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First, the record suggests the Government has the ability and the apparent intent to monitor and enforce its procompetitive  S 'policies.v@ ] {O&'#X\  P6G;P#эXSee supra n. 48.(#v Second, the Government's "Kiwi" Share in TCNZ ensures that standard residential rates  S 'for phone line rentals do not increase faster than movements in the Consumer Price Index, unless the  S 'profits of TCNZ are unreasonably impaired.vA H] {Oh'#X\  P6G;P#эXSee supra n. 58.(#v This service pledge provides some protection against the potential for TCNZ improperly to shift international service costs to local service customers. Third, with respect to potential misallocation of costs to TNZL's toll service competitors, who purchase exchange access, and in some cases, domestic toll services from TCNZ or TNZL, the record supports a finding that U.S. carriers today have the opportunity to obtain interconnection to TNZL's domestic facilities at reasonable rates. Finally, facilitiesbased competition in the intercity market, and the absence of resale restrictions in New Zealand, should help ensure that rates for intercity services remain reasonable. While it has been our experience that cost allocation rules are a necessary safeguard for the development of an effectively competitive market in countries where one carrier is dominant, competition has developed in the context of New Zealand's market conditions without such rules. We conclude on the basis of these findings that the absence of cost allocation rules does not preclude an ECO finding for New Zealand. We reiterate, however, that the prompt provision of reasonable and nondiscriminatory interconnection for international carriers is a specific condition of today's grant of TNZL's application.  S('28.` ` The record suggests that carriers are receiving the technical network information  S'necessary to interconnect with TNZL through their interconnection agreements. The publication of TCNZ's interconnection agreements provides at least some technical information needed to use or interconnect with TNZL's facilities. Furthermore, no party has offered specific evidence that any carrier has been denied the technical information needed to operate a telecommunications network"A0*(("  S'service in New Zealand.B] yOh'#X\  P6G;P#эXWe note that Clear has achieved a significant share of New Zealand's international and domestic toll markets, which suggests that Clear has obtained sufficient information to interconnect. (# The record indicates that withholding essential technical information by  S'TCNZ or TNZL also is actionable under the Commerce Act as anticompetitive conduct.  S'29.` ` With regard to carrier and customer proprietary information, there is no information in the record suggesting that TNZL cannot use the customer proprietary network information ("CPNI") of  S8'TNZL's local service customers to market international services.C8 ] yO'#X\  P6G;P#эXThe Commission currently is considering the extent to which new Section 222 of the Act permits a telecommunications carrier in the United States to use CPNI received by virtue of its provision of a  {O 'telecommunications service. See Implementation of the Telecommunications Act of 1996: Telecommunications Carriers' Use of Customer Proprietary Network Information and Other Customer  {O 'Information, Notice of Proposed Rulemaking, CC Docket No. 96115, 11 FCC Rcd 12513 (1996). The Commission's rules do not at this time specify particular CPNI requirements for local exchange carriers ("LECs") other than the Bell Operating Companies ("BOCs") and the General Telephone Operating Companies (GTE). The new Section 222 requirements regarding telecommunications carrier use of CPNI apply to, among other telecommunications carriers, all LECs including the BOCs and GTE. The BOCs are prohibited from providing "inregion" interstate, interLATA services except upon a Commission finding that they have met the requirements of new Section 271 of the Act. (#ƭ However, it appears that TCNZ and TNZL have affirmative obligations under New Zealand law and individual interconnection  S'agreements to protect carrier and customer proprietary information.D ] {O '#X\  P6G;P#эXTNZL Opposition at 15. See also Ministry Letter at 8. (#ư The Ministry has also informed us that New Zealand carriers are currently finalizing a privacy code that will, among other things, protect customer information held by one entity from being sold to another entity for marketing  Sp'purposes without the customer's permission.{Ep] {O&'#X\  P6G;P#эXMinistry Letter at 9.(#{ Our expectation is that specific safeguards in this area will be developed, as necessary, initially by the carriers themselves. We also find no basis to question TNZL's claim in this proceeding that TCNZ's interconnection agreements safeguard proprietary information.  S '30.` ` In sum, given the extent of competition in the New Zealand facilitiesbased market and the availability of favorable interconnection rates, New Zealand's general competition laws and regulations appear to be providing sufficient protection against anticompetitive practices, including crosssubsidization and the unauthorized disclosure of proprietary information. Also, New Zealand regulatory institutions have sufficient authority to intervene (as explained in the next section) to protect competition. Further, the record suggests that TCNZ provides carriers with the technical information necessary to interconnect, and that its interconnection agreements protect against the unauthorized disclosure of proprietary information. The number of international operators that have entered into interconnection agreements with TCNZ and that are operating in New Zealand today suggests that the New Zealand regulatory environment, including its competitive safeguards, is conducive to competitive entry by U.S. carriers.  