NOTICE ************************************************************************* NOTICE ************************************************************************* This document was originally prepared in Word Perfect. If the original document contained-- * Footnotes * Boldface & Italics --this information is missing in this version The document format (spacing, margins, tabs, etc.) is changed too. If you need the complete document, download the Word Perfect version. For information about downloading documents (FTP) see file pnmc5021. File pnmc5021 (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ************************************************************************* Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) ORIENT EXPRESS COMMUNICATIONS, ) L.L.C. ) ) File No. SCL-95-011 Application for a license to land and operate) a submarine fiber optic cable extending) between the U.S. Territory of Guam and the) Philippines, Hong Kong, the People's ) Republic of China, and the Republic of Korea) CABLE LANDING LICENSE Adopted: November 5, 1996 Released: November 7, 1996 By the Chief, Telecommunications Division: 1. In this Order, we grant the application of Orient Express Communications, L.L.C., (Orient Express) under the Cable Landing License Act for authority to land and operate a digital fiber optic submarine cable to be called the "Orient Express Cable System" extending between the United States Territory of Guam and the Philippines, Hong Kong, the People's Republic of China, and the Republic of Korea. The cable will be operated on a non common carrier basis. We find that Orient Express has provided sufficient information under our rules to comply with the Cable Landing License Act and therefore grant the cable landing license subject to the conditions listed below. The Application 2. Orient Express is a limited liability company organized under the laws of the Commonwealth of Virginia. All of its owners and officers are U.S. citizens. The applicant proposes to land and operate the Orient Express Cable System as a non common carrier system in which capacity would be sold or leased to users on a non-tariffed, non common carrier basis. The cable system would be owned by the applicant and by entities authorized to land and operate an international submarine fiber optic cable system in the Philippines, Hong Kong, the People's Republic of China, and the Republic of Korea. All of the proposed cable system's plant and equipment located in the United States would be owned by Orient Express. All plant and equipment located in the Philippines, Hong Kong, the People's Republic of China, and the Republic of Korea would be owned by entities authorized to land and operate an international submarine fiber optic cable system in those jurisdictions. The precise landing points have yet to be selected. Orient Express states that the landing points will be in conformity with plans approved by the Secretary of the Army and all necessary and appropriate agencies of the governments of the Philippines, Hong Kong, the People's Republic of China, and the Republic of Korea. The proposed cable system is scheduled to be operational in the second quarter of 1998. 3. The Orient Express Cable System will employ 1.55-micrometer wavelength technology operating on each of its fiber pairs at a minimum of 2.5 Gbps per fiber pair. The capacity on each fiber pair will be provided in a minimum of sixteen 155-Mbps streams, with each 155-Mbps stream containing 63 Minimum Investment Units (MIUs). Each MIU, the minimum unit of ownership investment in the cable system, consists of a 2.048-Mbps stream. The applicant states that the planning and development of the Orient Express Cable System will be based upon the use of submarine fiber optic technology judged suitable for implementation at the projected ready for commercial service (RFCS) date, employing the appropriate transmission rate necessary to meet the capacity requirements of the users of the system. Orient Express expects that the minimum system design capacity will be 10.0 Gbps. Orient Express states that it will ensure system reliability through the deployment of the appropriate cable system design. 4. The proposed cable system will consist of twelve segments, designated A through L. Segment A is the cable landing station to be located in the U.S. Territory of Guam. Segment B is the cable landing station to be located in the northeastern portion of the Philippines. Segment C is the cable landing station to be located in Hong Kong. Segment D is the cable landing station to be located in or near Shanghai, the People's Republic of China. Segment E is the cable landing station in the southeastern portion of the Republic of Korea. Segment F consists of the whole of the submarine cable system between the system interface at Segment A and branching unit #1 (BU1). Segment G consists of the whole of the submarine cable system between BU1 and branching unit #2 (BU2). Segment H consists of the whole of the submarine cable system between BU2 and the system interface at Segment B. Segment I consists of the whole of the submarine cable system between BU2 and the system interface at Segment C. Segment J consists of the whole of the submarine cable system between BU1 and branching unit #3 (BU3). Segment K consists of the whole of the submarine cable system between BU3 and the system interface at Segment D. Segment L consists of the whole of the submarine cable system between BU3 and the system interface at Segment E. Segment F will consist of four fiber pairs, Segment G three, Segment H three, Segment I two, Segment J three, Segment K three, and Segment L two. 5. Orient Express states that it intends to sell or lease, on a long-term basis, bulk capacity in the Orient Express Cable System to large users and telecommunications providers on a highly individualized basis. It states that it will make "individualized decisions, in particular cases, whether and on what terms to deal" and does not intend to undertake "to carry for all people indifferently" and that there is no public-interest reason for the Commission to require that the proposed facilities be operated on a common carrier basis. It asserts that we therefore have only to consider the requirements of the Cable Landing License Act to act on this application. 