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                                                        DA 97-496
                           Before the
               FEDERAL COMMUNICATIONS COMMISSION
                     Washington D.C. 20554

In the Matter of                   )
                              )
Telia North America, Inc.               )         
                              )
Applications for Authority, Pursuant to      )
Section 214 of the Communications Act,  )                   
as Amended, to                )
                              )
Resell Private Lines Interconnected     )         File Nos. I-T-C-96-310 
     
to the Public Switched Network for      )
the Provision of Switched               )
Services                      )
                              )
Resell Switched Services and       )                   I-T-C- 96-335
     
Non-interconnected Private Line         )
Services Between the United States and  )
Sweden                        )

               ORDER, AUTHORIZATION AND CERTIFICATE

     Adopted:  March 7, 1997            Released:  March 11, 1997 

By the Chief, Telecommunications Division:

                         I. INTRODUCTION 

     1.   In this decision, we grant the request of Telia North America, Inc. ("Telia NA")
for authority pursuant to Section 214 of the Communications Act, as amended, and Section
63.18(e)(6) of the Commission's Rules to resell international private lines for the provision of
switched services between the United States and Sweden.  We also grant Telia NA's request
for the same authority to resell switched services and private lines not interconnected to the
public switched network between the United States and Sweden.
     
                              II. BACKGROUND 
     
     2.   Telia NA is a wholly-owned subsidiary of Telia AB, Inc. ("Telia AB").  Telia
AB is a limited purpose commercial company whose shares are wholly owned by the
Government of Sweden.  Telia AB owns and controls telecommunications facilities in Sweden
and provides local, long distance and international telecommunications services.  

     3.   On June 10, 1996 Telia NA filed an application to resell private lines
interconnected to the public switched network at one or both ends for the provision of switched
services between the United States and Sweden.  This application was placed on public notice
on June 21; no comments were received.  

     4.   On June 19, 1996 Telia NA filed an application to resell switched services of
unaffiliated U.S. carriers to provide voice, data, facsimile, television, business, and other
authorized international services between the United States and Sweden and to resell capacity
to provide non-interconnected private line services on the same route.  This application was
placed on public notice on June 28; no comments were received. 

                         III. DISCUSSION 

     5.    Telia NA's affiliation with Telia AB, a Swedish carrier, requires us to review
these applications under the framework established in the Commission's Foreign Carrier Entry
Order.  In that decision, the Commission stated that carriers seeking to provide international
services to countries in which they have an affiliate with market power must demonstrate that
the foreign market offers effective competitive opportunities ("ECO") for U.S. carriers seeking
to offer like services.  If an applicant's foreign affiliate does not have market power in the
destination market, we do not conduct an ECO analysis.  The Commission also stated in the
Foreign Carrier Entry Order that it will continue to consider other public interest factors that
may weigh in favor of, or against, granting the application.

     A. Market Power Analysis 

     6.   The Foreign Carrier Entry Order defines "market power" as "the ability of the
carrier to act anticompetitively against unaffiliated U.S. carriers through the control of
bottleneck services or facilities on the foreign end."  Bottleneck services or facilities are
"those that are necessary for the provision of international services, including inter-city or
local access facilities on the foreign end."  Thus, we examine whether Telia AB has market
power in the facilities market for terminating private lines and switched services in Sweden,
the destination market Telia NA seeks to serve.  A carrier controlling bottleneck facilities and
services in the domestic local or inter-city markets could discriminate in favor of an affiliate
competing in the private line or switched services markets by offering its affiliate superior
technical quality, faster provisioning or preferential rates.

     7.   Telia AB is a government-owned company that provides almost ubiquitous
local, long distance and international services in Sweden.  Telia NA has not argued that Telia
AB lacks the ability to control bottleneck services or facilities in Sweden.  Nor has Telia NA
made any showing to demonstrate that Telia AB does not control bottleneck facilities or
services.  Given Telia AB's status in Sweden's telecommunications market and in the absence
of any showing otherwise, we find  for purposes of this decision that Telia NA's affiliate, Telia
AB, has the ability to discriminate against unaffiliated U.S. international carriers terminating
traffic in Sweden.  We thus find that Telia AB possesses market power in Sweden's facilities-
based market for local, long distance and international services.  