S'31.` ` Regulatory framework. The fourth factor to be reviewed under the ECO analysis is whether there is an effective regulatory framework in New Zealand to develop, implement and enforce"E0*((" legal requirements, interconnection arrangements and other competitive safeguards. The focus is on whether there is separation between the foreign regulator and the operator of international facilitiesbased services, and whether there are fair and transparent regulatory procedures in the destination market. Sufficient separation between the operator and the regulator is necessary to ensure that the regulator is independent, empowered, and does not have a conflict of interest in regulating the  S8'operator. Without sufficient separation, there is little reason to believe that the regulator will not favor the operator. Transparent procedures allow competitors to know precisely what obligations are required of the incumbent dominant carrier and what rights they have to seek enforcement of such  S'obligations.F] {O( '#X\  P6G;P#эXForeign Carrier Entry Order, 11 FCC Rcd at 3894 ( 54).(#Ơ  Sp'32.` ` AT&T, MCI and Sprint complain of the lack of an industryspecific regulator. They  SH 'argue that litigation under New Zealand's general antitrust statute is too costly and timeconsuming to be a plausible option, and in addition may not prove wholly effective in solving disputes. In the end, according to this line of reasoning, competitors have no choice but to resolve interconnection and  S 'other disputes on TCNZ's terms.G Z] {O'#X\  P6G;P#эXAT&T Petition at 1416; Sprint Petition at 7, 9; MCI Petition at 9.(#Ƶ TNZL replies that the Commission's ECO analysis is predicated in part on the existence of an "effective regulatory framework," which need not necessarily mirror the U.S. regulatory regime, and that the New Zealand regulatory framework has produced a high degree  SX'of competition which underscores its effectiveness.HX] {O'#X\  P6G;P#эXTNZL Opposition at 1517.(# AT&T, MCI and Sprint reply that they are not arguing for a U.S.like regulatory regime in New Zealand, but for an effective regulatory framework  S'that protects against anticompetitive behavior.I~] {O&'#X\  P6G;P#эXAT&T Reply at 5 n.4; Sprint Reply at 10; MCI Reply at 11.(#ƫ  S' 33.` ` Although we have concerns about the effectiveness of the New Zealand regulatory  S'regime, we nevertheless conclude that on balance there is sufficient regulatory oversight to protect and promote competition in the New Zealand telecommunications market. As an initial matter, we note that the Commission's ECO test does not require a regulatory regime exactly patterned on that which exists in the United States. While New Zealand does not have an FCC counterpart, three institutions oversee telecommunications in New Zealand the Commerce Commission, the Ministry, and the  S'court system.Jz] yOx'#X\  P6G;P#эXThe Commerce Commission, an independent statutory body, is responsible for the public enforcement of the Commerce Act 1986. It investigates possible violations of that law, takes legal action as appropriate, and makes recommendations to the Government on competition and price control issues. The Ministry administers the Telecommunications Act 1987, the Telecommunications (Disclosure) Regulations 1990, and the Telecommunications (International Services) Regulations 1994 , as well as provides policy advice to the New Zealand Government. The court system adjudicates disputes dealing  {O($'with anticompetitive behavior. Ministry Letter at 23.(# We recognize that reliance on private negotiations and the courts may be problematic,  S'as the courts may not have the expertise to make accurate, predictable, and efficient declarations consistently. However, parties may request intervention from the Ministry and from the Commerce Commission before going to the courts. Further, the New Zealand government has demonstrated its"PR J0*(("  S'willingness to intervene in disputes between competing carriers.vK] {Oh'#X\  P6G;P#эXSee supra n. 48.(#v Thus, there are alternative complaint procedures.  S'  S'!34.` ` While we believe competition would be better assured if the Ministry took a more active regulatory approach, we conclude there is adequate regulatory oversight in New Zealand, particularly when considered in combination with the expanding list of competitors in the New Zealand international telecommunications market. Further, we note that the New Zealand regulatory regime is legally distinct from TCNZ and TNZL, and the record indicates that it operates impartially. In this regard, the Kiwi Share the New Zealand government's specialized interest in TCNZ does not present concerns to us regarding the government's independence. The Kiwi Share is designed to allow the government to control the maximum shareholding of any single foreign party in TCNZ, and  SH 'to ensure TCNZ's compliance with certain residential service pledges.|LH Z] {OB '#X\  P6G;P#эXSee supra n. 58.(#| The New Zealand government does not receive the financial benefits normally accruing to equity ownership as a result of the Kiwi Share, nor does TCNZ possess any special influence in relation to New Zealand regulatory and policy matters due to the Kiwi Share. Finally, as detailed previously, the record indicates that sufficient regulatory transparency exists in New Zealand to allow competitors to know what mechanisms exist to  S 'redress perceived violations of the law by TCNZ or TNZL.M ] {O '#X\  P6G;P#эXSee supra  1819. (#Ɔ X(#  S0'"35.