Attachment Public Notice

Public Notice

PUBLIC NOTICE

Public Notice

2009-08-26

This document pretains to SCL-T/C-20090506-00009 for Transfer of Control on a Submarine Cable Landing filing.

IBFS_SCLTC2009050600009_737968

Before the FEDERAL COMMUNICATIONS COMMISSION Washington, DC 20554 In the Matters of CARIBBEAN CROSSINGS LTD., Application for Transfer of Control of Submarine Cable Landing License File No. SCL—T/C—20090506—00009 TRINITY COMMUNICATIONS LTD., Application‘for Transfer of Control of Section File No. ITC—T/C—20090506—00204 214 Authorization CONSOLIDATED AMENDMENTS TO APPLICATIONS FOR A CABLE LANDING LICENSE AND INTERNATIONAL SECTION 214 AUTHORITY Caribbean Crossings Ltd. ("CCL") and Trinity Communications Ltd. ("Trinity") (together, "the Companies"), by their undersigned counsel, and pursuant to the Commission‘s Report and Order in Rules and Policies on Foreign Participation ‘in the U.S. Telecommunications Market; Market Entry and Regulation of Foreign—Affiliated Entities, FCC 97—398, released November 26, 1997 ("Foreign Participation Order"), on reconsideration, FCC 00—339, released September 19, 2000, and, in the case of Trinity, pursuant to Section 63.18(k)(3) of the Commission‘s rules, 47 C.F.R. 53.18(k)(3), hereby amend their respective, above— captioned applications to demonstrate that the Commonwealth of The Bahamas provides effective competitive opportunities to U.S. carriers to compete in that country‘s market for resold and facilities—based telecommunications service, including submarine fiber optic cable service, and that the public interest would be served by the grant of their applications. This filing is necessitated by the fact that the Commonwealth of the Bahamas is not currently a member of the

World Trade Organization ("WTO") and that, as a result of the transfer of control contemplated in the Companies‘ submissions, the Government of The Bahamas, which currently owns 100% of Bahamas Telecommunications Company ("BTC"), the Commonwealth‘s dominant provider of domestic and international telecommunications services, will hold a 29.2% ownership interest in Cable Bahamas Ltd. ("CBL"), the Companies‘ parent. Pursuant to the Commission‘s rules, this ownership interest transforms BTC into a "foreign affiliate" of the Companies.‘ I. Background A. The ECO Test In its Foreign Participation Order, the Commission eliminated the "effective competitive opportunities" ("ECO") standard which was then in effect for applicants seeking Section 214 authorizations and submarine cable landing licenses who were affiliated with foreign carriers in WTO member nations, but retained it for applications involving non—WTO member states. The Commission drew this distinction because it found that "competitive concerns continue to exist for carriers that possess the ability to exercise market power in such [non—WTO Member] countries and that we should continue to pursue our goal of encouraging such countries to open their markets to competition." Foreign Participation Order, © 12. The Commuission‘s stated that its "primary competitive concern" was "preventing carriers that control bottleneck facilities in foreign countries from using those bottlenecks to discriminate against unaffiliated U.S. carriers... Absent effective regulation in our market, we are concerned that a foreign carrier with 1 Pursuant to Section 63.09(e) of the Commission‘s rules, 47 C.F.R. 63.09(e), two entities are affiliated with one another if one of them, or an entity that controls one of them, directly or indirectly owns more than 25% of the capital stock of, or controls, the other. In the instant case, the percentage of equity ownership in CBL held by the Government of The Bahamas will increase from 20.5% to 29.2% as a result of the proposed purchase by CBL of shares of CBL stock currently owned by its largest stockholder, Columbus Communications Ltd. In view of the de minimis amount by which the percentage equity interest of the Government of the Bahamas in CBL exceeds the Commission‘s 25% threshold, and for the public interest reasons set forth herein, as an alternative remedy the Companies hereby request the Commission to waive its 25% threshold in this case.

market power in an input market on the foreign and of a U.S. international route has the ability to exercise, or leverage, that market power into the U.S. market to the detriment of competition and consumers." Td. at § 140, 145. By retaining the ECO test for non—WTO Member countries, the Commission hoped to encourage such countries "to take unilateral or bilateral steps toward opening their markets to competition and may provide incentives for them to join the WTO." Id. at «| 125. The ECO test, set forth in Section 63.18(k)(3) of the Commission‘s rules, is designed to address these concerns. It requires applicants affiliated with foreign carriers in non—WTO member states to make the following showings: (i) If the applicant seeks to provide facilities—based international services, the legal ability of U.S. carriers to enter the foreign market and provide facilities— based international services, in particular international message telephone service (IMTS); (ii) If the applicant seeks to provide resold services, the legal ability of U.S. carriers to enter the foreign market and provide resold international switched services (for switched resale applications) or non—interconnected private line services (for non—interconnected private line resale applications); (iii) Whether there exist reasonable and nondiscriminatory charges, terms and conditions for interconnection to a foreign carrier‘s domestic facilities for termination and origination of international services or the provision of the relevant resale service;