     B. ECO Analysis     
     
     8.   Our finding that Telia AB has market power in Sweden's underlying facilities
market requires us to determine whether ECO exists in Sweden for the particular resale
services Telia NA seeks to provide.  Under the ECO analysis framework established in the
Foreign Carrier Entry Order, we examine: (1) the legal ability of U.S. carriers to provide the
relevant service in the destination market where the applicant's affiliate possesses market
power; (2) the practical barriers to entry, including the existence of reasonable and
nondiscriminatory interconnection charges, terms and conditions for the provision of such
service; (3) the competitive safeguards to protect against anticompetitive and discriminatory
practices affecting the service; and (4) fair and transparent regulatory procedures, including
separation between the regulator and operator of international services.  Additionally, we
examine other public interest factors that may warrant grant or denial of the application.  

          1. Resale of Interconnected Private Lines for the Provision of Switched 
              Services

     9.   Telia NA contends that the Commission should grant it authority to resell
private lines for the provision of switched services on the U.S.-Sweden route because the
Commission has found already that Sweden offers U.S. carriers equivalent switched private
line resale opportunities.  Telia NA states that the Commission has authorized numerous
carriers to provide this service between the United States and Sweden.  Telia NA now requests
the same authority. 

     10.  As Telia NA indicates, the International Bureau has found previously that
Sweden offers equivalent opportunities to U.S. carriers to resell private lines for the provision
of switched services on the U.S.-Sweden route.  In that order, the Bureau found that
Sweden's regulatory policies provide open entry, nondiscriminatory treatment of U.S. carriers
and the ability to interconnect a private line to the Swedish public switched network.  We
stated that although National Port & Telecom Agency ("NPTA"), the Swedish regulatory
authority, does not publish interconnection agreements because such agreements are regarded
as private commercial transactions, Telia AB's published standard interconnection terms and
conditions provided an adequate benchmark for resellers to determine whether they are being
treated in a nondiscriminatory manner.  We further stated that interconnection prices and
conditions appeared to enable new U.S. entrants a reasonable opportunity to succeed
commercially and acknowledged the presence of foreign-based carriers, including U.S.-based
carriers, in the Swedish telecommunications market.  We recognized that NPTA's role in
overseeing interconnection was limited because it may only act as a mediator and make
recommendations in interconnection disputes.  But we concluded that there are sufficient
safeguards to ensure that Telia AB cannot deny interconnection to resellers and that
interconnection is available for U.S.-based carriers in Sweden.  

     11.  There is no evidence in the record that contradicts our assessment in the Sweden
Equivalency Order, and we find no other reason to revisit that decision in this proceeding. 
Accordingly, we affirm our conclusion that Sweden offers U.S. carriers equivalent 
opportunities to resell private lines for the provision of switched services on the U.S.-Sweden
route.  Our finding of ECO here is a public interest factor that weighs in favor of granting
Telia NA's application to resell private lines for the provision of switched services to Sweden. 
     
          2. Resale of Switched Services and Non-interconnected Private Lines 
     
     12.  The Commission has not addressed whether ECO exists for the resale of
switched services and non-interconnected private lines on the U.S.-Sweden route.  In support
of finding that Sweden satisfies the ECO test for these services,  Telia NA states that there are
no licensing requirements that would raise a barrier to entry by U.S. carriers into Sweden's
international resale market.  According to Telia NA, in many cases, a license is not required to
resell switched services and non-interconnected private lines in Sweden.  Telia NA also
reiterates many of our findings about the openness of the Swedish telecommunications market
in the Sweden Equivalency Order.  Furthermore, Telia NA argues that granting its application
for these services would serve the public interest both by increasing competition in the
international services market, which would facilitate the more efficient use of facilities and
encourage carriers to provide high quality, affordable, and innovative telecommunications
services to the public and by providing an incentive for other foreign governments to open
their markets to U.S. carriers.  
 
     13.  As we stated in the Sweden Equivalency Order, there are no barriers to entry in
any segment of Sweden's telecommunications service market.  U.S. carriers entering
Sweden's telecommunications markets to provide resold switched services and non-
interconnected private line resale services are subject to substantially the same Swedish laws
governing entry, interconnection, competitive safeguards and regulatory framework as U.S.
carriers seeking to resell interconnected private lines for the provision of switched services. 
Given previous findings that these provisions are sufficient to provide U.S. carriers with
equivalent opportunities to resell interconnected private lines for the provision of switched
services, we also conclude that Sweden offers U.S. carriers effective competitive opportunities
to resell switched services and non-interconnected private lines.  Our finding of ECO in this
context is a public interest factor that weighs in favor of granting Telia NA's application to
resell switched services and non-interconnected private lines on the U.S.-Sweden route. 