` ` In summary, we find that ECO exists for international facilitiesbased operators in  S'New Zealand. There are no de jure barriers to entry, and foreign ownership of international providers is unrestricted. U.S. carriers appear in practice to have the opportunity to obtain reasonable and nondiscriminatory terms to interconnect for the origination and termination of international calls. Competitive safeguards and an independent regulatory framework provide checks on the potential for abuse of market power. Finally, the fact that there are ten registered international service operators in New Zealand, at least five of which are presently providing service, is evidence that New Zealand in fact offers U.S. carriers effective competitive opportunities to compete as international facilitiesbased carriers in that country today. However, because we have some concerns about the effectiveness of the New Zealand interconnection regime, we specifically condition this Section 214 authorization on the prompt provision of reasonable and nondiscriminatory interconnection for international carriers in New Zealand.  S*'#36.` ` Other Public Interest Factors. The additional factors we consider relevant to Section 214 public interest analyses include: the general significance of the proposed entry to the promotion of competition in the U.S. communications market; any national security, law enforcement, foreign policy, or trade concerns raised by the Executive Branch; and the presence of costbased accounting  S'rates.N~] {O$'#]\  PCP#эXForeign Carrier Entry Order, 11 FCC Rcd at 3897 ( 62).(#Ơ  Sb'  S:'$37.` ` AT&T, MCI and Sprint argue that grant of TNZL's application is not in the public interest. They argue that accounting rates on the U.S.New Zealand route will not decrease if we" N0*((" grant TNZL's application. They claim that, if the application is granted, TNZL will have no motivation to reduce its rates because TNZL will be effectively selfcorresponding, and therefore  S'would be immune from the impact that abovecost accounting rates have on competing U.S. carriers.@O] {O'#X\  P6G;P#эXAT&T Petition at 1617; Sprint Petition at 56; see also MCI Petition at 10 (arguing that TNZL would have no incentive to lower accounting rates because it currently enjoys a favorable settlements balance).(#@ AT&T suggests that the Commission should require TNZL to file a plan to further reduce accounting  S`'rates towards costbased rates before granting its application.QP\`"] {O"'#X\  P6G;P#эXAT&T Petition at 17 n.30 (citing BT North America, Inc., Memorandum Opinion, Order and  {O'Authorization, 10 FCC Rcd 3204 (1995) and Sprint Corporation, Declaratory Ruling and Order, 11 FCC Rcd 1850 (1996)).(#Q MCI also argues that grant of TNZL's application is not in the public interest because competition already exists on the U.S.New Zealand  S'route.yQF] {O '#X\  P6G;P#эXMCI Petition at 10.(#y  S'%38.` ` TNZL responds by asserting that U.S. carriers operating full circuits on the U.S.New Zealand route ensure that carriers have a costbased alternative if settlement rates with a correspondent exceed cost. It argues that denying TNZL reciprocal full circuit opportunities due to the level of  SH 'accounting rates is in reality intended to guarantee petitioners a private commercial advantage.|RH ] {O'#X\  P6G;P#эXTNZL Opposition at 18.(#| TNZL objects to AT&T's suggestion that it should be required to file a plan to reduce accounting  S 'rates as a condition of approval, as was required in the BTNA Order. TNZL's situation is different  S 'than BTNA in that its parent BT sought 20 percent of the secondlargest U.S. interexchange carrier. By contrast, TNZL is seeking to operate as a new entrant with zero market share in the U.S.  S 'international services market.sS j ] {O'#X\  P6G;P#эXId. at 1920.(#s Finally, TNZL argues that the Commission does not require costbased  SZ'accounting rates as a precondition for foreign carrier entry.pTZ ] {O'#X\  P6G;P#эXId. at 20.(#p AT&T, MCI and Sprint reply that, while granting TNZL's application will give it the opportunity to avoid current abovecost accounting rates,  S 'U.S. carriers have no practical ability to avoid TNZL's settlement and interconnection charges to gain the same advantages due to TNZL's control on local termination (Clear's network notwithstanding  S'because most if not all of Clear's traffic must be handed off to TNZL for termination).U ] {O'#X\  P6G;P#эXAT&T Reply at 8; Sprint Reply at 36; MCI Reply at 1213.(#ƫ  Sj'&39.` ` We conclude that the public interest supports grant of TNZL's application. First, the Executive Branch has not raised with us any concerns about TNZL's application. Second, we disagree with MCI's suggestion that competition on the U.S.New Zealand route would not benefit from the entry of an additional global competitor. We believe that additional competition on this route will result in lower prices and enhanced service options for U.S. consumers. Third, several parties focus  S'on the fact that accounting rates on the U.S.New Zealand route remain abovecost. In the Foreign  S|'Carrier Entry Order, the Commission noted that even where accounting rates are not costbased, the  SV'additional price and service competition that results from further market entry in the United States"V U0*((" should increase U.S.outbound demand. Increased U.S.outbound traffic should make foreign carriers more amenable to further reducing accounting rates in that they will experience less of a loss in net  S'settlement revenues, thus reducing the perminute settlement burden on U.S. consumers.V] {O'#X\  P6G;P#эXForeign Carrier Entry Order, 11 FCC Rcd at 3898 ( 67).