and Reach‘s acquisition of TWT and have each entered into
this Agreement to resolve any national security issues that the DOJ and the FBI might raise,
including in the CFIUS review process; and

        WHEREAS, representatives of Telstra and PCCW have met with representatives of the
FBI and the DOJ to discuss issues raised by the FBI and the DOJ. In these meetings, Telstra and
PCCW represented that: (a) neither Telstra, PCCW, nor Reach has present plans, or is aware of
present plans of any other entity, as a result of which a Domestic Communications Company will
provide Domestic Communications through facilities located outside the United States (though
the Parties recognize that Reach, Telstra, and PCCW may, for bonafide commercial reasons as
provided in this Agreement, use such facilities); and (b) Telstra and PCCW are entities whose
 commercial operations are wholly separate from their respective Governments and whose
 activities are overseen by independent regulatory authorities in their respective countries.
 Further, Telstra represented that TWT‘s U.S. communication businesses operate in extremely
 competitive markets and, to Telstra‘s knowledge, control less than one percent of the total U.S.
 market for services, in terms of revenues.

         NOW THEREFORE, the Parties are entering into this Agreement to address national
 security, law enforcement and public safety issues.

                            ARTICLE 1: DEFINITION OF TERMS

 As used in this Agreement:

 1L.1   "Call Associated Data" or "CAD" means any information related to a Domestic
 Communication or related to the sender or recipient of that Domestic Communication and
 includes without limitation subscriber identification, called party number, calling party number,
 start time, end time, call duration, feature invocation and deactivation, feature interaction,
 registration information, user location, diverted to number, conference party numbers, post cut—
 through dial digit extraction, in—band and out—of—band signaling, and party add, drop and hold.

  1.2    "Classified Information" means any information that has been determined pursuant to
  Executive Order 12958, or any predecessor or successor order, or the Atomic Energy Act of
  1954, or any statute that succeeds or amends the Atomic Energy Act, to require protection
  against unauthorized disclosure.

  1.3     "Control" and "Controly" means the power, direct or indirect, whether or not exercised,
  and whether or not exercised or exercisable through the ownership of a majority or a dominant
  minority of the total outstanding voting securities of an entity, or by proxy voting, contractual
  arrangements, or other means, to determine, direct, or decide matters affecting an entity; in
  particular, but without limitation, to determine, direct, take, reach, or cause decisions regarding:


  DCOLV/GRIF/161757.1


       (a)      the sale, lease, mortgage, pledge, or other transfer of any or all of the principal
       assets of the entity, whether or not in the ordinary course of business;

       (b)      the dissolution of the entity;

       (c)      the closing and/or relocation of the production or research and development
       facilities of the entity;

       (d)      the termination or nonfulfilliment of contracts of the entity;

       (e)     the amendment of the articles of incorporation or constituent agreement of the
       entity with respect to the matters described in Section 1.3(a) through (d); or

        (£)     Reach‘s, Telstra‘s and PCCW‘s obligations under this Agreement.

1.4     "Controlled Unclassified Information" means unclassified information, the export of
which is controlled by the International Traffic in Arms Regulations (ITAR), 22 C.F.R. Chapter
1, Subchapter M, or the Export Administration Regulations (EAR), 15 C.F.R., Chapter VII,
Subchapter C.

1.5     "Domestic Communications" means (i) Wire Communications or Electronic
Communications (whether stored or not) from one U.S. location to another U.S. location and
(ii) the U.S. portion of a Wire Communication or Electronic Communication (whether stored or
not) that originates or terminates in the United States.

1.6    "Domestic Communications Company" means all those subsidiaries, divisions,
departments, branches and other components of Reach, Telstra and PCCW that provide
Domestic Communications. If any subsidiary, division, department, branch or other component
of Reach, Telstra and PCCW provides Domestic Communications after the date thatall the
Parties execute this Agreement, then such subsidiary, division, department, branch or other
component of Reach, Telstra and PCCW shall be deemed to be a Domestic Communications
Company. If Reach, Telstra and PCCW has or in the future obtains Control over a jointventure
or other entity that provides Domestic Communications, then the joint venture or entity shall also
be deemed to be a Domestic Communications Company.

 1.7     "Domestic Communications Infrastructure" means facilities and equipment used by or on
 behalf of a Domestic Communications Company: (a) to provide, process, direct, control,
 supervise or manage Domestic Communications; (b) that are physically located in the United
 States; or (c) to control the equipment described in (a) above. Domestic Communications
 Infrastructure does not include equipment or facilities used by service providers that are not
 Domestic Communications Companies and that are:

         (a)     interconnecting communications providers; or

         (b)     providers of services or content that are

                 (i)     accessible using the communications services of Domestic
                         Communications Companies, and


                                                    3
  DCQLGRIFI61757.1


                (ii)   available in substantially similar form and on commercially reasonable
                       terms through communications services of companies other than Domestic
                        Communications Companies.

1.8    "Effective Date" means the date on which Reach consummates the acquisition of the
stock of TWT.

1.9     "EBlectronic Communication" has the meaning given it in 18 U.S.C. § 2510(12).

1.10 "Electronic Surveillance" means (a) the interception of wire, oral, or electronic
communications as defined in 18 U.S.C. §§ 2510(1), (2), (4) and (12), respectively, and
electronic surveillance as defined in 50 U.S.C. § 1801(f); (b) access to stored wire or electronic
communications, as referred to in 18 U.S.C. §2701 et seq.; (c) acquisition of dialing or signaling
information through pen register or trap and trace devices or other devices or features capable of
acquiring such information pursuant to law as defined in 18 U.S.C. § 3121 et seq. and 50 U.S.C.
§ 1841 et seq.; (d) acquisition of location related information concerning a service subscriber or
facility; (e) preservation of any of the above information pursuant to 18 U.S.C. § 2703(f); and (£)
access to, or acquisition or interception of, or preservation of communications or information as
described in (a) through (e) above and comparable State laws.

1.11    "Foreign" where used in this Agreement, whether capitalized or lower case, means non—
U.S.

