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Federal Communications Commission
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Washington, D.C. 20554
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Internet: http://www.fcc.gov

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. Circ 1974).

Report No. IN 98-62 INTERNATIONAL ACTION November 24, 1998


The International Bureau today directs Telmex/Sprint Communications (TSC) to show cause within 30 days why the Bureau should not find that TSC and its affiliate, Tel‚fonos de M‚xico (Telmex), have failed to satisfy the requirements of TSC's Section 214 authorization. Specifically, the Bureau identifies serious concerns about the compliance by TSC and its affiliate with certain service provisioning commitments required by TSC's authorization. The Bureau has received evidence of apparent anticompetitive conduct by TSC's affiliate that could adversely affect competition in the U.S. international services market.

In October 1997, the Bureau approved TSC's Section 214 request with certain preconditions to provide international switched resale services between the United States and all international points, including Mexico. In August of this year, the Bureau found that TSC had satisfied the preconditions and authorized TSC to begin offering services immediately. As part of the Section 214 authorization, the Bureau noted its expectations of market liberalization in Mexico and attached several conditions to TSC's authorization. AT&T and MCI/WorldCom have filed information with the Commission indicating that TSC and Telmex are not in compliance with specified conditions and expectations.

Based on this information, Telmex appears to be failing to comply with its commitment related to the provisioning of private lines and private circuits to competitors in violation of TSC's authorization. This commitment was a condition of TSC's Section 214 authorization. The Bureau also has serious concerns about: (1) the lack of progress in opening Mexico's market to "pure" switched resale; (2) the lack of progress on negotiations between Telmex and U.S. carriers for acceptable interim settlement rates for 1998 and 1999; (3) the continuation of Mexico's discriminatory 58 percent surcharge for inbound international calls; (4) the inability of Telmex and U.S. carriers to reach an agreement for "true up" arrangements relating to the inclusion of Paid-800 service in proportionate return (Paid-800 service allows callers in Mexico to initiate an international call to a U.S. toll-free number); and (5) the apparent discriminatory conduct by Telmex with respect to "received collect" traffic (collect calls made from Mexico to the United States for which the recipient is billed). The Bureau therefore directs TSC to address these matters and show cause within 30 days why the Bureau should not find that TSC and its affiliate are in violation of TSC's Section 214 authorization.

Action by Chief, International Bureau, November 24, 1998, by Order to Show Cause (DA 98-2400).

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International Bureau contact: Peter Pappas at (202) 418-0746 and Diane Cornell at (202) 418- 1470.
News Media contact: Rosemary Kimball at (202) 418-0500.