(#Ơ We believe it is not necessary at this time to require TNZL to submit a plan to reduce accounting rates to costbased levels, as AT&T suggests. We note that the settlement rate for TNZL is $0.215 (U.S.) for  S8'international message telephone service (IMTS), and for Clear is $0.18 (U.S.) for IMTS. These rates are within the Commission's current benchmarks. In addition, these rates are the lowest for any foreign country in Asia and are among the lowest in the world. Significantly, TNZL has demonstrated a commitment to costbased, nondiscriminatory and transparent accounting rates by voluntarily acting  S'to make public its accounting rates with foreign carrier correspondents on all international routes.W"Z] {O '#X\  P6G;P#эXTNZL ex parte letter (December 17, 1996). TNZL states the information will be made publicly available in the same manner as other information it is required to disclose publicly, and will be updated on a regular basis as long as TNZL or any affiliate or subsidiary of TNZL holds a Commission authorization to provide international telecommunications services.(# This step will help ensure that more information is made public about accounting rate levels in Asia; further, this additional transparency is also a useful step toward further reform of the accounting rate system.  S ''40.` ` We emphasize, however, the importance of bringing accounting rates on the U.S.New Zealand route closer to costbased levels. We accordingly require that TNZL, as a licensed U.S.  S 'international service provider, abide by all present and future accounting rate and international  SX'settlement policies, and continue to make progress toward costbased rates.X^XD] {O<'#X\  P6G;P#эXSee Regulation of International Accounting Rates, CC Docket No. 90337, Phase II, Fourth Report and  {O'Order, FCC 96459 (rel. December 3, 1996) (Flexibility Order); International Settlement Rates, IB  {O'Docket No. 96261, Notice of Proposed Rulemaking, FCC 96484 (rel. December 19, 1996).(#  S'B.` ` Regulatory Status.  S'(41.` ` TNZL requests nondominant treatment based on its belief that: (a) New Zealand  S'affords open entry in both the domestic and international services markets; (b) TNZL faces competition in both market segments from multiple competing carriers with significant market share; and (c) the legal requirement that TCNZ provide interconnection and disclose interconnection  S'agreements, which prevents TCNZ and TNZL from discriminating against unaffiliated U.S. carriers.Yj ] {O" '#X\  P6G;P#эXTNZL Application at 2122.(#ƀ Sprint, MCI, and CTS argue that TNZL should be subject to dominant carrier regulation because  S'TNZL controls essential bottleneck facilities needed by U.S. carriers and retains substantial market  S'power which it can exploit for anticompetitive purposes.Z ] {O<$'#X\  P6G;P#эXSprint Petition at 1314; MCI Petition at 12; CTS Letter at 2.(#ư  SP')42.` ` Under the Commission's rules, in order to be regulated as nondominant an applicant must show that its foreign affiliate lacks the ability to discriminate against unaffiliated U.S. carriers"( Z0*((q"  S'through control of bottleneck services or facilities in the destination country.[] yOh'#X\  P6G;P#эX47 C.F.R.  63.10(a)(3), 63.18(h)(8).(#ƌ In deciding that TNZL  S'was subject to our ECO analysis, supra,}\X] {O'#X\  P6G;P#эXSee supra  89.(#} we found that TNZL had the ability to discriminate against unaffiliated U.S. carriers because TNZL controlled the only ubiquitous local network in New Zealand. Consistent with that finding, we will regulate TNZL as dominant on the U.S.New Zealand route.   S:'C.` ` Request for "Points Beyond" Authority.  S'  S'*43.` ` TNZL requests authority for carriage of traffic from the United States to New Zealand  S'and points beyond on nondiscriminatory terms and conditions.}]] {OL '#X\  P6G;P#эXTNZL Application at 11.(#} AT&T argues that granting TNZL such authority would give TNZL a unique ability to engage in the refile of U.S. traffic via New Zealand. Because TNZL alone has facilities arrangements between New Zealand and nonU.S. markets, TNZL can gain a settlement cost advantage visavis other U.S. carriers by routing U.S. S" 'outbound traffic through New Zealand to third countries. Conversely, by offering a price to nonU.S. correspondents that is lower than the accounting rate to the United States applicable on the thirdcountry route, AT&T posits that TCNZ and TNZL would readily attract third countries to refile U.S. S 'bound traffic.~^ |] {O'#X\  P6G;P#эXAT&T Petition at 1819. (#~ Sprint argues that the Commission's precedent involving international private line (IPL) service (which it argues is analogous to full circuit service in being outside the settlement  SZ'process) limited authority strictly to service between the United States and a particular destination  S2'country (with two minor exceptions)._2] {O'#X\  P6G;P#эXSprint Petition at 1213.(# TNZL counters that these arguments are unavailing given the  S 'fact that AT&T and Sprint can operate in the same manner in New Zealand.|` ] {OJ'#X\  P6G;P#эXTNZL Opposition at 19.(#|  S'+44.` ` Given our finding that New Zealand satisfies the ECO standard, we find no reason to prohibit TNZL from routing U.S. inbound or outbound traffic through New Zealand, provided TNZL  Sj'complies with relevant Commission rules and policies for the routing of traffic that originates or terminates in the United States. This includes our International Settlements Policy, which applies to  S'the routing of U.S. traffic on a direct or indirect, switched transit basis.