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(1) (a) (i) 1) a)dK+b70t _5xŗ+tP+,` ` ` hhh 29 yO-#X\  P6G;QwP#X01Í ÍX81Í Í@--@  Њ x` `  hh@hpp  xx 0!L   0!L DA 961546 0!L   0!L   XX-+2#Xj\  P6G;XP#Before the w Federal Communications Commission  X*-Washington, D.C. 20554 ă  X-In the Matter of hh@h) x` `  hh@h)  X-GTE Telecom Incorporatedhh@h) x` `  hh@h)  X -Application for Authority Pursuant to @h)  Xr -Section 214 of the Communications Act ofh)ppITC95443  X[ -1934, as amended, and Section 63.01 of theh)  XD -Commission's Rules and Regulations for @h)  X--International Resale Switched Service and@h)  X-Facilitiesbased Service to Varioushh@h)  X-Countries` `  hh@h)  X-  ORDER, AUTHORIZATION AND CERTIFICATE ĐTP Adopted: September 16, 1996 Released: September 16, 1996TP By the Chief, International Bureau TABLE OF CONTENTS  X-Topic`(# Paragraph No.ă  X-I.xIntroduction`>"(#L 1  X-II.xBackground  X-xA.` ` Application`"(#R5  Xx-xB.` ` Interexchange and InRegion Proceedingspp`"(#R7  Xc -III.xDiscussion ``"(#L10  XL!-xA.` ` Regulation of GTE Telecom as Dominant or NonDominant under Competitive  X7"-x` ` Carrier Proceeding``"(#L11  X"#-xB.` ` Foreign Carrier Affiliations``"(#L28  X $- x` ` 1. GTE's Application to Provide FacilitiesBased International Private x` `  Line Services``"(#L29  X%-x` ` 2. GTE's Application to Resell International Switched Services``"(#L33  X&-IV.xConclusion``"(#L52  X'- V.xOrdering Clauses``"(#L56 "(0*0*0*B'"Ԍ X-ԙ I. Introduction T  X-TPx1.` ` GTE Telecom Incorporated (GTE Telecom) requests authority pursuant to Section 214 of the Communications Act, as amended (Act), to provide resold international switched voice service of unaffiliated U.S. international facilitiesbased carriers and facilities X-based international private line services. X]& yO-ԍxAmended Application of GTE Telecom Incorporated at 1 (filed Sept. 13, 1995) (GTE Telecom Amended Application). GTE Telecom filed its original application in File No. ITC95443 on July 6, 1995 (GTE Telecom Application).  GTE Telecom proposes to provide resold international switched service and international facilitiesbased private line services originating from both "outofregion" and "inregion" points in the United States. GTE Telecom is whollyowned by GTE Corporation (GTE), a New York corporation whose operating companies comprise the largest affiliation of independent local exchange carriers (LEC) in the  X -United States. W ]& yO-ԍxGTE Telecom Amended Application at 3. W  X -x2.` ` GTE Telecom's entrance into the international services market is not prohibited by the Act, judicial decree, or the Commission's rules. We find that a partial grant of GTE  X -Telecom's application subject to certain conditions that we impose on an interim basis will serve the public interest under Section 214 of the Act by facilitating the efficient and rapid provision of international services, while protecting ratepayers and competition in the U.S. international services market. In addition, we find that GTE Telecom's provision of the proposed international services should be subject to nondominant carrier regulation on all routes for which we grant GTE Telecom authority to provide such services. We also find, however, that GTE Telecom's authorization should be subject to safeguards to prevent it from leveraging the market power of its LEC affiliates in the provision of local exchange and exchange access services to obtain market power in the provision of international services. In addition, we find that GTE Telecom's application to resell international switched services to two affiliated countries, the Dominican Republic and Venezuela, raises issues relating to the settlements process that we must resolve in order to determine the public interest merits of GTE Telecom's application to serve those routes. The present record does not allow us to make that determination at this time. We therefore defer a decision whether to grant GTE Telecom's application to resell international switched services to the Dominican Republic and Venezuela and whether to classify GTE Telecom as a dominant or nondominant carrier on these routes.  X -x3.` ` The conditions that we apply on an interim basis to our partial grant of GTE Telecom's application are the same as the safeguards that have applied for more than ten  X-years to affiliates of independent LECsx]& yO&-ԍxBy independent LECs, we refer to exchange telephone companies, including GTE, other than the Bell Operating Companies (BOCs). that are regulated as nondominant in their provision  X-of interstate, domestic interexchange services under the rules established in the Competitive"0*(("  X-Carrier proceeding. The conditions we attach to our grant of GTE Telecom's Section 214 application will remain in place at least until the Commission has completed the  X-Interexchange and InRegion proceedings.]& yOM-ԍxPolicy and Rules Concerning the Interstate, Interexchange Marketplace and Implementation of Section  {O-254(g) of the Communications Act of 1934, Notice of Proposed Rulemaking, 11 FCC Rcd 7141 (1996)  {O-(Interexchange NPRM or Interexchange proceeding); Implementation of the NonAccounting Safeguards of Sections 271 and 272 of the Communications Act of 1934, as amended, and Regulatory Treatment of LEC  {Oq-Provision of Interexchange Services Originating in the LEC's Local Exchange Area, Notice of Proposed  {O;-Rulemaking, CC Docket No. 96149, FCC 96308 (released July 18, 1996) (InRegion NPRM or InRegion proceeding).  X-  X-x4.` ` We also conclude that GTE Telecom, in its provision of resold international switched services and facilitiesbased private lines services, must be treated as a nonregulated affiliate under the Commission's joint cost and affiliate transactions rules for exchange carrier accounting purposes, just as the independent LEC affiliates are now treated in their provision of interstate, domestic interexchange services. In addition, we find that the equal access and  X5-nondiscrimination requirements established in the GTE Consent Decree5]& {O-ԍxSee United States v. GTE Corporation, 603 F.Supp. 730 (D.C. Cir. 1984) (accepting with modifications  {O-consent decree submitted by GTE and U.S. government (GTE Consent Decree)) (U.S. v. GTE Corp.). apply to GTE Telecom's affiliated LECs and will govern its dealings with them in its provision of international service. x  X - II. Background TTP  X -xA.` ` Application  X-x5.` ` GTE Telecom requests Section 214 authority to resell international switched voice service using the capacity of existing, unaffiliated U.S. international facilitiesbased  XQ-carriers.XQl ]& yOn-ԍxGTE Telecom Amended Application at 12.X GTE Telecom asserts that, as a reseller of such services, it is entitled to non X:-dominant carrier treatment under Section 63.10(a)(4) of the Commission's rules.V: ]& yO-ԍxGTE Telecom Amended Application at 2.V GTE Telecom also seeks Section 214 authority to provide on a facilities basis international private line voice and data services between the United States and various countries through leased  X-circuits from Intelsat. X ]& {O2#-ԍxGTE Telecom Amended Application at 2; id. at Revised Attachment A; ex parte letter from F. Gordon Maxson, Director Regulatory Affairs, GTE Service Corporation, to William F. Caton, Acting Secretary, FCC (dated Aug. 8, 1996) (GTE Telecom proposes to offer such service between the United States and the following locations: Argentina, Australia, Belize, Bolivia, Brazil, Cayman Island, Chile, China, Colombia, Costa Rica, Ecuador, French Guyana, Guatemala, Guyana, Haiti, Honduras, Hong Kong, Jamaica, Japan, Malaysia, Mexico,"'0*((&" New Zealand, Nicaragua, Panama, Paraguay, Peru, Philippines, San Salvador, Surinam, Taiwan, United Kingdom, Uruguay, and Guantanamo Bay Naval Base).  GTE Telecom states that the facilitiesbased services it proposes to"0*((" offer "will be only to countries not served by a GTEaffiliated foreign local exchange  X-carrier." R ]& yO-ԍxGTE Telecom Amended Application at 2. In response to Domtel's allegation that GTE Telecom's original application was incomplete, GTE Telecom amended its application to include the certifications required  yO-by Sections 63.01(r)(2) and (4) of the rules (recently renumbered as Sections 63.18(h) and (g) in International Section 214 Authorization Process and Tariff Requirements, IB Docket No. 95118, FCC 9679 (released Mar.  {O -13, 1996) (Streamlining Order)). See Domtel Comments at 12; GTE Telecom Amended Application at 23  {Ol -(certifying, inter alia, that it has no affiliation with the U.S. carriers whose facilities it proposes to resell); GTE Telecom Opposition at 2. In response to WorldCom's and Sprint's concerns that GTE Telecom's application as originally filed was unclear with respect to the whether GTE Telecom proposes to provide facilitiesbased or resold switched services, GTE Telecom amended its application to clarify that it proposes to provide resold  {O -international switched services. See WorldCom Petition to Deny in Part at 1 (filed Aug. 23, 1995) (WorldCom Petition); Comments of Sprint at 1 (filed Sept. 11, 1995) (Sprint Comments); GTE Telecom Amended Application at 1. In response to WorldCom's concern that GTE Telecom's application as originally filed was unclear with respect to the countries that GTE Telecom proposes to serve on a facilities basis, GTE Telecom amended its application to clarify that it does not seek facilitiesbased authorizations to any country served by a  {Ox-GTEaffiliated monopoly local exchange carrier, including the Dominican Republic or Venezuela.  See  {OB-WorldCom Petition at 1 and 3; GTE Telecom Amended Application at 2; see also GTE Telecom Opposition at 34. We note that GTE Telecom does not seek facilitiesbased authorization to Canada. GTE Telecom claims that, as a provider of facilitiesbased services to countries in which GTE Telecom is unaffiliated with the foreign carrier, it is entitled to nondominant  X-carrier treatment under Section 63.10(a)(1) of the rules.V ]& yOn-ԍxGTE Telecom Amended Application at 2.V WorldCom, Inc. (WorldCom), Domtel Communications, Inc. (Domtel), Sprint Communications Company, L.P. (Sprint), and AT&T Corp. (AT&T) filed pleadings in response to GTE Telecom's application, to which  Xv-GTE Telecom in turn responded. xv]& yO-ԍxWorldCom Petition; Comments of Domtel (filed Aug. 28, 1995) (Domtel Comments); Sprint Comments; Opposition of GTE Telecom (filed Sept. 12, 1995) (GTE Telecom Opposition); Comments of Domtel to Opposition and Amended Application (filed Sept. 22, 1995) (Domtel Comments to Opposition); Opposition of GTE Telecom (filed Oct. 13, 1995) (GTE Telecom Opposition to Comments); AT&T Petition to Deny in Part GTE Telecom's Amended Application (filed Oct. 13, 1995) (AT&T Petition); Opposition of GTE Telecom (filed Oct. 24, 1995) (GTE Telecom Opposition to Petition); AT&T Reply to Opposition (filed Nov. 3, 1995) (AT&T Reply).   XH-x6.` ` On February 20, 1996, GTE Telecom filed an affiliation statement% H]& yO"-ԍxLetter from Thomas B. Duane, Vice President/General Manager, GTE Telecom, to William F. Caton, Acting Secretary, FCC (dated Feb. 20, 1996) (GTE Telecom Affiliation Statement) (stating that the affiliation  {O[$-statement was filed in compliance with Market Entry and Regulation of Foreignaffiliated Entities, Report and  {O%%-Order, IB Docket No. 9522, RM8355, RM8392, FCC 95475 (released Nov. 30, 1995) (Foreign Carrier Entry  {O%-Order)).