WPC 2a BKf Z CG TimesCG TimesCG Times BoldCourier PE37XP",tB^ f ^;C]ddCCCdCCCCddddddddddCCY~~vCN~sk~CCCddCYdYdYCdd88d8ddddJN8ddddYYdYddddddCddddddddd8YYYYYY~Y~Y~Y~YC8C8C8C8ddddddddddYdddddsdXdXXXddx|X~d~d|XdddddddC8ddddoddd|8|H~d|8|8dtddddHHdlLlLlLkd|H|8~dddddddXXXd~ddkd~ddxCddCCCWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNdddCYQQddddddFddddFCChhd44ddxxdddvooChdF"dhddCCxCddoddCdYds]xUvdYYCCCCx~oxoY~NYdYC8YooYdYxsdxdd~YYxoxxx~CdxYxxxxCCdddddddxCsdYC\   pxtll\tll@\@\`LHP LaserJet 5LHPLAS5L.PRS5Xw PE37\\y"]eXP2?    phoenix#XP\  P6Q}XP#XP#|x3|ws Boldourier New (TT)CG Times (Scalable)C\  P6QPd6X@DQ@(c P7P2ZQ?phoenix#XP\  P6QXP# Before the Tim MollenTim Mollen 22ll' % Default Paragraph FoDefault Paragraph Font footnote referencefootnote reference 2f X+7j ",tB^ f ^;C]ddCCCdCCCCddddddddddCCdxN`xoCCCddCdoYoYFdo8Co8odooYNCodddYdddddddddCddddddddo8dddddYYYYYN8N8N8N8oddddooooddpddddxodddXXddXddXdddddooL8doddpddo8PdN8ppoddXXdpLoNpLodPDdopoopdXYXodoodddCddCCCWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNdddCdUUddddddFddddFCCssd44ddxxddd~ooCsdF"dsddCCxCddoddCdYds`xUvdddCCCCxoxoYNYYYN8YooYdYxxdxddYYxoxxxNdxYxxxxCCdddddddxCxdYC\   pxtll\tll@\@\`L8wC;,}Xw PE37XP.7zC;, *Xz_ pi7X&?xxx,Q#x6X@`7X@>>\>d>>\>d>>\>>2 X-2( Before the W FEDERAL COMMUNICATIONS COMMISSION  X-Washington, D.C. 20554 TP  Y-XxX` ` X XXhhX@Xh@hh ` ` xPIn the Matter of hh@h)(# x` `  hh@h)  Y_-XxX` ` X XXhhX@XhXpph@hh ` ` xPApplication of WorldCom, Inc. and@hpp)CC Docket No. 97211(#p  YH-XxX` ` X XXhhX@Xh@hh ` ` xPMCI Communications Corporation for@h)(#  Y1-XxX` ` X XXhhX@Xh@hh ` ` xPTransfer of Control of MCI Communicationsh)(#  Y -XxX` ` X XXhhX@Xh@hh ` ` xPCorporation to WorldCom, Inc.hh@h)(#  X -h COMMENTS AND PETITION FOR RECONSIDERATION OF TELSTRA  TP  Y <M    Y- U 1 1!#xxdd+e Y-ؿ$(#(#(#(#!'#$ xTelstra Corporation Limited ACN 051 775 556 (#Xx6X@DQQ#X@#A#XP\  P6Q}XP#Telstra#Xx6X@DQQ#X@#@#XP\  P6Q}XP#), by its attorneys and  Yy-pursuant to the February 27, 1998 Order, DA 98384, issued by the Common Carrier Bureau in the abovecaptioned proceeding, submits these further comments regarding the proposed  Y<merger of WorldCom, Inc. (#Xx6X@DQQ#X@#A#XP\  P6Q}XP#WorldCom#Xx6X@DQQ#X@#@#XP\  P6Q}XP#) and MCI Communications Corporation (#Xx6X@DQQ#X@#A#XP\  P6Q}XP#MCI#Xx6X@DQQ#X@#@#XP\  P6Q}XP#).  Y<xTelstra welcomes the Bureau#Xx6X@DQQ#X@#=#XP\  P6Q}XP#s recognition that due process and other considerations require a further round of public comments in this docket. However, the current schedule is premature. The evidentiary record necessary to review the competitive impact of the merger on global Internet access and related markets is still woefully inadequate. WorldCom and  Y7<MCI have yet to submit sufficient information on the postmerger company#Xx6X@DQQ#X@#=#XP\  P6Q}XP#s arrangements regarding Internet access (or otherwise) and the FCC has yet to receive, let alone provide access to, relevant documents obtained by the Department of Justice (DOJ) under the HartScottRodino (HSR) amendments to the Clayton Act (hereafter HSR documents). The press  Y#<recently has reported that the DOJ#Xx6X@DQQ#X@#=#XP\  P6Q}XP#s investigation may still be four to six months from completion and the Department is still compiling an evidentiary record. For this reason  Y#'-alone, Telstra