 1.12   "Intercept" or "Intercepted" has the meaning defined in 18 U.S.C. § 2510(4).

 1.13   "Reach" means Reach Ltd., a Bermuda corporation.

 1.14    "Lawful U.S. Process" means lawful U.S. federal, state or local Electronic Surveillance
 court orders or authorizations, and other lawful orders, processes or authorizations for access to
 or disclosure of Domestic Communications, Call Associated Data, Transactional Data or
 Subscriber Information authorized by U.S. federal, state or local law.

 1.15    "Party" and "Parties" have the meanings given them in the Preamble.

 1.16    "PCCW" means Pacific Century CyberWorks Limited, a Hong Kong corporation.

 1.17    "Pro forma assignments or proforma transfers of control" are transfers that do not result
 in a change in the entity‘s ultimate control as defined by Section 63.24 of the FCC‘s Rules (47
 CER. §63.24).

  1.18 "Sensitive Information" means unclassified information regarding (a) the persons or
  facilities that are the subjects of Lawful U.S. Process, (b) the identity of the government agency
  or agencies serving such Lawful U.S. Process, (c) the location or identity of the line, circuit,
  transmission path, or other facilities or equipment used to conduct Electronic Surveillance
  pursuant to Lawful U.S. Process, (d) the means of carrying out Electronic Surveillance pursuant
  to Lawful U.S. Process, (e) the type(s) of service, telephone number(s), records,
  communications, or facilities subjected to Lawful U.S. Process, and (f) other unclassified
  information designated in writing by an authorized official of a federal, state or local law


  DCQUGRIEV161757.1


enforcement agency or a U.S. intelligence agency as "Sensitive Information." Domestic
Communications Companies may dispute pursuant to Article 4 whether information is Sensitive
Information under subparagraph 1.14(f). Such information shall be treated as Sensitive
Information unless and until the dispute is resolved in the Domestic Communications
Companies‘ favor.

1.19 "Subscriber Information" means information relating to subscribers of Domestic
Communications Companies of the type referred to and accessible subject to procedures
specified in 18 U.S.C. §2703(c) or (d) or 18 U.S.C. §2709. Such information shall also be
considered Subscriber Information when it is sought pursuant to the provisions of other Lawful
U.S. Process.

1.20 "Telstra" means Telstra Corporation Limited ACN 051 775 556, an Australian
corporation.

1.21     "Transactional Data" means:

         (a)      "call identifying information," as defined in 47 U.S.C. § 1001(2), including
         without limitation the telephone number or similar identifying designator associated with
         a Domestic Communication;

         (b)      Internet address or similar identifying designator associated with a Domestic
         Communication;

         (c)      the time, date, size, and duration of a Domestic Communication;

         (d)     any information possessed by the provider of Domestic Communications relating
         specifically to the identity and physical address of the provider‘s subscriber, user, or
         account payer;

         (e)      to the extent associated with such subscriber, user, or account payer, any
         information possessed by the Domestic Communications provider relating to all
         telephone numbers, Internet addresses, or similar identifying designators; the physical
         location of equipment, ifknown and if different from the location information provided
         under (£) below; types of services; length of service; fees; and usage, including billing
          records; and

          (6)    as to any mode of transmission (including mobile transmissions), and to the extent
          permitted by U.S. laws, any information indicating as closely as possible the physical
          location to or from which a Domestic Communication is transmitted.

  The term does not include the content of any communication.

  1.22    "United States" means the United States of America including all of its States, districts,
  territories, possessions, commonwealths, and the special maritime and territorial jurisdiction of
  the United States.

  1.23    "Wire Communication" has the meaning given it in 18 U.S.C. §2510(1).


                                                    5
  DCQLGRIFI/L61757.1


1.24 Other capitalized terms used in this Agreement and not defined in this Article shall have
the meanings assigned them elsewhere in this Agreement. The definitions in this Agreement are
applicable to the singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such term. Whenever the words "include," "includes,"
or "including" are used in this Agreement, they shall be deemed to be followed by the words
"*without limitation."

            ARTICLE 2: FACILITIES, INFORMATION STORAGE AND ACCESS

2.1      Except to the extent and under conditions concurred in by the FBI and the DOJ in
writing:

           (a)      in the absence of a strictly bona fide commercial reason, all Domestic
           Communications Infrastructure shall at all times be located in the United States and will
         be directed, controlled, supervised and managed by the Domestic Communications
           Company; and

           (b)     all Domestic Communications that are carried by or through, in whole or in part,
           the Domestic Communications Infrastructure shall pass through a facility under the
           control of a Domestic Communications Company and physically located in the United
           States, from which Electronic Surveillance can be conducted pursuant to Lawful U.S.
           Process. The Domestic Communications Company will provide technical or other
           assistance to facilitate such Electronic Surveillance.

 2.2    Domestic Communications Companies shall ensure at all times that their Domestic
 Communications Infrastructure is configured such that it will be capable of complying, and
 Domestic Communications Company employees in the United States will have unconstrained
 authority to comply, in an effective, efficient, and unimpeded fashion, with:

            (a)     Lawful U.S. Process;

            (b)     the orders of the President in the exercise of his/her authority under § 706 of the
            Communications Act of 1934, as amended, (47 U.S.C. § 606), and under § 302(e) ofthe
            Aviation Act of 1958 (49 U.S.C. § 40107(b)) and Executive Order 11161 (as amended by
            Executive Order 11382); and

            (c)    National Security and Emergency Preparedness rules, regulations and orders
            issued pursuant to the Communications Act of 1934, as amended (47 U.S.C. § 151 et
            seq.).

