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INTRODUCTION ĐTP  X-x1.` ` In this Order, we grant Telmex/Sprint Communications, L.L.C. (TSC)  X-authority, pursuant to Section 214 of the Communications Act of 1934,U yO -#X\  P6G;P#эx47 U.S.C.  214. We refer to the Communications Act of 1934, as amended, as "the Communications Act" or "the Act." to provide international switched resale services to all points, including Mexico, subject to certain conditions described below.  X7-x2.` ` We find that the public interest supports conditional grant of this application. U.S.affiliated facilitiesbased carriers are already competing in Mexico. These carriers have, in a relatively short period of time, succeeded in gaining a significant share of the Mexican longdistance and international markets by providing service on both a facilities and switched resale basis. Indeed, as a result of procompetitive legislative and regulatory initiatives undertaken by the Mexican government, new entrants have captured up to 30 percent of the  X!-markets in areas where presubscription has been introduced in less than a year.$"! U {O~&-#X\  P6G;P#эxSee Letter from Carlos Ruiz Sacristn, Secretary, Secretariat of Communications and Transport (SCT),  {OH'-to Reed Hundt, Chairman, FCC (October 22, 1997) at 2 (October 22, 1997 SCT letter). See also Letter from  yO(-Jaime Chico Pardo, Director General, Telmex to Regina Keeney, Chief, Int'l Bur. at 1 (Oct. 28 , 1997) (Telmex commitment letter) (noting that in 1997, Telmex has lost 2530 percent of its long distance market share in the"(0*0*0*)" 60 cities (representing over 75 percent of total number of lines in Mexico) in which presubscription has  {OX-occurred); Telmex Net Falls 22% As More Competition Erodes Market Share, Wall Street Journal, Oct. 22, 1997 at B2 (noting that Telmex's international longdistance revenues have, as a result of increased competition, fallen 31.5% during the first three quarters of 1997 from the year earlier period). In addition,"!0*0*0* "  X-we expect that Mexico will offer all U.S. carriers effective competitive opportunities to provide international switched resale services in the near future.  X-x3.` ` Through the course of this proceeding, Tel)fonos de M)xico, S.A. de C.V. (Telmex) has also made a number of procompetitive commitments that we find to be in the public interest. First, Telmex has committed to reduce its settlement rate with U.S. carriers to the benchmark rate of 19 cents by January 1, 2000, which is the date required under the  X_-Commission's recent Benchmarks Order._e {O -ԍxSee International Settlement Rates, Report and Order, IB Docket No. 96261, FCC 97280 (Aug. 18,  {O -1997) recon. pending (Benchmarks Order). Telmex is by far the largest recipient of settlement  XJ-outpayments by U.S. carriers, having received more than $875 million in net settlement  X3-payments in 1996. Z3e {O-ԍxSee Preliminary 1996 International Telecommunications Data at Table A1, page 3 (CCB, Indus.Anal.Div., October, 1997) (indicating that Telmex received $878,208,475 in settlement payments from U.S. carriers).  In making the commitment to reduce its settlement rate, Telmex demonstrates that it supports the Commission's settlement rate reform goals as articulated in  X -the Commission's August 1997 Benchmarks Order. Indeed, Telmex recognizes that it will benefit, along with U.S. carriers and U.S. consumers, by the stimulated call volumes that will flow from lower settlement rates. Telmex has also agreed to accept significant reductions in the U.S.Mexico settlement rate for 1998 and 1999.  X-x4.` ` As a result of these commitments, U.S. carriers and U.S. consumers will save hundreds of millions of dollars over the next three years. Moreover, we expect that, as a result of Telmex's settlement rate reductions, the volume of calls on the U.S.Mexico route will increase significantly, benefitting U.S. and Mexican consumers and carriers. Telmex's settlement rate commitments should significantly lower the prices U.S. consumers pay for international services on the U.S.Mexico route.  X-x5.` ` Second, Telmex has undertaken, or committed to undertake, a number of actions to resolve allegations made by parties in this proceeding that Telmex discriminates against U.S. carriers and their Mexican affiliates. Nevertheless, in this Order we impose certain conditions and safeguards on TSC's authorization to help eliminate the potential for anticompetitive conduct on the U.S.Mexico route that could arise as a result of TSC's affiliation with Telmex. In particular, we regulate TSC as dominant on the U.S.Mexico route. We also condition this grant on TSC not offering its service at an average price that is"i0 0*%%ZZ" below the average price at which TSC obtains those services from underlying carriers. In addition, we reserve the right to impose additional conditions or safeguards in the future in the event that we find that TSC is able to distort competition in the U.S. market.  X-x6.