asks the Bureau to reconsider its Order and, notwithstanding the current round  Y(<of comments, to issue a further order responsive to Telstra#Xx6X@DQQ#X@#=#XP\  P6Q}XP#s initial request: the law requires"(0*0*0**" that an adequate opportunity for public comment be provided after, not before, interested parties are able to inspect all relevant documents including the HSR documents which the FCC obtains in due course from the DOJ. A.Background  On February 4, 1998, Telstra filed a motion to extend the date for filing reply comments regarding the GTE Service Corporation (GTE) Motion to Dismiss. There Telstra also asked the Commission to establish a new pleading cycle beginning thirty days after #Xx6X@DQX@#A#XP\  P6QXP#(a) the FCC receives all relevant HartScottRodino Act documents from the [Department of Justice]; and (b) makes said HartScottRodino (HSR) documents available to parties, together with any other relevant documents, pursuant to outstanding [Freedom of Information Act (FOIA)] requests.#Xx6X@DQX@#@#footnote reference#X0X01ÍÍ#footnote reference##XP\  P6QXP#Í)footnote reference)Telstra Motion, Feb. 4, 1998, at 5.#XP\  P6QXP# Both Telstra and GTE Service Corporation (#Xx6X@DQX@#A#XP\  P6QXP#GTE#Xx6X@DQX@#@#XP\  P6QXP#) had earlier filed FOIA requests to review HSR documents as well as other documents gathered in the course of the Commission#Xx6X@DQX@#=#XP\  P6QXP#s investigation of the proposed merger.#footnote reference##footnote reference#Í)footnote reference)#XP\  P6QXP#See GTE, #Xx6X@DQX@#A#XP\  P6QXP#Request to Inspect Protected Information/Freedom of Information Act Request,#Xx6X@DQX@#@#XP\  P6QXP# Jan. 5, 1998; Telstra, #Xx6X@DQX@#A#XP\  P6QXP#Freedom of Information Act Request and Request for Expedited Action,#Xx6X@DQX@#@#XP\  P6QXP# Jan. 23, 1998. Subsequently, however, and prior to the release of the Bureau#Xx6X@DQX@#=#XP\  P6QXP#s February 27 Order, the FCC responded to the GTE and Telstra FOIA requests advising that the Commission had #Xx6X@DQX@#A#XP\  P6QXP#not received any protected, confidential or HartScottRodino materials#Xx6X@DQX@#@#XP\  P6QXP# and #Xx6X@DQX@#A#XP\  P6QXP#that [a]ll documents with respect to the [merger] proceeding have been placed in the public record.#Xx6X@DQX@#@#footnote reference#U#footnote reference#Í)footnote reference)See e.g., Letter to R. Edward Price, Koteen & Naftalin, from Gregory A. Weiss, Deputy Chief Enforcement Division, Common Carrier Bureau, FCC, February 13, 1998, p. 1.U#XP\  P6QXP# The FCC#Xx6X@DQX@#=#XP\  P6QXP#s staff informally has advised counsel for Telstra that, as of this writing, the Commission has still not obtained any HSR documents. Nor have WorldCom or MCI voluntarily supplemented the record in the interim. Thus, from an evidentiary standpoint, the record basis for determining the competitive impact of the proposed merger on global Internet access (i.e., whether the postmerger company will make available costbased, unbundled access to U.S. Internet facilities) remains as incomplete as it was when Telstra filed its February 4 motion to establish an additional public comment cycle.  