% certifying that through its parent, GTE, it has affiliations with British Columbia Telephone Company (BC Tel) in the Province of British Columbia, Quebec Telephone in the Province of Quebec,"  0*((B " Compania Dominicana de Telefonos, C. Por A. (Codetel) in the Dominican Republic, and  X-Compania Anonima Nacional Telefonos de Venezuela (CANTV) in Venezuela.G d ]& yOb-ԍxGTE Telecom Affiliation Statement (GTE owns 100 percent of the common stock of AngloCanadian Telephone Company (ACTel), which owns 50.38 percent of BC Tel, which provides telecommunications services within its certificated territory in the Province of British Columbia; ACTel also owns 50.63 percent of Quebec Telephone, which provides telecommunications service within its certificated territory in the Province of Quebec; GTE indirectly owns 100 percent of Codetel which provides domestic and international telecommunications service in the Dominican Republic; GTE owns 100 percent of GTE Venezuelan Telephone Incorporated, which owns 51 percent of VenWorld Telecom, C.A., a consortium which owns 40 percent of CANTV, which provides  {O-domestic and international telecommunications services in Venezuela). See also GTE Mobilnet Incorporated, on Behalf of Itself and Certain of its Corporate Affiliates, Application for Authorization pursuant to Section 214 of the Communications Act of 1934, as Amended, to Operate as an International Resale Carrier for International  {O4 -Switched Voice Services, ITC File No. ITC95561, at 6 (filed Oct. 3, 1995) (pending) (stating that GTE "is in operational control of CANTV") (GTE Mobilnet Section 214 Application).G We address  X-GTE Telecom's foreign carrier affiliations in Section III. B. infra.  X- TPxB.` ` Interexchange and InRegion Proceedings  Xz-x7.` ` The Commission has raised issues relating to the regulatory treatment of the independent LECs in their provision of interstate, domestic interexchange services and  XL-international services in two pending proceedings. Specifically, in the Interexchange NPRM, the Commission has sought comment on whether it should modify or eliminate the separation requirements that apply as a condition of nondominant treatment of independent LEC  X -provision of outofregion, domestic interstate, interexchange services.2 H ]& {O-ԍxInterexchange NPRM at  61; see also Bell Operating Company Provision of OutofRegion Interstate,  {Ox-Interexchange Services, Report and Order, CC Docket No. 9621, FCC 96288 at n. 5 (released July 1, 1996)  {OB-(Interim BOC Domestic OutofRegion Order) (the Interexchange "proceeding does not include international,  {O -interexchange services"); see also id. at  2 (concluding that, on an interim basis pending the outcome of the  {O-Interexchange proceeding, it would remove dominant carrier regulation for BOC outofregion, interstate,  {O-domestic, interexchange services when offered through an affiliate that meets the Competitive Carrier Fifth  {Oj-Report and Order separation requirements and that is treated as a nonregulated affiliate for purposes of BOC  {O4-accounting under the Commission's joint cost and affiliate transactions rules); see also NYNEX Long Distance Co. Application for Authority Pursuant to Section 214 of the Communications Act of 1934, as amended, to Provide International Services from Certain Parts of the United States to International Points through Resale of International Switched Services, ITC96125, Ameritech Communications Application for Authority Pursuant to Section 214 of the Communications Act, as amended to Provide International Services from the United States to International Points through Resale of International Switched Services, ITC96272, Bell Atlantic Communications, Inc. Application for Authority Pursuant to Section 214 of the Communications Act of 1934, as amended, to Resell Service of Other Common Carriers to Provide Switched Service from the United States to  {Ov"-International Points through Resale of International Switched Services, ITC96181, Order, Authorization and  {O@#-Certificate, DA 961169 at  12 and 1721 (International Bur., released July 24, 1996) (NYNEX et. al Order).  {O $-In the NYNEX et. al Order, the International Bureau granted Section 214 applications filed by subsidiaries of  {O$-NYNEX Corp., Ameritech Corporation, and Bell Atlantic Corporation (i.e., NYNEX Long Distance Co. (NYNEX LD), Ameritech Communications, Inc. (ACI) and Bell Atlantic Communications, Inc. (BACI), respectively) to resell, outofregion, international switched services of unaffiliated U.S. carriers on a non".' 0*((%'"ԫdominant basis subject to the same interim safeguards that the Commission adopted as a condition for nondominant treatment of the BOCs' provision of outofregion, domestic interstate, interexchange services in the  {O-Interim BOC Domestic OutofRegion Order. See also id. at  1 and 17 (stating that these conditions would  {O-remain in place pending the outcome of the Commission's Interexchange NPRM).2 " |0*(( "Ԍ X-ԙx8.` ` In the InRegion NPRM, the Commission has requested comment on whether it should "modify our existing rules that require independent LECs (exchange companies other  X-than the BOCs) to comply with [the] . . . separation requirements [as set forth in the  X-Competitive Carrier Fifth Report and Order] in order to qualify for nondominant regulatory  X-treatment in the provision of inregion, interstate, domestic, interexchange services."mD|]& {O -ԍxInRegion NPRM at  153; see also id. at  4, 108, and 113; see also id. at  153 (proposing to limit  {O -application of separate affiliation requirements to incumbent independent LECs). For purposes of the InRegion proceeding, the Commission has defined an independent LEC's "inregion services" as telecommunications services originating in the independent LEC's local exchange areas or 800 service, private line service, or their equivalents that: (1) terminate in the independent LEC's local exchange areas and (2) allow the called party to determine the interexchange carrier, even if the service originates outside the independent LEC's local exchange areas). We apply the same definition of an independent LEC's "inregion services" for purposes of this proceeding.m The Commission also is "consider[ing] whether to apply the same regulatory classification to the independent LECs' provision of inregion, international services as we adopt in this  Xc-proceeding for their provision of inregion, interstate, domestic, interexchange services.""c ]& {O-ԍxInRegion NPRM at  153; see also id. at  18 ("[t]he issue we address in this NPRM is whether a BOC affiliate or independent LEC should be regulated as dominant in the provision of inregion, international services because of the BOC or independent LEC's current retention of bottleneck facilities on the U.S. end of an international link").  X5-x9.` ` The InRegion proceeding does not modify the Commission's separate  X -framework, adopted in the International Service Order and Foreign Carrier Entry Order, for regulating U.S. international carriers (including BOC affiliates or independent LECs ultimately authorized to provide inregion international services) as dominant on routes where an affiliated foreign carrier has the ability to discriminate in favor of its U.S. affiliate through  X -control of bottleneck services or facilities in the foreign destination market.O r]& {O-ԍxInRegion NPRM at n.191.O  X-    III. Discussion T  Xj-T P x 10.` ` GTE Telecom's entrance into the international services market is not prohibited by the Act, judicial decree, or the Commission's rules. We find that, with the exception of GTE Telecom's request to provide resold international switched services on the U.S.Dominican Republic and U.S.Venezuela routes, a grant of GTE Telecom's application subject to the conditions detailed below will serve the public interest under Section 214 of the Act by facilitating the efficient and rapid provision of international services, and by benefiting"0*((" competition in the U.S. international services market and U.S consumers. In addition, we find that GTE Telecom's application to resell international switched services to the Dominican Republic and Venezuela raises issues that we must resolve to determine whether the public interest would be wellserved by authorizing GTE Telecom to resell switched services on these routes. To permit the parties additional opportunity to address these outstanding issues, we defer a decision whether to grant GTE Telecom's application to resell international switched services to the Dominican Republic and Venezuela and whether to classify GTE Telecom as a nondominant carrier on these routes.  X1-xA.` ` Regulation of GTE Telecom as Dominant or NonDominant under Competitive  X -x` ` Carrier Proceeding  X -x 11.` ` Although we find that, with the exception of the Dominican Republic and Venezuela routes, GTE Telecom's entrance into the international services market is in the public interest, we must also determine the appropriate regulatory treatment of GTE  X -Telecom's provision of the proposed international services. Since 1980, the Commission has distinguished between carriers with market power (dominant carriers) and those without  X}-market power (nondominant carriers) for purposes of Title II rate and entry regulation.`P}]& {O-ԍxSee Policy & Rules Concerning Rates for Competitive Common Carrier Services and Facilities  {O-Authorizations Therefor, CC Docket No. 79252 (Competitive Carrier), First Report & Order, 85 FCC 2d 1  {O-(1980); Second Report & Order, 91 FCC 2d 59 (1982); recon., 93 FCC 2d 54 (1983); Third Report & Order, 48  {OT-Fed. Reg. 46,791 (1983); Fourth Report & Order, 95 FCC 2d 554 (1983), vacated, AT&T v. FCC, 978 F.2d 727  {O-(1992), cert. denied, MCI Telecommunications Corp. v. AT&T, 113 S.Ct. 3020 (1993); Fifth Report & Order,  {O-98 FCC 2d 1191 (1984); Sixth Report & Order, 99 FCC 2d 1020 (1985), rev'd, MCI Telecommunications Corp.  {O-v. FCC, 765 F.2d 1186 (D.C. Cir. 1985); see 47 C.F.R.  61.3(o) (dominant carrier is defined as "[a] carrier  {O|-found by the Commission to have market power (i.e., power to control prices)").` If a common carrier is determined to be "nondominant," Title II regulatory requirements are "streamlined." The Commission has applied standard principles of antitrust analysis to determine whether a carrier possesses market power in the provision of the relevant service in  X!-the relevant geographic market.m!]& {O-ԍxMotion of AT&T Corp. to be Declared NonDominant for International Service, Order, FCC 96209  {O|-(released May 14, 1996) (AT&T International NonDominance Order); Competitive Carrier, First Report and  {OF-Order, 85 FCC 2d at 21; Motion of AT&T to be Reclassified as a NonDominant Carrier, 11 FCC Rcd 3271,  {O-329394 (1995); Revisions to Price Cap Rules for AT&T Corp., 10 FCC Rcd 3009, 3016 (1995) (Commercial  {O-Services Order); Competition in the Interstate Interexchange Marketplace, CC Docket No. 90132, Report and  {O -Order, 6 FCC Rcd 5880, 5888 (1991) (First Interexchange Competition Order), recon., 6 FCC Rcd 7569 (1991),  {On!-further recon., 7 FCC Rcd 2677 (1992).m This analysis includes a focus on: (1) market share, (2) the demand elasticity of a carrier's customers, (3) the supply elasticity of the market, and (4) a  X-carrier's cost structure, size and resources.C.]& {O$-ԍxSee AT&T International NonDominance Order  at  36; see also Commercial Services Order at 3016  {O%-(describing demand elasticity); First Interexchange Competition Order at 5888 (describing supply elasticity).C "0*((r"Ԍ X-x 12.