` ` In light of its commitments to reduce settlement rates and address anticompetitive conduct, we find TSC's entry into the U.S. market to be in the public interest. TSC's entry into the U.S. international services market will provide a new source of price and service quality competition, particularly on the U.S.Mexico route. U.S. consumers will realize benefits from this increased competition in the form of lower prices and greater service choice and innovation. Under these circumstances, we find that conditional grant of this application is in the public interest.  X -g II. BACKGROUND ĐTP  X -x7.` ` TSC, a limited liability company organized under the laws of Delaware, is a joint venture between an indirect subsidiary of Telmex, a Mexican corporation, and an indirect subsidiary of the Sprint Corporation (Sprint), a U.S. corporation. Telmex and Sprint  Xy-each holds a 50 percent ownership interest in TSC.ye yO-ԍxTelmex/Sprint Communications L.L.C. Application, File No. ITC97127 at 7 (filed Feb. 27, 1997) (TSC application). Because of Telmex's 50 percent interest in TSC, TSC has an "affiliation," as defined in Section 63.18(h)(1)(i) of the Commission's  XK-rules,LK e yO-ԍx47 C.F.R.  63.18(h)(1).L with a foreign carrier. In addition, because of Sprint's 50 percent interest in TSC, TSC  X4-has an affiliation, as defined in Section 63.18(h)(1)(i) of the Commission's rules,:4e {O-ԍxId.: with a U.S. carrier.  X-x8.` ` On February 27, 1997, TSC filed an application to obtain Section 214 authority to provide international switched resale services between the United States and all international points, including Mexico. TSC proposes to resell Sprint's facilitiesbased  X-services.Be {O-ԍxTSC application at 8. TSC states that it may also resell other U.S. carriers' facilitiesbased services. Id.ĥ AmericaTel, AT&T, MCI and WorldCom filed petitions to deny TSC's  X-application.x e yO"-ԍxPetition to Deny of AmericaTel Corp., File No. ITC97127 (filed April 4, 1997); Petition to Deny of AT&T Corp., File No. ITC97127 (filed April 4, 1997); Petition to Deny of MCI Telecommunications Corp., File No. ITC97127 (filed April 4, 1997); Petition to Deny of WorldCom, Inc., File No. ITC97127 (filed April 4, 1997).x The City of Laredo, Texas filed a petition to condition grant of TSC's" 0*%%ZZ3"  X-application. e yOy-ԍxPetition to Condition Certificate of the City of Laredo, Texas, File No. ITC97127 (filed April 4, 1997). Frontier filed comments generally supporting the grant of TSC's application. e yO-ԍxComments of Frontier Communications Services, Inc., File No. ITC97127 (filed April 4, 1997).  X-TSC filed a Consolidated Opposition in response to the petitions and comment. e yOJ-ԍxConsolidated Opposition of Telmex/Sprint Communications, L.L.C., File No. ITC97127 (filed April 25, 1997) (TSC opposition). On April 16, 1997, TSC filed a Motion for Extension of Time of one week within  {O-which to submit its response to the petitions and comments filed with respect to its application. See Motion for Extension of Time, Telmex/Sprint Communications, L.L.C., File No. ITC97127 (filed April 16, 1997). TSC sought the brief extension in order to respond fully to the large number of petitions to deny its application. Because TSC demonstrated good cause for the brief extension, and because no party objected to TSC's request, we grant TSC's motion. In its Opposition, TSC also argues that the Commission must deny the Petitions to Deny filed by AT&T, MCI and WorldCom because they were not accompanied by affidavits as required by Section 63.20 of the Commission's rules. TSC Opposition at footnote 5. That rule requires a petition to deny to "contain specific allegations of fact sufficient to show that the petitioner is a party in interest and that a grant of  {O-the application would be prima facie inconsistent with the public interest. Such allegations of fact shall, except for those of which official notice may be taken be supported by affidavit of a person or persons with personal knowledge thereof." 47 C.F.R.  63.20. AT&T and MCI attached affidavits to their replies to the TSC opposition. We find that any violations that may have occurred were technical in nature and, in the cases of AT&T and MCI, were immediately remedied. In any event, TSC has not argued, and we do not find, that the lack of affidavits demonstrate that petitioners are not parties in interest, or that they lack personal knowledge of the facts averred. Consequently, we deny TSC's request to deny the Petitions to Deny of AT&T, MCI and WorldCom. AmericaTel,  X-AT&T, MCI and WorldCom filed replies to TSC's opposition.o e yO-ԍxReply to Consolidated Opposition of AmericaTel, File No. ITC97127 (filed April 4, 1997); Reply of AT&T Corp., File No. ITC97127 (filed April 4, 1997); Reply of MCI Telecommunications Corp., File No. ITC97127 (filed April 4, 1997); Reply to Opposition of WorldCom, Inc., File No. ITC97127 (filed April 4, 1997).o  X-x9.` ` On June 16, 1997, the International Bureau convened a status conference on TSC's application. Representatives of all of the petitioners and commenters, as well as the  Xv-applicant, were present.