B.The Bureau#Xx6X@DQX@#=#XP\  P6QXP#s Order Does Not Address Telstra#Xx6X@DQX@#=#XP\  P6QXP#s Concerns And Interested Parties Should Be Given Further Opportunity To Comment After The Record Has Been Supplemented With The HSR Documents And The Materials Gathered During The FCC#Xx6X@DQX@#=#XP\  P6QXP#s Own Investigation   The Order states that Telstra has #Xx6X@DQX@#A#XP\  P6QXP#essentially [been] grant[ed] the relief [it] seeks#Xx6X@DQX@#@#XP\  P6QXP# by requesting an extension of the date for reply comments on GTE#Xx6X@DQX@#=#XP\  P6QXP#s Motion to Dismiss because a further two weeks has been granted for filing comments. The Order misinterprets Telstra#Xx6X@DQX@#=#XP\  P6QXP#s request. An additional comment round is necessary so that the parties may examine relevant factual documents #Xx6X@DQX@#C#XP\  P6QXP# including, but not limited to, HSR documents provided by WorldCom and MCI to the Justice Department #Xx6X@DQX@#C#XP\  P6QXP# that the Commission has a duty to obtain in the course of its investigation of the competitive effects of the proposed merger. Recent developments have underscored the significance of providing interested parties access to such documents. For example, both the DOJ and the European Commission have announced a widening of their merger review principally so that they can further investigate the effects which the proposed merger might have on various Internet service markets.#footnote reference##footnote reference#Í)footnote reference)#XP\  P6QXP#See John R. Wilke & Jared Sandberg, WorldCom, MCI Probe Is Widened, Wall St. J., Mar. 10, 1998, at A3, A8 (this article is appended hereto as Attachment 1); see Rivals Cheer As Europeans Probe WorldComMCI Merger, Telecom. Reports, Mar. 9, 1998, at 26. Moreover, in an attempt to compile an adequate record to resolve the competition issues involved, the Justice Department has hired outside experts and has sent civil subpoenas to the providers of Internet services seeking information about their reliance on the Internet backbone networks of WorldCom and MCI.#footnote reference##footnote reference#Í)footnote reference)#XP\  P6QXP#Id. The DOJ also has made a second formal request for information to WorldCom and MCI #Xx6X@DQX@#C#XP\  P6QXP# a request which presumably would not have been submitted if the parties had already allayed the DOJ#Xx6X@DQX@#=#XP\  P6QXP#s competition concerns. The FCC also has a unique role to play in determining whether the merger is procompetitive or not. The Commission has a coequal responsibility with the DOJ in protecting the public from anticompetitive combinations in the communications industry. It also has a separate statutory obligation under the Communications Act to ensure that common carrier facilities are not provided on anticompetitive or unreasonably discriminatory terms (e.g., to investigate the terms on which a postmerger MCIWorldCom will furnish International Private Lines and other common carrier services and facilities to Internet Service Providers (ISPs), including ISPs affiliated with MCIWorldCom).#footnote reference##footnote reference#Í)footnote reference)#XP\  P6QXP#47 U.S.C. #Xx6X@DQX@#''#XP\  P6QXP# 214(a), 310(d); see also MCI Communications Corp. and British Telecommunications plc, 12 FCC Rcd 15351, 15353 (#Xx6X@DQX@#&#XP\  P6QXP#2) (1997) (#Xx6X@DQX@#A#XP\  P6QXP#BT/MCI Order#Xx6X@DQX@#@#XP\  P6QXP#) (#Xx6X@DQX@#A#XP\  P6QXP#[W]e must be persuaded that the proposed transaction is in the public interest . . . before we can approve the . . . merger. Applicants bear the burden of demonstrating that the proposed transaction is in the public interest.