6. Orient Express states that the proposed cable system will provide needed additional voice, video and high-speed data transmission capacity between and among the United States via the Territory of Guam, the Philippines, Hong Kong, the People's Republic of China, the Republic of Korea, and points beyond. It will also interconnect with the domestic and international interexchange telecommunications networks of the United States, the Philippines, Hong Kong, the People's Republic of China, the Republic of Korea, and points beyond. Orient Express states that the cable system will also provide high reliability and low-cost capacity, redundancy, security, and restoration. Comments 7. The Orient Express application was placed on public notice on October 13, 1995. AT&T Submarine Systems, Inc., (AT&T-SSI) filed comments on November 13, 1995, and Orient Express filed Reply Comments on November 22. Pursuant to Section 1.767(b) of the Commission's rules, the Cable Landing License Act, and Executive Order No. 10530, we informed the Department of State of Orient Express's application. The Department of State, after coordinating with the National Telecommunications and Information Administration and the Department of Defense, stated that it has no objection to the issuance of the cable landing license. 8. In its comments, AT&T-SSI states that it favors a fully competitive private cable industry in which the market determines a private cable system's viability. AT&T-SSI requests that if we grant this license, we make clear the Commission's pro-competition policy by stating that the grant does not preclude the licensing of future cable systems, whether common carrier or private, that could be competitive alternatives. Orient Express responds that no clarification is necessary because the Commission has never considered private cable system applications to be mutually exclusive and has never precluded the licensing of such systems because of overcapacity on existing and future systems. Discussion 9. Orient Express requests a license under the Commission's private submarine cable policy to promote competition in the provision of international transmission facilities. Pursuant to this policy, the Commission has authorized non common carrier cables where there is no legal compulsion to serve the public indifferently and where there are no reasons implicit in the nature of the operations to expect an indifferent holding-out to the eligible user public. 10. Because of the wide availability of common carrier circuits on existing and future cables and satellite circuits between the U.S. Territory of Guam, the Philippines, Hong Kong, the People's Republic of China, and the Republic of Korea, there is no public-interest reason to require that Orient Express's proposed cable facilities be provided on a common carrier basis. 11. In addition, since Orient Express will make "individualized decisions, whether and on what terms to deal" and does not undertake to "carry for all people indifferently," there is no reason to expect that the proposed cable circuits would be held out to the public by Orient Express indifferently. We thus conclude that Orient Express will not in fact offer capacity in the Orient Express cable system to the public on a common carrier basis, and thus is not subject to regulation under Title II of the Communications Act. 12. In response to AT&T-SSI's comments, we reaffirm that our grant of a license for one non common carrier cable does not in any way preclude the grant of future licenses for potentially competing cables, whether non common carrier or common carrier. The market, not our economic judgment, will determine the viability of potential cables along any given route. As Orient Express stated, this has been the Commission's policy since Tel-Optik. 13. Consistent with prior decisions, we find that Orient Express's statement that the Orient Express Cable System will land in the U.S. Territory of Guam, the Philippines, Hong Kong, the People's Republic of China, and the Republic of Korea to be sufficient to determine whether the proposed cable would comply with the provisions of the Cable Landing License Act and Commission rules. Since the time of the filing of Orient Express's application, the Commission has reduced the amount of information required in cable landing license applications. Specifically, the Section 214 Streamlining Order permits applicants in their initial applications to provide a general geographic description of the landing points. It requires that grant of cable landing license applications be conditioned on final approval of a specific description of landing points no later than ninety days prior to construction. The Commission will give public notice of this description, and grant of the license will be considered final unless we issue a public notice to the contrary no later than sixty days after receipt of the specific description of the landing points. 14. Based on the information provided by Orient Express and pursuant to the Commission's procedures implementing the National Environmental Policy Act of 1969, we conclude that the grant of the requested authorizations would not significantly affect the environment. Consequently, Orient Express is not required to submit an environmental assessment, and this application is categorically excluded from environmental processing. 