Attachment Tata Guam SCL Pro Fo SCL-T/C-20110802-00025

Attachment Tata Guam SCL Pro Fo

This document pretains to SCL-T/C-20110802-00025 for Transfer of Control on a Submarine Cable Landing filing.

IBFS_SCLTC2011080200025_912254

SCL-MOD-20050304-00004 Tyco Telecommunications (US) Inc. and Tyco Networks (Guam)
L.L.C.
MODIFICATION OF LICENSE

On March 4, 2005, Tyco International Ltd. (“Tyco”), Tyco Telecommunications (US) Inc. (“Tyco
Telecom”), Tyco Networks (Guam) L.L.C. (“Tyco Guam”), and VSNL Telecommunications (US) Inc.
(“VSNL USA” and, together with Tyco, Tyco Telecom, and Tyco Guam, the “Applicants”) filed the three
above-captioned applications.1 On March 17, 2005, we placed the applications on public notice.2 Today,
we find that grant of the applications serves the public interest, and we grant the applications, subject to
the listed conditions.

The three applications seek to: (1) assign Tyco Telecom’s interests in the two Tyco Global Network
submarine cables that land in the United States, Tyco Atlantic and Tyco Pacific, to VSNL USA; (2)
transfer control of Tyco Guam, a joint licensee with Tyco Telecom for the Tyco Pacific cable, to VSNL
USA; and (3) prior to the assignment and transfer, modify the Tyco Pacific license to remove from the
license the authority to construct, land and operate the original southern segment of the cable (unbuilt
with the exception of a six-mile-long stub extending from the Hermosa Beach, California landing) and
issue a separate cable landing license for that segment.3 Tyco Atlantic and Tyco Pacific are two of five
submarine cable systems (along with Tyco Northern Europe, Tyco Western Europe, and Tyco Pan-Asia)
collectively known as the Tyco Global Network.4 Pursuant to a November 1, 2004 stock and asset
purchase agreement, Videsh Sanchar Nigam Ltd. (“VSNL”) and various subsidiaries, including VSNL
USA, will acquire the Tyco Global Network as well as a terrestrial network of leased capacity and dark

1
Application for Assignment of a Cable Landing License for the Tyco Atlantic Submarine Cable System and a
Jointly-Held Cable Landing License for the Tyco Pacific Submarine Cable System, File No. SCL-ASG-20040304-
00003; Application for Transfer of Control of a Jointly-Held Cable Landing License for the Tyco Pacific Submarine
Cable System, File No. SCL-T/C-20050304-00005; Application to Modify the Cable Landing License for the Tyco
Pacific Submarine Cable System, File No. SCL-MOD-20050304-00004 (filed March 4, 2004).
2
Streamlined Submarine Cable Landing License Applications Accepted for Filing, Public Notice, DA 05-700
(PD/Int’l Bur. March 17, 2005) (“Acceptable for Filing Public Notice”).
3
Our grant of the above-referenced modification application (File No. SCL-MOD-20050304-00004) filed by Tyco
Telecom and Tyco Guam removes the California-Hawaii-Guam southern segment, currently unbuilt except for the
six-mile-long stub, from the Tyco Pacific cable landing license. Applicants state that, prior to closing the
transactions described in File Nos. SCL-ASG-20050304-00003 and SCL-T/C-20050304-00005, Tyco Guam will
assign to Tyco Telecom, on a pro forma basis, its entire ownership interest in the original southern segment
(California-Hawaii-Guam), including any new cable landing license issued for that segment. (See File No. SCL-
MOD-20020412-00027, amending the Tyco Pacific cable landing license to permit the filing of post-transaction
notifications of pro forma transfers or assignments.) Thus, at the time of closing, Tyco Guam will have no interest
in the unbuilt southern segment, the cable stub, or any separate cable landing license issued for the unbuilt segment
and cable stub. The six-mile-long stub currently does not connect the Hermosa Beach beach landing with any U.S.
or foreign point and is not capable of being operational absent further construction. By separate action today, we
issue a separate cable landing license for the original southern segment of Tyco Pacific to Tyco Telecom. See Tyco
Telecommunications (US) Inc., Cable Landing License, File No. SCL-LIC-20050304-00011, Public Notice, Actions
Taken under Cable Landing Act, DA 05-1269 (PD/Int’l Bur. Apr. 29, 2005).
4
Tyco Atlantic is a non-common carrier cable extending between the United States and the United Kingdom. Tyco
Telecom, a wholly-owned indirect subsidiary of Tyco International, is the successor-in-interest to TyCom Atlantic
(US) Inc., the original licensee of Tyco Atlantic. Tyco Pacific is a non-common carrier cable extending from the
continental United States to Japan, with a link from Japan to Guam. Tyco Telecom, the successor-in-interest to
TyCom Networks (US) Inc., an original licensee of Tyco Pacific, and Tyco Guam (formerly, Tycom Networks
(Guam) L.L.C.), a wholly-owned indirect subsidiary of Tyco, are the joint U.S. licensees of Tyco Pacific.

