WPCB 2BIJ Courier X4#o\  PC9XP#  3|j#PCL) (Additional)HL4MPCAD.PRSx  @\ vX@25%6 ZKTimes New RomanTimes New Roman Bold PCXP#  3|o" HP LaserJet 4M (PCL) (Additional)HL4MPCAD.PRSC\  P6Q\ vP"i~'^09CSS999S]+9+/SSSSSSSSSS//]]]Ixnnxg]xx9?xgxx]xn]gxxxxg9/9MS9ISISI9SS//S/SSSS9?/SSxSSIP!PZ9+ZM999+99999999S/xIxIxIxIxIlnIgIgIgIgI9/9/9/9/xSxSxSxSxSxSxSxSxSxSxIxSxRxSxSxS]SxIxIxInInInZnIxigIgIgIgIxSxSxSxZxSxZxS9/9S999Su]ZZxSg/gCg9g9g/xSbxSxSxSxSxn9n9n9]?]?]?]ZgFg/gMxSxSxSxSxSxSxxZgIgIgIxSg9xS]?g9xSi+SS88WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN8HH"&H>XHH8HB8>HH^HH>"".2",2,2,"222N2222"&22H22,006"6."""""""""""2H,H,H,H,H,XAB,>,>,>,>,""""H2H2H2H2H2H2H2H2H2H2H,H2H1H2H2H282H,H,H,B,B,B6B,H?>,>,>,>,H2H2H2H6H2H6H2""2"""2F866H2>>(>">">H2;H2H2H2H2XHB"B"B"8&8&8&86>*>>.H2H2H2H2H2H2^HH6>,>,>,H2>"H28&>"H2?22!!WFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN$<<$.2",2222`2 LL2 LL2L"",,2d""information about indirect foreign ownership even before adoption of the Commission's Foreign Carrier  {O-  /Entry Order, but, in any event, our rules now make that obligation explicit. See 47 C.F.R. 63.18(h)(2)  {O_-(1996); Foreign Carrier Entry Order 98.(#H Accordingly, we consider the merits of AT&T's petition for reconsideration in ITC95434.  Qa1for orders x8. In the matter of Impsat's resale application, file no. ITC95485, AT&T filed a timely petition to deny that raised the same concerns about foreign ownership of the applicant. Impsat opposed AT&T's petition in part on grounds that AT&T had made a procedural error by failing to state its interest in the pending application as required by Section 63.52(c) of our rules. We find, as argued by AT&T, that AT&T's status as a party in interest is a matter of  X-public record of which we can take official notice. Gx {O9'-ԍXxSee AT&T's Reply to Opposition to Petition to Deny in file no. ITC95485 at 2 n.1.(#ƒ AT&T holds Section 214 authority to"B ,-(-(ZZr" provide international service between the United States and many international points, including Italy, and therefore potentially could be competitively harmed by grant of this  X-application.7Gx yOb-  ԍXxWe have no intention of taking official notice of petitioners' status as partiesininterest in every application.   We choose to do so here as a matter of discretion and for the sake of a full exposition of the issues. It   remains the obligation of each petitioner to comply with the partyininterest requirements of Section 63.52(c).(#Ƽ   X< b. Analysis of Market Entry Under the Foreign Carrier Entry Order   Qa1for orders  Xw-x9. We do not address whether the new rules adopted in the Commission's Foreign  Xb-Carrier Entry Order, in particular the new affiliation standard, apply to our reconsideration of Impsat's facilities authorization, because we find that, under both the old and new rules, Impsat's application would still be granted. We do, however, apply the new rules to Impsat's application for resale authority, which was pending at the time the rules were adopted. We  X -have stated as recently as Shell Offshore Services CompanyY Gx yO-ԍXxDA 961458 (rel. Aug. 29, 1996).(#Y that the Commission's authority  X -to apply new rules and policies to pending matters is well established, and in the Foreign  X -Carrier Entry Order the Commission explicitly said that all carriers would have their "future  X -or pending" applications subject to the standards adopted in that order.d WGx {O-ԍXxForeign Carrier Entry Order  109.(#d  Qa1for orders  X-x 10. In the Foreign Carrier Entry Order, the Commission determined that the provision of telecommunications services by a foreign carrier to a market in which it is has market power presents a risk of anticompetitive conduct. To prevent this anticompetitive conduct, we will examine whether effective competitive opportunities exist for U.S. carriers in the destination markets when either the applicant is affiliated with a dominant foreign carrier or the investment otherwise presents a significant potential impact on competition in the U.S.  X-market for basic telecommunications services.QGx {O-ԍXxId.  89.(#Q  Qa1for orders x 11. Our review under the current rules begins with the question of whether Impsat is  X-affiliated with any foreign carrier with market power. Under the Foreign Carrier Entry  X-Order's definitionAFFILIATION of affiliation, a carrier is affiliated with a foreign carrier if the foreign carrier owns more than a 25 percent equity interest or otherwise controls the U.S. carrier or  X-the U.S. carrier is under common control with a foreign carrier.{Gx {O#-ԍXx47 C.F.R. 63.18(h)(1)(i) (1996); Foreign Carrier Entry Order 73!87.(#Ɠ Here, Impsat clearly has affiliations with those carriers in Argentina, Colombia, Mexico, Ecuador, and Venezuela in  X_-which Impsat Corporation has a controlling investment.V_ Gx {O'-ԍXxSee supra note 9.