******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 DA 97-1323 In the Matter of ) ) WORLDCOM, INC.) Transferor,) ) and) ) STRATOS WIRELESS, INC.) Transferee, ) ) Application for authority,) File No. I-T-C-97-234-TC pursuant to Section 214 of ) the Communications Act of) 1934, as amended, to transfer ) control of an authorized) international carrier.) MEMORANDUM OPINION, ORDER AND AUTHORIZATION Adopted: June 24, 1997Released: June 25, 1997 By the Chief, Telecommunications Division: 1.WorldCom, Inc. (WorldCom), Stratos Wireless, Inc. (STRATos Wireless) and IDB Mobile Communications, Inc. (IDB Mobile), pursuant to Section 214 of the Communications Act of 1934, as amended, submitted the above-captioned application requesting authority to transfer WorldCom's 50% interest in IDB Mobile to Stratos. The application was placed on public notice on May 2, 1997. On May 30, 1997, AT&T Corp. (AT&T) filed Comments in Opposition. However, AT&T withdrew its opposition in exchange for the conditions set forth in paragraph 8 infra. 2.IDB Mobile is a U.S. facilities-based provider of international mobile satellite services (MSS) via the INMARSAT satellite system. Stratos Wireless, a Canadian corporation, currently owns 50% of IDB Mobile's capital stock through a wholly-owned subsidiary, TII Aeronautical Corp. (TIIA). The other 50% of IDB Mobile's capital stock is currently owned by WorldCom through a wholly-owned subsidiary, IDB WorldCom, Inc. (IDB WorldCom). Neither of the two owners has affirmative control over IDB Mobile. Stratos Wireless and WorldCom have signed an agreement whereby the former would acquire the other 50% of IDB Mobile's capital stock. IDB Mobile would become a wholly-owned subsidiary of Stratos Wireless. IDB Mobile's principle business is the provision of MSS over the INMARSAT satellite system, including the U.S.-Canada route. IDB Mobile is also authorized to provide international resale services, including switched and private line services, between the United States and international points, excluding Canada. 3.Stratos wireless acquired its wholly-owned subsidiary, TIIA, from Teleglobe, Inc. (Teleglobe), the Canadian signatory to INMARSAT. Stratos Wireless has also entered into an agreement to manage Teleglobe's INMARSAT facilities in Canada. However, Teleglobe owns 30% of Stratos Wireless' capital stock. Therefore, the requested transfer of control will result in an affiliation between Teleglobe and IDB Mobile through its indirect ownership of 30% of IDB Mobile's capital stock. 4.While it is clear that Teleglobe's subsidiary, Teleglobe Canada, Inc. (TGC), does have market power in Canada, the Commission has previously found that MSS does not fit the traditional half-circuit model. A key difference between the global MSS and IMTS markets is that in the MSS industry, distribution in monopoly foreign markets will not necessarily be accomplished through a monopoly carrier. In the case of Cruisephone, another provider of INMARSAT services, the Commission said that the company's affiliation with the monopoly carrier did not provide it with an opportunity to discriminate against other U.S. carriers because it was not using any of the facilities of the foreign monopoly carrier. 5.Upon consideration of the application and in view of the foregoing, we conclude that consent to the transfer of the other 50% of IDB Mobile's capital stock, and thus affirmative control of IDB Mobile to Stratos Wireless will serve the public interest, convenience and necessity. 6.Accordingly, IT IS ORDERED that the application of WorldCom and Stratos Wireless, File No. I-T-C-97-234-TC IS GRANTED, and the transfer of affirmative control of IDB Mobile is authorized. 7.IT IS FURTHER ORDERED that all terms and conditions of any Commission orders granting authority to IDB Mobile to provide common carrier services remain in effect. 8.IT IS FURTHER ORDERED that with respect to any non-MSS services to be provided by IDB Mobile, the company shall observe the following conditions: (1) IDB Mobile shall file with the Commission any written or oral agreements entered into with Teleglobe relating to routing of U.S. traffic through Teleglobe's facilities; and (2) IDB Mobile shall purchase or obtain Teleglobe's services at published rates. 9.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 this Order (see Section 1.4(b)(2)). FEDERAL COMMUNICATIONS COMMISSION Diane J. Cornell Chief, Telecommunications Division International Bureau