FOR RECORD ONLY


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$///DA 95-119,2/3/95,RO///$



                                         DA 95-119

                               Before the 
                    Federal Communications Commission
                        Washington, D.C.    20554

In the Matter of)
     )
American Telephone    )  File No. I-T-C-93-162
     and Telegraph Company       )
     )
AT&T (UK) Limited     )
     )
Application for Authority        )
Under Section 214 of the Communications)
Act to Provide International Switched  )
Services via International Private Lines     )
Interconnected to the Public Switched  )
Networks in the United States    )
and the United Kingdom)

MEMORANDUM OPINION, ORDER AND AUTHORIZATION

     Adopted:  January 27, 1995              Released: January 30, 1995

By the Chief, International Bureau:

I. INTRODUCTION
               
     1.   On April 15, 1993, American Telephone and Telegraph Company ("AT&T") and
AT&T (UK) Limited filed the above-captioned application seeking authority pursuant to
Section 214 of the Communications Act ("the Act"), as amended, to provide switched services
via international private lines between the United States and the United Kingdom that are
interconnected to the public switched network ("PSN") in the United States, or in the United
Kingdom, or both.   For the reasons stated below, we grant AT&T's application.

                              II.  BACKGROUND

     2.   AT&T requests authority to connect AT&T-owned facilities in transatlantic cable
systems in which AT&T owns capacity, including TAT-8, TAT-9 and TAT-10, with private
line half-channels to be leased by AT&T (UK) from British Telecommunications ("BT"), or
Mercury Communications, Ltd. ("MCL") at BT's or MCL's prevailing tariff rates.  The
circuits will be interconnected to the PSN on the U.S. or U.K. end, or both.  They will be
used to provide certain of AT&T's authorized services, including International Message
Telecommunications Service ("IMTS"), in accordance with AT&T's tariffs, and to terminate
U.K.-outbound services provided to U.K. customers by AT&T (UK).  As such, AT&T asserts,
this arrangement will constitute international private line resale, as defined in the International
Resale Order.   AT&T Application at 6.  In that order, the Commission required that
applicants seeking authority under Section 214 of the Communications Act to interconnect
private lines to the U.S. or foreign PSN for the purpose of providing international switched
services demonstrate that the destination foreign market affords opportunities for resale that
are equivalent to those available under U.S. law.  AT&T also notes that, concurrent with the
instant application, AT&T filed in the U.K. a request for a license to resell international
private lines between the United Kingdom and the United States, interconnected to the PSN
on both ends. 

     3.   We placed the application on public notice on April 28, 1993.  BTNA, IDB
Communications Group, Inc. ("IDB"), and Motor-Columbus AG ("Motor-Columbus") filed
comments on the application.  AT&T filed an opposition to the comments and Motor-
Columbus filed a reply.  

                              III.  COMMENTS

     4.  IDB and Motor-Columbus make essentially identical arguments in their comments.  
IDB and Motor-Columbus assert that AT&T does not need to obtain Commission
authorization for the services covered by the instant application because it already has
authorization as a facilities-based carrier.  Motor-Columbus observes that the Commission has
stated:

     The court [in Execunet]  . . . decreed that a Section 214(a) authorization
     permits a carrier to offer any service which the authorized facility can be used
     to provide in the absence of a Section 214(c) condition that expressly prohibits
     the use of a facility to provide a particular service.

Motor-Columbus Comments at 5 (quoting MTS and WATS Market Structure, 75 FCC 2d
644, 648 (1980)).   IDB and Motor-Columbus also express concern that grant of AT&T's
application "could be used to curtail the Title II authority which other facilities-based
international carriers now have and thus to block the international private line services which
these carriers currently provide in competition with AT&T."  Motor-Columbus Comments at
6.   BTNA does not oppose AT&T's application, but contends that it is deficient in that it
fails to demonstrate that equivalent private line resale opportunities exist in the United
Kingdom as required by Section 63.01(k)(5) of the Commission's rules, 47 C.F.R. 
63.01(k)(5).

     5.   In its opposition to the comments, AT&T disputes BTNA's contention that its
application is deficient.  AT&T explains it seeks Section 214 authorization only in the event
the Commission concludes that equivalent private line resale opportunities exist in the United
Kingdom and therefore grants BTNA's application.   AT&T also asserts that the legal issues
raised by IDB and Motor-Columbus provide no basis for denying AT&T's application. 
AT&T states that:

     Motor-Columbus and IDB are correct that AT&T seeks to use its own
     previously authorized circuits to interconnect with a reseller in the U.K., and
     AT&T would not, therefore, be engaged in "resale."  Moreover, under the
     Execunet decision, AT&T's prior authorizations are legally sufficient to permit
     AT&T to use its circuits to provide switched services by interconnecting with
     resold private line circuits on the foreign end. . . . AT&T's decision to submit
     its application. . . is based on its unavoidable need to position itself
     competitively to provide switched services via resold private line arrangements
     between the U.S. and U.K.