Page 2 of 7

fiber within the United States.5 Upon consummation of the transaction, VSNL intends to rename Tyco
Atlantic and Tyco Pacific.

Crest Communications Corporation (“Crest”) filed a petition to deny and reply against the applications.6
Crest objects to grant of the applications on national security and competition grounds.7 Crest argues that
VSNL USA’s purchase of Tyco Pacific would permit VSNL USA’s ultimate parent, VSNL, to preserve
and strengthen its monopoly power in the U.S.-India telecommunications market.8 Crest asks the
Commission to remove the applications from 45-day streamlined review and, ultimately, to deny the
applications.9 The Applicants respond that Crest’s allegations lack merit. They assert that the sale of

5
VSNL USA is a newly-created Delaware corporation, wholly owned by VSNL Nederlands B.V. (“VSNL
Nederlands”), itself a subsidiary of VSNL Singapore Pte. Limited (“VSNL Singapore”), which in turn is wholly
owned by VSNL, the incumbent provider of international telecommunications services in India. The Tata Group, an
India commercial conglomerate, holds an aggregate 46.6% ownership interest, and exercises a controlling ownership
and managerial interest, in VSNL. The Government of India holds an approximate 26% ownership interest in
VSNL. The Bank of New York holds 13.3% of VSNL as American Depository Receipts. VSNL is publicly traded
on the Bombay Stock Exchange and India’s National Stock Exchange.
6
Petition to Deny of Crest Communications Corporation (filed Mar. 31, 2005) and Reply Brief in Support of
Petition to Deny of Crest Communications Corporation (filed Apr. 18, 2005). Crest is the parent of Northern Lights,
which has a conditional submarine cable license to land the Northern Lights cable system at three cable stations in
Alaska and connect the Northern Lights cable through two branching units on the northern link of Tyco Pacific. See
Northern Lights Holdings, Inc., Submarine Cable Landing License, Public Notice, Actions Taken under Cable
Landing License Act, DA 02-2554, 17 FCC Rcd 19571 (PD/Int’l Bur. 2002) (“Northern Lights Public Notice
Grant”). The license is conditional because Northern Lights had not filed the prerequisite landing point notification,
with specific geographic coordinates, that it must file at least 90 days before beginning construction. See 47 C.F.R.
§ 1.767(a)(5), (g)(8); 17 FCC Rcd at 19572, 19773, 19574. The Northern Lights cable, once constructed, would be
a network of three interrelated cable segments.
7
Crest’s national security argument is based on its concern that its economic interests in the as-yet-unbuilt Northern
Lights cable system, which would serve points in Alaska by interconnecting with Tyco Pacific, could be adversely
affected by VSNL USA’s purchase of Tyco Pacific. Crest advises that it has been in discussions with the U.S.
Department of Defense (“DOD”) about using the Northern Lights cable system for military purposes. Crest states
that it is concerned that the transfer of Tyco Pacific to VSNL USA would diminish DOD’s interest in using the
Northern Lights cable system, the segments of which would be interconnected through branching units and capacity
acquisition on Tyco Pacific.
8
Crest asks the Commission to define the relevant market as the U.S.-India route, rather than focusing on Japan and
the United Kingdom as the destination markets of Tyco Pacific and Tyco Atlantic. Crest alleges that, if the
transaction is approved, VSNL will have an end-to-end pipe between India and the United States. Crest contends
that VSNL’s cable network would include the Tata Indicom cable between India and Singapore, dark fiber on the
c2c network between Singapore and Japan, and Tyco Pacific, arguing that VSNL would have “unquestioned
dominance on the critical U.S. to India route across the Pacific.” Crest suggests that VSNL’s acquisition of Tyco
Pacific would deter other carriers from building new undersea cables in the Pacific and landing stations in India.
Crest asserts that the transaction would eliminate Tyco as a potential threat to VSNL in the India cable station
market. Crest contends that Tyco, as owner of Tyco Pacific, is a potential competitor to construct a new cable
landing station in India that competes with those owned by VSNL. Crest argues that if Tyco retained ownership of
Tyco Pacific, Tyco would have a strong incentive to break VSNL’s bottleneck in India, which, Crest says, would
result in opening the India market and increasing demand for transpacific cable capacity.
9
In its reply, Crest first raises two requests for alternative relief. If the Commission does not deny the applications,
Crest asks the Commission to grant the transfer and assignments conditioned on VSNL’s divestiture of two Tyco
Pacific fiber pairs and/or on imposition of common carrier regulation on the Tyco Pacific cable. As noted below, we
deny the new requests for relief on procedural grounds. See infra notes 19 & 21.