` ` The Commission first applied its dominant/nondominant regulatory scheme to  X-U.S. international carriers in 1985.]& {Ob-ԍxSee International Competitive Carrier Policies, Report & Order, 102 FCC 2d 812 (1985) (International  {O,-Competitive Carrier), recon. denied, 60 RR 2d 1435 (1986). The Commission held that international message telephone service (IMTS) (including international switched services) and nonIMTS (including private line services) are separate product markets. The Commission also held that, in applying the dominant/nondominant regulatory scheme for international services, every  X-destination country constituted a separate geographic market.&$]& {Ob -ԍx International Competitive Carrier at  37. The Commission also found all foreignowned carriers to be  {O, -dominant for all services to all countries. Id. at  7273, and 84; see infra Section III. B. The Commission  {O -recently further streamlined the Title II regulation of nondominant international carriers. Streamlining Order at  77, and 8081. The Commission did not distinguish among different regions of the continental United States in defining the relevant  X_-geographic market.@_]& yO"-ԍxThe Commission did, however, separately analyze the market power of certain carriers providing  {O-international services for noncontiguous domestic points. International Competitive Carrier at  4749; see  {O-also InRegion NPRM at  129 ("invit[ing] parties to discuss why they believe we should examine smaller areas for purposes of determining whether a BOC affiliate or independent LEC possesses market power in the provision of inregion, international services").@  X1-x 13.` ` With the exception of the Dominican Republic, Venezuela, and Canada routes where GTE Telecom is affiliated with incumbent foreign carriers, we believe that there are no critical distinctions on the basis of GTE Telecom's market share, its size and resources, demand and supply elasticities, or conditions of entry from one destination country to another which would require a routebyroute analysis of GTE Telecom's market position for either  X -international switched services or private line services.u ]& {O5-ԍxCf. AT&T International NonDominance Order at  3136. u GTE Telecom currently has zero share in the market for international switched services. GTE Telecom is authorized to provide  X-resold noninterconnected private line services only on the U.S.Canada route."X ]& yO-ԍxGTE Telecom Incorporated Application for Authority pursuant to Section 214 of the Communications Act, as Amended, and Section 63.01 of the Commission's Rules and Regulations, to Lease Terrestrial Facilities  {O)-for TwoWay Service to Canada and Pro Forma Assignment of Authorization, 9 FCC Rcd 3356 (Com. Car. Bur., released July 15, 1994).  As a relatively new entrant, GTE Telecom's market share on that route in the provision of private  Xb-line service is de minimis.bB]& yOU#-ԍxGTE Telecom's provision of resold noninterconnected private line service on the U.S.Canada route in 1994 represented 0.8 percent of the total private line service revenues reported by U.S. carriers for service to  {O$-Canada. See 1994 Section 43.61 International Telecommunications Data, January 1996, Tables B1 and B9. The 1994 international traffic data does not separate facilitiesbased from facilities resale service. Therefore, the total billed revenue for 1994 double counts some service. Section 43.61 international traffic data has not been"?'0*((&" published for 1995. GTE's filed data shows that revenues from its service to Canada increased from $421,900 in 1994 to $728,814 in 1995. Even if other carriers reported no growth in revenues for private line service to Canada and even if we assume that all revenue was doublecounted, GTE Telecom would still account for less than 5 percent of revenue billed to customers in 1995. We therefore conclude that GTE Telecom's market position for"bx0*((h" international switched services and private line services does not differ among routes and that we need not generally make specific routebyroute findings with the exception of the specific affiliated routes identified above.  X- x 14. ` ` In applying the Commission's standard principles of antitrust analysis to determine whether a carrier possesses market power, it is clear that, as a proposed new entrant in the provision of international switched services, GTE Telecom does not possess any share  X_-in the market for such services. Also, GTE Telecom has a de minimis share of the market for private line services. The Commission recently found that customers in the international services market are highly demandelastic and will switch carriers in order to obtain price  X -reductions and desired services.i x]& {OE-ԍxAT&T International NonDominance Order at  47.i The Commission also found that the elasticities of supply in  X -the international services market are high.Q ]& {O-ԍxId. at  35, 4865.Q Further, we do not envision that GTE Telecom's cost structure, size, and resources will allow it to control prices or exclude competition insofar as it is a new entrant into the international switched services market (with zero market share)  X -and has only a de minimis share of the one private line market that it currently serves. GTE Telecom, moreover, will face a number of large, wellfinanced competitors, including MCI, Sprint, and AT&T in the product and geographic service markets that it proposes to serve.  Xf-x15.` ` The principal regulatory concern with GTE Telecom's application is whether it may be able to leverage the market power of its LEC affiliates in the provision of local exchange and exchange access services to gain market power in the provision of international  X!-services.!]& yOn-ԍxAs noted above, the Commission has requested comment on this issue with respect to the independent  {O6-LECs' provision of inregion international services.  See InRegion NPRM  15562 (in considering the appropriate regulatory treatment of an independent LEC's provision of interstate, domestic interexchange services originating within its local service area and its provision of international services originating within its local  {O -service area, the Commission has raised the issue of whether an independent LEC's control of local exchange and exchange access facilities potentially gives that LEC an incentive and ability to disadvantage its affiliate's interexchange competitors and its international service competitors through improper allocation of costs,  {O"-discrimination, or other anticompetitive conduct); see also id. at  160 ("The rules we adopt in this proceeding will be designed to protect against leveraging of market power from one market (the local exchange and exchange access market) to gain market power in other markets (the domestic interexchange and international services markets").  Specifically, we are concerned that GTE's control of local exchange and exchange access facilities potentially gives GTE an incentive and ability to disadvantage GTE"  0*((" Telecom's competitors through improper allocation of costs, discrimination, or other anticompetitive conduct.  X-x16.` ` The Commission raised a substantially similar concern in the Competitive  X-Carrier proceeding in considering the appropriate treatment of the independent LECs'  X-provision of interstate, interexchange services, i.e., that the independent LECs might have the  X|-potential to engage in costshifting and anticompetitive conduct.e|]& {O-ԍxSee Fifth Report and Order, 98 FCC 2d at 1198.e In the Competitive Carrier  Xg-Fourth Report and Order, the Commission determined that, with a certain amount of separation, interexchange carriers affiliated with independent LECs should be regulated as  X;-nondominant.e;Z]& {OF -ԍxFourth Report and Order, 95 FCC 2d at 57579. e In the Competitive Carrier Fifth Report and Order, the Commission clarified that, in order to qualify for nondominant treatment, the affiliate of an independent LEC providing interstate, domestic, interexchange services must: (1) maintain separate books of account; (2) not jointly own transmission or switching facilities with its affiliated exchange telephone company; and (3) acquire any services from its affiliated exchange telephone  X -company at tariffed rates, terms and conditions.a ]& {Og-ԍxFifth Report and Order, 98 FCC 2d at 1198.a The Commission observed that these separation requirements would provide some "protection against costshifting and anticompetitive conduct" by an independent LEC that could result from its control of local  X-bottleneck facilities.d!~]& {O-ԍxFifth Report and Order, 98 FCC 2d at 119899.d The Commission further concluded that any interstate, interexchange services offered directly by an independent LEC (rather than through a separate affiliate) or through an affiliate that did not satisfy the specified conditions would be subject to dominant  X@-carrier regulation.d"@]& {O-ԍxFifth Report and Order, 98 FCC 2d at 119899.d Independent LEC affiliates providing interstate, domestic interexchange services are treated, for purposes of the LECs' accounting, as a nonregulated affiliate under  X-the Commission's joint cost and affiliate transactions rules.#(]& {Oe-ԍxSee 47 C.F.R.  32.27, 64.901904; Separation of Costs of Regulated Telephone Service from Costs of  {O/-Nonregulated Activities, First Report and Order, 2 FCC Rcd 1298 (1987), recon., 2 FCC Rcd 6283 (1987),  {O-further recon., 3 FCC Rcd 6701 (1988), aff'd sub nom. Southwestern Bell Corp. v. FCC, 896 F.2d 1378 (D.C.  {O -Cir. 1990); see also BOC Domestic Outof Region Order at  2, 23, and 39. The Commission's determination  X-in Competitive Carrier was for "interstate, domestic, interexchange telecommunications  X-services," and did not specifically address international services.N$ ]& {O)$-ԍxSee Fourth Report and Order, 95 FCC 2d at 554. These separation requirements were subsequently  {O$-used, however, to classify as nondominant an independent LEC affiliate's international service. See Petition of the Puerto Rico Telephone Authority for Declaratory Ruling that a Subsidiary Corporation Offering Interstate and International Message Telephone Service Off of the Island of Puerto Rico is Nondominant, 3 FCC Rcd 5675  {OM'-(Com. Car. Bur. 1988) (Puerto Rico Declaratory Ruling).N" H$0*(("Ԍ X-ԙx17.` ` We believe that application of the separation safeguards that were adopted in  X-the Competitive Carrier Fifth Report and Order as a condition of our granting in part the instant application will provide sufficient protection against potential abuses by GTE Telecom in its provision of outofregion and inregion international resold switched services and  X-facilitiesbased private line services pending resolution of the Interexchange and InRegion proceedings. We find no basis for distinguishing between an independent LEC's ability and incentive to improperly allocate costs, discriminate against, or otherwise disadvantage unaffiliated domestic interexchange competitors as opposed to international service competitors. Indeed, we recently found "no practical distinctions between a BOC's ability and incentive to improperly allocate costs, discriminate against, or otherwise disadvantage  X -unaffiliated domestic interexchange as opposed to international service competitors."k% ]& {O -ԍxInterim BOC Domestic OutofRegion Order at  17.k We therefore granted several BOC Section 214 applications to resell international switched services subject to the same conditions that the Commission adopted as a condition for nondominant treatment of BOC provision of outofregion, domestic interstate, interexchange  X -services.j& Z]& {O-ԍxInterim BOC Domestic OutofRegion Order at  2.j Further, in the InRegion NPRM, the Commission tentatively concluded that it should apply the same regulatory approach that it adopts for an independent LEC's provision of interstate, domestic, interexchange services originating within its local service area to an independent LEC's provision of international services originating within its local service  Xh-area.R'h]& {O-ԍxInRegion NPRM at  160.R  X:-x18.