(iv) Whether competitive safeguards exist in the foreign country to protect against anticompetitive practices, including safeguards such as: _ (a) Existence of cost—allocation rules in the foreign country to prevent cross— subsidization; (b) Timely and nondiscriminatory disclosure of technical information needed to use, or interconnect with, carriers‘ facilities; and (c) Protection of carrier and customer proprietary information; (v) Whether there is an effective regulatory framework in the foreign country to develop, implement and enforce legal requirements, interconnection arrangements and other safeguards; and (vi) Any other factors the applicant deems relevant to its demonstration. B. The Bahamas and the WTO While the Commonwealth of the Bahamas is not currently a WTO Member, and is therefore subject to the ECO test, in recent years the Commonwealth has taken both unilateral and bilateral measures to open its telecommunications market to competition, and membership in the WTO itself is imminent. Among the initiatives the Commonwealth has undertaken are the following: » WTO Membership. The Commonwealth of the Bahamas filed an application for accession to the WTO in 2001, and in April of this year submitted to the organization its Memorandum on the Foreign Trade Regime, a critical step in the accession process." Members have been asked to review the Memorandum and submit questions and comments on the See http://www.wto.org/english/thewto e/ace e/acces e.htm

Bahamas trade regime. See http://www.ustr.gov/trade—agreements/wto—multilateral—affairs/wto— accessions/other—accessions. > EU Economic Partnership Agreement. In December 2008, the Bahamas, together with several other Caribbean nations, entered into an Economic Partnership Agreement with the European Union. See http://trade.ec.europa.eu/doclib/docs/2008/february/tradoc 137971.pdf. See also www.crum.org. Article 67 of the Agreement generally prohibits, inter alia, limitations on the participation of foreign capital in terms of maximum percentage limits on foreign shareholding or the total value of individual or aggregate foreign investment. In May 2009, the Government of the Bahamas submitted to the EU a schedule of its specific market access commitments, and discussions on these commitments are now in progress. > Privatization of BTC. In 2008 the Government of the Bahamas announced plans to privatize Bahamas Telecommunications Company ("BTC"), the Commonwealth‘s state—owned dominant carrier, with the sale of 51% of BTC‘s stock to outside investors. On July 14, 2009, the Government issues a Request for Registration, announcing that it was "seeking a partner to acquire a 51% shareholding, including operational control" in BTC, and invited interested parties to register for the bidding process by July 28, 2009. iSee http://btcprivatisation.com/index.php?page=notice—of—privatisation. As part of the privatization process, the Prime Minister of the Bahamas last year appointed a BTC Privatization Committee, which was tasked with the implementation of a new regulatory framework which "will create the conditions which will allow competition to flourish to the benefit of consumers and the nation as a whole." See www.btcprivatisation.com. The Committee has already launched important public consultations on licensing, interconnection and access, retail pricing, and universal service, as detailed below.

> New Communications Act. In May 2009, the Legislature of the Bahamas enacted a new Communications Act which, together with concurrently enacted legislation creating a new regulatory authority and appeals tribunal, establishes a new regulatory framework for the Commonwealth. The new legislation sets no barriers to market entry, and requires only that license applicants be entities duly incorporated in The Bahamas. Foreign companies are free to establish Bahamas subsidiaries in order to comply with this requirement. The new legislation also establishes detailed requirements for interconnection and access, special provisions for carriers having significant market power, ‘ and contains critical provisions to address anticompetitive conduct. See http://btcprivatisation.com/index.php?page=consultation. > Public Consultations. The BTC Privatization Committee has also launched public consultations in anticipation of the liberalization of the new regime, seeing public comments on proposed rules on licensing, universal service, access and interconnection, and retail pricing. Z4 These rules will ultimately be adopted and implemented by the Commonwealth‘s new regulatory body, the Utilities Regulatory and Competition Authority ("URCA"). C. The Privatization of BTC Among the recent developments in The Bahamas relevant to the Companies‘ pending applications, the planned privatization of BTC deserves special attention. As noted above, the necessity for the instant filing arises from the fact that, as a result of the proposed transfer of control of CBL, the Companies‘ parent, BTC will become a foreign affiliate of the Companies, for purposes of Section 63.09(e) of the Commission‘s rules since the Government of the Bahamas which currently owns 100% of the capital stock of BTC, will hold a 29.2% equity 3 Under the legislation, BTC is presumed to have significant market power for the provisioning of fixed voice, mobile voice and mobile data service, and CBL is presumed to have significant market power for the provisioning of high speed data services and connectivity and pay TV services. See Communications Bill, Schedule 4, http://btcprivatisation.com/uploads/Communications%20Bil1%20—%20Tabled%20Version.pdf.


Document Created: 2009-09-08 11:42:09
Document Modified: 2009-09-08 11:42:09
© 2024 FCC.report
This site is not affiliated with or endorsed by the FCC