Page 3 of 7

Tyco Atlantic and Tyco Pacific raises no competition or market access concerns, in particular raising no
competitive concerns on the U.S.-Japan or transpacific routes served by Tyco Pacific.10

On April 11, 2005, the U.S. Department of Justice, including the Federal Bureau of Investigation
(“DOJ/FBI”), the U.S. Department of Homeland Security (“DHS”), and the U.S. Department of Defense
(“DOD” and, together with DOJ/FBI and DHS, the “Executive Branch Entities”) and VSNL USA, VSNL
America and VSNL submitted a Joint Petition to Adopt Conditions to Authorizations and Licenses
(“Petition”). The Petition states that on April 7, 2005 the Executive Branch Entities entered into an
agreement (“Agreement”) with VSNL USA, VSNL America and VSNL that is intended to ensure that the
Executive Branch Entities 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. The Petition advises that the Executive Branch Entities do not object to the
grant of the above-referenced applications, provided that the Commission conditions such grant on
compliance with the commitments set forth in the Agreement.11

After careful consideration of the record in this proceeding, we conclude that the concerns raised by Crest
are not sufficient to persuade us to remove the applications from streamlined treatment.12 WE GRANT
the applications, SUBJECT TO the conditions set forth below.13

10
Applicants note that neither Tyco Pacific nor the overall Tyco Global Network serves India. They state that
transpacific capacity increased by 2500 percent from 1998 to 2003 and this new capacity has resulted in a “capacity
glut” that essentially eliminates the risk of dominant behavior on the U.S.-Japan route. They contend that VSNL has
no incentive to depress demand for Tyco Pacific’s transpacific capacity by artificially raising capacity rates to
above-market levels. The Applicants state that Crest filed its petition to deny to obtain commercial leverage over
Tyco Telecom in negotiations over ongoing business transactions involving Tyco Telecom’s undersea cable supply
business. The ongoing negotiations concern the price for construction of the Northern Lights cable system. Joint
Opposition to Petition to Deny (filed Apr. 11, 2005). Crest, in its reply, denies that it filed its petition as part of a
retaliation campaign against Tyco.
11
The Agreement is available as an attachment to the two files for the assignment and transfer of control
applications in the Commission’s International Bureau Filing System. See
http://svartifoss2.fcc.gov/servlet/ib.page.FetchAttachment?attachment_key=429057. VSNL America is a subsidiary
of VSNL that has international section 214 authority. See VSNL America Inc., Application for Authority under
Section 214 of the Communications Act of 1934, as amended, to Operate as a Facilities-Based Carrier and as a
Resale Carrier for the Provision of International Switched and Private Line Services to All International Points,
Order, Authorization and Certificate, File No. ITC-214-20030728-00376, DA 04-2668, 19 FCC Rcd 16555 (Int’l
Bur. 2004) (granting VSNL America international section 214 authority conditioned on compliance with network
security agreement).
12
In addition to the Crest pleadings, we received an April 28, 2005 letter from counsel for Polargrid LLC, a