` ` The Commission recently found that the "safeguards [established in the Fifth  X%-Report and Order] have worked reasonably well and generally have been effective . . . in deterring the improper allocation of costs and unlawful discrimination [in the independent  X-LECs' provision of interstate, domestic, interexchange services]."R(~]& {O(-ԍxInRegion NPRM at  146.R Although the Commission  X-has not adopted the Fifth Report and Order separation requirements as rules applicable to the independent LECs' provision of international services, the Common Carrier Bureua used the separation requirements to classify as nondominant an independent LEC affiliate's  X-international service.`)]& {O`!-ԍxSee Puerto Rico Declaratory Ruling.`  Xq-x19.` ` We also believe that the application of the safeguards adopted in the Fifth  X\-Report and Order will not impose an unreasonable burden on GTE Telecom in its provision  XG-of inregion and outofregion international services pending resolution of the Interexchange  X2-and InRegion proceedings. GTE Telecom states that, in accordance with the separation  X-requirements adopted in the Competitive Carrier proceeding, it has "separate books, do[es] not jointly own transmission or switching facilities with the [GTE telephone operating companies" )0*((x"  X-(GTOCs)] and acquire[s] exchange service from the GTOCs by access tariff."*$]& {Oy-ԍx See ex parte letter from Gail L. Polivy, Senior Attorney, GTE Service Corporation (GTE Service), to William F. Caton, Acting Secretary, Federal Communications Commission at 2 (dated June 17, 1996)(GTE  {O -Telecom June 17, 1996 Ex Parte Letter). GTE Service filed this ex parte letter on GTE Telecom's behalf in the instant proceeding. To avoid confusion, we hereinafter refer in this order to GTE Service as GTE Telecom. We therefore  X-do not believe that applying the Fifth Report and Order safeguards on an interim basis to GTE Telecom's provision of inregion and outofregion international services will entail  X-extensive modifications to GTE's existing company procedures.   X-x20.` ` These conditional safeguards will remain in place at least until completion of  Xx-the Interexchange and InRegion proceedings. We reserve the right to modify the conditions of GTE Telecom's authorization, as necessary, upon adoption of final rules for the independent LECs' provision of international and domestic interstate, interexchange services. In the meantime, it is our view that granting the instant Section 214 application, in part, subject to the safeguards as detailed below, will serve the public interest by facilitating the efficient and rapid provision of international services, while protecting ratepayers and competition in the U.S. international services market.  X - x 21.` ` Specifically, we grant GTE Telecom's Section 214 application to resell international switched services of unaffiliated U.S. carriers on all international routes (with the exception of the U.S.Dominican Republic and U.S.Venezuela routes) and to provide facilitiesbased international private line voice and data services between the U.S. and various countries subject to the condition that GTE Telecom: (1) maintain separate books of account from its affiliated LECs; (2) not jointly own transmission or switching facilities with its affiliated LECs; and (3) take any tariffed services from its affiliated LECs pursuant to the  X!-terms and conditions of the LECs' generally applicable tariff.+!]& yO-ԍxThis provision applies only to services for which GTE Telecom's affiliated LECs are required to file a tariff, not to detariffed services such as billing and collection. Although we require GTE Telecom to maintain its corporate structure as a separate legal entity from its LEC affiliates,  X-we do not require that its separate books of account comply with our Part 32 rules.,| ]& {O-ԍxSee Interim BOC Domestic OutofRegion Order at  23. Books of account refer to the financial accounting system a company uses to record, in monetary terms, the basic transactions of a company. These books of account reflect the company's assets, liabilities, and equity, and the revenues and expenses from operations. Each company has its own separate books of account. The Commission's Part 32 rules, the Uniform System of Accounts (USOA), prescribe the books of account for the telephone companies. The Part 32 USOA, however, is not required to be kept by affiliates of a telephone company. These affiliates maintain their own  {Ob"-separate books of account. Id. at  23, n.62.  Further, except for the ban on joint ownership of transmission and switching facilities, we will permit  X-GTE Telecom and its affiliated LECs to share personnel and other resources or assets.q-P ]& {O%-ԍxSee Interim BOC Domestic OutofRegion Order at  22. q GTE Telecom may be staffed by its LEC affiliates' personnel, housed in existing affiliated LEC offices, and use affiliated LEC marketing or other services." -0*((3"Ԍ X-ԙ x 22.` ` The Commission's existing accounting safeguards for affiliate transactions were  X-developed in the Joint Cost Order and are codified in Parts 32 and 64 of our rules.?.(]& {Ob-ԍxSeparation of Costs of Regulated Telephone Service from Costs of Nonregulated Activities, Report and  {O,-Order, CC Docket No. 86111, 2 FCC Rcd 1298 (1987) (Joint Cost Order), recon., 2 FCC Rcd 6283 (1987)  {O-(Joint Cost Reconsideration Order), further recon., 3 FCC Rcd 6701 (1988), aff'd sub nom. Southwestern Bell  {O-Corp. v. FCC, 896 F.2d 1378 (D.C.Cir. 1990); 47 C.F.R. Parts 32 and 64.? The Part 64 cost allocation rules prescribe how carriers separate the costs of regulated activities from the costs of nonregulated activities, where the nonregulated activities are performed  X-directly by the carrier rather than through an affiliate.]/]& {O -ԍxSee 47 C.F.R.  64.901.] The Part 32 affiliate transactions  X-rules prescribe the way local exchange carriers record their costs, for Title II accounting  Xx-purposes, when the regulated carrier does business with its nonregulated affiliates.d0xJ]& {Os -ԍXxSee 47 C.F.R.  32.27.(#d These rules are designed to prevent local exchange carriers from imposing the costs and risks of their competitive ventures on local telephone ratepayers. These rules do not require carriers or their affiliates to charge any particular prices for assets transferred or services provided; rather, they require carriers to use certain specified valuation methods in determining the  X -amounts to record in their Part 32 accounts, regardless of the prices charged.m1 ]& {O-ԍXxSee Joint Cost Order, 2 FCC Rcd at 1313.(#m  X -   X -x23.` ` To help ensure that the affiliated LECs properly allocate the costs of any services provided to GTE Telecom, we will require GTE Telecom to be treated as a nonregulated affiliate for purposes of its affiliated LECs' accounting under the Commission's  X-joint cost and affiliate transactions rules,2n ]& {O-ԍx47 C.F.R.  32.27, 64.901904; see also Interim BOC Domestic OutofRegion Order at  22, and 3540. just as independent LEC affiliates are now treated  X{-in their provision of interexchange, interstate services.o3{ ]& {O-ԍxSee Interim BOC Domestic OutofRegion Order, at  2.o The fact that GTE Telecom's provision of international switched resale services and facilitiesbased private line services are  XM-services regulated under Title II does not per se eliminate the potential for improper allocation of costs between GTE Telecom's competitive (international) and noncompetitive (local exchange and exchange access) services. The Commission has required on an interim basis that the BOCs treat their interexchange, interstate service affiliates as nonregulated for accounting purposes "to minimize the possibility that a BOC could improperly shift the costs of its interstate, interexchange operations to its regulated local exchange and exchange access  X-ratepayers."4\Z ]& {O%-ԍxInterim BOC Domestic OutofRegion Order at  39; see also id. at  22 (requiring BOCs to treat their interexchange affiliates for accounting purposes as nonregulated affiliates "[t]o help ensure that the BOCs  {Ob'-properly allocate the costs of any services provided to the interexchange affiliate . . . ."); see also id. at  19. The Commission also noted that this requirement is consistent with the current" ~40*((" practice of independent LECs that treat their affiliates providing interexchange services as  X-nonregulated for exchange carrier accounting purposes.5$]& {Ob-ԍxSee Interim BOC Domestic OutofRegion Order at  39; see also NYNEX et al. Order at  20 ("Because the cost allocation and affiliate transaction rules are an important component of our accounting safeguards, we  {O-find, as did the Commission in the BOC Domestic OutofRegion Order, that these rules should apply to NYNEX LD's, ACI's and BACI's provision of outofregion international switched resale services").  For the same reasons, we find that application of our cost allocation and affiliate transaction rules is necessary to minimize the  X-possibility that GTE Telecom could improperly shift the costs of its international switched resale and facilitiesbased operations to its regulated local exchange and exchange access  X-ratepayers.v6]& {O -ԍx See Interim BOC Domestic OutofRegion Order at  39. v  X_-x24.` ` The application of the interim safeguards as a condition to our grant of GTE Telecom's application to provide international services will be an effective complement to  X1-existing equal access and nondiscrimination safeguards established under the GTE Consent  X -Decree that continue to apply to GTE Telecom's affiliated local exchange carriers. The equal  X -access and nondiscrimination requirements established under the GTE Consent Decree remain in effect "until such restrictions or obligations are explicitly superseded by regulations  X -prescribed by the Commission[.]"b7 F]& yO-ԍxSection 251(g) of the Act, 47 U.S.C.  251(g).b Specifically, the GTE Consent Decree prohibited GTE from discriminating against the various interexchange carriers in: (1) the establishment and dissemination of technical information and interconnection standards; (2) interconnection and use of exchange services or facilities, or the charges for each element of services; and (3) the provision of new exchange access and the planning for and implementation of the construction  Xj-or modification of facilities used to provide such access.^8j]& {O-ԍxU.S. v. GTE Corp., 603 F. Supp. at 739.^ The GTE Consent Decree also required that GTE provide all interexchange carriers access that is equal in type, quality and  X>-price.B9>h ]& {OW-ԍxId. at 743.B  X-x25.