$vte {O-ԍxIn addition, representatives of CompTel attended the status conference and filed ex parte comments  {Oe-generally supportive of the petitions to deny filed by AT&T, MCI and WorldCom. See Letter from Carol Ann Bischoff, Vice President, Legislative and Regulatory Affairs, CompTel to William F. Caton, Acting Secretary, FCC (Aug. 11, 1997). The purpose of the status conference was to attempt to narrow the factual questions at issue in the TSC application. These issues, described in greater detail below, concern petitioners' allegations that: 1) TSC's Mexican affiliate, Telmex, engages in various forms of discriminatory conduct; 2) Telmex does not offer reasonable and nondiscriminatory charges, terms and conditions for interconnection to its network; 3) Telmex" `0*%%ZZB " does not abide by Mexican proportionate return rules; 4) the settlement rate for U.S.Mexico traffic is significantly above cost and subsidizes Telmex's operations in Mexico; and 5) Mexico regulations do not allow nonfacilitiesbased U.S. carriers to provide international switched resale services from Mexico. On July 16, 1997, TSC submitted a letter in response  X-to many of the issues raised at the status conference.e {O-ԍxSee Letter from Gary M. Epstein and Teresa D. Baer, counsel for TSC to William F. Caton, Acting Secretary, FCC (July 16, 1997) (July 16, 1997 TSC letter). On October 28 , 1997, Telmex submitted a letter specifying the conditions that it is willing to accept as part of the TSC  Xv-Section 214 authorization.Tv"e {OI -ԍxSee Telmex commitment letter.T  XH- III. DISCUSSION TP  X - xA. Application of Current Market Entry Rules  X -x 10.` ` The Commission has proposed to eliminate the current effective competitive  X -opportunities (ECO) test for U.S. market entry for WTO Member countries such as Mexico as  X -part of our Foreign Participation proceeding.?\ e {O#-ԍxSee Rules and Policies on Foreign Participation in the U.S. Telecommunications Market, Notice of  {O-Proposed Rulemaking, IB Docket No. 97142, FCC 97195 (rel. June 4, 1997) (Foreign Participation  yO-Proceeding).? Under the proposed rules, we would not examine whether Mexico offers U.S. switched resellers the ability to compete in Mexico.  X-Until final rules are adopted, however, we must continue to apply our existing Foreign  X}-Carrier Entry Order framework.#}e {O-#X\  P6G;P#эxSee Market Entry and Regulation of Foreignaffiliated Entities, Report and Order, 11 FCC Rcd 3873  {O-(1995), recon. pending at 3912 (Foreign Carrier Entry Order).# We therefore examine TSC's entry into the U.S. market under our current rules.  X:-x 11.` ` TSC's affiliation with a foreign carrier requires us to review its application  X#-under the framework established in the Commission's Foreign Carrier Entry Order.#4 e yO-#X\  P6G;P#эxThe Commission specifically stated that it would apply the ECO test to foreignaffiliated carriers that  {O-seek to provide international service via switched resale to markets in which they possess market power. Foreign  {O -Carrier Entry Order 11 FCC Rcd at 3928 and 47 C.F.R. 63.18(h)(7). The Commission defined affiliation to include an ownership interest of greater than 25 percent, or a controlling interest at any level, in a U.S. carrier by  {O,"-a foreign carrier. Id. at 390006 and 47 C.F.R.  63.18(h)(1)(i)(B).  In that order, the Commission stated that carriers seeking to provide international services to countries in which they have an affiliate with control of bottleneck services or facilities must demonstrate that the affiliated market offers effective competitive opportunities for U.S."0*%%ZZ"  X-carriers seeking to offer like services.e {Oy-#X\  P6G;P#эXxForeign Carrier Entry Order at 392630 and 47 C.F.R.  63.18 (h)(7).(#ƭ The Commission stated that it would apply the ECO analysis only to Section 214 applications from foreign carriers, or affiliates of foreign carriers, that have the ability to discriminate against unaffiliated U.S. carriers through the control of bottleneck services or facilities that potentially can be leveraged to the detriment of  X-unaffiliated U.S. carriers providing service to those countries.Ze {O-#]\  PCP#эXxForeign Carrier Entry Order, 11 FCC Rcd at 3912.(#Ɩ The Commission also stated that it will continue to consider other public interest factors that may weigh in favor of, or against, granting the application. These factors include the general significance of the proposed entry to the promotion of competition in the U.S. communications market; any national security, law enforcement, foreign policy, or trade concerns raised by the Executive  X1-Branch; and the presence of costbased accounting rates.N1e {O -ԍxId. 11 FCC Rcd at 3897.N  X -x 12.` ` We accordingly consider first whether TSC's affiliate, Telmex, possesses bottleneck control of services or facilities in the market TSC seeks to serve. If we find that Telmex has such control in the relevant destination market (in this case, Mexico), TSC must demonstrate whether Mexico offers U.S. carriers effective competitive opportunities to provide international services via switched resale.  