company that has a contractual dispute with VSNL that currently is before the U.S. District Court, S.D.N.Y. Letter
from Mark S. Baldwin to Donald Abelson, Chief, International Bureau, Federal Communications Commission
(dated Apr. 28, 2005). We do not find that the pending litigation justifies either deferring action on the applications
or dismissing them. It is long-standing Commission policy not to involve itself with private contract disputes. See,
e.g., Applications of Verestar, Inc. (Debtor-in-Possession) for Consent to Assignment of Licenses to SES Americom,
Inc., Memorandum, Opinion, Order and Authorization, IB Docket No. 04-174, DA 04-3639, 19 FCC Rcd 22750,
22756, para. 16 (Int’l Bur. & Wireless Tele. Bur. 2004). We find that the letter is not timely filed, and we dismiss
the letter on procedural grounds. See 47 C.F.R. § 1.45; Acceptable for Filing Public Notice, supra note 2 (filings in
proceeding due by March 31).
13
Today’s grant of the above-referenced assignment application (File No. SCL-ASG-20050304-00003) authorizes
VSNL USA to acquire from Tyco Telecom the New Jersey cable station, the portions of Tyco Atlantic extending
between the New Jersey cable station and the twelve-nautical-mile limit of the U.S. territorial sea, and the Tyco
Atlantic cable landing license. VSNL Bermuda Limited (“VSNL Bermuda”), a wholly-owned subsidiary of VSNL
Singapore, will own the subsea portions of Tyco Atlantic located in international waters, and VSNL
Telecommunications (UK) Limited, a wholly-owned subsidiary of VSNL Nederlands, will own the cable station in
Page 4 of 7

claim that VSNL’s purchase of Tyco Pacific and Tyco Atlantic would strengthen VSNL’s existing ability
to leverage its market power in the Indian market into the transatlantic or transpacific international
transport markets to the detriment of U.S. consumers. As a result, we do not find record support for
Crest’s request that we deny the applications or that we grant the transfer and assignment applications
conditioned on VSNL’s divestiture of two Tyco Pacific fiber pairs and/or on the imposition of common
carrier regulation, as Crest requests.19 Further, no VSNL entity has or will have market power in the
United Kingdom or Japan. Thus, pursuant to the Commission’s rules, the applications are eligible for 45-
day streamlined review.20 Therefore, WE DENY Crest’s petition.21

Conditions and Requirements

Our grant of the applications IS SUBJECT TO the following conditions:

Tyco Atlantic:

See Tycom Atlantic (US) Inc., Application for a License to Land and Operate a Private Fiber-Optic Cable
System between the United States Mainland and the United Kingdom, File No. SCL-LIC-20000308-
00007, 15 FCC Rcd 14881 (Int’l Bur. 2000) (initial license), as modified by File Nos. SCL-MOD-
20010201-00005, 16 FCC Rcd 3600 (Int’l Bur. 2001) (changes to U.K. landing), SCL-MOD-20020412-
00016 and SCL-MOD-20020412-00017, 17 FCC Rcd 12916 (Int’l Bur. 2002) (modification of conditions
for Tyco Atlantic cable). VSNL USA shall comply with the requirements of section 1.768 (notifications
and prior approval for submarine cable landing licensees that are or propose to become affiliated with a
foreign carrier), 47 C.F.R. § 1.768. VSNL USA shall notify the Commission of the consummation of the
transaction within 30 days of consummation, and further shall notify the Commission of the new name
given to Tyco Atlantic.