` ` GTE Telecom states that the safeguards established under the GTE Consent  X-Decree are equally relevant whether "the interexchange carrier is providing interstate or  X-international service.":" ]& {O"-ԍxGTE Telecom June 17, 1996 Ex Parte Letter at 2; see also id. (noting that "it is irrelevant whether the interexchange carrier is providing interstate or international service . . . . [because i]ts dealings with the LEC for access are the same regardless of whether the interexchange service terminates or originates nationally or in a foreign location"). GTE Telecom also observes that, "[a]lthough Section 601(a)(2) of the  X-1996 Act removes the restrictions and obligations imposed on GTE by its Consent Decree, the same equal access and nondiscrimination requirements the GTOCs [GTE Operating  X-Companies] had under the GTE Consent Decree continue in force through Section 251(g) of":0*((o"  X-the 1996 Act.";$]& {Oy-ԍxGTE Telecom June 17, 1996 Ex Parte Letter at 3 (noting that "Section 251(g) specifically requires that the equal access and nondiscriminatory interconnection obligations continue to apply to all local exchange  {O -carriers"); see also id. (stating that "[t]hus, the GTOCs are required to deal with GTE Telecom . . . under the same terms they interconnect or provide access to other carriers"). We agree with GTE Telecom that there is no basis for distinguishing here between interexchange service and international service for purposes of GTE's equal access and nondiscrimination obligations. The equal access and nondiscrimination requirements  X-established in the GTE Consent Decree apply to GTE Telecom's affiliated local exchange carriers and will govern its dealings with them in its provision of international service.  Xx-x26.` ` GTE Telecom also states that "[a]ll the GTOCs had customer proprietary network information (CPNI) safeguards in place before Section 702 of the 1996 Act added a  XJ-new Section 222 to the Communications Act codifying confidentiality of CPNI."f<J]& {O -ԍxGTE Telecom June 17, 1996 Ex Parte Letter at 3.f In addition, GTE Telecom asserts that the "GTOCs do not share CPNI with any GTE interexchange carrier or any other interexchange providers . . . . [and that t]he GTOCs will  X -continue to comply fully with their CPNI safeguards and others required by the 1996 Act."f= F]& {O-ԍxGTE Telecom June 17, 1996 Ex Parte Letter at 3.f  X -We also note that the nondiscrimination obligations of the GTE Consent Decree apply to the GTOCs' handling of CPNI. GTE's exchange carrier affiliates must therefore continue to  X -observe all CPNI safeguards mandated by the GTE Consent Decree and prior Commission proceedings until the Commission rules otherwise. We note that Section 702 of the 1996 Act added a new Section 222 to the Communications Act of 1934, codifying the confidentiality of  X-CPNI.?>X]& yO-ԍx1996 Act  702 (1996). This section added a new, selfexecuting Section 222 to the Communications Act of 1934, as amended, which sets forth restrictions on the use of CPNI obtained by telecommunications carriers in providing telecommunications services to customers.? The Commission has already commenced a rulemaking to clarify the CPNI  Xh-requirements imposed on all telecommunications carriers by the 1996 Act.l?\h ]& yO-ԍxImplementation of the Telecommunications Act of 1996: Telecommunications Carriers Use of Customer  {O-Proprietary Network Information and Other Customer Information, Notice of Proposed Rulemaking, CC Docket  {O-Nol 96115, FCC 96221 (released May 16, 1996) (CPNI NPRM). l The Commission's rulemakings on the 1996 Act may impose additional requirements on international operations of independent LECs, or may reduce them, but until that time, GTE Telecom's affiliated LECs must continue to adhere to the equal access and nondiscrimination  X -requirements established in the GTE Consent Decree. To the extent that the 1996 Act requires more of GTE, or imposes greater restrictions on GTE's use of CPNI, the statute, of  X-course, governs.O@]& {O%-ԍxSee CPNI NPRM at  3.O "@0*(("Ԍ X-x27.` ` In summary, we grant in part GTE Telecom's Section 214 application to resell international switched services and to provide facilitiesbased international private line  X-services subject to the condition that GTE Telecom complies with the Fifth Report and Order separation requirements. We also require that GTE Telecom, in its provision of resold international switched services and facilitiesbased private lines services, be treated as a nonregulated affiliate under the Commission's joint cost and affiliate transactions rules for exchange carrier accounting purposes, just as the independent LEC affiliates are now treated in their provision of interstate, domestic interexchange services. The conditions we attach to our grant of GTE Telecom's Section 214 application will remain in place at least until the  X3-Commission has completed the Interexchange and InRegion proceedings. We reserve the right to modify the conditions of the authorization granted in this order, as necessary, upon the Commission's adoption of final rules for independent LECs' provision of international and domestic interstate, interexchange services.  X -xB.` ` Foreign Carrier AffiliationsĐ  X- x28.` ` In 1992, the Commission modified its 1985 policy that treated U.S. foreignowned common carriers as dominant in their provision of all international services to all foreign markets. Specifically, the Commission adopted a framework for regulating U.S. international carriers as dominant on routes where an affiliated foreign carrier has the ability to discriminate in favor of its U.S. affiliate through control of bottleneck services or facilities  X!-in the destination market.AJ!]& {O-ԍxRegulation of International Common Carrier Services, 7 FCC Rcd 7331, 7334 (1992) (International  {Od-Services); see also Market Entry and Regulation of Foreignaffiliated Entities, Report and Order, IB Docket No.  {O.-9522, 11 FCC Rcd 3873,  24555 (1995) (Foreign Carrier Entry Order) (reaffirming the basic framework for classifying and regulating a carrier as dominant based upon its foreign carrier affiliations as set forth in  {O-International Services). The Commission considers to be "foreignaffiliated" those U.S. carriers with a greater than 25 percent interest or controlling interest at any level held by a foreign carrier, as well as those U.S. carriers  {OR-with interests of more than 25 percent in, or control of, a foreign carrier. Foreign Carrier Entry Order at  7892, and 24551.  Under this framework, a U.S. international carrier having no affiliation with, and that itself is not, a foreign carrier in the destination market is  X-presumptively nondominant for that route.LB]& yO~-ԍx47 C.F.R.  63.10(a)(1).L In addition, a U.S. international carrier that serves a destination market solely through the resale of the switched services of a U.S. facilitiesbased carrier with which the reseller is not affiliated is presumptively nondominant  X-for that route "regardless of any foreign affiliations."Cj ]& {O"-ԍxInternational Services at 7335; 47 C.F.R.  63.10(a)(4); see also Streamlining Order at  77, 8081;  {O#-International Competitive Carrier at  7677.   X-x` ` 1. GTE's Application to Provide Facilitiesbased International Private Line  Xi-x` `  Services "R C0*(("Ԍ X-x29.` `  Under the framework adopted in International Services and Section 63.10(a)(1) of the rules, we find that GTE Telecom qualifies as a nondominant provider of facilitiesbased international private line services to the various countries not served by a GTEaffiliated foreign carrier as listed in GTE Telecom's Section 214 application.  X-x30.` ` Domtel asserts that any grant of GTE Telecom's application to provide  Xx-facilitiesbased international private line services on a nondominant basis should be conditioned on "GTE Telecom's continuing not to have any affiliation with a carrier in any  XJ-country to which it has been granted such authority."[DJ]& yO -ԍxDomtel Comments to Opposition at 2. [ Domtel also recommends that "any grant of the authority requested for facilitiesbased service should be conditioned upon GTE Telecom's not routing traffic through third countries to or from countries for which it does  X -not have 214 authority, such as the Dominican Republic, Venezuela and Canada."E$ X]& yO-ԍxDomtel Comments to Opposition at 3 (noting that "[a] similar concern was expressed by the  {O-Commission in the Telefonica de Larga Distancia Order and a condition was imposed that the company 'shall not route traffic to or from third countries for which it does not have authorization under Section 214 of the  {Oh-Communications Act") (citing Telefonica Larga Distancia de Puerto Rico et al., 8 FCC Rcd 106, 116 (1992)). 0  X -x31.` ` In response, GTE Telecom asserts that Domtel's request that the authorization be conditioned upon GTE Telecom's continuing not to have any affiliation with a carrier in any country to which it has been granted such authority is unnecessary. GTE Telecom asserts that Section 63.11 requires a carrier who later becomes affiliated with a foreign carrier to notify the Commission and file certain information so that the Commission can determine  Xd-whether dominant regulation should then be applied.[FdD]& yOY-ԍxGTE Telecom Opposition to Comments at 23.[  X6-x32.` ` Under Section 63.11 of the rules, a carrier authorized to provide international communications is required to notify the Commission when it becomes affiliated with a foreign carrier and to file (and maintain the accuracy of) certain certified information related  X-to the foreign carrier affiliation.FG]& yOv-ԍx47 C.F.R.  63.11.F The Commission may use this information "to determine  X-whether a change in [the carrier's] regulatory status may be warranted."{Hd ]& yO -ԍxSection 63.11(c)(3) of the Commission's rules, 47 C.F.R.  63.11(c)(3).{ In the event that GTE Telecom becomes affiliated with a foreign carrier on a route for which it receives authority to provide international private line services, the Commission will have the opportunity to determine whether GTE Telecom continues to qualify for nondominant carrier  X~-treatment on that route under the framework adopted in International Services and Section  Xi-63.10 of the Commission's rules. To the extent that Domtel suggests that we should review  XR-de novo the public interest merits of GTE Telecom's provision of international private line service on the routes where it may acquire an affiliation with a foreign carrier, we note that"= H0*(("  X-the Commission in the Foreign Carrier Entry Order specifically declined to adopt any  X-prohibition against U.S. carrier investments in foreign carriers.jI]& {Od-ԍxSee Foreign Carrier Entry Order at  1036. j We therefore deny Domtel's request that we condition GTE Telecom's authorization to provide on a nondominant basis international private line services to countries not served by a GTEaffiliated foreign LEC on its continuing not to have any affiliation with a carrier in any country to which it has been granted such authority. We will impose the same conditions on our grant of this application  Xx-as we impose on any other application to provide facilitiesbased private line services.QJxZ]& {O -ԍ x See infra Section V.Q These conditions should address Domtel's concerns regarding GTE Telecom's routing of traffic through third countries to or from countries for which it does not have Section 214  X3-authority.K3]& yO -ԍxWe note that Domtel is incorrect in suggesting that GTE Telecom does not have Section 214 authority  {O-on the U.S.Canada route. See supra Section III. A.  