     C. Additional Public Interest Factors 
     
     14.       We next examine whether there are any countervailing public interest reasons to
deny Telia NA's applications.  No party has contested either application and the Executive
Branch has not raised any national security, law enforcement, foreign policy or trade concerns
regarding these applications.  We thus find that no countervailing public interest factors
warrant denial of Telia NA's applications.  Indeed, we anticipate that Telia NA's entry will
promote competition in the U.S. international services market. 
     
     D. Regulatory Status of Telia NA 

     15.  The final issue is the regulatory status of Telia NA for its provision of the
proposed services on the U.S.-Sweden route.  Under the Commission's rules, a U.S. carrier
that is affiliated with a foreign carrier that is not a monopoly in a destination country and that
seeks to be regulated as a non-dominant carrier bears the burden of demonstrating that its
foreign affiliate lacks the ability to discriminate against unaffiliated U.S. international carriers
through control of bottleneck services or facilities.

     16.  Telia NA has not sought non-dominant status, nor has it provided any evidence
to support a finding of non-dominance.  Accordingly, we regulate Telia NA as dominant on the
U.S.-Sweden route for the provision of the services authorized in this decision.  

                         IV. CONCLUSION 

     17.  We grant Telia NA's applications.  We find that the public interest would be
served by granting Telia NA's applications to resell private lines for the provision of switched
services between the United States and Sweden and to resell switched services and non-
interconnected private lines between the United States and Sweden. 
          
                       V. ORDERING CLAUSES

     18.  Accordingly, IT IS HEREBY ORDERED that application Files I-T-C-96-310
and I-T-C-96-335 ARE GRANTED and Telia North America, Inc. is authorized to: resell
international private line circuits interconnected to the public switched network for the
provision of switched services between the United States and Sweden; resell switched services
of unaffiliated U.S. carriers to provide voice, data, facsimile, television, business, and other
authorized international services between the United States and Sweden; and to resell private
lines not interconnected to the public switched network to provide international private line
services between the United States and Sweden.  

     19.  It is FURTHER ORDERED that Telia North America, Inc. will be regulated as
a dominant carrier on the U.S.-Sweden route pursuant to Section 63.10 of the Commission's
rules, 47 C.F.R.  63.10 (1995). 

     20.  IT IS FURTHER ORDERED that the authority granted herein to resell
international private lines for the provision of switched and non-interconnected private line
services between the United States and Sweden is limited to the provision of such services
between the United States and Sweden only - - that is, private lines which carry traffic that
originates in the United States, and terminates in Sweden, or traffic that originates in Sweden
and terminates in the United States.  This restriction is subject to the following exceptions: (a)
applicant may engage in "switched hubbing" through Sweden consistent with the rules adopted
in the Foreign Carrier Entry Order, 11 FCC Rcd 3873 at paras. 169-70 (1995); and (b)
applicant may provide U.S. inbound or outbound switched basic service over its authorized
private lines extending between the United States, the United Kingdom, Sweden and New
Zealand provided the applicant also is authorized to provide switched basic service using resold
private lines between the United States and these countries. 

     21.  It is FURTHER ORDERED that Telia North America, Inc. shall comply with
the requirements of Section 63.10(c) of the Commission's rules, 47 C.F.R.  63.10(c),
Sections 43.51 and 43.61 of the Commission's Rules,  43.51 and 43.61. 

     22.  IT IS FURTHER ORDERED that grant of this authorization is conditioned
upon Sweden's continuing to afford resale opportunities to U.S.-based carriers equivalent to
those afforded under U.S. law.

     23.  This Order is issued under Section 0.261 of the Commission's Rules, 47 C.F.R.
 0.261 (1994), and is effective upon adoption.  Petitions for reconsideration under Section
1.106, 47 C.F.R.  1.106 (1994), or applications for review under Section 1.115 ofthe Commission's Rules, 47 C.F.R.  1.115 (1994), may be filed within thirty days of the
public notice of this Order (see 47 C.F.R.  1.4(b)(2)).

                         FEDERAL COMMUNICATIONS COMMISSION


     
                         Diane J. Cornell
                         Chief, Telecommunications Division