Xy-xB.` ` Analysis of Telmex's Control of Bottleneck Services or Facilities  XK-x 13.` ` The Foreign Carrier Entry Order requires us to consider whether Telmex has the ability to act anticompetitively against unaffiliated U.S. carriers through control of  X-bottleneck services or facilities in Mexico.~~e {ON-#]\  PCP#эXxId., 11 FCC Rcd at 3917.(#~ Bottleneck services or facilities are "those that are necessary for the provision of international services, including intercity or local access  X-facilities on the foreign end." ie {O-#]\  PCP#эXxId.(#i We therefore examine whether TSC's affiliate, Telmex, has  X-bottleneck control over local or intercity facilities markets for terminating international switched services in Mexico, as a U.S. carrier ultimately relies upon a facilitiesbased carrier operating in those markets to reach the Mexican end user. A carrier controlling bottleneck facilities and services in the domestic local or intercity markets could discriminate in favor of an affiliate competing in the switched services markets by offering its affiliate superior technical quality, faster provisioning, or preferential rates. "P0*%%ZZ"Ԍ X-x 14.` ` Telmex was the stateowned monopoly provider of telecommunications services  X-in Mexico until 1990.e yOb-ԍxTSC application at 12. TSC notes that Telmex never had an exclusive concession to provide local  {O*-telephone service. Id. at note 13. That year, the Mexican Government privatized Telmex and amended its concession to authorize Telmex to operate a public switched local and long distance  X-telephone network throughout Mexico."e {O-ԍxSee Amendment to the Concession of Tel)fonos de M)xico, S.A. de C.V., Official Gazette, Dec.10, 1990 (Telmex Concession). The concession gave Telmex the exclusive right to provide domestic and international longdistance services until August 11, 1996. The concession further required Telmex to interconnect with other public switched long distance  Xv-networks beginning January 1, 1997.Jv|e yO -ԍxTSC application at 1213.J Although Telmex has been subject to increasing competition since January of 1997, it continues to maintain the only ubiquitous local and intercity networks in Mexico. TSC has not argued or sought to demonstrate that Telmex lacks control over bottleneck services or facilities in Mexico. Given Telmex's status in Mexico's telecommunications market and the absence of any showing otherwise, we assume for purposes of this decision that TSC's affiliate, Telmex, has the ability to discriminate against unaffiliated U.S. international carriers terminating traffic in Mexico through its  X -bottleneck control over facilities for terminating U.S. international switched services in  X -Mexico. e {O{-ԍxSee Telia North America, Inc., Order, Authorization and Certificate, File No. ITC96545, DA 97511 (Int'l Bur., rel. March 11, 1997) at  8.  X-xC. Effective Competitive Opportunities Analysis x` ` 1. Introduction  X4-x15.` ` As the Commission noted in the Foreign Carrier Entry Order, our approach in applying the ECO analysis to a switched resale application differs from the approach we apply  X-in the context of a facilitiesbased application.gf e {O-ԍxForeign Carrier Entry Order, 11 FCC Rcd at 3928.g In the context of a switched resale application, the analysis focuses on whether effective competitive opportunities exist to provide switched resale (as opposed to facilitiesbased) international service in the destination market of a carrier with market power. The ECO test, as applied to switched resale applications, was intended primarily to encourage the opening of foreign markets on an  X-incremental (i.e., servicebyservice) basis. The Commission did not consider ECO in this context necessary to prevent anticompetitive conduct because "[t]he ability to provide service" 0*%%ZZ2" via resale does not offer as great a potential for anticompetitive conduct as does facilities X-based entry."Oe {Ob-ԍxId., 11 FCC Rcd at 3928.O  X-x16.` ` Under the ECO test for switched resale entry, we first consider the legal, or de  X-jure, ability of U.S. carriers to provide switched resale services in the destination country where the applicant possesses market power. Next, we consider practical barriers to entry, including the existence of reasonable and nondiscriminatory charges, terms and conditions for the provision of such resale service, competitive safeguards to protect against anticompetitive and discriminatory practices affecting resale, fair and transparent regulatory procedures, and  X5-separation between the regulator and operator of international services.q5Ze {O@ -ԍxId., 11 FCC Rcd at 3929 and 47 C.F.R.  63.18(h)(7)(i).q As in the context of facilitiesbased applications, we focus on the overall effect of these elements on the opportunities to provide switched resale services in the foreign market. If, however, any of the ECO factors are completely absent, we will deny authority to provide international switched resale services to the destination country where the applicant possesses market  X -power, unless other public interest factors warrant a different result.g e {O_-ԍxForeign Carrier Entry Order, 11 FCC Rcd at 3890.g  X-x17.