  2.3       Domestic Communications Companies shall have the ability to provide in the United
  States the following:

            (a)     stored Domestic Communications, if such communications are stored by or on
            behalf of a Domestic Communications Company for any reason;

             (b)     any Wire Communications or Electronic Communications (including any other
             type of wire, voice or electronic communication not covered by the definitions of Wire


                                                       6
   DCOL/GRIFI/161757.1


       Communication or Electronic Communication) received by, intended to be received by,
       or stored in the account of a customer or subscriber of a Domestic Communications
       Company, if such communications are stored by or on behalf of a Domestic
       Communications Company for any reason;

       (c)    Transactional Data and Call Associated Data relating to Domestic
       Communications, if such data are stored by or on behalf of a Domestic Communications
       Company for any reason;

       (d)     Subscriber Information, if such information is stored by or on behalf of a
       Domestic Communications Company for any reason, concerning customers who are
       U.S.—domiciled, customers who hold themselves out as being U.S.—domiciled, and
       customers who make a Domestic Communication; and

       (e)    billing records of customers who are U.S.—domiciled, customers who hold
       themselves out as being U.S.—domiciled, and customers who make a Domestic
       Communication, for so long as such records are kept and at a minimum for as long as
       such records are required to be kept pursuant to applicable U.S. law or this Agreement.

2.4    Domestic Communications Companies shall ensure that the data and communications
described in Section 2.3(a)—(e) of this Agreement are stored in a manner not subject to mandatory
destruction under any foreign laws, if such data and communications are stored by or on behalf
of a Domestic Communications Company for any reason. Domestic Communications
Companies shall ensure that the data and communications described in Section 2.3(a)—(e) of this
Agreement shall not be stored by or on behalf of a Domestic Communications Company outside
of the United States unless such storage is strictly for bonafide commercial reasons weighing in
favor of storage outside the United States.

2.5    Domestic Communications Companies shall store for at least two years all billing records
maintained by Domestic Communications Companies for their customers and subscribers.

2.6     Upon a request made pursuant to 18 U.S.C. § 2703(f) by a governmental entity within the
United States to preserve any information in the possession, custody, or control of Domestic
Communications Companies that relates to (a) a customer or subscriber of a Domestic
Communications Company, (b) any communication of such customer or subscriber described in
(a) above, or (c) any Domestic Communication, Domestic Communications Companies shall
store such preserved records or other evidence in the United States.

2.7     Nothing in this Agreement shall excuse a Domestic Communications Company from any
obligation it may have to comply with U.S. legal requirements for the retention, preservation, or
production of such information or data.

2.8     Except strictly for bonafide commercial reasons, Domestic Communications Companies
shall not route a Domestic Communication outside the United States.

2.9    Domestic Communications Companies shall comply, with respect to Domestic
Communications, with all applicable FCC rules and regulations governing access to and storage
of Customer Proprietary Network Information ("CPNI"), as defined in 47 U.S.C. § 222(h)(1).


DCO L/GRIFJ/161757.1                             7


                                    ARTICLE 3: SECURITY

3.1    Domestic Communications Companies shall take all reasonable measures to prevent the
use of or access to the Domestic Communications Infrastructure to conduct Electronic
Surveillance in violation of any U.S. federal, state, or local laws or the terms of this Agreement.
These measures shall take the form of detailed technical, organizational, personnel related
policies and written procedures, necessary implementation plans, and physical security measures.

3.2     Domestic Communications Companies shall not, directly or indirectly, disclose or permit
disclosure of, or provide access to Domestic Communications, Call Associated Data,
Transactional Data, or Subscriber Information stored by Domestic Communications Companies
in the United States to any person if the purpose of such access is to respond to the legal process
or the request of or on behalf of a foreign government, identified representative, component or
subdivision thereofwithout the express written consent ofthe DOJ or the authorization of a court
of competent jurisdiction in the United States. Any requests made to an officer of a Domestic
Communications Company or submission of legal process described in this Section 3.2 of this
Agreement shall be reported by executive officers of Domestic Communications Companies to
the DOJ as soon as possible and in no event later than five (5) business days after such request or
legal process is received by and personally known to the executive officers of Domestic
Communications Companies. Domestic Communications Companies shall take reasonable
measures to ensure that their executive officers will promptly learn of all such requests or
submission of legal process described in this Section 3.2 of this Agreement.

 3.3    Domestic Communications Companies shall not, directly or indirectly, disclose or permit
 disclosure of, or provide access to:

         (a)      Classified or Sensitive Information; or

         (b)      Subscriber Information, Transactional Data, Call Associated Data, or a copy of
         any Wire Communications or Electronic Communication intercepted or acquired
         pursuant to Lawful U.S. Process to any foreign government, identified representative,
         component or subdivision thereof without satisfying all applicable U.S. federal, state and
         local legal requirements pertinent thereto, and obtaining the express written consent of
         the DOJ or the authorization of a court of competent jurisdiction in the United States.
         Any requests or any legal process submitted by a foreign government, an identified
         representative, a component or subdivision thereof to Domestic Communications
          Companies for the communications, data or information identified in this Section 3.3 of
          this Agreement that is maintained by Domestic Communications Companies shall be
          referred to the DOJ as soon as possible and in no event later than five (5) business days
          after such request or legal process is received by and personally known to the executive
          officers of Domestic Communications Companies unless the disclosure of the request or
          legal process would be in violation of an order of a court of competent jurisdiction within
          the United States. Domestic Communications Companies shall take reasonable measures
          to ensure that their executive officers will promptly learn of all such requests or
          submission of legal process described in this Section 3.3 of this Agreement.




                                                    g
  DCOL/GRIF/161757.1


3.4     At least every three (3) months, Domestic Communications Companies shall notify DOJ
in writing of legal process or requests by foreign nongovernmental entities to Domestic
Communications Companies for access to or disclosure of Domestic Communications carried by
or through, in whole or in part, the Domestic Communications Infrastructure unless the
disclosure of the legal process or request would be in violation of an order of a court of
competent jurisdiction within the United States.