}a2 ] yO '#X\  P6G;P#эXIndirect, switched transit traffic, often referred to generally as "transit traffic," is traffic that is switched  {O!'through an intermediate country, where the United States is one of the terminal points. See Implementation and Scope of the International Settlements Policy for Parallel Routes, CC Docket No.  {OF#'85204, Report and Order, 51 Fed. Reg. 4736 (Feb. 7, 1986), modified in part on recon., 2 FCC Rcd  {O$'1118 (1987), further recon., 3 FCC Rcd 1614 (1988). (#} This policy prevents foreign carriers from discriminating against U.S. carriers in the settlements process and requires: (1) the equal division of accounting rates; (2) nondiscriminatory treatment of U.S. carriers; and (3) proportionate return of inbound traffic. This policy applies to U.S. traffic carried by TNZL on a direct facilities  Sz'basis between the United States and New Zealand unless and until TNZL requests and receives"za0*((" approval to enter into an alternative settlement arrangement in accordance with the Commission's  S'Flexibility Order.vb] {O@'#X\  P6G;P#эXSee supra n. 88.(#v This policy also applies to U.S. traffic that TNZL routes to a third country through New Zealand on an indirect, switched transit basis.  Sb',45.` ` Additionally, our rules require that TNZL file with the Commission any contracts or other agreements (including oral agreements) that it enters into with TCNZ for the routing of U.S.  S'traffic through TCNZ's facilities.}cZ] yO '#X\  P6G;P#эX47 C.F.R.  43.51(a), (b).(#} To the extent TNZL uses any of its, or TCNZ's, New Zealand facilities or services for the routing of U.S. inbound or outbound traffic to third countries, we specifically condition this authorization to require that it use such facilities or services pursuant to rates  S'that are published in New Zealand or publicly filed with this Commission. This requirement is consistent with our rule that prohibits U.S. carriers such as TNZL from agreeing to accept special  SJ 'concessions from foreign carriers.udJ ] yO'#X\  P6G;P#эX47 C.F.R.  63.14.(#u It also is consistent with our "switched hubbing" rule. This rule permits authorized U.S. carriers to route U.S.outbound switched traffic over international private lines that terminate in an equivalent country (such as New Zealand), and then to forward the traffic to a third, nonequivalent country by taking at published rates and reselling the IMTS of a carrier in the  S 'equivalent country.e z] {O'#X\  P6G;P#эX47 C.F.R.  63.17(a)(1). See also id.  63.17(a)(2) (prescribing procedures for the routing of U.S. inbound traffic).(# These safeguards should ensure that TNZL does not engage in discriminatory routing practices to the benefit of its affiliated operations in the United States.  S2'8D.` ` Other issues.  S'` ` a. Origination of Calls in Bell Atlantic & Ameritech Regions.  S'  S'-46.` ` 8Sprint and CTS argue that the Commission must prohibit TNZL from carrying U.S.New Zealand calls which originate from the regions of Ameritech and Bell Atlantic, its U.S. carrier  SB'affiliates within the meaning of new Section 271 of the Telecommunications Act of 1996.sfB] yO'#X\  P6G;P#эX47 U.S.C.  271.(#s They argue that this prohibition is necessary because TNZL failed to demonstrate that Ameritech and Bell  S'Atlantic have met the conditions imposed by Section 271 for gaining authority to provide interLATA  S'services originating within their regions.gd ] {O!'#X\  P6G;P#эXSprint Petition at 14; CTS Letter at 3.(#Ɠ TNZL opposes such a prohibition, arguing that Sprint's sole purpose in seeking a condition barring origination of calls from the Bell Atlantic and Ameritech regions is to create additional impediments to competition in the interLATA services market. TNZL points out that AT&T, MCI and Sprint ultimately will oppose inregion relief, and that this would be  S*'the appropriate time to argue for special restrictions on New ZealandU.S. route.|h* ] {O&'#X\  P6G;P#эXTNZL Opposition at 19.(#|  S'" h0*((["Ԍ S'.47.` ` Under the Telecommunications Act of 1996, a more than 10% equity interest results in affiliation for purposes of the Section 271 limitation on BOC provision of inregion interLATA  S'services.wi] yO'#X\  P6G;P#эX47 U.S.C.  153 (1).(#w Because Bell Atlantic and Ameritech each own just under 25% of TCNZ (TNZL's parent), their operating companies are affiliates of TNZL for purposes of Section 271. TNZL  S`'therefore is prohibited from providing any international telecommunications services originating in Bell Atlantic's or Ameritech's inregion states until and only to the extent the Commission grants each of their respective operating companies' applications to provide inregion interLATA services pursuant to  S'Section 271 of the Act.jX] {O '#X\  P6G;P#эXSee 47 U.S.C.  271(i)(1) (defining "inregion State" as "a State in which a Bell operating company or any of its affiliates was authorized to provide wireline telephone exchange service pursuant to the reorganization plan approved under the AT&T Consent Decree, as in effect on the day before the date  {O: 'of enactment of the . . .[1996 Act]"); id.  271(j) (a BOC's inregion services includes "800 service, private line service, or their equivalents that (1) terminate in an inregion State of that . . . [BOC], and  {O '(2) allow the called party to determine the interLATA carrier[.]"). See also Bell Operating Company  {O'Provision of OutofRegion Interstate, Interexchange Services, CC Docket No. 9621, Report and Order,  {O`'FCC 96288 (rel. July 1, 1996), recon. pending (OutofRegion Order) (finding that calling card, collect and third party billed calls that originate outofregion and terminate inregion do not fall within the scope of Section 271(j)).(#ƕ  S'/48.