     6.   In reply to AT&T's opposition, Motor-Columbus states that AT&T appears to
agree with the arguments advanced in Motor-Columbus's comments.  Motor-Columbus
contends that AT&T's opposition makes unclear, however, whether AT&T (UK) would be
reselling only the U.K. half-circuit or would be reselling the U.S. half-circuit as well.  Motor-
Columbus urges us to grant the application only to the extent that AT&T (UK) seeks
authorization to resell U.S. half-circuits.

                              IV.  DISCUSSION

     7.   We grant AT&T's application.  We note first that AT&T will be using its own
private lines in the United States.   AT&T will therefore not be reselling private line service
in the United States.  In the United Kingdom, on the other hand, AT&T (UK) will be
reselling private lines it leases from BT or MCL.  We interpret the International Resale Order
to require that, whenever a carrier seeks to reroute switched traffic not subject to the
settlements process over private lines interconnected to the PSN, that carrier must seek
separate authorization to do so under Section 214.  The International Resale Order sought to
protect the U.S. public interest against the detrimental effects of one-way resale by requiring
an applicant for authority to resell international private lines in the United States to
demonstrate that equivalent resale opportunities exist in the destination market.  We were
concerned about diversion of switched traffic from the international settlements process.  The
traffic configuration AT&T proposes, which routes switched traffic over an international
private line connected at one or both ends to the PSN, is therefore subject to this equivalency
requirement.   A separate 214 is necessary to enable us to enforce the Commission's 
equivalency requirement.  For this reason, we conclude that AT&T must obtain the additional
Section 214 authorization it seeks in this application.  

     8.  We agree generally with Motor-Columbus and IDB that under Execunet AT&T's
existing authorizations are adequate to allow it to offer any lawful service over the authorized
facilities.   The Court also held, however, that "Section 214(c) . . . authorize[s] the
Commission to restrict the services that may be offered over a communication line once it is
built, acquired, or extended."  Execunet, 561 F.2d at 377.  The Court went on to note that
such a restriction must be based on the Commission's affirmative determination that the
public convenience and necessity require it.  Id.  As we have stated, the Commission's
International Resale Order affirmatively determined that the public convenience and necessity
require a separate Section 214 authorization as a mechanism to enforce its equivalency
requirement whenever a carrier seeks to reroute switched traffic over private lines
interconnected to the PSN.  

     9.  We find that the present and future public convenience and necessity require the
grant of this authorization to AT&T, subject to its continued regulation as a dominant carrier
for the provision of IMTS.  We will regulate as dominant AT&T's provision of the services
hereby authorized because of AT&T's market power in the U.S. IMTS market and not due to
its affiliation with a foreign carrier.  We therefore grant AT&T authorization to provide
switched services via international private lines between the United States and the United
Kingdom that are interconnected to the U.S. PSN, or the U.K. PSN, or both.

                           IV. ORDERING CLAUSES

     10.  Upon consideration of the above-captioned application, IT IS HEREBY
CERTIFIED that the present and future public convenience and necessity require the provision
by AT&T of switched services to the United Kingdom via international private lines
interconnected to the Public Switched Network at either or both ends.  

     11.  Accordingly, IT IS ORDERED that application File I-T-C-93-162 IS GRANTED
to the extent indicated herein.

     12.  IT IS FURTHER ORDERED that the application File I-T-C-93-162 filed by
AT&T (UK) Limited IS DISMISSED. 

     13.  IT IS FURTHER ORDERED that neither AT&T nor any persons or companies
directly or indirectly controlling it or controlled by it, or under direct or indirect common
control with it, shall acquire or enjoy any right, for the purposes of handling or interchanging
traffic to or from the United States, its territories or possessions which is denied to any other
United States carrier by reason of any concession, contract, understanding, or working
arrangement to which AT&T or any such persons or companies controlling or controlled by
AT&T are parties.  See also 47 C.F.R.  63.14.

     14.   IT IS FURTHER ORDERED that AT&T shall comply with Section 203 of the
Communications Act, 47 U.S.C. 203, Part 61, and Sections 43.51 and 43.61 of the
Commission's Rules, 47 C.F.R. Part 61, and 43.51 and 43.61. 

     15.  IT IS FURTHER ORDERED that AT&T, as a dominant carrier, shall request
Section 214 authorization for all circuit additions to the United Kingdom, pursuant to Section
63.01 of the Commission's Rules, 47 C.F.R. 63.01.
     
     16.  IT IS FURTHER ORDERED that AT&T shall comply with any current and
future Commission policies and requirements concerning international accounting and
settlement rates and shall file copies of any operating agreements which it enters into with its
foreign correspondents within 30 days of their execution.

     17.  This Order is issued under Section 0.261 of the Commission's Rules and is
effective upon adoption.  Petitions for reconsideration under Section 1.106 or applications for
review under Section 1.115 of the Commission's Rules may be filed within 30 days of the
public notice of this Order (see Section 1.4(b)(2)).


     FEDERAL COMMUNICATIONS COMMISSION



     Scott Blake Harris 
     Chief, International Bureau