News media information  202 / 418-0500
                                                  Fax-On-Demand  202 / 418-2830
                                                   Internet: http://www.fcc.gov
                                                                    ftp.fcc.gov
Federal Communications Commission
1919 M Street, N.W.
Washington, D.C. 20554

This is an unofficial announcement of Commission action.  Release of the full text of a Commission order
constitutes official action.  See MCI v. FCC, 515 F.2d 385 (D.C. Cir. 1974).


       Report No. IN 98-54             INTERNATIONAL ACTION                  October 5, 1998
                                       
               COMMISSION REAFFIRMS THAT AT&T IS NON-DOMINANT
                         FOR INTERNATIONAL SERVICES 
                           (CC Docket No. 79-252)

     In a reconsideration order released today, the Commission reaffirmed that AT&T lacked
market power and was non-dominant in the international telecommunications services market.  As
a non-dominant carrier, AT&T is not subject to price caps and can file tariffs on one day's notice,
actions that the Commission found would promote competition and benefit consumers of
international telephone services.  The Commission noted that the petitioners (MFS, Sprint, MCI
and WorldCom) did not present any evidence to contradict the Commission's prior findings, set
forth in its original 1996 order finding AT&T non-dominant, that residential customers were
highly responsive to price signals and likely to switch carriers if AT&T raised prices.  

     As evidence of the growing competition in the international services market, the
Commission noted several factors.  First, AT&T's overall market share has continued to fall: from
98.5 percent in 1985, to 72.7 percent in 1991, to 59 percent in 1994, to 49.3 percent in 1996. 
Second, multiple U.S. carriers have operating agreements to all but the smallest International
Message Telephone Services (IMTS) markets and, thus, are able to compete much more easily
than a decade ago.  Third, with the World Trade Organization (WTO) Basic Services
Telecommunications Agreement now in place, AT&T's competitors are able to obtain operating
agreements from new entrants as well as incumbent carriers in WTO countries.

     The Commission also declined to regulate AT&T's Unisource partners (such as Telia,
Swisscom, and KBN (Netherlands)) as affiliated dominant carriers on particular routes.  The
Commission found that non-equity partners, such as those in AT&T's alliance with Unisource,
have a greater financial incentive to serve all carriers on the same terms than to discriminate
against another partner's competitors.  The Commission noted that, as a further safeguard, the
International Settlements Policy (ISP), "No Special Concessions" rule, and circuit status and traffic
reporting requirements protect U.S. carriers from potential discrimination in favor of AT&T.  The
Commission also noted that, because the AT&T/Unisource partnership was providing entirely
intra-European services, it lacked jurisdiction to regulate the partnership.

     Action by the Commission September 30, 1998, by Order (FCC 98-253).  Chairman
Kennard, Commissioners Ness, Furchtgott-Roth, Powell and Tristani.

                                    - FCC -


     News Media contact: Rosemary Kimball at (202) 418-0500.
     International Bureau contact:  Sherille Ismail at (202) 418-2792.
NEWS