` ` All parties in this proceeding raise issues and arguments that extend beyond the scope of the ECO analysis for switched resale entry. Because these issues bear on the state of competition in the Mexican long distance and international market, and are relevant to our  XO-overall public interest analysis, we also address them at appropriate points below.Z! O~e yO~-ԍxOn October 23, 1997, AT&T submitted additional information describing alleged continuing  {OF-anticompetitive conduct by Telmex. See Letter from Judy Simonson, AT&T to Regina Keeney, Chief, Int'l Bur., FCC (October 23, 1997) (October 23, 1997 AT&T letter). In addition to allegations previously raised by AT&T in its pleadings, AT&T asserts that Telmex has acted anticompetitively by: 1) failing to comply with its obligations with respect to the implementation of presubscription; 2) benefitting unfairly from the Mexican regulators' assessment of charges on all Mexican carriers for Telmex's expenses associated with the introduction of competition; 3) failing to comply with its obligations to provide competitors billing and collection services for collect calls; and 4) requiring charges for customers who seek to make domestic 800 calls from pay phones. These allegations extend far beyond the scope of the ECO analysis for international switched resale services. AT&T's allegations, even if true, do not appear to be connected in any significant way to potential competitive harms in the U.S. international services market. Nevertheless, we will monitor these issues, many of which are pending before the Mexican regulators. If and when it can be demonstrated that Telmex has the ability to act anticompetitively in the Mexican market, and such anticompetitive activity is adversely affecting competition in the U.S. international services market, we will consider whether to impose additional conditions or safeguards on TSC's authorization.Z x"8!0*%%ZZ "Ԍ X-x` ` 2. Switched Resale Entry in Mexico  X-x18.` ` We first consider whether U.S. carriers have the legal ability to provide switched resale services in Mexico. TSC states that the Federal Telecommunications Law  X-(FTL), enacted by the Mexican Legislature in 1995,p"e yO-ԍxFederal Telecommunications Law, Official Gazette, June 7, 1995.p specifically permits the resale of domestic and international long distance services pursuant to Mexican Government regulations. TSC acknowledges, however, that the Mexican telecommunications regulatory agency, Comisi;n Federal de Telecomunicaciones (Cofetel), has not issued resale regulations  XH-or permits to "pure" (i.e., nonfacilities based or "stand alone") resale carriers. TSC claims that Cofetel's President has advised Telmex's representatives that Cofetel intends to issue its resale regulations in the near future and Cofetel expects pure resale to commence in Mexico  X -soon.G# Xe yO-ԍxTSC application at 14.G  X -x19.` ` TSC further indicates that facilitiesbased carriers operating in Mexico are currently authorized to provide service via both their own facilities and/or the resale of other carriers' services. TSC points out that at least six facilitiesbased carriers competing with Telmex in Mexico are affiliated with U.S. partners, and that some of them are relying entirely on the resale of Telmex's services in order to provide domestic and international switched  Xd-long distance services in Mexico.D$de {O-ԍxId. at 1517.D TSC concludes that U.S.affiliated carriers have the legal ability to compete in the resale of international switched services in Mexico, as evidenced by  X6-the fact that such carriers are already providing those services there.A%6ze {Oa-ԍxId. at 17.A  X-x20.` ` AT&T, MCI and WorldCom argue that U.S. carriers do not have the legal ability to provide switched resale services in Mexico. These petitioners each note that pure resale of Telmex's services for the provision of international switched resale is not permitted in Mexico. Rather, resale is only permitted by those carriers that also provide facilitiesbased  X-services in Mexico.v& e yOi -ԍxAT&T petition at 24; MCI petition at 34; WorldCom petition at 34. v WorldCom states that it understands that the Mexican Government intends to delay the issuance of regulations and resale permits for at least 18 months to two  X~-years in order to allow the facilitiesbased carriers a head start in the Mexican market.H'~e yO#-ԍxWorldCom petition at 4.H In  Xg-addition, AT&T and WorldCom also state that Mexico limits foreign ownership of the carriers"g , '0*%%ZZ1"  X-currently allowed to provide switched resale services to 49 percent.`(e yOy-ԍxAT&T petition at 45; WorldCom petition at 45.