#Xx6X@DQX@#@#XP\  P6QXP#) (footnote omitted); NYNEX Corp. and Bell Atlantic Corp., 12 FCC Rcd 19985, 20000 (#Xx6X@DQX@#&#XP\  P6QXP# 29) (1997) (#Xx6X@DQX@#A#XP\  P6QXP#Bell Atlantic/NYNEX Order#Xx6X@DQX@#@#XP\  P6QXP#). The twin FCC pleadings submitted by WorldCom and MCI on January 26 and 27, 1998 provide further evidence as to why such an investigation is still necessary.  C.The WorldComMCI Joint Comments And Joint Opposition Do No Demonstrate That The PostMerger Company Will Provide NonDiscriminatory, Cost Based Access To U.S. Internet Facilities  The WorldComMCI January 27, 1997 #Xx6X@DQX@#A#XP\  P6QXP#Joint Opposition#Xx6X@DQX@#@#XP\  P6QXP# To GTE#Xx6X@DQX@#=#XP\  P6QXP#s Motion to Dismiss provides no additional factual information regarding the terms on which offshore ISPs will have access to the post merger company#Xx6X@DQX@#=#XP\  P6QXP#s Internet backbone and switching facilities. That pleading is devoted almost exclusively to legal arguments regarding the public interest burden which the applicants must satisfy the applicants rely upon their initial application and their January 26, 1997 #Xx6X@DQX@#A#XP\  P6QXP#Joint Reply#Xx6X@DQX@#@#XP\  P6QXP# for the facts. However, neither of these documents contains adequate information to carry the applicant#Xx6X@DQX@#=#XP\  P6QXP#s public interest burden on the Internet access issues raised by Telstra. For example, at pages 88 to 91 of their #Xx6X@DQX@#A#XP\  P6QXP#Joint Reply#Xx6X@DQX@#@#XP\  P6QXP#, WorldCom and MCI attempt to rebut Telstra#Xx6X@DQX@#=#XP\  P6QXP#s concerns regarding Internet access for offshore ISPs by stating that Telstra #Xx6X@DQX@#A#XP\  P6QXP#can buy a whole circuit of transoceanic capacity, purchase backhaul [from an international gateway] ... and then connect via any U.S. regional or national backbone provider to the Internet.#Xx6X@DQX@#@#footnote reference#\#footnote reference#Í)footnote reference)#Xx6X@DQX@#A#XP\  P6QXP#Joint Reply#Xx6X@DQX@#@#XP\  P6QXP# at p. 90.\#XP\  P6QXP# It also is asserted that #Xx6X@DQX@#A#XP\  P6QXP#MCI, WorldCom and other U.S. ISP backbone providers offer foreign ISPs interconnection with their networks at the same price, and on the same terms and conditions that they offer access to domestic ISPs.#Xx6X@DQX@#@#footnote reference##footnote reference#Í)footnote reference)Ibid.#XP\  P6QXP# The foregoing statements are without factual support in the record and seek to sidestep the discriminatory economic regime for global Internet access which Telstra has challenged. Though Telstra, or its U.S. affiliate, may legally buy a whole circuit across the Pacific to connect to the Internet, WorldCom and MCI have yet to show that requiring Telstra and other offshore ISPs to pay the full cost of Internet access is a reasonable and nondiscriminatory practice under the Communications Act when that capacity is used to carry traffic in both directions #Xx6X@DQX@#C#XP\  P6QXP# that is, Internet traffic to Australia generated by U.S. ISPs, including ISPs affiliated with WorldCom and MCI. Likewise, because WorldCom and MCI have not fully disclosed their