WPC' 2BJZ Courier3|jix6X@`7X@HP LaserJet 4M (PCL) (Add), Rm 844HL4MPCAD.PRSx  @\ X@26 ZF K3|jHP LaserJet 4M (PCL) (Add), Rm 844HL4MPCAD.PRSx  @\ X@"i~'^:DPddDDDdp4D48dddddddddd88pppX|pDL|pp||D8D\dDXdXdXDdd88d8ddddDL8ddddX`(`lD4l\DDD4DDDDDDDDd8XXXXXX|X|X|X|XD8D8D8D8ddddddddddXdbdddpdXXXXXlX~|X|X|X|XdddldldD8DdDDDdplld|8|P|D|D|8dvddddDDDpLpLpLpl|T|8|\ddddddl|X|X|Xd|DdpL|Dd~4ddC$CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxH\dDXddddd8@d<@d<DDXXdDDxddzHxxHvppDXd<"dxtldpxxd2L D'KkKK CourierTimes New RomanTimes New Roman BoldTimes New Roman Italic"i~'^:DpddȨDDDdp4D48ddddddddddDDpppd|Ld|pȐD8DtdDdpXpXDdp8Dp8pdppXLDpdddXP,PhD4htDDD4DDDDDDdDp8dddddȐXXXXXJ8J8J8J8pddddppppddpddddzpdddXXhXXXXXdddhdptL8LpLDLpphhp8ZDP8pppddƐXXXpLpLpLphfDtppppppȐhXXXpDppLDd4ddC6CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxHjdDddddddK,H6X@`7h@<r5ddd,|d6X@`7@y.X80,X\  P6G;P\ {,W80,-0W*f9 xr G;XW!@(#,h@\  P6G;hPXd|DdpL|Dd~4ddC$CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxH\dDXddddd8@d<@d<DDXXdD X<  `)(##Xj\  P6G;9XP#DA 971281 A8#Xj\  P6G;9XP#Before the Federal Communications Commission Washington, D.C. 20554  X-In the Matter of hh) x` `  hh)  X_-MCI Telecommunications Corp.hh)@hFile Nos. ISP96W356  XH-AT&T Corp.` `  hh)@hpp ISP96W372 x` `  hh)  X -Petitions for Waiver of thehh)  X -International Settlements Policyhh)  X -to Change the Accounting Ratehh)  X -for Switched Voice Service withhh)  X -Ecuador` `  hh)  Xy- ORDER AND AUTHORIZATION  XK-Adopted: June 19, 1997hh@hppReleased: June 23, 1997 By the Chief, Telecommunications Division  X- ,Introduction ă  X-x1.` ` We have before us petitions by MCI Telecommunications Corporation ("MCI") and AT&T Corporation ("AT&T") to waive the Commission's International Settlements  X-Policy (ISP)q* O <ԍ` ` #d6X@`7|@##X\  P6G;P#The ISP requires uniform settlement rates, accounting rates, and division of tolls for U.S.  {O-x` ` international carriers on parallel routes. See Implementation of Uniform Settlements Policy for  {O-x` ` Parallel International Communications Routes, 51 Fed. Reg. 4736 (1986) (ISP Order);  {Ox-x` ` Reconsideration, 2 FCC Rcd 1118 (1987); Further Reconsideration, 3 FCC Rcd 1614 (1988). x` ` In 1991, the Commission reformed the ISP to encourage and facilitate accounting rate  {O -x` ` reductions by U.S. carriers. See Regulation of International Accounting Rates, 6 FCC Rcd  {O-x` ` 3553 (1991) (Phase I Report and Order); Reconsideration, 7 FCC Rcd 8049 (1992).  to change the accounting rate for switched voice service with Ecuador. AT&T's petition was opposed by WorldCom because the monopoly foreign carrier in Ecuador, Instituto Ecuatoriano de Telecommunicaciones (EMETEL), offered WorldCom a later effective date than AT&T's for the new, lower accounting rate. The International Bureau suspended the petition filed by MCI involving EMETEL because it too had a later effective date than AT&T's.  X-x2.` ` We reiterate that this Commission will no longer tolerate accounting rate discrimination among U.S. carriers and the adverse impact it has on the ability of U.S.""0*((" carriers to compete in the international telecommunications service market in the United  X-States.q* Mb<ԍ#X\  P6G;P#` ` See In the Matter of AT&T Corp., MCI Telecommunications Corp., Petition of the International  {O8-x` ` Settlements Policy to Change the Accounting Rate for Switched Service with Bolivia, 11 FCC  {O-x` ` Rcd 13799 (1996) and In the Matter of AT&T Corp., MCI Telecommunications Corp., Sprint, (#(#X {M-x` ` LDDS WorldCom Petition of the International Settlements Policy to Change the Accounting (#(#X {O-x` ` Rate for Switched Service with Peru, 11 FCC Rcd 12107 (1996). This exercise of monopoly power by EMETEL has produced a disparity in accounting rates among U.S. carriers, and thus violates the Commission's ISP. To enforce our law, to ensure equitable treatment of U.S carriers, and to protect U.S. consumers, we approve the waivers, but direct all U.S. carriers to negotiate a nondiscriminatory agreement with EMETEL at the lowest rate and the earliest effective date negotiated with any U.S. carrier. In the interim, we order all U.S. carriers to settle at the lowest rate in effect between any carrier and EMETEL until the discrimination is eliminated. Finally, having addressed the discrimination issues raised by WorldCom, we dismiss its opposition to AT&T's waiver.  X -- Background  X - x3.