` ` In view of the fact that Bell Atlantic and NYNEX Corporation have announced plans to merge their operations, we also require that TNZL not initiate international service originating in NYNEX's inregion states until the Bureau issues an order determining the regulatory treatment of such international services. If Bell Atlantic and NYNEX decide not to consummate the announced merger, and TNZL seeks to provide outofregion international service originating from NYNEX's inregion territory, it may do so upon the filing of a letter by Bell Atlantic with the Commission stating  S 'Bell Atlantic's decision not to consummate the announced merger and provided TNZL complies with all other requirements of this order. The International Bureau imposed this same condition in its recent authorization to subsidiaries of NYNEX, Bell Atlantic and Ameritech to resell outofregion the  S0'international switched services of unaffiliated U.S. carriers on a nondominant carrier basis.?k0 ] {O'#X\  P6G;P#эXNYNEX Long Distance Co., et al., Order, Authorization and Certificate, DA 961169, (International  {O'Bur., rel. July 24, 1996) (NYNEX LD et al. Order or NYNEX LD et al. proceeding).(#? In the  S'NYNEX LD et al. Order, the International Bureau imposed on these BOC affiliates the same interim safeguards and conditions that the Commission adopted for nondominant treatment of the BOC's  S'provision of outofregion, domestic interstate, interexchange services in the OutofRegion Order. The Commission adopted these interim safeguards to "facilitate the BOCs' prompt provision of outof Sl'region, domestic, interstate, interexchange services."llV ] {Ob"'#X\  P6G;P#эXOutofRegion Order at  3.(#Ƅ  S'049.` ` Because we find that TNZL is affiliated with the Bell Atlantic and Ameritech operating companies for purposes of Section 271 of the Act, and that the relevant facts underlying this  S'application are virtually the same as those underlying the BOC applications in the NYNEX LD et al. proceeding, we find it necessary to impose on TNZL's authorization the same interim safeguards and conditions that we imposed in that proceeding. We find these interim safeguards and conditions to be"~l0*((" equally relevant in the context of a BOC affiliate's application to provide international service as a nondominant carrier on a facilities, as opposed to a resale, basis. In brief, we require that TNZL: (1)  S'maintain separate books of account from any affiliated local exchange company ("LEC"); (2) not jointly own transmission or switching facilities with the LEC; and (3) take any tariffed services from the affiliated LEC pursuant to the terms and conditions of the LEC's generally applicable tariff. In addition, we require that TNZL be treated as a nonregulated affiliate for purposes of BOC accounting  S'under the Commission's joint cost and affiliate transaction rules.m {O/'#X\  P6G;P#эXSee 47 C.F.R.  32.27, 64.901904.(#Ə  S'  S'150.` ` These interim separation safeguards will remain in place pending the Commission's  S'resolution of the outofregion issues raised in the Interexchange proceeding.n\Z] yO '#X\  P6G;P#эXPolicy and Rules Concerning the Interstate, Interexchange Marketplace and Implementation of Section  {OZ '254(g) of the Communications Act of 1934, Notice of Proposed Rulemaking, CC Docket No. 9661, 11  {O$ 'FCC Rcd 7141 (1996) (Interexchange proceeding).(#ƈ We reserve the right to modify the conditions of TNZL's authorization, as necessary, upon adoption of final rules for the BOCs' provision of outofregion domestic, interstate, interexchange services. We note that TNZL will be subject to the dominant carrier requirements of Section 63.10(c) of our rules on the U.S.New  S 'Zealand route, under our separate 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  S 'through control of bottleneck services or facilities in the destination market.xo ~] {O'#X\  P6G;P#эXSee supra  42.(#x  SZ'` ` b. OutofRegion Resale of Bell Atlantic Services.  S '251.` ` As previously noted, the International Bureau recently granted a Bell Atlantic subsidiary (Bell Atlantic Communications, Inc. ("BACI")) Section 214 authority to resell international switched services of unaffiliated U.S. international carriers originating from U.S. points except the in S'region states served by Bell Atlantic.wp] {OB'#X\  P6G;P#эXSee supra n. 107.(#w MCI argued in that proceeding that we should scrutinize the  Sj'Bell Atlantic interest in TCNZ and TNZL for its potential impact on competition. In the NYNEX LD  SD'et al. Order,qD] {O'#X\  P6G;P#эXNYNEX LD et al. Order at  2831.(#Ǝ we said we would address the issue of Bell Atlantic's relationship with TCNZ and TNZL in the context of this proceeding. We also transferred the record to this proceeding.  S'352.` ` MCI specifically requested that we prohibit BACI from reselling TNZL's services between the United States and New Zealand, because TNZL, TCNZ and BACI can engage in a variety of practices that would give BACI preferential access to the New Zealand market. If the Commission  SV'decides to grant BACI authority to resell TNZL's services, MCI requested that we impose on BACI conditions analogous to those the Commission imposed on MCI in approving BT's 20 percent".4 q0*((q"  S'investment in that carrier.r^] {Oh'#X\  P6G;P#эXMCI Petition to Deny, File No. ITC96181, filed April 22, 1996 (MCI Opposition) at 56 (citing MCI  {O2'Communications Corporation/British Telecommunications plc, Declaratory Ruling and Order, 9 FCC  {O'Rcd 3960, 397273 (1994) (MCI/BT Order)). (#Ƌ  S'453.` ` MCI recognizes that BACI is not affiliated with TNZL under the definition of  S'affiliation adopted in the Foreign Carrier Entry Order.1s$] yO'#X\  P6G;P#эXIn general, a U.S. carrier is considered to be affiliated with a foreign carrier when a foreign carrier owns a greater than 25 percent interest in, or controls, the U.S. carrier, or when the U.S. carrier owns a  {O 'greater than 25 percent interest in, or controls, a foreign carrier. 