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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** DA 97-572 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) U S WEST NewVector Group, Inc. ) ) Application for Authority Pursuant to ) Section 214 of the Communications Act of ) ITC-96-663 1934, as amended, to Resell ) International Communications Services to ) Lithuania and Russia ) ORDER, AUTHORIZATION AND CERTIFICATE Adopted: March 17, 1997 Released: March 19, 1997 By the Chief, Telecommunications Division I. Introduction 1. U S WEST NewVector Group, Inc. (NewVector) requests authority pursuant to Section 214 of the Communications Act of 1934, to provide international telecommunications services originating from NewVector's service areas and terminating in Lithuania and Russia through the resale of switched services of unaffiliated U.S. international carriers. NewVector seeks classification as a non-dominant reseller of international switched services on both the U.S.-Lithuania and U.S.-Russia routes. NewVector, a cellular licensee, requests authority to resell such international switched services to its commercial mobile service customers. No party opposed NewVector's Section 214 application. 2. We find that a grant of NewVector's application will serve the public interest under Section 214 of the Act. We also find that NewVector's provision of resold switched services on the U.S.-Lithuania and U.S.-Russia routes should be subject to non-dominant carrier regulation. II. Discussion 3. NewVector, a cellular licensee and a Colorado corporation, is a wholly-owned subsidiary of U S WEST, Inc. (U S WEST) and an affiliate of U S WEST Communications, Inc., a Bell operating company (BOC). NewVector requests Section 214 authority to resell on a non- dominant carrier basis international switched services of unaffiliated U.S. international carriers for the provision of international switched services originating in NewVector's service areas and terminating in Russia and Lithuania. NewVector maintains that a grant of its application will increase competition on the U.S.-Lithuania and U.S.-Russia "routes and benefit consumers by reducing prices, increasing the availability of a wider variety of service options, and promoting the more efficient use of existing international facilities." A. Provision of Incidental InterLATA Services under Section 271(b)(3) 4. The Telecommunications Act of 1996 permits a BOC or a BOC affiliate to "provide incidental interLATA [i.e., local access and transport area] services . . . originating in any State[.]" Section 271(g)(3) defines "incidental interLATA services" as including "the interLATA provision by a Bell operating company or its affiliate . . . of commercial mobile services in accordance with section 332(c) of th[e] Act[.]" 5. NewVector certifies that the "authority it seeks in the instant application is associated solely with its provision of incidental interLATA services, as that term is defined in Section 271(g) of the Act." NewVector states that, "[a]s a cellular licensee, . . . [it] provides commercial mobile services in accordance with Section 332(c) of the [Act.]" We find that the resale of international switched services on the U.S.-Lithuania and U.S.-Russia routes by NewVector to its commercial mobile services customers is permitted under Section 271(b)(3) of the Act. We also find that a grant of NewVector's application will serve the public interest under Section 214 of the Act by facilitating the efficient and rapid provision of international services. B. Foreign Carrier Affiliations 6. Although we find that the resale of international switched services of unaffiliated carriers by NewVector to its commercial mobile services customers is permitted by the Act and that a grant of its application is in the public interest, we must also determine the appropriate regulatory treatment of NewVector's provision of such services on the U.S.-Lithuania and U.S.- Russia routes. NewVector certifies that it is affiliated through U S West with foreign carriers in the destination countries under Section 63.18(h)(1) of the rules. NewVector maintains that it is presumptively non-dominant on these two routes despite its affiliation with foreign carriers in the destination countries. 7. The Commission regulates 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 in the destination market. Under this framework, a U.S. international carrier that serves a destination market solely through the resale of the switched services of a U.S. facilities-based carrier with which the reseller is not affiliated is presumptively non-dominant for that route -- "regardless of any foreign affiliations." The Commission has found that the resale of an unaffiliated U.S. facilities-based carrier's switched services "presents no substantial possibility of anticompetitive effects in the U.S. international service market, because the reseller's foreign affiliate is negotiating the terms and conditions of access to the destination market with an unaffiliated carrier on the U.S. end[.]" 8. NewVector certifies that it is affiliated within the meaning of Section 63.18(h)(1) with Lintel, "an international gateway operator in Lithuania." NewVector says that, "Lintel does not control inter-city or local access facilities in Lithuania, and does not provide resale service in Lithuania." NewVector maintains that it "lacks the ability to directly or indirectly influence Lintel's interconnection and related interconnection agreements with international carriers, and U S WEST has neither participated in nor influenced such agreements." 9. NewVector also certifies that it is affiliated within the meaning of Section 63.18(h)(1) with Westelcom, Delta Telecom, BaikalWestcom, AKOS, UralWestcom, Nizhegorodskaya Cellular Communications (NCC), Moscow Cellular Communications (MCC), and Dontelecom in Russia. According to NewVector, Westelcom is "a joint venture which operates three international gateway switches (and extensions thereof) in Russia." NewVector also states that Delta Telecom, BaikalWestcom, AKOS, UralWestcom, NCC, MCC, and Dontelecom provide cellular services in various parts of Russia. BaikalWestcom also provides intercity exchange service in Irkuktsk. NewVector avers that BaikalWestcom, AKOS, UralWestcom, NCC, and Dontelcom are "relatively" new market entrants, and that they each have less than 2000 subscribers, with the exception of AKOS and UralWestcom, which have fewer than 4000 and 1000 subscribers, respectively. NewVector says that Westelcom, Delta Telecom, BaikalWestcom, AKOS, UralWestcom, NCC, MCC, and Dontelecom "hold[] no ownership interest in international facilities and lack[] authority to route international traffic or otherwise negotiate the terms of interconnection agreements with U.S. international carriers." 10. Under the framework adopted in International Services and Section 63.10(a)(4) of the rules, we find that NewVector qualifies as a non-dominant reseller of international switched services on the U.S.-Lithuania and U.S.-Russia routes. No party filed an opposition to NewVector's Section 214 application or requests that NewVector be classified as dominant on the U.S.-Lithuania and U.S.-Russia routes. We therefore find no basis at this time to regulate NewVector as a dominant carrier in the resale of international switched services on the two routes for which it seeks Section 214 authorization. 11. As a non-dominant reseller of international switched services, NewVector 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. It also will be subject to the Section 214 requirements of non- dominant U.S. international carriers. 12. As a non-dominant carrier, NewVector 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 206-209). Title II carriers also are required to file tariffs pursuant to our streamlined tariffing procedures (Sections 203 and 205). Non-dominant U.S. international switched resellers also are subject to the requirements of Sections 43.51, 43.61, 63.14 and 63.19 of the Commission's rules. III. Ordering Clauses 13. Upon consideration of the applications and in view of the foregoing, IT IS HEREBY CERTIFIED that the present and future public convenience and necessity require the resale of international switched services by U S WEST NewVector Group, Inc. (NewVector). 14. Accordingly, IT IS HEREBY ORDERED that application File No. ITC-96-663 filed by NewVector IS GRANTED and NewVector is authorized to resell on a non-dominant carrier basis international switched services of unaffiliated U.S. international carriers for the provision of international switched services originating from U.S. points served by NewVector and terminating in Lithuania and Russia. 15. IT IS FURTHER ORDERED that NewVector shall comply with the requirements specified in Section 63.21 of the Commission's rules, 47 C.F.R.  63.21. 16. 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 the public notice of this order (see Section 1.4(b)(2)). FEDERAL COMMUNICATIONS COMMISSION Diane J. Cornell Chief, Telecommmunications Division International Bureau