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File pnmc5021 (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ************************************************************************* Before the Federal Communications Commission Washington, D.C. 20554 DA 96-1412 In the Matter of ) ) AMERICATEL CORPORATION ) File No. I-S-P-96-002 ) Petition for Expedited Modification ) of Regulatory Status from Dominant to ) Non-Dominant for International ) Communications Services with Chile ) ) Application for Authority to Establish and ) File No. I-T-C-96-263 Operate Facilities for the Provision of ) Interconnected Private Line Service, and to ) Provide on a Resale Basis Interconnected and ) Non-interconnected Private Line Services ) Between the United States and Chile ) ORDER AND AUTHORIZATION Adopted: August 21, 1996 Released: August 21, 1996 By the Acting Chief, International Bureau: I. INTRODUCTION 1.In this Order, we reclassify AmericaTel Corporation ("AmericaTel") as a non- dominant carrier for service between the United States and Chile. We also grant AmericaTel authority to resell international private line services of other carriers for the purpose of providing non-interconnected private line service between the United States and Chile. We defer action on AmericaTel's requests to establish and operate private line facilities that are interconnected to the public switched network ("PSN") in both the United States and Chile and to resell private line services of other carriers on the U.S.-Chile route interconnected to the PSN at one or both ends of the route. II. BACKGROUND 2.On February 12, 1996, AmericaTel filed a petition requesting a change in its regulatory status between the United States and Chile from dominant to non-dominant for all services, in accordance with Section 63.10(a)(3) of the Commission s Rules. No opposition to AmericaTel s petition has been filed. 3. On April 23, 1996, AmericaTel filed an application for authority to provide certain private line services between the United States and Chile pursuant to Section 214 of the Communications Act of 1934, as amended. Specifically, AmericaTel seeks authority to: 1) provide private line services between the United States and Chile, interconnected to the PSN on both ends; 2) resell international private line services of other carriers to provide non- interconnected private line service; and 3) resell international private line services of other carriers interconnected to the PSN at one or both ends of the U.S-Chile route. 4. On June 6, 1996, AT&T filed a petition to deny AmericaTel's application to establish facilities-based and resold private lines interconnected to the PSN for the provision of switched services between the United States and Chile. AT&T does not oppose AmericaTel's application to provide non-interconnected private line services between the United States and Chile. AmericaTel filed an opposition to AT&T's petition and AT&T filed a reply to AmericaTel's Opposition. 5. AmericaTel is "affiliated" with Empresa Nacional de Telecomunicaciones S.A. ( ENTEL-Chile ), a domestic and international long distance carrier in Chile. AmericaTel is authorized to resell international switched voice services of other common carriers and to provide a range of facilities-based services between the United States and various countries, including international switched and private line services. These authorizations expressly prohibit AmericaTel from providing facilities-based International Business Service (IBS) and/or private line services between the United States and Chile that are connected to the PSN. In a 1994 order granting authority to transfer control of AmericaTel from Northland Communications, Inc. to ENTEL-Chile, the Commission designated AmericaTel as a dominant carrier on the U.S.-Chile route. AmericaTel is authorized to serve all other routes as a non-dominant carrier. 6. The Commission classified AmericaTel as a dominant carrier to Chile for two reasons. First, at the time of the Transfer of Control Order, Telefonica de Espa¤a S.A. ( Telefonica ) was a shareholder of both ENTEL-Chile and Compa¤ia de Telefonos de Chile ( CTC ), Chile s primary local telephone service provider. The Commission determined that, because CTC controlled bottleneck local telephone facilities, Telefonica s ownership interest in both CTC and ENTEL-Chile provided the incentive and ability for CTC to discriminate in favor of AmericaTel at the expense of unaffiliated U.S. carriers. Second, the Commission noted that Chile's regulatory regime was newly established and had not yet demonstrated that it would be effective in controlling potential discrimination in matters such as interconnection, routing of traffic and disclosure of network information. As a result, the Commission was concerned that AmericaTel might gain an unfair competitive advantage vis-a-vis unaffiliated U.S. carriers. III. DISCUSSION A. Petition for Non-dominant status. 