3.5    Within sixty (60) days after the Effective Date, Domestic Communications Companies
shall designate points of contact within the United States with the authority and responsibility for
accepting and overseeing the carrying out of Lawful U.S. Process to conduct Electronic
Surveillance of or relating to Domestic Communications carried by or through, in whole or in
part, the Domestic Communications Infrastructure; or relating to customers or subscribers of
Domestic Communications Companies. The points of contact shall be assigned to Domestic
Communications Companies security office(s) in the United States, shall be available twenty—
four (24) hours per day, seven (7) days per week and shall be responsible for accepting service
and maintaining the security of Classified Information and any Lawful U.S. Process for
Electronic Surveillance of or relating to Domestic Communications carried by or through, in
whole or in part, the Domestic Communications Infrastructure, or relating to customers or
subscribers of Domestic Communications Companies, in accordance with the requirements of
U.S. law. Promptly after designating such points of contact, Domestic Communications
 Companies shall notify the FBI and the DOJ in writing of the points of contact, and thereafter
 shall promptly notify the FBI and the DOJ of any change in such designation. The points of
 contact shall be resident U.S. citizens who are eligible for appropriate U.S. security clearances.
 Domestic Communications Companies shall cooperate with any request by a government entity
 within the United States that a background check and/or security clearance process be completed
 for a designated point of contact.

 3.6       Domestic Communications Companies shall protect the confidentiality and security of all
 Lawful U.S. Process served upon them and the confidentiality and security of Classified
 Information and Sensitive Information in accordance with U.S. federal and state law or
 regulation and this Agreement.

 3.7       Domestic Communications Companies shall, within security office(s) in the United
 States:

           (a)    take appropriate measures to prevent unauthorized access to data or facilities that
           might contain Classified Information or Sensitive Information;

           (b)     assign U.S. citizens, who meet high standards of trustworthiness for maintaining
           the confidentiality of Sensitive Information, to positions that handle or that regularly deal
           with information identifiable to such person as Sensitive Information;

           (c)     upon request from the DOJ or FBI, provide the name, social security number and
           date of birth of each person who regularly handles or deals with Sensitive Information;

           (d)     require that personnel handling Classified Information shall have been granted
            appropriate security clearances;



  DCOGRIEV/161757.1                                  9


        (e)    provide that the points of contact described in Section 3.5 of this Agreement shall
        have sufficient authority over any of Domestic Communications Companies‘ employees
        who may handle Classified Information or Sensitive Information to maintain the
        confidentiality and security of such information in accordance with applicable U.S. legal
        authority and the terms of this Agreement; and

        (8)      maintain appropriately secure facilities (e.g., offices) for the handling and storage
        of any Classified Information and Sensitive Information.

3.8    Domestic Communications Companies shall instruct appropriate officials, employees,
contractors, and agents as to their obligations under this Agreement and shall issue periodic
reminders to them of such obligations.

3.9   Nothing contained in this Agreement shall limit or affect the authority of a U.S.
government agency to deny, limit or revoke Domestic Communications Companies‘ access to
Classified, Controlled Unclassified, and Sensitive Information under that agency‘s jurisdiction.

                                     ARTICLE 4: DIESPUTES

4.1      The Parties shall use their best efforts to resolve any disagreements that may arise under
this Agreement. Disagreements shall be addressed, in the first instance, at the staff level by the
Parties‘ designated representatives. Any disagreement that has not been resolved at that level
shall be submitted promptly to the Chief Executive Officers of Reach, Telstra, and PCCW, the
General Counsel of the FBI, and the Deputy Attorney General, Criminal Division, DOJ, or their
designees, unless the FBI or the DOJ believes that important national interests can be protected,
or a Domestic Communications Company believes that its paramount commercial interests can
be resolved, only by resorting to the measures set forth in Section 4.2 of this Agreement. If, after
meeting with higher authorized officials, any of the Parties determines that further negotiation
 would be fruitless, then that Party may resort to the remedies set forth in Section 4.2 of this
 Agreement. If resolution of a disagreement requires access to Classified Information, the Parties
 shall designate a person or persons possessing the appropriate security clearances for the purpose
 of resolving that disagreement.

 4.2.     Subject to Section 4.1 of this Agreement, if any of the Parties believes that any other of
 the Parties has breached or is about to breach this Agreement, that Party may bring an action
 against the other Party for appropriate judicial relief.

 4.3      Reach, Telstra, and PCCW agree that the United States would suffer irreparable injury if
 for any reason a Domestic Communications Company failed to perform any of its significant
 obligations under this Agreement, and that monetary relief would not be an adequate remedy.
 Accordingly, Reach, Telstra, and PCCW agree that, in seeking to enforce this Agreement against
 Domestic Communications Companies, the FBI and the DOJ shall be entitled, in addition to any
 other remedy available at law or equity, to specific performance and injunctive or other equitable
 relief.

  4.4     The availability of any civil remedy under this Agreement shall not prejudice the exercise
  of any other civil remedy under this Agreement or under any provision of law, nor shall any
  action taken by a Party in the exercise of any remedy be considered a waiver by that Party of any

                                                    10
  DCQOLGRIFW161757.1


other rights or remedies. The failure of any Party to insist on strict performance of any of the
provisions of this Agreement, or to exercise any right they grant, shall not be construed as a
relinquishment or future waiver, rather, the provision or right shall continue in full force. No
waiver by any Party of any provision or right shall be valid unless it is in writing and signed by
the Party.

4,.5    Reach, Telstra and PCCW agree that, to the extent that a Domestic Communications
Company or any of its property (including FCC licenses and authorizations and intangible
property) is or becomes entitled at any time to any immunity on the ground of sovereignty or
otherwise based upon a status as an agency or instrumentality of government from any legal
action, suit or proceeding or from setoff or counterclaim relating to this Agreement from the
jurisdiction of any competent court or the FCC, from service of process, from attachment prior to
judgment, from attachment in aid of execution of a judgment from execution pursuant to a
judgment or arbitral award, or from any other legal process in any jurisdiction, it, for itself and
its property expressly, irrevocably and unconditionally waives, and agrees not to plead or claim,
any such immunity with respect to matters arising with respect to this Agreement or the
© obligations herein (including any obligation for the payment of money) in any proceeding
brought by a U.S. federal, state or local governmental authority. Reach, Telstra, and PCCW
agree that the waiver in this provision is irrevocable and is not subject to withdrawal in any
jurisdiction or under any statute, including the Foreign Sovereign Immunities Act, 28 U.S.C.
 Section 1602 et seq. The foregoing waiver shall constitute a present waiver of immunity at any
 time any action is initiated by a U.S. federal, state or local governmental authority against any
 Domestic Communications Company with respect to compliance with this Agreement.