` ` MCI filed a waiver of the Commission's ISP to reduce its accounting rate of  X -$1.39 per conversation minute with EMETEL to $1.10 effective July 1, 1996. q* O<ԍ#X\  P6G;P#` ` MCI's International Settlements Policy Waiver for a Change in the Accounting Rate for x` ` International Switched Voice Service with Ecuador, ISP96W356 (filed September 20, 1996). AT&T also filed a waiver of the Commission's ISP for service with EMETEL which would extend its accounting rate of $1.39 per minute from January 1, 1995 through May 31, 1996, and then  X-reduce that rate to $1.10 for the period June 1, 1996 through December 31, 1996.#q* O5<ԍ#X\  P6G;P#` ` AT&T's International Settlements Policy Waiver for a Change in the Accounting Rate for (#(#Xx` ` International Switched Voice Service with Ecuador, ISP96W372 (filed October 2, 1996).#  Xb-x4.` ` The International Bureau suspended the MCI waiver because AT&T had been offered an earlier effective date for the lower accounting rate with EMETEL than MCI  X4-proposed in its waiver.4\ q* OA<ԍ#X\  P6G;P#` ` See letter from Troy F. Tanner, FCC, to Nakul Rege, MCI, October 10, 1996. WorldCom opposes the AT&T waiver because EMETEL refuses to  X-offer the same effective date to WorldCom that it negotiated with AT&T.Ah q* O <ԍ#X\  P6G;P#` ` WorldCom's accounting rate with EMETEL is $1.10 per minute but the effective date of that x` ` rate was July 1, 1996, rather than June 1, 1996. See WorldCom opposition to AT&T waiver, x` ` October 11, 1996.A  X-,0 Discussion ă  X-x5.` ` The Commission's policy is clear: it expects accounting rates to be costbased, nondiscriminatory and transparent. The two waivers under consideration in this order would",0*((p" move the accounting rate with EMETEL in the right direction. While the accounting rate of $1.10 per minute would finally bring the rate for service with Ecuador within the benchmark  X-range we adopted for countries like Ecuador in 1992,mjq* OK<ԍ#X\  P6G;P#` ` The benchmark settlement rate for Ecuador is 39 to 60 per minute. Regulation of  {O#-x` ` International Accounting Rates, Second Report & Order and Second Further Notice of x` ` Proposed Rulemaking, 7 FCC Rcd 8040 (1992).m it would still be at the upper end of the range, and significantly higher than the range we have proposed for Ecuador in our recent  X-notice to update the benchmark figures.lq* OO <ԍ#X\  P6G;P#` ` In a recent notice, we proposed benchmark settlement rates of 6 to 19.1 for service with  {O' -x` ` countries at a stage of economic development comparable to Ecuador. See Notice of Proposed  {O -x` ` Rulemaking on International Settlement Rates, 61 Fed. Reg. 68702 (1996). High accounting rates artificially inflate U.S. carriers' costs which puts upward pressure on U.S. calling prices and this has a detrimental effect on U.S. consumers. Therefore, we expect U.S. carriers to continue to negotiate actively with EMETEL to bring about further, substantial reductions in the accounting rate towards  XH-cost. 0H.q* O'<ԍ#X\  P6G;P#` ` AT&T recently filed another waiver for service with EMETEL but it only provides for an x` ` extension of the $1.10 accounting rate through March 31, 1997, rather than a reduction in that x` ` rate. See AT&T's International Settlements Policy Waiver for a Change in the Accounting Rate x` ` for Switched Service with Ecuador, ISP97W050 (filed February 21, 1997).   X -x6.` ` Of even greater concern to us here is the disparity in accounting rate proposals offered to U.S. carriers by EMETEL, and its refusal to make the same accounting rate and  X -effective date available to all U.S. carriers.n h & q* O<ԍ#X\  P6G;P#` ` The Commission expressed its concern to EMETEL about this situation but has received no x` ` response. See Letter from Donald H. Gips, Chief, International Bureau, FCC, to Ing. Sergio x` ` Flores Macias, Presidente Ejecutivo, EMETEL, January 15, 1997.n The purpose of the ISP is to prevent monopoly carriers such as EMETEL from exercising market power against U.S. carriers in accounting rate negotiations by engaging in discriminatory behavior that favors selected carriers at the expense of others. As part of the ISP, the Commission has stated that it expects an accounting rate revision to be made available to all U.S. carriers. This includes both the  Xy-accounting rate level and its effective date.I yVq* O<ԍ#X\  P6G;P#` ` The Commission stated that "We wish to emphasize again to both U.S. carriers and their x` ` foreign correspondents that it is our expectation that an accounting rate modification agreed to x` ` by a given foreign correspondent will be available to all competing carriers in a  {O!