7. Under the Commission's rules, a U.S. carrier that is affiliated with a foreign carrier that is not a monopoly in a destination country and that seeks to be regulated as non- dominant bears the burden of submitting information sufficient to demonstrate that its foreign affiliate lacks the ability to discriminate against unaffiliated U.S. international carriers through control of bottleneck services or facilities in the destination country. Thus, in determining whether to modify AmericaTel's current classification of dominant to non-dominant for the U.S.-Chile route, we examine whether its affiliate, ENTEL-Chile, has the ability to discriminate against unaffiliated U.S. international carriers terminating traffic in Chile through the control of bottleneck services or facilities in Chile. 8. ENTEL-Chile provides domestic long distance and international telephone services in Chile. As recently as 1992, ENTEL-Chile provided nearly 100 percent of Chile's international telephone service. Since then, Chile has opened up its international telecommunications market to competition. The Commission has previously recognized that "Chile's liberalized telecommunications regulatory environment. . .[has] progressed substantially in promoting competition and preventing the abuse of market power." Since the Commission issued the Transfer of Control Order, the number of long distance providers in Chile has grown from five to eight. ENTEL-Chile's market share of total international telephone service revenues has dropped to approximately 37 percent as of May, 1996. ENTEL-Chile's market share for international service revenues, coupled with the increasing number of competitors, is evidence that ENTEL-Chile does not possess market power in the IMTS market. It also indicates to us that Chile's new regulatory regime has in fact succeeded in promoting competition and controlling discrimination in the international telephone service market. 9. In addition, there is no other evidence that ENTEL-Chile's domestic long distance and international services and facilities constitute a bottleneck for U.S. carriers terminating traffic in Chile. Indeed, at the time of the Transfer of Control Order, the Commission found that ENTEL-Chile did not control any bottleneck facilities. AmericaTel states that ENTEL-Chile continues to lack ownership or control of "switching or other key facilities with which other international long distance carriers must connect in order to provide telecommunications services in Chile." AmericaTel also states that since Chile's legislature adopted the Multicarrier Amendment, local exchange carriers have been required to make it possible for consumers to choose a long distance carrier (for both domestic and international long distance service) on a call-by-call basis. According to AmericaTel, this law was fully implemented on October 29, 1994. AmericaTel observes that "ENTEL-Chile has no control over which carrier is selected by individual users under Chile's Multicarrier Amendment, and users have eight long distance carriers to choose from." We also note that Telefonica has divested its ownership stake in ENTEL-Chile, and that ENTEL-Chile now has no indirect ownership interest in the local exchange carrier CTC. We find on the basis of this information that ENTEL-Chile has no control over bottleneck services or facilities that can be used to discriminate against unaffiliated U.S. carriers terminating traffic in Chile. 10. We also find that reclassifying AmericaTel as non-dominant on the U.S.-Chile route would serve the public interest. This reclassification will encourage competition in the U.S. and Chilean markets and should foster lower prices, innovative services, increased responsiveness to consumer needs, and closer social, cultural and business ties between the United States and Chile. Continued regulation of AmericaTel as a dominant carrier on the U.S.-Chile route is unnecessary because ENTEL-Chile does not have the ability to favor AmericaTel through control of bottleneck services or facilities in Chile. 11. Consistent with AmericaTel's reclassification as non-dominant for services between the United States and Chile, AmericaTel will no longer be required to seek prior Section 214 approval to add or delete circuits, file quarterly reports of traffic and revenue, or maintain circuit provisioning and maintenance reports for the U.S.-Chile route. It can also file its tariffs on no less than one day's, rather than 14 days', notice. As a non-dominant carrier, AmericaTel will still be subject to regulation under Title II of the Communications Act of 1934. Specifically, Title II requires carriers to offer international services under rates, terms and conditions that are just, reasonable and not unduly discriminatory (Sections 201 and 202), and Title II carriers are subject to the Commission's complaint process (Sections 206- 209). Title II carriers also are required to file tariffs pursuant to our streamlined tariffing procedures (Sections 203 and 205). As a non-dominant carrier on the U.S.