 4.6     It is agreed by and between the Parties that a civil action among the Parties for judicial
 relief with respect to any dispute or matter whatsoever arising under, in connection with, or
 incident to, this Agreement shall be brought, if at all, ifjurisdiction can be obtained, in the
 United States District Court for the District of Columbia.

 4.7     Nothing in this Agreement shall limit or affect the right of a U.S. government agency to:

         (a)    seek revocation by the FCC of any license, permit, or other authorization granted
         or given by the FCC to Domestic Communications Companies, or any other sanction by
          the FCC against Domestic Communications Companies;

          (b)    seek civil sanctions for any violation by Domestic Communications Companies of
          any U.S. law or regulation or term of this Agreement; or

          (c)      pursue criminal sanctions against Domestic Communications Companies, or any
          director, officer, employee, representative, or agent of Domestic Communications
          Companies, or against any other person or entity, for violations of the criminal laws of
          the United States.

  4.8     This Article 4, and the obligations imposed and rights conferred herein, shall be effective
  upon the execution of this Agreement by all the Partics.

                ARTICLE 5: AUDITING, REPORTING, NOTICE AND LIMITS



                                                    11
   DCOVGRIFI/61757.1


5.1    Ifany Domestic Communications Company makes any filing with the FCC or any other
governmental agency relating to the Control of a Domestic Communications Company except
for filings with the FCC for assignments or transfers of control to any Domestic Communications
Company that are proforma, Reach, Telstra, or PCCW shall promptly provide to the FBI and the
DOJ written notice and copies of such filing. This Section 5.1 is effective upon execution of this
Agreement by all the Parties.

5.2     Effective upon execution ofthis Agreement by all the Parties, Reach, Telstra, and PCCW
shall provide to the FBI and the DOJ written notice within fourteen (14) days after its executive
officers have personal knowledge that any foreign government, any foreign government
controlled entity, or any other foreign entity obtains or seeks to obtain an ownership interest or
increase its existing ownership interest (direct or indirect) in Reach, Telstra, and PCCW to a
level such that the foreign government or entity is itself entitled to (i) Board of Directors
representation (including representation on the Management Board or Supervisory Board), (ii)
special voting or veto rights, or(iii) minority shareholder rights under applicable Articles of
Incorporation, bylaws (or equivalent documents), or other constituent agreements; or in the case
of a foreign entity, obtains Control of Reach, Telstra, and PCCW. To the extent known to
Reach, Telstra, and PCCW, such notice shall, at a minimum, (a) identify the foreign government
or foreign entity, (b) quantify the amount of ownership interest in Reach, Telstra, and PCCW that
the entity holds or will likely hold, and (c) include a description of the transaction that has
resulted in or through which the foreign government or foreign entity seeks to obtain Control of
Reach, Telstra, and PCCW.

 5.3     Domestic Communications Companies shall provide to the FBI and the DOJ thirty (30)
 days advance notice if a Domestic Communications Company plans to store or have stored on its
 behalf any data or communications as defined in Section 2.3(a)—(e) outside the United States.
 Such notice shall, at a minimum, (a) include a description of the type of information to be stored
 outside the United States, (b) identify the custodian of the information if other than a Domestic
 Communications Company, (c) identify the location where the information is to be located, and
 (d) identify the factors considered in deciding to store the information outside of the United
 States (see Section 2.4 of this Agreement). This Section 5.3 is effective 30 days after execution
 of this Agreement by all the Parties.

 5.4     Reach, Telstra, and PCCW have entered into or may enter into joint ventures under which
 the joint venture or entity may provide Domestic Communications. To the extent Reach, Telstra,
 and PCCW does not have Control over such joint venture or entity, Reach, Telstra, and PCCW
 shall in good faith (a) notify such entity of this Agreement and its purposes, (b) endeavor to have
 such entity comply with this Agreement as if it were a Domestic Communications Company, and
 (c) consult with the FBI or the DOJ about the activities of such entity. This Section 5.4 is
  effective upon execution of this Agreement by all the Parties. Nothing in this Section 5.4 does
  nor shall it be construed to relieve Domestic Communications Companies of obligations under
  Sections 2.3 and 2.4 of this Agreement. The obligations of Reach, Telstra, and PCCW under this
  Section 5.4 shall not be considered "significant obligations" for purposes of Section 4.3 of this
  Agreement.

  5.5   If a Domestic Communications Company outsources functions covered by this
  Agreement to a third party that is not a Domestic Communications Company, that Domestic


                                                   12
  DCOMGRIFI/161757.1


Communications Company shall take reasonable steps to ensure that the third party complies
with the applicable terms of this Agreement. Such steps shall include the following:

        (a)     the Domestic Communications Company shall include in its contracts with any
        such third parties written provisions requiring that such third parties comply with all
        app licable terms of this Agreement or take other reasonable, good—faith measures to
        ensure that such third parties are aware of, agree to, and are bound to comply with the
        applicable obligations of this Agreement;

        (b)     if the Domestic Communications Company learns that the outsourcing third party
        or the outsourcing third party‘s employee has violated an applicable provision of this
        Agreement, the Domestic Communications Company will notify the DOJ and the FBI
        promptly; and

        (c)   with consultation and, as appropriate, cooperation with the DOJ and the FBI, the
        Domestic Communications Company will take reasonable steps necessary to rectify
        promptly the situation, which steps may (among others) include terminating the
        arrangement with the outsourcing third party, including after notice and opportunity for
        cure, and/or initiating and pursuing litigation or other remedies at law and equity.