current or postmerger terms for connecting with U.S. or offshore ISPs #Xx6X@DQX@#C#XP\  P6QXP# indeed, that is one of the central competitive issues now before the FCC #Xx6X@DQX@#C#XP\  P6QXP# the bold assertion that such terms are nondiscriminatory plainly does not meet their burden of proof. For the same reason, the FCC should not place any weight on the recently reported statement by WorldCom Vice Chairman John Sidgmore to the effect that the postmerger company would #Xx6X@DQX@#A#XP\  P6QXP#absolutely not#Xx6X@DQX@#@#XP\  P6QXP# change its peering policy.#footnote reference# #footnote reference#Í)footnote reference)M. Mills and R. Chandrasakaran #Xx6X@DQX@#A#XP\  P6QXP#Smaller Rivals Question MCIWorldCom Merger Plan,#Xx6X@DQX@#@#XP\  P6QXP# The Washington Post, March 11, 1998 at C11. The reason is that neither WorldCom or MCI have fully disclosed their current peering policies and to the extent they have, they plainly do discriminate against offshore and other ISPs such as Telstra.#footnote reference# #footnote reference#Í)footnote reference)The criteria which WorldCom#Xx6X@DQX@#=#XP\  P6QXP#s UUNet subsidy announced in mid1997 for peering would disqualify Telstra and many other ISPs because they lack U.S. backbone networks of adequate size and diversity (i.e., a U.S. network with DS3 (45 Mbps) links to at least four city Network Access Points (NAPs). See #Xx6X@DQX@#A#XP\  P6QXP#UUNet Details Peering Strategy#Xx6X@DQX@#@#XP\  P6QXP# ISPs which lack direct peering agreements face unequal access to the U.S. Internet as UUNet has acknowledged. See Telstra#Xx6X@DQX@#=#XP\  P6QXP#s initial #Xx6X@DQX@#A#XP\  P6QXP#Comments#Xx6X@DQX@#@#XP\  P6QXP# at p. 6, n.16. D.Conclusion For all the above reasons, the Bureau should reconsider its Order; conduct the premerger investigation required by law; obtain all relevant HSR documents from the DOJ; make the HSR documents and the record it has independently compiled available to interested parties; and then provide a further opportunity for public comment. Commonsense principles of administrative justice require no less. That is also what the Communications Act and the FCC#Xx6X@DQX@#=#XP\  P6QXP#s competition policies require. And this approach also will best serve the broader community of telecom users in the U.S. and abroad by making it clear that the principal U.S. telecommunications regulator will conduct a full and impartial review of the largest telecom merger ever proposed. Respectfully submitted, TELSTRA CORPORATION LIMITED By:______________________________ Alan Y. Naftalin Gregory C. Staple R. Edward Price KOTEEN & NAFTALIN, L.L.P. 1150 Connecticut Avenue, N.W. Washington, D.C. 200364104 (202) 4675700 Its Attorneys March 13, 1998  CERTIFICATE OF SERVICE I, Barbara Frank, a legal secretary in the firm of Koteen & Naftalin, L.L.P., hereby certify that on the 13th day of March 1998, copies of the foregoing #Xx6X@DQX@#A#XP\  P6QXP#Comments And Petition For Reconsideration Of Telstra#Xx6X@DQX@#@#XP\  P6QXP#, were deposited in the U.S. mail, postage prepaid, or hand delivered*, addressed to: (#҇# # *Chairman William E. Kennard Federal Communications Commission 1919 M Street, N.W., Room 814 Washington, D.C. 20554 *Commissioner Susan Ness Federal Communications Commission 1919 M