X -x` ` 2. GTE's Application to Resell International Switched Services  X -x 33.` ` Under the framework adopted in International Services and Section 63.10(a)(4) of the rules, we find that GTE Telecom qualifies as a nondominant reseller of international switched services on all routes for which we grant GTE Telecom Section 214 authorization, including the U.S.Canada route where GTE Telecom is affiliated with BC Tel and Quebec Telephone. With regard to GTE Telecom's resale of switched services to countries other than the Dominican Republic and Venezuela, no party filed an opposition or requests that GTE Telecom be classified as dominant. We find that GTE Telecom qualifies as a nondominant reseller of international switched services on all routes for which we grant GTE Telecom Section 214 authorization, including the U.S.Canada route where GTE Telecom is affiliated with BC Tel and Quebec Telephone.  X-x!34.` ` By contrast, we find that GTE Telecom's application to resell international switched services to the Dominican Republic and Venezuela raises issues relating to the settlements process that we must resolve in order to determine the public interest merits of its application to serve these destination countries. The present record does not allow us to make that determination at this time. We therefore defer a decision whether to grant GTE Telecom's request to resell international switched services to the Dominican Republic and  XR-Venezuela and whether to classify GTE Telecom as a nondominant carrier on these routes.LXRF]& yOI#-ԍxNo party alleges, nor is there any evidence before us that suggests, that GTE Telecom's application to resell international switched services to Canada raises issues relating to the settlements process that would require us to defer a decision with respect to its request to provide such services on a nondominant basis on that route.  X$-x"35.` ` With regard to GTE Telecom's request to resell international switched services  X -on a nondominant carrier basis to the Dominican Republic and Venezuela, Domtel and" f L0*((y" AT&T filed oppositions. Domtel asserts that GTE Telecom is not entitled to a presumption of nondominance on these routes under Section 63.10(a)(4) of the rules because: (1) GTE, through its ownership of Codetel and CANTV in the Dominican Republic and Venezuela,  X-respectively, has a history of discriminating against unaffiliated carriers;TM]& yO4-ԍxDomtel Comments to Opposition at 4.T (2) Codetel and CANTV are dominant carriers in their respective markets; and (3) two of the U.S. carriers whose services GTE Telecom proposes to resell "together dominate (80 percent) U.S. traffic  Xv-to the foreign destination[.]"VNvX]& yO -ԍxDomtel Comments to Opposition at 34.V Under these circumstances, argues Domtel, GTE Telecom "has the ability to interfere with the underlying operating arrangements of the resold U.S. carrier  XH-and [GTE Telecom's] . . . foreign affiliate[.]"TOH]& yO -ԍxDomtel Comments to Opposition at 4.T  X -x#36.` ` As evidence of GTE's anticompetitive behavior, Domtel asserts that Codetel: (1) has entered into exclusive correspondent agreements with MCI, Sprint and Telefonica Larga Distancia de Puerto Rico; (2) agreed to interconnect Dominican carriers only if they would agree to relinquish any right to provide local exchange service, and only if they would agree to a price fixing arrangement which establishes U.S. accounting rates satisfactory to GTE; (3) attempted to block the assignment of central office codes to Tricom, its Dominican competitor and Domtel's parent; and (4) established growthbased accounting rate mechanisms  Xy-with AT&T and MCI, but refused to do so with smaller U.S. carriers.TPyx]& yO-ԍxDomtel Comments to Opposition at 4.T Domtel claims that Codetel controls bottleneck facilities and 90 percent of the local exchange market in the  XK-Dominican Republic, as well as 80 percent of its international market.QK]& yO-ԍxDomtel Comments at 4 and 6 (also asserting that Codetel "maintains and controls the country's international satellite relationships"). Domtel claims that CANTV, GTE Telecom's foreign affiliate in Venezuela, has a legal monopoly over basic  X-services through the year 2000.R$` ]& {O.-ԍxDomtel Comments at 5; id. (stating that, pursuant to a Concession Agreement between the Venezuelan government and CANTV, CANTV controls the private line market and interconnection into the public switched  {O-telephone network). As noted supra in Section II. A., GTE Mobilnet, Incorporated, a whollyowned subsidiary  yO -of GTE, states that GTE "is in operational control of CANTV." GTE Mobilnet Section 214 Application at 6.  X-x$37.` ` Domtel maintains that two U.S. facilitiesbased carriers together account for 80 percent of the U.S. traffic to the Dominican Republic. Domtel recommends that, if the Commission grants GTE Telecom's application to resell either of these two U.S. facilitiesbased carriers to the Dominican Republic, then the Commission should classify GTE Telecom  X-as a dominant carrier on this route.TSL ]& yO'-ԍxDomtel Comments to Opposition at 4.T Domtel also requests that GTE Telecom be allowed to"S0*((o" resell the services of these two U.S. carriers only when "the U.S. carrier makes the same  X-volume and terms and conditions of resale available to all other resellers."T]& yOb-ԍxDomtel Comments to Opposition at 5. We note that all U.S. international carriers, including nondominant carriers, are subject to the nondiscrimination requirements of Section 202 of the Act. In addition, Domtel requests that "GTE Telecom's resale be required to adhere in all respects to  X-proportionate return . . . . [i.e., that GTE Telecom] accept only . . . [its] proportionate share  X-of return traffic]."U ]& yOw-ԍx Domtel Comments to Opposition at 5. We note that GTE Telecom, as a reseller, would not receive proportionate return traffic from Codetel. In any event, all facilitiesbased U.S. carriers are subject to the  {O -Commission's longstanding policy that they accept only their proportionate share of return traffic. See  {O -Regulation of International Accounting Rates, CC Docket No. 90337, Phase II, Second Report and Order and  {O -Second Further Notice of Proposed Rulemaking, 7 FCC Rcd 8040 (1992) (International Accounting Rates  {Oe -Order), recon. denied, 11 FCC Rcd 6332 (1996).  X-  Xx-x%38.` ` AT&T asserts that GTE Telecom's application should be denied with respect to its request for authority to resell switched services on the U.S.Dominican Republic and the U.S.Venezuela routes. AT&T contends that GTE Telecom's control of Codetel and CANTV  X3-(which AT&T characterizes as the de facto and de jure monopoly carriers in the Dominican Republic and Venezuela, respectively) permits GTE Telecom to maintain abovecost accounting rates between these foreign countries and the United States to the detriment of the  X -U.S. public interest.DV ]& yOA-ԍxAT&T Petition at 2.D AT&T claims that granting GTE Telecom resale authority to the Dominican Republic and Venezuela would remove any incentive GTE Telecom's foreign  X -affiliates may have to reduce their abovecost accounting rates.fW 0 ]& {O-ԍxAT&T Reply at 1; see also AT&T Petition at 23.f As a result, AT&T claims, U.S. consumers would continue to bear the burden of settlements subsidies to Codetel and  X-CANTV caused by these carriers' abovecost rates.AX ]& yO-ԍxAT&T Reply at 1.A AT&T contends that granting GTE Telecom resale authority to the Dominican Republic and Venezuela would provide it with the incentive and the ability to price resold services to these countries "at or below its costs in order to generate significant profits through its affiliates' abovecost accounting rates with  X8-U.S. carriers."AY8R ]& yO;!-ԍxAT&T Reply at 2.A  X -x&39.` ` AT&T states that its current accounting rate with Codetel during the peak  X-period is $1.10 per minute.DZ]& yO%-ԍxAT&T Petition at 3.D AT&T asserts that, because of competition in the United States for international traffic and because U.S. carriers price their services on a twoway basis taking into account the settlements credit they receive for return traffic, U.S. resale customers"rZ0*((" can readily obtain prices for switched services to the Dominican Republic that are well below  X-the per minute settlement rate.[]& {Ob-ԍxAT&T Petition at 3; see also id. (claiming that potential customers have informed AT&T that other carriers are quoting prices to the Dominican Republic of $0.30 per minute). AT&T avers that "the combination of intense competition on  X-the U.S. side and Codetel's de facto monopoly in the Dominican Republic means that GTE [Telecom] could make substantial profits as a reseller even if it prices its U.S.based offering at its cost or lower and makes its profit solely from the settlements payments paid by the  X-underlying facilitiesbased carrier."E\"]& yOb -ԍxAT&T Petition at 4. E AT&T bases its argument on the proposition that GTE Telecom "could price its U.S.outbound switched resale service [to the Dominican Republic] to make no money and earn $0.45 per minute [profit] based on the settlements payments paid  XJ-by the underlying U.S. facilitiesbased carrier.":]J]& {O -ԍxId.: AT&T estimates that Codetel can terminate traffic at less than $0.10 per minute, thereby affording a profit of at least $0.45 ($0.55 settlement fee minus $0.10 termination cost) per minute of inbound traffic from the United  X -States.?^ D]& {O-ԍx Id. ? x  X -x'40.` ` In response, GTE Telecom contends that Domtel's "unsupported generalized claim of the potential to discriminate is not enough to overcome the presumption" of nondominance for carriers seeking to provide resale through the facilities of an unaffiliated U.S.  X-carrier under Section 63.10(a)(4) of the rules._Z]& {O-ԍxGTE Telecom Opposition at 3; see also GTE Telecom Opposition to Comments at 2; id. (asserting that there would be no opportunity for a reseller such as GTE Telecom to influence th[e] relationship with the foreign carrier").  GTE Telecom also generally denies Domtel's allegations of anticompetitive activities by Codetel in the Dominican Republic. GTE Telecom claims that AT&T has presented no evidence to rebut the presumption of nondominance for  XM-international resale under Section 63.10(b)(4) of the rules.Q`M ]& yO-ԍxGTE Opposition to Petition at 3.Q GTE Telecom "vehemently denies" AT&T's allegation that its foreign carrier affiliates in the Dominican Republic and  X-Venezuela have extorted monopoly rents through abovecost accounting rates.Ya ]& yOX!-ԍxGTE Telecom Opposition to Petition at 3.Y GTE Telecom asserts that the U.S./Dominican Republic accounting rates have declined significantly  X-in the last five yearsb$"]& {O$-ԍxGTE Opposition to Petition at 3 (citing Trends in the International Telecommunications Industry, FCC  {O%-Common Carrier Bureau, Industry Analysis Division, June 1995 at Table 18 (International Trends Report), Accounting Rates for International Message Telephone Service of the United States, FCC International Bureau,"'a0*((m&"  {OX-Telecommunications Division, October 1, 1995 (IMTS Accounting Rate Report), and Preliminary 1994 Section 43.61 International Telecommunications Data, Industry Analysis Division, Common Carrier Bureau, Federal Communications Commission, Table A1 (Oct. 12, 1995)). and that "the current average settlement rate for the Dominican"b0*(( "  X-Republic is within the benchmarks established by the Commission[.]"c]& {Oc-ԍxGTE Telecom Opposition to Petition at 4 (citing International Accounting Rates Order). GTE Telecom avers that the accounting rate to Venezuela also has declined in the last five years because of  X-volume and offpeak discounts.YdD]& yO -ԍxGTE Telecom Opposition to Petition at 4.Y GTE Telecom further contends that "the level of accounting rates has . . . nothing to do with the foreign affiliate's ability to discriminate  X-against AT&T or any other U.S. carrier in favor of GTE Telecom."Ye]& yO) -ԍxGTE Telecom Opposition to Petition at 4.Y  Xv- x(41.