47 C.F.R.  63.18(h)(1)(i). See also  {Op 'Foreign Carrier Entry Order, 11 FCC Rcd at 390006 and 396669 ( 7387 and 24551).(#1 Nonetheless, MCI requests that we scrutinize Bell Atlantic's ownership interest in TNZL on the basis that the interest presents a "significant potential impact on competition in the U.S. market for international telecommunications  S'services."ot] {O'#X\  P6G;P#эXMCI Opposition at 5. The Commission stated in the Foreign Carrier Entry Order that, where a  {OV'particular foreign carrier investment fell below the affiliation threshold, the Commission would subject the investment to the ECO test where it presents a significant potential impact on competition in the  {O'U.S. market for international telecommunications services.  See Foreign Carrier Entry Order, 11 FCC Rcd at 3906 ( 89).(#o MCI has not demonstrated any such potential impact from BACI reselling the switched services of TNZL on the U.S.New Zealand route. BACI currently is authorized only to resell switched services on the U.S.New Zealand route. We find that MCI has not shown how the potential collusive behavior it describes is financially and technically feasible where BACI is merely reselling  Sr'TNZL's switched services.ur ] {O'#X\  P6G;P#эXSee MCI Opposition at 4 (stating that TNZL could "interconnect BACI's services to matching, unregulated [TNZL] circuits at the foreign end of the U.S.New Zealand link. The [TNZL] circuits, in turn, would be interconnected on preferential terms to [TNZL]'s local exchange networks . . . . Similarly, the absence of regulatory constraints could allow TCNZ to crosssubsidize the [TNZL] services provided to BACI . . . . "). These potential harms do not appear to contemplate the resale of switched services between the United States and New Zealand.(#ƒ While MCI also expresses concern that TNZL could provide switched service to BACI on preferential terms and conditions, any such offering is prohibited by Section 202 of the Act and Section 63.14 of the Rules. Moreover, even if we were to conclude that we should scrutinize BACI's relationship with TNZL under the "significant potential impact" standard, the  S 'Commission found no basis in the Foreign Carrier Entry Order to prohibit resale by U.S. carriers with  S 'investments in dominant foreign carriers.v ] {OV '#X\  P6G;P#эXSee Foreign Carrier Entry Order, 11 FCC Rcd at 391214 ( 103106).(#ƶ  S\'554.` ` For the reasons stated above, we also find that BACI's resale of TNZL's switched services on the U.S.New Zealand route does not present a substantial risk of anticompetitive conduct. We therefore find it unnecessary to impose dominant carrier regulation on BACI's provision of such  S'service,wZ~] {O &'#X\  P6G;P#эXSee 47 C.F.R.  63.10(a)(1) (providing that a U.S. carrier that has no affiliation with a foreign carrier in a particular destination country will presumptively be considered nondominant for the provision of"'v0*((&"  {OX'international service on that route). See also International Services, 7 FCC Rcd 7331, 7332 ( 6) (1992) (limiting dominant carrier safeguards to those instances where a relationship between a U.S. international carrier and a foreign carrier may present some substantial risk of anticompetitive conduct);  {O'Foreign Carrier Entry Order, 11 FCC Rcd at 396667 ( 246) (maintaining the basic regulatory  {O|'framework adopted in International Services for determining the regulatory status of U.S. international carriers that are affiliated with foreign carriers). (# or any of the safeguards applied to MCI in the MCI/BT Order that do not already apply to"w0*(("  S'TNZL by Commission rule.1xX] yO'#X\  P6G;P#эXTNZL, like all U.S. international carriers, is subject to the "no special concessions" prohibition contained in Section 63.14 of the Rules, and the contract filing requirements of Section 43.51 of the Rules. (#1  S'D IV. CONCLUSION Đ\  S`'655.` ` We conclude that grant of TNZL's application for facilitiesbased service on the U.S.New Zealand route is in the public interest. We find that U.S. carriers have effective competitive opportunities to provide international facilitiesbased service in New Zealand. There are no legal barriers to entry or ownership of international service providers. Ten companies are currently registered to operate as international service providers in New Zealand, and five presently operate on a facilitiesbasis, suggesting the absence of practical barriers to entry. New Zealand's competition laws and regulations, its independent regulatory institutions, and current market conditions (particularly favorable toll interconnection rates) appear to provide adequate assurance of reasonable and nondiscriminatory interconnection at this time. However, we are sufficiently concerned about New Zealand's regime that we condition today's grant on the prompt provision of reasonable and nondiscriminatory interconnection to TCNZ's and TNZL's network for international carriers. If we obtain evidence that such interconnection is not available, we will revisit the issue of whether the public interest continues to be served by grant of this application or any future applications by TNZL to add facilities on the U.S.New Zealand route. We also grant TNZL's request for "pointsbeyond" authority. However, due to Bell Atlantic's and Ameritech's investments in TNZL's parent, TCNZ, TNZL is prohibited from providing international services that originate in the Ameritech and Bell Atlantic inregion states until the relevant requirements for such service under the Telecommunications Act of 1996 are satisfied. Further, because TNZL controls the only ubiquitous local network in New Zealand, we will regulate TNZL as a dominant carrier.  