Street, N.W. Room 832 Washington, DC 20554 *Commissioner Gloria Tristani Federal Communications Commission 1919 M Street, N.W. Room 826 Washington, DC 20554 *Commissioner Michael K. Powell Federal Communications Commission 1919 M Street, N.W. Room 802 Washington, DC 20554 *Commissioner Harold W. FurchtgottRoth Federal Communications Commission 1919 M Street, N.W. Room 844 Washington, DC 20554 *Richard Metzger Chief, Common Carrier Bureau 1919 M Street, N.W. Room 500 Washington, DC 20554 *Michelle Carey Common Carrier Bureau Federal Communications Commission 1919 M Street, N.W. Room 534J Washington, D.C. 20554 *Geraldine Matise Chief, Network Services Division Common Carrier Bureau Federal Communications Commission 2000 M Street, N.W. Room 235 Washington, DC 20554 (2 copies) *Gregory M. Cooke Network Services Division Common Carrier Bureau Federal Communications Commission 2000 M Street, N.W. Room 235 Washington, DC 20554 *Regina M. Keeney Chief, International Bureau Federal Communications Commission 2000 M Street, N.W. Washington, DC 20554 *International Transcription Service, Inc. 1231 20th Street, N.W. Washington, DC 20036 *Janice M. Myles Common Carrier Bureau Federal Communications Commission 1919 M Street, N.W., Room 544 Washington, D.C. 20554 Michael H. Salsbury Mary L. Brown Larry A. Blosser MCI Communications Corporation 1801 Pennsylvania Avenue, N.W. Washington, DC 200063606 Andrew D. Lipman Jean L. Kiddoo Swidler & Berlin, Chtd. 3000 K Street, N.W., Suite 300 Washington, DC 20007 Catherine R. Sloan Robert S. Koppel WorldCom, Inc. 1120 Connecticut Avenue, N.W. Washington, DC 20036 Patrick M. Scanlon Mark F. Wilson Communications Workers of America, AFLCIO, CLC 501 Third Street, N.W. Suite 800 Washington, D.C. 20001 Barbara O#Xx6X@DQX@#=#XP\  P6QXP#Connor Donald Vial Maureen Lewis The Alliance for Public Technology 901 Fifteenth Street, N.W. Suite 230 Washington, D.C. 20005 Sue Ashdown XMission 51 E. 400 S. Suite 200 Salt Lake City, UT 84111 Janice Mathis Rainbow/PUSH Coalition Thurmond, Mathis & Patrick 1127 W. Hancock Avenue Athens, GA 30603 David Honig Rainbow/PUSH Coalition 3636 16th Street , N.W. #B366 Washington, D.C. 20010 Ramsey L. Woodworth Robert M. Gurss Rudolph J. Geist Wilkes, Artis, Hendrick & Lane, Chartered 1666 K Street, N.W. Suite 1100 Washington, D.C. 20006 Matthew R. Lee Inner City Press/Community on the Move & Inner City Public Interest Law Project 1919 Washington Avenue Bronx, NY 10457 John Thorne Sarah Deutsch Robert H. Griffen Bell Atlantic 1320 North Court House Road 8th Floor Arlington, VA 22201 Richard E. Wiley R. Michael Senkowski Jeffrey S. Linder Peter D. Shields Wiley, Rein & Fielding 1776 K Street, N.W. Washington, D.C. 20006  John J. Sweeney American Federation of Labor and Congress of Industrial Organizations 815 16th Street, N.W. Washington, D.C. 20006 William B. Barfield Jonathan Banks 1155 Peachtree Street, N.E. Suite 1800 Atlanta, GA 30309 Thomas A. Hart, Jr. Amy E. Weissman M. Tamber Christian Ginsburg, Feldman and Bress, Chartered 1250 Connecticut Avenue, N.W. Washington, D.C. 20036 Andrew Jay Schwartzman Gigi B. Sohn Joseph S. Paykel Media Access Project Suite 400 1707 L Street, N.W. Washington, D.C. 20036 #X P7XP# ____________________________________ Barbara Frank#XP\  P6QXP#