` ` GTE Telecom maintains that AT&T's suggestion that GTE Telecom could benefit from purported "abovecost" accounting rates is unfounded. GTE Telecom states that,  XH-according to the IMTS Accounting Rate Report, three carriers have established accounting rates for the Dominican Republic. GTE Telecom asserts that the underlying U.S. facilities carrier (and not GTE Telecom as a reseller) would negotiate with one of these three Dominican carriers for delivery of traffic in the Dominican Republic and that GTE Telecom, as a reseller, "has no role in choosing or dealing with the carrier in the Dominican  X -Republic."Yf d ]& yO-ԍxGTE Telecom Opposition to Petition at 5.Y GTE Telecom states that its resold traffic to the Dominican Republic "could  X -well be handled by one of the two unaffiliated [Dominican] carriers[.]":g ]& {Oe-ԍxId.:  X-x)42.` ` AT&T asserts that, contrary to GTE Telecom's suggestion, U.S. carriers cannot readily avoid Codetel's abovecost accounting rates by terminating their traffic to the Dominican Republic with Dominican international carriers that are not affiliated with GTE. AT&T asserts that Codetel's control of "the overwhelming majority of the local access lines in the Dominican Republic . . . . enables it to control international traffic to and from the Dominican Republic and thus prevents [the two unaffiliated Dominican carriers,] AAC&R and  X-Tricom[,] from providing a viable alternative traffic bound for the Dominican Republic."Uh ]& yO?"-ԍxAT&T Reply at 3; AT&T Petition at 5.U Consequently, AT&T claims, "Codetel possesses the ability to dictate the average settlement  X-rate between the U.S. and the Dominican Republic.":i]& {O%-ԍxId.: AT&T asserts that "granting GTE [Telecom] the authority it seeks would provide Codetel the means through GTE [Telecom] to distort traffic flows between the U.S. and the Dominican Republic in order to increase"i0*((" the amount of settlement subsidies paid to it by U.S. carriers, and ultimately by U.S.  X-consumers."@j]& {Ob-ԍxId. at 4.@ AT&T recommends that the Commission either deny GTE Telecom's request for resale authority to the Dominican Republic and to Venezuela or, alternatively, grant such authority upon "GTE [Telecom's] establishment of costbased accounting rates in the  X-Dominican Republic and Venezuela.":kZ]& {O-ԍxId.: AT&T also contends that U.S. carriers cannot avoid the abovecost accounting rates of GTE Telecom's foreign affiliate in Venezuela because  Xv-"CANTV has a monopoly through the year 2000."Elv]& {O -ԍxId. at 3, n.4.E  XH-x*43.` ` We defer a decision with respect to GTE Telecom's request to resell international switched services to the Dominican Republic and Venezuela. The record  X -indicates that GTE controls both Codetel and CANTV.Pm ~]& {OI-ԍxSee note 13, supra.P We are concerned that GTE Telecom, as a reseller of international switched services to the Dominican Republic and Venezuela, may be able to use the market power of its foreign carrier affiliates in those countries in ways that directly undermine the public interest in an effectively competitive U.S. international services market.  X-x+44.` ` We acknowledge that the Commission has determined that a U.S. international carrier that serves a destination market solely through the resale of the switched services of a U.S. facilitiesbased carrier with which the reseller is not affiliated is presumptively non XK-dominant for that route regardless of any foreign affiliations.xnK]& {O -ԍxInternational Services at 7335; 47 C.F.R.  63.10(a)(4).x In the Foreign Carrier  X6-Entry Order, the Commission noted that it was unlikely that a foreign carrier reseller would engage in discriminatory conduct because, in order to favor its U.S. resale affiliate, the  X -foreign carrier affiliate would necessarily have to favor the underlying carrier as well.joZ ]& {O]-ԍxSee Foreign Carrier Market Entry Order at  143 (rejecting GTE's proposal that the Commission regulate affiliated switched service resellers as dominant, stating that "[w]e continue to consider it unlikely that a foreign carrier reseller would engage in discriminatory conduct under such circumstances").j In the case of the Dominican Republic and Venezuela, however, sufficient questions regarding GTE Telecom's affiliates' ability to harm competition in these markets have been raised that require further analysis.  X-x,45.` ` GTE Telecom's application to resell international switched services to the Dominican Republic and Venezuela raises the question whether GTE Telecom has the ability and the incentive to manipulate the settlements process and its prices to U.S. consumers on these affiliated routes in a manner that increases U.S. carrier outpayments to Codetel and"R o0*((" CANTV. AT&T has raised a plausible scenario under which GTE could maximize its overall profits by pricing GTE Telecom's U.S. resold switched services at or even below cost in order to generate significant settlement payments to its foreign carrier affiliates. While such pricing behavior might benefit U.S. consumers in the shortrun by reducing international switched service rates to the Dominican Republic and Venezuela, we are concerned about the longterm effects of such pricing behavior. U.S facilitiesbased carrier costs may increase as a result of an increase in their outpayments to Codetel and CANTV, which could negatively impact rates paid by U.S. consumers. And the profitability of such a scheme for GTE may decrease that carrier's incentive to encourage its affiliates to negotiate lower, costoriented accounting rates with U.S. carriers.  X -x-46.` ` AT&T's alleged pricing scheme would not be of concern if we were confident that accounting rates for the Dominican Republic and Venezuela were set at nondiscriminatory, costoriented levels. It also would not be of concern if these markets were effectively competitive and market forces determined the charges for terminating U.S. international traffic. The record, however, does not support the conclusion that charges for terminating U.S. traffic to the Dominican Republic or Venezuela are the product of effectively competitive markets or otherwise established at nondiscriminatory, costoriented levels.  XK-x.47.` ` The problem raised by AT&T is not an issue of discrimination. It is a question of whether allowing GTE Telecom to resell switched services could exacerbate the settlement outpayments by U.S. carriers to the Dominican Republic and Venezuela. In 1994, for  X-example, U.S. carriers had a net outpayment of $129,000,000 to the Dominican Republic.p]& {O-ԍxSee 1994 Section 43.61 International Telecommunications Data, Industry and Analysis Division, Common Carrier Bureau, Federal Communications Commission (Jan. 1996). A portion of this outpayment represents Dominican carriers' cost of terminating traffic, but the great majority of it apparently represents a subsidy from U.S. consumers to the Dominican carriers, of which Codetel is by far the largest.  X-x/48.` ` We also note that in Venezuela, CANTV has engaged in discriminatory treatment of U.S. carriers in its accounting rate negotiations by refusing to offer the same terms and conditions to all U.S. carriers in violation of our International Settlements Policy ("  XN-ISP").q\N"]& yO! -ԍxThis policy requires (1) the equal division of accounting rates; (2) nondiscriminatory treatment of U.S.  {O -carriers; and (3) proportionate return of inbound traffic. See Policy Statement on International Accounting Rate  {O!-Reform, Policy Statement, 11 FCC Rcd 3146,  11 (1996).  This behavior involves both the accounting rates and their effective dates. CANTV's current accounting rate with WorldCom is $1.30 per minute and the rate with AT&T and MCI is $1.30 during the peak period and $1.00 during the offpeak period. Recently,  X -AT&TFrX F]& yO&-ԍ#X\  P6G;QwP#xAT&T's International Settlements Policy Waiver for a Change in the Accounting Rate for Switched Service with Venezuela, ISP96W255 (filed June 17, 1996). This waiver was opposed by WorldCom and will be decided in a separate proceeding.F and MCILs f ]& yO-ԍ#X\  P6G;QwP#xMCI's International Settlements Policy Waiver for a Change in the Accounting Rate for Switched Service with Venezuela, ISP96W318 (filed Aug. 6, 1996). This waiver was opposed by WorldCom and will be decided in a separate proceeding. MCI previously negotiated a different accounting rate agreement with CANTV which provided for the same rates and effective dates proposed by WorldCom in its waiver but MCI  {O-withdrew the waiver. See ISP96W252 (filed June 14, 1996). L filed waivers of the Commission's ISP to implement a reduction of their" zs0*((=" peak period accounting rates with CANTV to $1.25 on May 1, 1995, then to $1.20 on July 1, 1995, and finally to $1.15 on October 1, 1995. WorldCom filed a waiver of the Commission's ISP to reduce its accounting rate with CANTV to $1.15 during the peak period  X-and to introduce a $1.00 rate during the offpeak period, effective January 1, 1996.tz]& yO -ԍx#X\  P6G;QwP#WorldCom's International Settlements Policy Waiver for a Change in the Accounting Rate for Switched Service with Venezuela, ISP96W306 (filed Aug. 1, 1996). Its peak period rate would fall to $1.10 on January 1, 1997. Thus, WorldCom would not receive the benefits of the two interim reductions offered by CANTV to AT&T and MCI, and the offpeak rate, which is part of AT&T and MCI's current arrangement, would not become effective until January 1, 1996. Moreover, the rate of $1.15 per minute would not be available to WorldCom until three months after AT&T and MCI would receive it. Finally, WorldCom's agreement with CANTV includes a reduction scheduled for January 1, 1997, that is not part of the AT&T or MCI waivers. If approved, the result would be different accounting rate arrangements with different U.S. carriers.  X -x049.` ` The purpose of the ISP is to prevent monopoly carriers such as CANTV from exercising their market power against U.S. carriers in accounting rate negotiations by engaging in discriminatory conduct. This kind of discriminatory conduct by CANTV would result in different accounting rates among U.S. carriers that are unrelated to costs and raise the costs of some U.S. carriers above the costs of others. These differences would impair the ability of those carriers that are the target of discrimination to compete in the U.S. international services market to the detriment of U.S. consumers. To prevent such abusive behavior, the Commission has stated that, as part of the ISP, it expects accounting rate revisions to be made available to all U.S. carriers. This includes both the accounting rate and  X-the effective date of the rate.u]& yO-ԍ#X\  P6G;QwP#xThe Commission stated that: "We wish to emphasize again to both U.S. carriers and their foreign correspondents that is our expectation that an accounting rate modification agreed to by a given foreign correspondent will be available to all competing carriers in a nondiscriminatory fashion." Regulation of International Accounting Rates, Phase I, 6 FCC Rcd 3552 (1991). The Commission added that: "This would include, of course, the expectation that the effective date of the accounting rate change, whether prospective or  {Oq!