-Chile route, AmericaTel will be subject to the provisions of Sections 43.82, 63.14, 63.15(b), 63.19 and 63.21 of the Commission's Rules. 12. Finally, in view of our finding that market and regulatory conditions in Chile warrant regulating AmericaTel as non-dominant, we will no longer require AmericaTel to file annual progress reports detailing the status of Chile's telecommunications industry and regulatory regime. The Commission imposed these reports to help it monitor the effectiveness of the safeguards imposed by Chile's regulatory regime, including the Multicarrier Amendment and Chilean judicial order that Telefonica divest its interest in either ENTEL-Chile or CTC. These reports have assisted our analysis of AmericaTel's requests to add circuits to Chile and our analysis here. We find no compelling reason to continue to require that AmericaTel file these progress reports. B. Section 214 Application 13. As noted above, AmericaTel's request to resell international private line services of other carriers to provide non-interconnected private line service is unopposed. We find that immediate grant of AmericaTel's request to resell international private line services of other carriers to provide non-interconnected private line service would serve the public interest, convenience and necessity. We defer acting, however, on AmericaTel's requests to provide facilities-based private line services between the United States and Chile, interconnected to the PSN on both ends, and to resell private line services of other carriers interconnected to the PSN in the United States and/or Chile. Both requests require that we conduct an effective competitive opportunities or "equivalency" analysis of private line resale opportunities for U.S. carriers in Chile. These portions of AmericaTel's application are contested and require further analysis. Specifically, AT&T argues that Chile imposes discriminatory, one-way access charges on all foreign-originated switched traffic terminating in Chile. According to AT&T, the access charge for switched international traffic terminating in Chile (including switched private line) is five to ten times greater than the access charge for international traffic originating in Chile. As a result, AT&T concludes that Chile does not afford resale opportunities equivalent to those available under U.S. law. We will conduct an "equivalency" analysis of private line resale opportunities for U.S. carriers in Chile and issue an Order resolving the outstanding portions of AmericaTel's application as expeditiously as possible. IV. ORDERING CLAUSES 14. Accordingly, it is ORDERED, pursuant to Section 63.10(a)(3) of the Commission's rules, that application File No. ISP-96-002 IS GRANTED and AmericaTel shall be regulated as a non-dominant carrier for service between the United States and Chile, and AmericaTel s existing authorizations for service between the United States and Chile are modified to: (a) eliminate the requirements to file quarterly reports of revenue, number of messages and number of minutes; (b) reduce the tariff notice period to no less than one day; (c) eliminate the requirement to obtain prior Section 214 authorization before adding or deleting circuits between the United States and Chile. 15. It is FURTHER ORDERED that AmericaTel is no longer required to file annual progress reports detailing the status of Chile's telecommunications industry and regulatory regime. 16. It is CERTIFIED that the present and future public convenience and necessity require the grant in part of application file number I-T-C-96-263 and it is hereby ORDERED that application file number I-T-C-96-263 IS GRANTED IN PART AND DEFERRED IN PART to authorize AmericaTel to resell international private line services of other carriers to provide non-interconnected private line service. AmericaTel may not -- and AmericaTel's tariffs must state that its customers may not -- connect private lines provided over these facilities to the public switched network at either the U.S. or Chile end or both, for the provision of international switched basic services, unless authorized to do so by the Commission upon a finding that Chile affords resale opportunities equivalent to those available under U.S. law, in accordance with the Foreign Carrier Entry Order, 11 FCC Rcd 3873, 3924-3925 (1995). 18. It is FURTHER ORDERED that AmericaTel shall comply with Section 63.21 and 63.15(b) of the Commission's Rules. 19. It is FURTHER ORDERED that AmericaTel shall file the annual reports of overseas telecommunications traffic required by Section 43.61 of the Commission's Rules. 20. It is FURTHER ORDERED that AT&T's Motion for Extension of Time for a one- day extension of the July 1, 1996 filing date for the reply to AmericaTel's opposition IS GRANTED. 21. This order is issued under 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 date of the public notice of this Order (see 47 C.F.R.  1.4(b)(2)). FEDERAL COMMUNICATIONS COMMISSION Donald H. Gips Acting Chief, International Bureau