` Although the FTL authorizes 100 percent foreign ownership of pure resale carriers, no such permits have yet been issued. As a result, petitioners argue that Mexican carriers currently allowed to provide resale services are effectively limited to 49 percent nonMexican ownership. WorldCom requests that any grant of Section 214 authorization to TSC be conditioned on a future showing by TSC that the Mexican government has published the necessary resale regulations and issued resale permits.  XH-x21.` ` TSC replies that Mexico satisfies the de jure prong of the ECO test because U.S.affiliated facilitiesbased carriers and others are already reselling domestic and international switched long distance services, and that pure resale is expected to commence in  X -Mexico in the very near future.E) Xe yO-ԍxTSC opposition at 7.E TSC states that it understands Cofetel will issue resale regulations and award resale permits by the end of 1997. TSC states further that this time frame is assured independently by Mexico's WTO commitments, which specifically include a commitment to allow competition in all market segments of public telecommunications services, on both facilities and resale bases, by January 1, 1998. TSC also argues that AT&T's and MCI's arguments on this point are disingenuous. According to TSC, AT&T's and MCI's affiliates in Mexico, Alestra and Avantel, respectively, have urged Cofetel to postpone the issuance of resale authorizations until they solidify their competitive position in Mexico. Finally, TSC argues that WorldCom's claim that Mexico imposes an effective 49 percent foreign ownership limitation on resellers is erroneous. Despite the fact that pure resellers are not allowed to operate in Mexico now, TSC asserts that Mexican law imposes no foreign ownership limitations on standalone resellers. TSC concludes that Mexico imposes  X-no barriers to competition from U.S.affiliated carriers.C*e {O-ԍxId. at 912.C  X-x22.` ` In response, AT&T states that TSC's "understanding" concerning Cofetel's intentions to issue resale permits in the "near future" does not provide the reasonable certainty  X-required by the Foreign Carrier Entry Order that resale opportunities must be available to  X-U.S. carriers.u+ze {O -ԍxAT&T reply at 4; see also MCI reply at 3, WorldCom reply at 4.u MCI states that in fact there is no scheduled date for the implementation of  Xi-regulations or issuance of the permits necessary to provide pure switched resale in Mexico.@,i e yO&#-ԍxMCI reply at 3.@  XR-MCI also states that the competitive carriers (i.e., Alestra and Avantel) did not ask the Mexican government for a delay in the implementation of resale regulations. According to"= ,0*%%ZZ" MCI, Telmex's competitors believed that implementation by the Mexican government of other issues such as equal access were more important than resale. As a result, Telmex's competitors simply requested that other issues such as equal access be granted priority over  X-implementation of resale regulations.F-e {O4-ԍxId. at note 10.F  X-x23.` ` We agree with petitioners that, at present, U.S. carriers may not provide the same service in Mexico that Telmex's affiliate, TSC, now seeks to provide in the United States. That is, U.S. carriers who have not entered the Mexican market on a facilities basis are not able to provide "pure" switched resale services in Mexico. Although the FTL permits switched resale competition, regulations governing the provision of "pure" switched resale have not yet been published and Cofetel has not yet issued any resale permits. We understand that this is due in part to the Mexican Government's policy of promoting competitive infrastructure during the period in which competition is being first introduced to the  X -incumbent carrier.V. Ze {O-ԍxSee October 22 SCT Letter at 3.V We nevertheless anticipate, based on the record, that Mexico will publish the relevant regulations and issue resale permits in the near future. First, as the applicant demonstrates, the FTL specifically permits the resale of domestic and international long  X-distance services pursuant to regulations and permits to be issued by Cofetel.R/e {O--ԍxSee FTL arts. 44(I), 5254.R Second, Mexico specifically committed in its WTO commitments to open its market to allow resale  Xb-services effective January 1, 1998.n0b~e {O-ԍxSee WTO Doc. No. GATS/SC/56/Suppl. 2 (April 11, 1997). n Third, current Mexican regulations have permitted at least six U.S.affiliated, facilitiesbased carriers to compete through resale of Telmex's domestic and international switched long distance services.  X-x24.` ` Thus, although Mexico does not currently offer nonfacilitiesbased U.S. carriers the ability to provide "pure" switched resale services, several facilitiesbased affiliates of U.S. carriers are currently providing resale services and TSC has demonstrated that  X-regulations are likely to be published, and resale permits granted, in the near future.'1Ze {O-ԍxSee Foreign Carrier Entry Order, 11 FCC Rcd at 3891 ("a favorable effective competitive opportunities finding can be made if such opportunities currently exist or if it is reasonably certain that they will be available in the near future.")' Consequently, we find that Mexico can be reasonably expected to allow the provision of "pure" switched resale services in the near future. In the event that Mexico does not take the necessary actions to permit "pure" switched resellers to operate in the near future, we reserve the right to revisit this issue to determine whether TSC's authorization should be revoked or,"e 2 10*%%ZZ" alternatively, whether TSC's authorization should be subject to additional conditions and/or safeguards.  