15. Accordingly, we conclude that U.S. interests under the Cable Landing License Act will be served by grant of the license to Orient Express, as conditioned below. Ordering Clauses 16. Consistent with the foregoing, we hereby GRANT AND ISSUE, under the provisions of the Cable Landing License Act and Executive Order 10530, Orient Express Communications, L.L.C., a license to land and operate a high-capacity fiber optic submarine cable system (with four fiber pairs operating at 2.5 Gbps per pair) extending between the U.S. Territory of Guam, the Philippines, Hong Kong, the People's Republic of China, and the Republic of Korea, with landing points in each of those areas. This grant is subject to all rules and regulations of the Federal Communications Commission; any treaties or conventions relating to communications to which the United States is or may hereafter become a party; any action by the Commission or the Congress of the United States rescinding, changing, modifying or amending any rights accruing to any person hereunder; and the following conditions: (1)The location of the cable system within the territorial waters of the United States of America, its territories and possessions, and upon its shore shall be in conformity with plans approved by the Secretary of the Army, and the cables shall be moved or shifted by the Licensee at its expense upon the request of the Secretary of the Army whenever he or she considers such course necessary in the public interest, for reasons of national defense, or for the maintenance or improvement of harbors for navigational purposes; (2)The Licensee shall at all times comply with any requirements of United States government authorities regarding the location and concealment of the cable facilities, buildings, and apparatus with a view of protecting and safeguarding the cables from injury or destruction by enemies of the United States of America; (3)The Licensee or any persons or companies controlling it, controlled by it, or under direct or indirect common control with it does not enjoy and shall not acquire any right to handle traffic to or from the United States, its territories, or its possessions unless such service be authorized by the Commission pursuant to section 214 of the Communications Act, as amended; (4)The Licensee or any persons or companies controlling it, controlled by it, or under direct or indirect common control with it shall not acquire or enjoy any right for the purpose of handling or interchanging traffic to or from the United States, its territories, or its possessions to land, connect, or operate cables or landlines, to construct or operate radio stations, or to interchange traffic, that is denied to any other United States company by reason of any concession, contract, understanding, or working arrangement to which the Licensee or any persons controlling it, controlled by it, or under direct or indirect common control with it are parties; (5)Neither this license nor the rights granted herein shall be transferred, assigned, or in any manner either voluntarily or involuntarily disposed of or disposed of indirectly by transfer of control of the Licensee to any persons, unless the Federal Communications Commission shall give prior consent in writing; (6)The Licensee shall notify the Commission in writing of the precise locations at which the cables will land no later than ninety days prior to commencing construction of cable landing stations at those locations. The Commission will give public notice of the filing of these descriptions, and grant of this license will be considered final unless the Commission issues a notice to the contrary no later than sixty days after receipt of the specific descriptions of landing points; (7)The Commission reserves the right to require the Licensee to file an environmental assessment or environmental impact statement should it determine that the landing of the cables at those locations and construction of necessary cable landing stations would significantly affect the environment within the meaning of Section 1.1307 of the Commission's procedures implementing the National Environmental Policy Act of 1969; this license is subject to modification by the Commission upon its review of any environmental assessment or environmental impact statement that it may require pursuant to its rules; (8)The Licensee shall maintain no less than a 50-percent ownership interest and voting control share in the cables, including 100-percent ownership in the cable stations in the United States and in the U.S. land portion of the cables from the stations to the U.S. beach joint of the submerged portion of the cables; (9)The Licensee shall, by application, obtain Commission approval prior to the sale or transfer to a foreign entity of five percent or more in the aggregate of U.S.-owned and -controlled stock; (10)This license is revocable by the Commission after due notice and opportunity for hearing pursuant to section 2 of "An Act Relating to the Landing and Operation of Submarine Cables in the United States," 47 U.S.C.  35, or for failure to comply with the terms of the authorizations; (11)The Licensee shall notify the Commission in writing of the date on which the cable is placed in service, and this license shall expire 25 years from such date, unless renewed or extended upon proper application, and, upon expiration of this license, all rights granted under it shall be terminated; and (12)The terms and conditions upon which this license is given shall be accepted by the Licensee by filing a letter with the Secretary, Federal Communications Commission, Washington, D.C. 20554, within 30 days of the release of the cable landing license. 17. This Order is issued under Section 0.261 of the Commission's rules, 47 C.F.R.  0.261, and is effective upon release. Petitions for reconsideration under Section 1.106 or applications for review under Section 1.115 of the Commission's rules, 47 C.F.R.  1.106, 1.115, may be filed within 30 days of the date of public notice of this order (see 47 C.F.R.  1.4(b)(2)). FEDERAL COMMUNICATIONS COMMISSION Diane Cornell Chief, Telecommunications Division International Bureau