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

In the Matter of                )
                                )
MFS Globenet, Inc.              )
                                  )File No. SCL-96-004(M)
Cable & Wireless plc            )
                                )
Notification Pursuant to        )
Submarine Cable Landing License Conditions)


              MODIFICATION OF CABLE LANDING LICENSE


    Adopted:  December 18, 1996Released:  December 18, 1996

By the Chief, Telecommunications Division:


     1.On October 25, 1996, MFS Globenet, Inc., (MFS Globenet) and Cable & Wireless
plc (C&W) filed the above-captioned "Notification" with the Commission regarding proposed
changes in ownership of certain of the facilities of the MFS-1 and MFS-2 Cable System (now
known as the Gemini Cable System).  The parties stated that they were filing the notification
pursuant to the terms and conditions of the conditional submarine cable landing license granted
to MFS Globenet and Section 1.767 of the Commission's rules, 47 C.F.R.  1.767.  The parties
request consent for C&W to own 50 percent of the corporate entity that will own the undersea
portion of the cable system's facilities outside U.S. and U.K. territorial waters.  We grant this
request.

                             Parties

     2.MFS Globenet is a Delaware corporation and a wholly owned subsidiary of MFS
International, Inc., also a Delaware corporation, which is in turn a wholly owned subsidiary of
MFS Communications Company, Inc.  MFS Communications Company, Inc., is a widely held
Delaware corporation; no single shareholder owns 10 percent or more of its shares.  Pursuant to
the cable landing license granted October 3, MFS Globenet or its subsidiaries were to own and
operate the entire cable system, including the beach head cable segments, the U.S. landing station
facilities, and the undersea portion of the cable system.

     3.CableCo International Ltd. (CableCo International), a Bermuda corporation, is
currently wholly owned by MFS CableCo (Bermuda) Ltd., a Bermuda corporation that is wholly
owned by MFS CableCo U.S., Inc., a Delaware corporation that is wholly owned by MFS
Globenet.  CableCo International is the MFS Globenet subsidiary that will own and operate the
undersea portion of the Gemini Cable System.

     4.C&W is a corporation incorporated under the laws of England and Wales whose
officers are citizens of the United Kingdom.  One subsidiary of C&W, Mercury
Communications, Ltd., is a public telecommunications operator in the United Kingdom.  Another
subsidiary, Cable & Wireless, Inc., is a U.S. corporation authorized by the Commission to
provide international facilities-based and resale services between the United States and various
overseas points.

                         The Transaction

     5.Under the proposed transaction, a 50 percent voting equity interest in CableCo
International would be transferred to C&W.  CableCo International would be responsible for
systems integration and marketing and for constructing, owning, operating, and managing the
undersea portion of the cable system.  MFS Globenet would retain sole ownership of the U.S.
landing stations and the U.S. land portion of the cable system from the landing stations to the
U.S. beach joint of the submerged portion of the cables.  MFS Globenet would also retain control
of the cable landing license granted to it for the Gemini Cable System and would be responsible
for compliance with all terms and conditions of the license.

     6.The conditional cable landing license stated that MFS Communications Limited, a
wholly owned subsidiary of MFS Globenet, was expected to be the owner of the U.K. landing
stations and beach head cable segments.  The present notification states that MFS Globenet does
not now expect to be able to obtain in the necessary time frame environmental approvals for
construction of new U.K. landing stations.  Accordingly, CableCo International now expects to
obtain U.K. landing stations and associated facilities from a previously licensed C&W affiliate.

     7.As a result of the transaction and the modification in plans related to the U.K. landing
stations, MFS Globenet and C&W each would hold direct and indirect ownership interests in 50
percent of the entire cable system.

                             Comments

     8.The application was placed on public notice on October 29, 1996.  No comments
were received.  Pursuant to Section 1.767(b) of the Commission's rules, the Cable Landing
License Act, and Executive Order No. 10,530, we informed the Department of State of the
application.  The Department of State, after coordinating with the National Telecommunications
and Information Administration and the Department of Defense, stated that it approves of the
proposed ownership change.