X-x` ` 3. Practical Barriers to Entry  X-x25.` ` We now consider practical barriers to entry, including the existence of reasonable and nondiscriminatory charges, terms and conditions for the provision of resale service, competitive safeguards to protect against anticompetitive and discriminatory practices affecting resale, fair and transparent regulatory procedures, and separation between the regulator and operator of international services. x` `  a. Resale charges, terms and conditions  X -x26.` ` TSC maintains that Mexican rules and procedures ensure the existence of reasonable and nondiscriminatory charges, terms and conditions for the resale of Telmex's domestic and international switched long distance services. In addition, TSC indicates that the Mexican Government's policies ensure that there is an effective means to monitor and enforce  Xy-these charges, terms and conditions.G2ye yO-ԍxTSC application at 18.G  XK-x27.` ` More specifically, TSC states that Telmex sells its domestic and international  X4-long distance services to its facilitiesbased competitors34Xe yO=-ԍxAs noted above, under Mexican law, facilitiesbased carriers in Mexico are authorized to resell Telmex's long distance and international services. under its "Plan Lada Operadores" (Plan), which is uniformly available on the same terms and conditions to all long distance service providers. According to TSC, all entities subscribing to this Plan, including Telmex's competitors offering resale services, receive an identical 38 percent discount off of Telmex's publicly filed tariffs for domestic and international long distance services, resulting in a  X-charge of approximately 18 cents per minute.P4e yO"-ԍxTSC application at 1819.P TSC also indicates that there is an effective means to monitor and enforce the terms for the resale of Telmex's services. Mexican law requires Telmex to register with Cofetel its tariffs for providing long distance services and Cofetel must maintain this information in its publicly available National Telecommunications Registry. Finally, TSC states that Telmex's concession prohibits it from granting preferential treatment to any person and Mexican law prohibits all operators from applying tariffs in a  X7-discriminatory manner.A57@e {O($-ԍxId. at 19.A"7 50*%%ZZ"Ԍ X-ԙx28.` ` Petitioners argue that Telmex fails to provide reasonable and nondiscriminatory  X-charges, terms and conditions for the provision of resale service.6e {Ob-ԍxSee AmericaTel petition at 68; AT&T petition at 56; MCI petition at 45. AT&T states that in addition to the Plan rate, carriers reselling Telmex's services must pay Telmex the  X-interconnection charges required under Mexico's Domestic Interconnection Order, or approximately $0.025 per minute. AT&T maintains that because Telmex customers under this Plan do not pay access charges, Telmex is in effect doublerecovering the interconnection  Xx-charge from its competitors and imposing on them an additional expense.F7xZe yO -ԍxAT&T petition at 56.F MCI complains that the 38 percent discount is restricted to traffic over interconnection facilities purchased from Telmex and to traffic originating from only those cities that have converted to equal  X3-access.E83e yO -ԍxMCI petition at 45.E  X -x29.` ` TSC disagrees that Telmex is allowed to double recover originating access charges. TSC further states that because resale charges are entirely unregulated in Mexico, the Mexican competitors, including AT&T's affiliate, Alestra, negotiated with Telmex and agreed to the 38 percent discount. In addition, TSC claims that the competitors rejected a greater 50 percent discount on the ground that resale of their own facilities would not be  X-profitable at such a deep discount.F9ze yO-ԍxTSC opposition at 15.F TSC also argues that MCI's complaint is meritless because Telmex's competitors cannot provide service to customers in a particular city until  Xd-that city has at least begun the process of converting to equal access.A:d e {O-ԍxId. at 16.A  X6-x30.` ` MCI replies that the 38 percent discount Plan was more favorable than the 50 percent discount Plan initially offered by Telmex because it applies to both peak and offpeak rate levels. MCI also states that the geographical limitations of the Plan discriminate against Telmex competitors. While the competitors can offer resale only in those cities that are converting to equal access, Telmex continues to offer the same plan to its business customers throughout Mexico. In addition, MCI complains that, because Telmex offers the same rate to its business customers, Telmex's competitors are left with no margin to compete with  X-Telmex.B;e yO"-ԍxMCI reply at 67.B AT&T also asserts that Telmex's failure to offer its competitors a wholesale rate that is lower than the retail rate Telmex offers its large business customers is discriminatory. According to AT&T, Telmex's resale plan offered to large business customers is below cost"g , ;0*%%ZZ1" and, prior to intervention by the Mexican regulator, contained an anticompetitive clause  X-requiring the customer to rely exclusively on Telmex for all telecommunications services.