-x` ` nondiscriminatory fashion." Report and Order in CC Docket No. 90337, 6 FCC Rcd 3553, x` ` 3555 (1991). The Commission added that "This would include, of course, the expectation that x` ` the effective date of the accounting rate change, whether prospective or retroactive, will be  yOB$-x` ` available to competing U.S. carriers." Id. at n. 36. I Discriminatory treatment of U.S. carriers needs to be eliminated, not merely reduced.  X4-x7.` ` We have before us clear evidence of a pattern of unfair discrimination by"4 0*((*" EMETEL against a U.S. carrier. Although EMETEL negotiated an accounting rate reduction with WorldCom to reduce the rate to $1.10, it offered the same rate to AT&T with an effective date that preceded the WorldCom effective date by one month. Similarly, EMETEL offered the same terms and conditions to MCI it negotiated with WorldCom. Different accounting rates among U.S carriers, unrelated to costs, that are the result of discriminatory behavior by foreign monopoly carriers arbitrarily raise the costs of some U.S. carriers above the costs of others. These cost disparities impair the ability of those U.S. carriers that are the target of discrimination to compete in the U.S. market for international services. The situation is aggravated if the target is an emerging, small U.S. carrier or a new entrant into the marketplace. The waiver proposals filed with the Commission would, if approved without additional action, perpetuate this discrimination and distortion of competition in our market, and give the mistaken impression that we condone such behavior by foreign monopoly suppliers.  X -x8.` ` The Commission has made clear that it will aggressively enforce the ISP in order to protect the U.S. market from competitive distortions, particularly when those distortions are the result of discriminatory treatment of U.S. carriers by foreign monopoly suppliers. We find that EMETEL's refusal to negotiate comparable rates with all U.S. carriers for service with Ecuador is inconsistent with our ISP. This discrimination must be eliminated. To achieve this result, we approve AT&T's waiver to extend its accounting rate of $1.39 per conversation minute for the period January 1, 1996, through May 31, 1996, and to introduce a lower rate of $1.10 for the period June 1, 1996, through December 31, 1996. We also approve MCI's accounting rate of $1.10 per conversation minute. We direct, however, all U.S. facilitiesbased carriers which have an operating agreement with EMETEL for direct service between the United States and Ecuador to negotiate a settlement arrangement with EMETEL at the lowest accounting rate in effect with any U.S. carrier at the earliest effective date of that rate. Pending further negotiations with EMETEL to establish this nondiscriminatory accounting rate, we order all U.S. carriers to conduct settlements using an accounting rate of $1.10 for service beginning June 1, 1996.  XN- Ordering Clauses  X -x 9.` ` Accordingly, IT IS ORDERED that U.S. facilitiesbased carriers negotiate nondiscriminatory settlement arrangements with EMETEL.  X-x10.` ` IT IS FURTHER ORDERED that MCI's request to establish an accounting rate with EMETEL at $1.10 per conversation minute is APPROVED but the effective date of July 1, 1996 is DENIED.  X#-x11.` ` IT IS FURTHER ORDERED that AT&T's request to extend its accounting rate of $1.39 per conversation minute with EMETEL from January 1, 1996, through May 31, 1996 is APPROVED.  X#'-x12.` ` IT IS FURTHER ORDERED that AT&T's request to establish an accounting"#' 0*((%" rate of $1.10 per conversation minute with EMETEL effective June 1, 1996, through December 31, 1996 is APPROVED.  X-x13.` ` IT IS FURTHER ORDERED that all U.S. carriers shall conduct settlements with EMETEL for all service beginning on June 1, 1996, at an accounting rate of $1.10 per conversation minute.  X_-x14.` ` IT IS FURTHER ORDERED that all U.S. carriers shall continue their efforts to achieve significantly lower, nondiscriminatory accounting rates with EMETEL that fall within the prevailing Commission benchmark range applicable to Ecuador.  X -x15.` ` IT IS FURTHER ORDERED that WorldCom's opposition to the AT&T filing is dismissed.  X -x16.` ` This order 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 this Order (see C.F.R. Section 1.4(b)(2)). x` `  hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhDiane J. Cornell x` `  hhChief, Telecommunications Division x` `  hhInternational Bureau