NEWSReport No. IN 98-35                INTERNATIONAL ACTION                 June 30, 1998

                   INTERNATIONAL BUREAU AUTHORIZES ISR
                   BETWEEN THE UNITED STATES AND JAPAN

     The Telecommunications Division of the FCC's International Bureau today approved two carriers' requests
to resell switched services over private lines that are interconnected to the public switched network (also known as
International Simple Resale or ISR) between the United States and Japan, a World Trade Organization (WTO)
Member country.  As a result of this approval, all carriers authorized by the FCC to provide ISR to any other
country may also now provide it to Japan, unless the carrier has an affiliation with a dominant Japanese carrier. 
Today's action, in conjunction with the FCC's new Foreign Participation rules adopted last November and Japan's
decision in December to open its market to ISR, will permit U.S. and Japanese carriers to route traffic between the
two countries outside the traditional settlements system, enabling carriers to offer international service at lower
rates.  Because Japan is the largest U.S. route to Asia and serves as a major traffic hub for the region, today's
action will dramatically increase competitive pressures on rates for international telecommunications services to all
parts of Asia.

     The Commission's Rules permit ISR on a U.S.-WTO Member country route if (1) settlement rates for at
least 50 percent of the settled U.S.-billed traffic between the United States and the WTO Member country are at or
below the relevant benchmark settlement rate adopted in the FCC's Benchmarks Order, or (2) the WTO Member
country affords resale opportunities equivalent to those available under U.S. law.  The Telecommunications
Division has approved accounting rate reductions negotiated by AT&T and MCI with KDD in Japan that set
accounting rates below the relevant benchmark rate of 15›.  These reductions take effect upon authorization of ISR
between the United States and Japan and cover more than 50% of the traffic on the U.S.-Japan route.  As a result,
the Telecommunications Division found the benchmark settlement rate condition for ISR satisfied, and
consequently approved the requests of Pacific Gateway Exchange, Inc. (PGE) and Cable & Wireless, Inc. (CWI) to
provide ISR to Japan.

     Today's action adds Japan to the list of fourteen other countries to and from which U.S. carriers can
provide ISR.  With the addition of Austria and Switzerland to the list last week, U.S. carriers can now send 46% of
all U.S. international traffic outside of the traditional settlements system.  Today's action will benefit U.S. and
Japanese consumers by reducing prices, encouraging greater service options, stimulating demand and spurring
technological innovation.

     Action by Chief, Telecommunications Division, International Bureau, June 30, 1998, by Order and
Authorization (DA 98-1300).

 - FCC -

     News Media contact:  Rosemary Kimball at (202) 418-0500.
     International Bureau contact:  John Giusti at (202) 418-1407.