Today’s authorization to assign the Tyco Atlantic cable landing license to VSNL USA, as well as the
assigned Tyco Atlantic cable landing license itself, ARE CONDITIONED on compliance with the
provisions of the Agreement between VSNL, VSNL USA, and VSNL America, on the one hand, and the
DOJ/FBI, DHS and DOD, on the other hand, which Agreement is designed to address national security,
law enforcement, and public safety concerns of DHS, DOJ, FBI and DOD 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 Commission’s implementing
regulations.

19
As noted above, see supra note 9, Crest failed to makes its requests for alternative relief until it filed its reply. As
discussed infra at note 21, we deny these alternative requests on procedural grounds. In any case, we note that we
retain the ability to impose common carrier regulation under the existing conditions of the Tyco Pacific cable
landing license, if we should need to do so in the future. See Tycom Networks (US) Inc. and Tycom Networks
(Guam) L.L.C., Application for a License to Land and Operate a Private Fiber-Optic Cable System between the
United States Mainland, Hawaii, Guam, and Japan, File No. SCL-LIC-20000717-00026, 15 FCC Rcd 24078,
24086 (Int’l Bur. 2000) (“Pursuant to Section 35 of the Cable Landing License Act, 47 U.S.C. § 35, Executive Order
No. 10530, as amended, and Section 214 of the Communications Act of 1934, as amended, 47 U.S.C. § 214, the
Commission reserves the right to impose common carrier or common-carrier-like regulation on the operations of the
cable system if it finds that the public interest so requires”); see also 47 C.F.R. § 1.767(g)(10) (common carrier
condition).
20
See 47 C.F.R. § 1.767(k).
21
We deny on procedural grounds Crest’s requests for alternative relief – asking for VSNL’s divestiture of two
Tyco Pacific fiber pairs and/or imposition of common carrier regulation on the Tyco Pacific cable – first raised by
Crest in its reply. See 47 C.F.R. § 1.45(c) (reply shall be limited to matters raised in the opposition); see also supra
notes 9 and 19.

Page 6 of 7

Tyco Pacific:

See Tycom Networks (US) Inc. and Tycom Networks (Guam) L.L.C., Application for a License to Land
and Operate a Private Fiber-Optic Cable System between the United States Mainland, Hawaii, Guam,
and Japan, File No. SCL-LIC-20000717-00026, 15 FCC Rcd 24078 (Int’l Bur. 2000) (initial license), as
modified by File Nos. SCL-MOD-20010326-00010, 16 FCC Rcd 11778 (Int’l Bur. 2001) (changes to
cable landing stations), SCL-MOD-20020412-00027 and SCL-MOD-20020412-00028, 17 FCC Rcd
12916 (PD/Int’l Bur. 2002) (modification of conditions), File No. SCL-MOD-20020826-00079, 17 FCC
Rcd 22508, 22511 (PD/Int’l Bur. 2002) (approving new southern segment), and File No. SCL-MOD-
20050304-00004 (PD/Int’l Bur. Apr. 29, 2005) (removing original southern segment). VSNL USA shall
comply with the requirements of section 1.768 (notifications and prior approval for submarine cable
landing licensees that are or propose to become affiliated with a foreign carrier), 47 C.F.R. § 1.768.
VSNL USA shall notify the Commission of the consummation of the transaction within 30 days of
consummation, and further shall notify the Commission of the new name given to Tyco Pacific.

Today’s authorization to assign Tyco Telecom’s interests in the Tyco Pacific cable landing license, and to
transfer control of Tyco Guam, to VSNL USA, as well as the Tyco Pacific cable landing license itself, as
modified, ARE CONDITIONED on compliance with the provisions of the Agreement between VSNL,
VSNL USA, and VSNL America, on the one hand, and the DOJ/FBI, DHS and DOD, on the other hand,
which Agreement is designed to address national security, law enforcement, and public safety concerns of
DHS, DOJ, FBI and DOD 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 Commission’s implementing regulations.

-FCC-

Page 7 of 7

Document Created: 2011-08-12 16:24:21
Document Modified: 2011-08-12 16:24:21

© 2024 FCC.report
This site is not affiliated with or endorsed by the FCC