                            Discussion

     9.The parties state that consummation of the proposed transaction would serve the
public interest by helping MFS Globenet construct and operate an advanced fiber optic cable
system between the United States and the United Kingdom on an expedited basis.  The
participation of C&W would bring marketing benefits and enable the Gemini Cable System to be
constructed and enter into operation more quickly.  Once operational, the cable system will
provide alternative cost-efficient routing and additional cable capacity, route diversity, and
restoration capabilities and will promote increased competition and innovative services.

     10.The parties contend that the proposed transaction does not raise any reciprocity
concerns under the Cable Landing License Act because the U.S. landing stations would be
wholly owned by MFS Globenet.  Under that statute, the Commission "may withhold or revoke
[a cable landing license] when . . . such action will assist in securing rights for the landing or
operation of cables in foreign countries, or in maintaining the rights or interests of the United
States or of its citizens in foreign countries . . . ."  47 U.S.C.  35. 

     11.In Optel Communications, Inc., the Commission found that a 20 percent ownership
interest by Teleglobe Canada, Inc., a Canadian carrier, in Optel (the U.S. licensee) did not
represent facilities-based entry into the U.S. market and thus did not raise the issue of reciprocity
under the Cable Landing License Act.  In the arrangement approved by the Commission in
Optel, the U.S. landing station was to be owned by Optel (and thus be 20 percent foreign owned),
the international portion of the cable was to be owned 50 percent by Optel and 50 percent by
Teleglobe (and thus be 60 percent foreign owned), and the landing station in Canada was to be
100 percent owned by Teleglobe.  Similarly, in TeleBermuda International, L.L.C., the
Telecommunications Division found that allowing 20 percent foreign ownership of the U.S.
licensee was consistent with Optel and, because it did not represent facilities-based entry into the
U.S. market, did not implicate the reciprocity provision of the Cable Landing License Act.

     12.Here, the proposed transaction would not bring about any foreign ownership of the
U.S. landing station.  Rather, the U.S. landing station would be 100 percent owned by MFS
Globenet, a U.S. corporation that is entirely U.S. owned.  This transaction would affect only the
"wet" portion of the cable system, over which the U.S. licensee would retain a 50 percent
ownership interest.  The foreign carrier, C&W, would hold an interest only in 50 percent of the
"wet" portion and in the U.K. landing stations.

     13.Consistent with Optel and TeleBermuda, we find that the proposed transaction does
not represent facilities-based entry into the U.S. market and therefore does not trigger our
reciprocity inquiry.  As in Optel, a 50 percent ownership interest in the "wet" portion of the cable
system does not itself give rise to the kind of foreign presence that prompted Congress to enact
the reciprocity provision of the Cable Landing License Act.

     14.We also find that the proposed transaction would be consistent with the seventh
condition imposed on the Gemini Cable System's cable landing license, which reads as follows:

     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.

The licensee, MFS Globenet, would own 50 percent of the company that would own the
undersea (or "wet") portion of the cable system and would continue to own 100 percent of the
U.S. cable stations.  It would therefore own an interest of at least 50 percent in the entire cable
system.

     15.Accordingly, we conclude that a grant of the application would be consistent with
the Cable Landing License Act.  We therefore consent to the proposed changes in ownership of
the undersea portion of the Gemini Cable System.

                         Ordering Clauses

     16.In consideration of the foregoing, IT IS ORDERED that the application, File No.
SCL-96-004(M), is GRANTED, and MFS Globenet, Inc., is authorized to transfer 50 percent
ownership of CableCo International, the entity that will own the undersea portion of the Gemini
Cable System, to Cable & Wireless plc.  The cable landing license, SCL-96-004, is MODIFIED
to reflect 100 percent ownership of the undersea portion of the cable system by a Bermuda
corporation that is 50 percent owned by a wholly owned subsidiary of MFS Globenet and 50
percent owned by Cable & Wireless.

     17.This Order is issued under Section 0.261 of the Commission's rules, 47 C.F.R.
 0.261, and is effective upon adoption.  Petitions for reconsideration under Section 1.106 or
applications for review under Section 1.115 may be filed within 30 days of the date of public
notice of this Order (see Section 1.4(b)(2)).

     FEDERAL COMMUNICATIONS COMMISSION



     Diane J. Cornell
     Chief, Telecommunications Division
     International Bureau