S@'- V. ORDERING CLAUSES \  S'756.` ` Accordingly, IT IS HEREBY CERTIFIED that the present and future public interest, convenience, and necessity require a grant of the present application, and IT IS ORDERED that application File No. ITC96097 IS GRANTED, and Telecom New Zealand Limited (TNZL) is authorized to acquire and operate the following facilities for the provision of switched, private line, and other authorized services between the United States and New Zealand: 20 E1s on the PacRim East undersea cable, 20 E1s on the Hawaii5 cable, 10 E1s on the Tasman 2 cable, 10 E1s on the PacRim West cable, 10 E1s on the TPC5CN cable, up to 200 voice grade circuits (64 kps per circuit) from COMSAT, and up to 200 voice grade circuits (64 kps per circuit) from other authorized satellite operators. ". x0*(("Ԍ S' !B`    !B` 857.` ` IT IS FURTHER ORDERED that TNZL and its parent Telecom Corporation of New Zealand Limited (TCNZ) are required promptly to provide reasonable and nondiscriminatory interconnection to their facilities in New Zealand for international carriers for the origination and termination of international services.  S8'958.` ` IT IS FURTHER ORDERED that TNZL shall be regulated as a dominant carrier on the U.S.New Zealand route pursuant to Section 63.10 of the Commission's rules, 47 C.F.R.  63.10 and shall comply with the requirements of paragraph (c) of that section.  S':59.` ` IT IS FURTHER ORDERED that TNZL shall comply with Sections 43.51, 43.61, and 43.82 of the Commission's rules, 47 C.F.R.  43.51, 43.61 & 43.82.  S ';60.` ` IT IS FURTHER ORDERED that TNZL's authorization to provide private line service is limited to the provision of private line service only between the United States and New Zealand, that is, private lines that originate in the United States and terminate in New Zealand or that originate in New Zealand and terminate in the United States. In addition, TNZL may not connect private lines between the United States and New Zealand to the public switched network at either the U.S. or New Zealand end, or both, for the provision of international switched basic services, unless authorized to do so by the Commission in accordance with paragraphs (e)(4) and (e)(6) of Section 63.18 of the Commission's rules, 47 C.F.R.  63.18(e)(4) & (6) or except as provided in paragraph (e)(4)(ii) of Section 63.18, 47 C.F.R.  63.18(e)(4)(ii).  S'<61.` ` IT IS FURTHER ORDERED that, to the extent TNZL uses any of its or TCNZ's New Zealand facilities or services for the routing of U.S. inbound or outbound traffic to third countries, it shall do so only pursuant to rates that are published in New Zealand or publicly filed with the Commission.  S'=62.` ` IT IS FURTHER ORDERED that TNZL 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.  S'>63.` ` IT IS FURTHER ORDERED that this authorization is subject to the condition that TNZL be treated as a nonregulated affiliate for purposes of Bell Operating Company (BOC) accounting under the Commission's joint cost and affiliate transactions rules as set forth in Parts 32 and 64 of the Commission's rules.  S8'?64.` ` IT IS FURTHER ORDERED that the conditions that attach to the grant of this application as set forth in paragraphs 62 and 63 of this order will remain in place pending the outcome of the Commission's decision in Policy and Rules Concerning the Interstate, Interexchange  S!'Marketplace and Implementation of Section 254(g) of the Communications Act of 1934, Notice of  S"'Proposed Rulemaking, CC Docket No. 9661, 11 FCC Rcd 7141 (1996). The International Bureau reserves the right to modify the conditions of this authorization, as necessary, upon the Commission's adoption of final rules for BOC outofregion domestic interstate, interexchange services.  S%'@65.` ` IT IS FURTHER ORDERED that TNZL is prohibited from providing any international services originating in Bell Atlantic Corporation's or Ameritech Corporation's inregion territories until and only to the extent the Commission grants each of their respective operating companies' applications to provide inregion interLATA services pursuant to new section 271 of the Communications Act of 1934, as amended."\)x,**'"  S' !Ba    !Ba A66.` ` IT IS FURTHER ORDERED that TNZL is prohibited from providing any authorized international services originating in NYNEX Corporation's (NYNEX) inregion territory until TNZL informs the Commission in writing of its intention to provide such services and an order is issued determining the regulatory treatment of such services.  S8'B67.` ` IT IS FURTHER ORDERED that, if Bell Atlantic and NYNEX decide not to consummate their announced merger and TNZL seeks to provide its authorized international services originating in NYNEX's inregion territory, it may do so upon the filing of a letter by Bell Atlantic stating its decision not to consummate the announced merger and provided TNZL complies with all other conditions of this Order in the provision of such services. ` `  SH ' C68.` ` This Order is issued under Section 0.261 of the Commission's rules and is effective upon adoption. Petitions for reconsideration under Section 1.106 or applications for review under Section 1.115 of the Commission's rules may be filed within 30 days of the date of public notice of  S 'this Order. See Section 1.4(b)(2) of the Commission's Rules, 47 C.F.R.  1.4(b)(2). ` `  hhCqFEDERAL COMMUNICATIONS COMMISSION ` `  hhCqDonald H. Gips ` `  hhCqChief, International Bureau