-retroactive, will be available to competing U.S. carriers." Id. at n.36.   X- x150.` ` In addition, the record in Domtel Communications, Inc. contains credible evidence that Tricom, Domtel's parent and a Dominican carrier, "encountered formidable obstacles in its dealings with Codetel, and has established and expanded its presence [in the"L u0*(("  X-Dominican Republic] only with difficulty." v]& yOy-ԍxDomtel Communications, Inc., Application for Authority to Provide Direct Service between the United  {OA-States and the Dominican Republic, 100 FCC Rcd 12159 (1995) (Domtel Communications, Inc.).  Codetel also appears to have used its accounting rate negotiations with U.S. carriers as a vehicle to thwart competition in the Dominican Republic, albeit in a manner that ultimately reduced U.S. carrier settlement  X-costs.*w"]& {O-ԍxSee American Telephone and Telegraph Company and MCI Telecommunications Corporation, Petitions for Waiver of the International Settlements Policy for a Change in the Accounting Rate with the Dominican  {O -Republic, order on recon., 100 FCC Rcd 8264,  17 (International Bur. 1995) (Codetel Accounting Rates) (approving growthbased accounting rates with AT&T and MCI and rejecting Tricom's claims of anticompetitive conduct as not subject to remedy in the proceeding).* Such moves to frustrate competition in the Dominican telecommunications market undermine the Commission's efforts to encourage competition in foreign markets as a vehicle to drive accounting rates toward cost.  X_-x251.` ` The present record does not allow us to determine at this time the degree to which GTE Telecom has the ability and incentive to exacerbate the already serious settlements imbalance on the U.SDominican Republic and U.S.Venezuela routes and the implications of such distortions for U.S. consumers. We must resolve these issues in order to determine whether the public interest would be served by authorizing GTE Telecom to resell switched service on these routes. We therefore defer a decision with respect to GTE Telecom's request for authorization on the Dominican Republic and Venezuela routes to permit the parties an additional opportunity to address these outstanding issues.  X- #Xj\  P6G;XP#  IV. Conclusion ĐTP  Xb-x352.` ` We find that a partial grant of GTE Telecom's application, subject to the conditions that we impose on an interim basis as set forth above, will serve the public interest under Section 214 of the Act by increasing competition in international services, expanding the range of new and innovative services, and allowing for the more efficient use of existing international telecommunications facilities. In addition, we find that GTE Telecom's application to resell international switched services to two affiliated countries, the Dominican Republic and Venezuela, raises issues relating to the settlements process that cannot be resolved on the present record at this time. We therefore defer a decision with respect to GTE Telecom's application to resell international switched services to those two destinations to give the parties an additional opportunity to address these issues. We also find that GTE Telecom qualifies for nondominant carrier regulation on the routes for which we authorize it to provide international service. We therefore grant in part GTE Telecom's application for authority (1) to resell the switched services of other common carriers to provide international switched telecommunications services between the United States and all international points (with the exception of the Dominican Republic and Venezuela) and (2) to provide on a facilities basis international private line voice and data services between the United States and the various countries identified in paragraph 58 by leasing circuits from Intelsat. The conditions we attach to our partial grant of the instant Section 214 application will remain in"w0*(("  X-place at least until the Commission completes the Interexchange and InRegion proceedings. Specifically, we reserve the right to modify the conditions of the authorization granted in this order, as necessary, upon the Commission's adoption of final rules for independent LECs' provision of international and domestic interstate, interexchange services.  X-x453.` ` As a nondominant provider of international resold switched services and facilitiesbased private line services, GTE Telecom will be allowed to file tariffs on no less than one days' notice, without economic or cost support, and the tariffs will be presumed lawful. GTE Telecom also will be subject to the Section 214 requirements of nondominant U.S. international carriers.  X -x554.` ` As a nondominant carrier, GTE Telecom will be subject to regulation under Title II of the Act. 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 206209). Title II carriers also are required to file tariffs pursuant to our streamlined tariffing procedures (Sections 203 and 205). Nondominant U.S. international carriers, such as GTE Telecom, also are subject to the requirements of Sections 43.51, 43.61,  Xd-43.82, 63.14 and 63.19 of the Commission's rules.x* d]& {O-ԍxSee 47 C.F.R.  43.51 (requiring common carriers engaged in foreign communications to file with the Commission certain contracts, agreements, concessions, licenses, authorizations, and other arrangements); 47 C.F.R.  43.61 (requiring common carriers engaged in the provision of international telecommunications service between the U.S. and foreign destinations to file reports containing annual traffic and revenue data); 47 C.F.R.  43.82 (requiring facilitiesbased carriers engaged in the provision of international service to file annual international circuit status reports); 47 C.F.R.  63.14 (prohibiting U.S carriers authorized to provide international communications service from agreeing to accept special concessions directly or indirectly from any foreign carrier or administration with respect to traffic or revenue flows between the United States and any foreign country for which the U.S. carrier is authorized to provide service); 47 C.F.R.  63.19 (requiring nondominant international carriers to "notify all affected customers of the planned discontinuance, reduction or impairment [of service] at least 60 days prior to. . . [the] planned action[;]" notification of such action must be in writing to each affected customer, unless otherwise authorized in advance by the Commission, and a copy of such notification must be filed with the Commission).  X6- x 655. This order will be effective upon its adoption.  X-  V. Ordering Clauses ĐTP  X-x756.` ` Upon consideration of the application and in view of the foregoing, IT IS HEREBY CERTIFIED that the present and future public convenience and necessity require the provision of resold international switched services between the United States and all international points (with the exception of the Dominican Republic and Venezuela) and the provision of facilitiesbased international private line services by GTE Telecom Incorporated (GTE Telecom) subject to the conditions set forth below. "P x0*((|"Ԍ X-x857.` ` Accordingly, IT IS HEREBY ORDERED that application File No. ITC95443 filed by GTE Telecom IS GRANTED IN PART and GTE Telecom is authorized to resell on a nondominant carrier basis international switched services of unaffiliated U.S. international carriers for the provision of international switched services originating from U.S. points and terminating at all international points, with the exception of the Dominican Republic and Venezuela.  X_-x958.` ` IT IS FURTHER ORDERED that GTE Telecom is authorized to provide on a nondominant carrier basis facilitiesbased international private line voice and data services between the U.S. and the following locations only: Argentina, Australia, Belize, Bolivia, Brazil, Cayman Island, Chile, China, Colombia, Costa Rica, Ecuador, French Guyana, Guatemala, Guyana, Haiti, Honduras, Hong Kong, Jamaica, Japan, Malaysia, Mexico, New Zealand, Nicaragua, Panama, Paraguay, Peru, Philippines, San Salvador, Surinam, Taiwan, United Kingdom, Uruguay, and Guantanamo Bay Naval Base. In addition, GTE Telecom may not and its 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 foreign end or both (except in the case of the United Kingdom), for the provision of international switched basic services, unless authorized to do so by the Commission upon a finding that the foreign administration affords resale opportunities equivalent to those available under U.S. law, in accordance with Market Entry and Regulation of Foreignaffiliated Entities, 11 FCC Rcd 3873 (1995). The limitations in this paragraph are subject to the exceptions contained in Sections 63.17 and 63.18(e)(4) of the Commission's rules, 47 C.F.R.  63.17 (in the case of the United Kingdom) and 63.18(e)(4).  X-x:59.` ` IT IS FURTHER ORDERED that GTE Telecom shall: (1) maintain separate books of account from any affiliated local exchange carrier (LEC); (2) not jointly own transmission or switching facilities with any affiliated LEC; and (3) take any tariffed services from the affiliated LEC pursuant to the terms and conditions of the LEC's generally applicable tariff.  XN-x;60.` ` IT IS FURTHER ORDERED that this authorization is subject to the condition that GTE Telecom be treated as a nonregulated affiliate for purposes of local exchange carrier accounting under the Commission's joint cost and affiliate transactions rules as set forth in Parts 32 and 64 of the Commission's rules.  X-x<61.` ` IT IS FURTHER ORDERED that the conditions that attach to the grant of GTE Telecom's application as set forth in Section III. A. of this order will remain in place at least until the Commission has completed Policy and Rules Concerning the Interstate, Interexchange Marketplace and Implementation of Section 254(g) of the Communications Act  X#-of 1934, Notice of Proposed Rulemaking, CC Docket No. 9661, FCC 96123 (released Mar.  Xj$-25, 1996) and Implementation of the NonAccounting Safeguards of Sections 271 and 272 of the Communications Act of 1934, as amended, and Regulatory Treatment of LEC Provision  X<&-of Interexchange Services Originating in the LEC's Local Exchange Area, Notice of Proposed  X''-Rulemaking, CC Docket No. 96149, FCC 96308 (released July 18, 1996). The International"''x0*((%" Bureau reserves the right to modify the conditions of the authorization granted in this order, as necessary, upon the Commission's adoption of final rules for the independent LECs' provision of outofregion and inregion international and domestic interstate, interexchange services.  X-x=62.` ` IT IS FURTHER ORDERED that GTE Telecom shall comply with the requirements specified in Sections 43.82 and 63.21 of the Commission's rules, 47 C.F.R.  43.82 and 63.21.  X1-x>63.` ` This order is issued under Section 0.261 of the Commission's rules and is  X -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  X -of the public notice of this order (see Section 1.4(b)(2)). x` `  hh@FEDERAL COMMUNICATIONS COMMISSION  XM- x` `  hh@ Donald H. Gips  X6-x` `  hh@Chief, International Bureau  X-