 5.6     If any member of the Reach, Telstra, or PCCW Board of Directors or member of the
 senior management of Reach, Telstra, and PCCW (including the Chief Executive Officer,
 President, General Counsel, Chief Technical Officer, Chief Financial Officer or other senior
 officer) learns that any foreign government

         (a)     plans to participate or has participated in any aspect of the day—to—day
         management of Domestic Communications Companies in such a way that interferes with
         or impedes the performance by Domestic Communications Companies of duties and
         obligations under the terms of this Agreement, or interferes with or impedes the exercise
         by Domestic Communications Companies of its rights under the Agreement, or

         (b)       plans to exercise or has exercised, as a direct or indirect shareholder of Reach,
         Telstra, and PCCW or their subsidiaries, any Control of Domestic Communications
          Companies in such a way that interferes with or impedes the performance by Domestic
          Communications Companies of duties and obligations under the terms of this Agreement,
          or interferes with or impedes the exercise by Domestic Communications Companies of
          rights under the terms of this Agreement, or in such a way that foreseeably concerns
          Domestic Communications Companies‘ obligations under this Agreement,

 then such member shall promptly cause to be notified the Vice President for Legal Affairs or
  other designated representative of a Domestic Communications Company located in the United
  States, who in turn, shall promptly notify the FBI and the DOJ in writing of the timing and the
  nature ofthe government‘s plans and/or actions. This Section 5.6 is effective upon the execution
  of this Agreement by all the Parties.

  5.7   Domestic Communications Companies shall take practicable steps to ensure that, if any
  Domestic Communications Companies official, employee, contractor or agent acquires any
  information that reasonably indicates: (a) a breach of this Agreement; (b) Electronic Surveillance


  DCOU/GRIFI/161757.1                                13


conducted in violation of federal, state or local law or regulation; (c) access to or disclosure of
CPNI or Subscriber Information in violation of federal, state or local law or regulation (except
for violations of FCC regulations relating to improper use of CPNI); or (d) improper access to or
disclosure of Classified Information or Sensitive Information, then Domestic Communications
Companies shall notify the FBI and the DOJ in the same manner as specified in Section 5.6 of
this Agreement. This report shall be made promptly and in any event no later than 10 calendar
days after Domestic Communications Companies acquired information indicating a matter
described in Section 5.7(a)—(d) of this Agreement. Domestic Communications Companies shall
lawfully cooperate in investigating the matters described in Sections 5.6 and 5.7(a)—(d) of this
Agreement. Domestic Communications Companies need not report information where
disclosure of such information would be in violation of an order of a court of competent
jurisdiction in the United States. This Section 5.7 is effective thirty (30) days after execution of
this Agreement by all the Parties.

5.8   In response to reasonable requests made by the FBI or the DOJ, Domestic
Communications Companies shall provide access to information concerning technical, physical,
management, or other security measures and other reasonably available information needed by
the DOJ or the FBI to assess compliance with the then—effective terms of this Agreement. This
Section 5.8 is effective upon execution of this Agreement by all the Parties.

5.9      Upon reasonable notice and during reasonable hours, the FBI and the DOJ may visit and
inspect any part of Domestic Communications Companies‘ Domestic Communications
Infrastructure and security offices for the purpose of verifying compliance with the terms of this
Agreement. Domestic Communications Companies may have appropriate Domestic
 Communications Companies employees accompany U.S. government representatives throughout
 any such inspection.

~5.10 Upon reasonable notice from the FBI or the DOJ, Domestic Communications Companies
 will make reasonably available for interview officers or employees of Domestic
 Communications Companies, and will seek to require contractors to make available appropriate
 personnel located in the United States who are in a position to provide information to verify
 compliance with the then—effective terms of this Agreement. This Section 5.10 is effective upon
 execution of this Agreement by all the Parties.

 5.11 On or before the last day ofJanuary of each year, a designated senior corporate officer of
 Domestic Communications Companies shall submit to the FBI and the DOJ a report assessing
 Domestic Communications Companies‘ compliance with the terms of this Agreement for the
 preceding calendar year. The report shall include:

          (a)       a copy of the policies and procedures adopted to comply with this Agreement;

          (b)       a summary of the changes, if any, to the policies or procedures, and the reasons
           for those changes;

           (c)      a summary of any known acts of noncompliance with the terms of this
           Agreement, whether inadvertent or intentional, with a discussion of what steps have been
           or will be taken to prevent such acts from occurring in the future; and



                                                     14
  DCOLUGRIFI/161757.1


       (d)        identification of any other issues that, to Domestic Communications Companies‘
       knowledge, will or reasonably could affect the effectiveness of or compliance with this
       Agreement.

5.12 Effec'tive upon execution of this Agreement by all the Parties, all notices and other
commur{icathqs given or made relating to this Agreement, such as a proposed modification,
shall be in writing and shall be deemed to have been duly given or made as of the date of rec,:eipt
and shall be (a) delivered personally, or (b) sent by facsimile, (c) sent by documented overnight
courier service, or (d) sent by registered or certified mail, postage prepaid, addressed to the
Parties‘ designated representatives at the addresses shown below, or to such other representatives
at such others addresses as the Parties may designate in accordance with this Section:

Department of Justice
Assistant Attorney General
Criminal Division
Main Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530

Federal Bureau of Investigation
General Counsel
935 Pennsylvania Avenue, NW
 Washington, DC 20535

 With a copy to:

 Federal Bureau of Investigation
 The Assistant Director
 National Security Division
 935 Pennsylvania Avenue, NW
 Washington, DC 20535

 Reach Ltd.
 Secretary
 Clarendon House
 Two Church Street
 Hamilton HM11
 Bermuda

  Telstra Corporation Limited
  Level 26
  242 Exhibition Street
  Melbourne, Victoria 3000
  Australia
  Attention: Deputy Group General Counsel

  Pacific Century CyberWorks Limited



     OLVGRIF/161757.1                              15
  DCOLU/GRIF]


38th Floor
Citibank Tower
Citibank Plaza
3 Garden Road
Central
Hong Kong

With a copy to:

Vinson & Elkins LL.P.
1455 Pennsylvania Avenue, N.W.
Washington, D.C. 20004—1008
Attention: Gregory C. Staple

and

Kelley Drye & Warren L.L.P.
1200 Nineteenth Street, N.W.
Washington, D.C. 20036—2423
Attention: Robert J. Aamoth