(#V We find, however, based on the"_ ,-(-(ZZ" record, that none of those affiliated carriers has market power. Therefore, we will not conduct an ECO analysis of those countries.  Qa1for orders x 12. On the other hand, Impsat does have a relationship with STET, a carrier that clearly has market power in Italy due to its monopoly position there. But STET's ownership interest in Impsat is only 25 percent, which does not rise to the initial threshold of our  Xv-definition of affiliation.vGx {O-  ԍXxSee 47 C.F.R. 63.18(i)(B) (1996) (defining affiliation to include a direct or indirect ownership interest of  {O-greater than 25 percent).(# In addition, there is no evidence that STET has other means of controlling Impsat. In particular, because the remaining 75 percent of Impsat Corporation is owned by a single holding company, STET's 25 percent interest does not appear to give  X1-STET control of Impsat.V1$Gx {O -ԍXxSee supra note 9.(#V Therefore, we find that Impsat is not affiliated with any foreign carrier with market power.  Qa1for orders x 13. Even when foreign carrier investment in an applicant does not rise to the level of an affiliation, we nevertheless apply the ECO test if the foreign investment presents a  X -significant potential impact on competition. Gx {O%-ԍXxForeign Carrier Entry Order  89; see, e.g., Sprint Corporation, 11 FCC Rcd 1850, 1856 39 (1996).(#ƴ For instance, when a U.S. carrier is very large, even a small incentive to discriminate in favor of its foreign investor could have a large effect on the market for service on that route. This is especially a concern where a carrier could leverage its market power along one route into the market for service along other routes.  Qa1for orders x 14. Here, Impsat is a small carrier that does not, at this time, have a significant share of the market for service along any route. Therefore, even if STET's investment gives Impsat some incentive to discriminate, that discrimination would not have a significant effect on the U.S.!Italy market. Because Impsat could not dominate the U.S.!Italy route, we need not address its ability to leverage its market power into other routes. We thus conclude that a carrier the size of Impsat operating along the U.S.!Italy route does not present the degree of  X-anticompetitive risk that was presented in Sprint, where the second and fifthlargest  X-international carriers sought an investment in the thirdlargest U.S. international carrier.ZHGx {O-  ԍXxWe do not mean to suggest that the arrangement scrutinized in Sprint is the minimum at which we will   scrutinize a smallerthan25percent investment, only that the present arrangement does not rise to the level of a "significant potential impact on competition" that requires application of the ECO test.(#Ə  Qa1for orders x15. In these circumstances, we reject AT&T's objections and find that there is not a need to apply the ECO test to Impsat's application to carry traffic along the U.S.!Italy route. STET's 25 percent investment in Impsat does not present such a significant potential impact on competition that such scrutiny is warranted, and we need not address AT&T's arguments as to the state of competition in Italy.""j ,-(-(ZZ"Ԍ Qa1for ordersۙx16. Finally in our review of Impsat's applications, we must look at any other public interest factors that weigh in favor of or against grant of the applications. The Commission has recently announced a renewed interest in seeing accounting rates lowered closer to costbased levels, and to reach this goal has proposed new benchmark settlement rates. Although Italy's current settlement rate of $0.26 is within our current benchmarks, it is significantly  X-above our proposed benchmark rateGx {O-  ԍXxSee International Settlement Rates, Notice of Proposed Rulemaking, FCC 96484, IB Docket No. 96261,  {O-47 (rel. Dec. 19, 1996) (1996 Benchmarks NPRM).(# and is well above the actual cost of providing service. We are concerned that STET could use the subsidy embedded in this abovecost settlement rate to crosssubsidize Impsat. Therefore, to ensure that Impsat does not gain an unfair competitive advantage, we will condition Impsat's authorization to serve Italy on a facilities basis on Impsat's maintaining its settlement rate with STET within our current and future  X -benchmarks.^ $Gx {O -  yԍXxSee Regulation of International Accounting Rates, CC Docket No. 90337, Phase II, Second Report & Order  {O-  =and Second Further Notice of Proposed Rulemaking, 7 FCC Rcd 8040 (1992) (adopting 1992 benchmarks);  {O-1996 Benchmarks NPRM, supra note 24 (proposing new benchmarks).(#Ɯ We also note that under the Commission's International Settlements Policy, JGx yO-  \ԍXxFor background on the Commission's International Settlements Policy, see Implementation and Scope of  {O-  Lthe International Settlements Policy for Parallel Routes, CC Docket No. 85204, Report and Order, 51 Fed.  {O-  Reg. 4736 (Feb. 7, 1986) (ISP Order), modified in part on recon., 2 FCC Rcd 1118 (1987), further recon.,  {Oq-  3 FCC Rcd 1614 (1988); and Regulation of International Accounting Rates, CC Docket No. 90337, Report  {O;-and Order, 6 FCC Rcd 3552 (1991), on recon., 7 FCC Rcd 8049 (1992).(#ƾ the rate at which Impsat settles with STET must be available to all U.S. carriers on a nondiscriminatory basis. We impose this condition on reconsideration based on the new information brought to our attention by AT&T's petition. Our ability to do so does not  X -depend on whether the rules adopted in the Foreign Carrier Entry Order apply to the petition for reconsideration.  Qa1for orders x17. We find that Impsat's application for resale authority should be granted under the  Xd-standard adopted by the Commission in the Foreign Carrier Entry Order, and we find that, whether or not those rules apply to the petition for reconsideration of Impsat's facilities authorization, that application would also be granted. We therefore deny AT&T's petition for reconsideration of the facilities authorization and grant Impsat's resale authorization.  X- d. Regulatory Classification of Impsat Along the U.S.!Italy Route  Qa1for orders  X-x18. Under the rules adopted in the Foreign Carrier Entry Order, a U.S. carrier that has no affiliation with a foreign carrier in a particular country to which it provides service is presumptively classified as nondominant for the provision of international communications  X-services to that country.[ Gx yO5&-ԍXx47 C.F.R. 63.10(a)(1) (1996).(#[ Affiliation is defined the same way it is defined in the entry" ,-(-(ZZ" context: an ownership interest greater than 25 percent, or a controlling interest at any level,  X-by the foreign carrier.oGx yOb-ԍXx47 C.F.R. 63.10(a)(4), 63.18(h)(1)(i) (1996).(#o  Qa1for orders x19. The presumption of nondominance is overcome, and an unaffiliated U.S. carrier will be regulated as dominant, when the foreign carrier investment nonetheless presents a  X-significant potential impact on competition.dXGx {O-ԍXxForeign Carrier Entry Order 250.(#d In such circumstances, the Commission stated, safeguards may be needed to ensure that the foreign carrier is unable to leverage its market power into the U.S. market for international services through an investment in the U.S.  XH-carrier.BHGx {O -ԍXxId.(#B  Qa1for orders x20. Here again, Impsat is presumed nondominant along the U.S.!Italy route because  X -its relationship with STET does not rise to the level of an affiliation.l |Gx {O0-ԍXxSee supra AFFILIATION11.(#l We thus turn again to whether STET's investment presents a significant potential impact on competition. In these circumstances, there are no facts peculiar to this investment that persuade us that the  X -presumption should be overcome. Thus, consistent with the Foreign Carrier Entry Order, we find no need to impose dominant carrier safeguards on Impsat's operation on the U.S.!Italy route.  Xd- Ordering Clauses ă  Qa1for orders x21. Accordingly, IT IS ORDERED that AT&T's petition for reconsideration of the application of IMPSAT USA, Inc., File No. ITC95434, is DENIED. IMPSAT USA, Inc., is authorized to provide the services authorized in our earlier order, DA 951962, adopted September 8, 1995, released September 19, 1995.  Qa1for orders x22. IT IS HEREBY CERTIFIED that the present and future public convenience and necessity require a grant of the present application, and IT IS ORDERED that application File No. ITC95485 IS GRANTED, and IMPSAT USA, Inc., is authorized to provide international switched service by the resale of international switched services of other authorized international carriers pursuant to Section 63.18(e)(2) of the Commission's Rules, 47 U.S.C. 63.18(e)(2).  Qa1for orders x23. IT IS FURTHER ORDERED that IMPSAT USA, Inc., shall be regulated as a nondominant carrier on all routes pursuant to Section 63.10 of the Commission's rules.  Qa1for orders",-(-(ZZZ"Ԍx24. IT IS FURTHER ORDERED that the authorization to provide facilitiesbased service to Italy shall be valid only so long as IMPSAT USA, Inc., maintains with its Italian affiliate a settlement rate that is within the Commission's current and future benchmarks.  Qa1for orders x25. IT IS FURTHER ORDERED that IMPSAT USA, Inc., shall comply with Sections 43.82, 63.15, and 63.21 of the Commission's rules, 47 C.F.R. 43.82, 63.15, 63.21.  Qa1for orders x26. This order is issued under Section 0.261 of the Commission's rules, 47 C.F.R. 0.261 (1996), 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, 47C.F.R.1.106, 1.115,  may be filed within thirty days of the public notice of this order (see 47 C.F.R. 1.4(b)(2)). x` `  hh@FEDERAL COMMUNICATIONS COMMISSION x` `  hh@Peter F. Co "bY whey x` `  hh@Chief x` `  hh@International Bureau