                       ARTICLE 6: FREEDOM OF INFORMATION ACT

6.1      The DOJ and FBI shall take all reasonable measures to protect from public disclosure all
information submitted by Telstra, PCCW, or Reach to the DOJ or FBI in connection with this
Agreement and clearly marked with the legend "Business Confidential; subject to protection
under 5 U.S.C. § 553(b); not to be released without notice to the filing party" or similar
designation. Such markings shall signify that it is the company‘s position that the information so
 marked constitutes "trade secrets" and/or "commercial or financial information obtained from a
 person and privileged or confidential," or otherwise warrants protection within the meaning of 5
 U.S.C. 552(b)(4). If a request is made under 5 U.S.C. 552(a)(3) for information so marked, and
 disclosure of any information (including disclosure in redacted form) is contemplated, the DOJ
 or FBI, as appropriate, shall notify the company of the intended disclosure as provided by
 Executive Order 12600, 52 Fed. Reg. 23781 (June 25, 1987). If the company objects to the
 intended disclosure and its objections are not sustained, the DOJ or FBI, as appropriate, shall
 notify the company of its intention to release (as provided by Section 5 of E.0. 12600) not later
 than five business days prior to disclosure of the challenged information.

 6.2     Nothing in this Agreement shall prevent the FBI or the DOJ from lawfully disseminating
 information as appropriate to seek enforcement of this Agreement, provided that the FBI and the
 DOJ take all reasonable measures to protect from public disclosure the information marked as
 described in Section 6.1.

 6.3      The DOJ and FBI acknowledge that officers and employees of the United States and of
 any department or agency thereof are subject to liability under 18 U.S.C. § 1905 for unlawful
 disclosure of information provided to them by other Parties to this Agreement.



  DCOL/GRIFIA61757.1                              16


                         ARTICLE 7: FCC CONDITION AND CFIUS

7.1     Upon the execution of this Agreement by all the Parties, the FBI and the DOJ shall
promptly notify the FCC that, provided the FCC adopts a condition substantially the same as set
forth in Exhibit A attached hereto (the "Condition to FCC Authorization"), the FBI and the DOJ
have no objection to the FCC‘s grant of the application filed with the FCC in FCC File Number
ITC—214—20001228—00771,

7.2   Reach, Telstra, and PCCW agree that in any application or petition by any Domestic
Communications Company to the FCC for licensing or other authority filed with the FCC after
the Effective Date, except with respect to proforma assignments or proforma transfers of
control, they shall request that the FCC condition the grant of such licensing or other authority
on compliance with the terms of this Agreement. The FBI and the DOJ reserve the right to seek
additional or different terms that would, consistent with the public interest, address any threat to
their ability to enforce the laws, preserve the national security and protect the public safety raised
by the transactions underlying such applications or petitions.

7.3      Provided that the FCC adopts the Condition to FCC Authorization, the Attorney General
shall not make any objection to the CFIUS or the President concerning the formation of Reach,
Reach‘s acquisition of TWT, or grant of the application filed with the FCC in FCC File Number
ITC—214—20001228—00771. This commitment, however, does not extend to any objection the
Attorney General may wish to raise with the CFIUS or the President in the event that (a) Reach,
Telstra, and PCCW fail to comply with the terms of this Agreement, (b) the Attorney General
learns that the representations of Telstra, PCCW, and Reach made to the DOJ, the FBI, or the
FCC above are materially untrue or incomplete, (c) there is a material increase in the authority of
 a foreign entity to exercise Control of a Domestic Communications Company such that it might
 threaten to impair the national security, law enforcement, or public safety objectives of this
 Agreement, or (d) there is any other material change in the circumstances associated with the
 transactions at issue.

                                       ARTICLE 8: OTHER

 8.1     Telstra, PCCW, and Reach represent that they have and shall continue to have throughout
 the term of this Agreement the full right to enter into this Agreement and perform their
 obligations hereunder and that this Agreement is a legal, valid, and binding obligation of Telstra,
 PCCW, and Reach enforceable in accordance with its terms.

 8.2      The Article headings and numbering in this Agreement are inserted for convenience only
 and shall not affect the meaning or interpretation of the terms of this Agreement.

 8.3      Nothing in this Agreement is intended to limit or constitute a waiver of (a) any obligation
 imposed by any U.S. federal, state or local laws on Telstra, PCCW, Reach, or any Domestic
 Communications Company (b) any enforcement authority available under any U.S. or state laws,
 (c) the sovereign immunity of the United States, or (d) any authority the U.S. government may
 possess over the activities of Telstra, PCCW, Reach, or any Domestic Communications
  Company located within or outside the United States.



                                                   17
  DCQO1/GRIFI161757.1


8.4   All references in this Agreement to statutory provisions shall include any future
amendments to such statutory provisions.

8.5      Nothing in this Agreement is intended to confer or does confer any rights on any person
Other than the Parties and any U.S. governmental authorities entitled to effect Electronic
Surveillance pursuant to Lawful U.S. Process.

8.6      None of the terms of this Agreement shall apply to (a) any services that a Telstra entity or
PCCW entity other than Reach provides in the United States exclusively pursuant to Section 214
of the Communications Act of 1934, as currently construed, or (b) any non—communications
services provided by a Telstra or PCCW entity unrelated to the provision of Domestic
Communications.

8.7   This Agreement may only be modified by written agreement signed by all of the Parties.
The FBI and the DOJ agree to consider in good faith and promptly possible modifications to this
Agreement if Telstra, PCCW, and Reach believe that the respective obligations imposed on them
under this Agreement are substantially more restrictive than those imposed on other U.S. and
foreign licensed service providers in like circumstances in order to protect U.S. national security,
law enforcement, and public safety concerns. Any substantial modification to this Agreement
shall be reported to the FCC within thirty (30) days after approval in writing by the Parties.

8.8    The DOIJ and the FBI agree to negotiate in good faith and promptly with respect to any
request by Reach, Telstra, and PCCW for relief from application of specific provisions ofthis
Agreement: (a) if the Federal Government of Australia reduces its ownership interest in Telstra
below twenty—five (25) percent; (b) if Reach, Telstra, or PCCW provide Domestic
 Communications solely through the resale of transmission or switching facilities owned by third
 parties, or (c) as regards future Reach, Telstra, and PCCW activities or services, if those
 provisions become unduly burdensome or adversely affect Reach, Telstra, and PCCW‘s
 competitive position.

 8.9      If after the date that all the Parties have executed this Agreement the DOJ or the FBI
 finds that the terms of this Agreement are inadequate to address national security, law
 enforcement, or public safety concerns presented, then Telstra, PCCW and Reach will negotiate
 in good faith to modify this Agreement to address those concerns.

 8.10     If any portion ofthis Agreement is declared invalid by a U.S. court ofcompetent
 jurisdiction, this Agreement shall be construed as if such portion had never existed, unless such
 construction would constitute a substantial deviation from the Parties‘ intent as reflected in this
 Agreement.                 ©

 8.11 This Agreement may be executed in one or more counterparts, including by facsimile,
 each of which shall together constitute one and the same instrument.

 8$.12    This Agreement shall inure to the benefit of, and shall be binding upon, the Parties, and
 their respective successors and assigns.

  8.13 This Article 8, and the obligations imposed and the rights conferred herein, is effective
  upon the execution of this Agreement by all the Parties.


  DCOVGRIFJ/61757.1                                 18


8.14   Except as otherwise specifically provided in the provisions of this Agreement, the
obligations imposed and rights conferred by this Agreement shall take effect upon the Effective
Date.

8.15     Nothing in this Agreement is intended to or is to be interpreted to require the Parties to
violate any applicable U.S. law.

8.16    This Agreement shall terminate upon fifteen (15) days notice to the FBI and the DOJ:

        (a)       if Reach withdraws the above—referenced application to the FCC (FCC File
        Number ITC—214—20001228—00771); or

        (b)    if, upon grant of the FCC application referenced in subparagraph (a) of this
        Section 8.16, Reach later surrenders said grant and does not engage in Domestic
        Communications.

8.17    This Agreement shall be suspended upon thirty (30) days notice to the FBI and DOJ with
        respect to any covered PCCW, Telstra, or Reach entity, if said entity is no longer a
        Domestic Communications Company.




                                                    19
  DCOLGRIFN/1 61757.1


         This Agreement is executed on behalf of the Parties:

                                              Telstra Corporation Limited

Date:                                         By:
                                              Printed Name:
                                              Title:


                                               Pacific Century Cyber        ks Limited

Date:                                          By:_x.                                o
                                               Printed Name: /Aiex Arena
                                               Title:  Executive Director



                                               Reach Ltd.

Date:_________________                         By:
                                               Printed Name:
                                               Title:


                                               Federa       reau       vestigation

Date:
          [{[—24—01                            By:
                                                      ()R(Z “??LL—“
                                               Printed Nadgje: Larry R. Parkinson
                                               Title: General Counsel


                                               United States Department of Justice

 Date:        1t}21 (ot                        By:j%@jg_l@_
                                               PrintedMame: Thkn G. Pmleolm
                                               Title: Deputy;‘Attorney General
                                                            AsSishn?




                                                     20
  DCOLGRIR/L61757.1


         This Agreement is executed on behalf of the Parties:

                                              Telstra Corporation Limited

Date:                                         By:
                                              Printed Name:
                                              Title:


                                              Pacific Century CyberWorks Limited

Date:                                         By:
                                              Printed Name:
                                              Title:


                                               Reach Ltd.

                octaێnr 200.
                                                                                 ~
DateeO G_                                      By:       Cz
                                               Printed Name: MigtTMC GAC( EVE
                                               Title: CthEF cCc uTivé OFfLCEL


                                               Federal Bureau of Investigation

Date:                                          By:
                                               Printed Name: Larry R. Parkinson
                                               Title: General Counsel



                                               United States Department of Justice

 Date:      /23/oi                             By:            ,4 %M
                                               Printéd   Name: Tpha G. Malealm
                                               Title: Deputy Attorney General
                                                              A
                                                              Agistint




 pCo1/GRIFJ/161757.1                              20


          This Agreement is executed on behalf of the Parties:

                                               Telstra Corporation Limited

Date:__     4201                               By:     A/Ifl ‘é—’/
                                               Printed Name: Po CC A: G@ATiGY
                                               Title   ComrAM1           GguTLetac3


                                               Pacific Century CyberWorks Limited

Date:                                          By:
                                               Printed Name:
                                               Title:


                                               Reach Ltd.

Date:                                          By:
                                               Printed Name:
                                               Title:



                                               Federal Bureau of Investigation

Date:                                          By:
                                               Printed Name: Larry R. Parkinson
                                               Title: General Counsel


                                               United States Department of Justice

Date:        t 13'7 fol                        By:     MJ%M
                                               PrintedName: Tpha G. Pulésim
                                               Title: Deput};’Attorney General
                                                            AsSiztamt~




              P
 DCor/GRIFJA61757.1                              20


                                            EXHIBIT A

                              CONDITION TO FCC AUTHORIZATION

            ITIS FURTHER ORDERED, that the authorization is subject to compliance with the
provisions of the Agreement attached hereto between Telstra, PCCW, and Reach on the one
hand, and the Department of Justice (the "DOJ") and the Federal Bureau of Investigation (the
"FBI") on the other, dated W& 2001, which Agreement is designed to address
national security, law enforcement, and public safety issues of the FBI and the DOJ regarding
the authority granted herein. Nothing in this Agreement is intended to limit any obligation
imposed by Federal law or regulation including, but not limited to, 47 U.S.C. § 222(a) and (c)(1)
and the FCC‘s implementing regulations.




 131324.1




 DCO1/GRIRN/1 61757.1                             21



Document Created: 2007-07-24 11:44:43
Document Modified: 2007-07-24 11:44:43

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