<e yOb-ԍxLetter from Judy Simonson, AT&T to Regina Keeney, Chief, Int'l. Bur., FCC (Oct. 23, 1997) at 2, 5 (October 23, 1997 AT&T letter).  X-x31.` ` We find that petitioners have not provided sufficient evidence that the charges, terms and conditions under which Telmex provides resale services are unreasonable or discriminatory. First, Telmex's new competitors have rapidly been able to gain a substantial share of the Mexican longdistance market, much of it through reselling Telmex's services. According to the Mexican Government and TSC, the new entrants have, in less than a year, captured up to 30 percent of the Mexican longdistance market in the 60 cities (representing over 75% of the total access lines in Mexico) in which carrier presubscription has been  X -introduced.= e yO -ԍxOctober 22, 1997 SCT letter at 2; TSC opposition at 34; TSC July 16, 1997 letter at 2; Telmex commitment letter at 1. In addition, according to Telmex estimates, approximately half of Alestra's and Avantel's long distance services, and the majority of some of the new competitors' long X -distance services, currently are provided over resold Telmex facilities.E> xe yO-ԍxTSC opposition at 8.E Thus, although petitioners may prefer that Telmex's resale services be made available on more favorable terms, it does not appear that such terms are so unreasonable or discriminatory as to prevent the Mexican competitors from taking substantial market share away from Telmex via resale of Telmex's services.  Xb-x32.` ` Second, we do not find that AT&T or MCI has demonstrated that the Telmex Plan is unreasonable or discriminatory. The fact that Telmex may offer the Plan to its own customers at the same rate that it offers it to Avantel does not, by itself, indicate that Telmex discriminates against its competitors. MCI has not shown that Telmex provides Avantel with a worse rate than Telmex charges its own customers and AT&T has not presented any evidence that Telmex's business offering is below cost. In addition, MCI has not demonstrated that Avantel lacks the ability to negotiate a better rate, or that it cannot provide competitive service at the Plan rate by providing innovative service offerings, such as improved billing. We also note that Telmex's competitors are not limited to competing against Telmex through resale of Telmex's services. Rather, carriers such as Avantel may provide, and are providing, service by building out facilities to their customers. Finally, we find that the Mexican regulators bear primary responsibility to determine whether the rates, terms and conditions of Telmex's resale plans are discriminatory or anticompetitive. We will nevertheless monitor this issue to determine whether Telmex's international switched resale plans have an anticompetitive effect on U.S.international markets. At present, however, we" >0*%%ZZz" find that the petitioners have failed to demonstrate that the charges, terms and conditions under which Telmex provides resale services are unreasonable or discriminatory. XxX` ` X (# x` `  b. Competitive safeguards  X-x 33.` ` We now examine whether Mexico provides competitive safeguards to protect against anticompetitive and discriminatory practices affecting resale and facilitiesbased services. The safeguards we consider important include: (1) existence of costallocation rules to prevent crosssubsidization; (2) timely and nondiscriminatory disclosure of technical information needed to use, or interconnect with, carriers' facilities; and (3) protection of  X -carrier and customer proprietary information.m? e {O -ԍxForeign Carrier Entry Order, 11 FCC Rcd at 3893, 3929.m In its application, TSC states that Mexico has  X -significant safeguards in place to protect against anticompetitive activities by Telmex.L@ Ze yO-ԍxTSC application at 2527. L For example, TSC indicates that Mexico has rules to prevent crosssubsidization, provisions for timely and nondiscriminatory disclosure of technical information among competitors, and protections for carrier and customer proprietary information. Generally, petitioners disagree that Mexico has adopted sufficient competitive safeguards to prevent Telmex from  X-discriminating against unaffiliated carriers.Ae yO+-ԍxAmericaTel petition at 9; AT&T petition at 910; AT&T Oct. 23, 1997 letter at 7; MCI petition at 89.  Xb-x` `  i) Crosssubsidization regulations  X4-x!34.` ` TSC states that Telmex's concession and the FTL expressly prohibit Telmex  X-from crosssubsidizing any competitive services.|Bze yOH-ԍxTSC application at 25 (citing Telmex Concession at  210; FTL art. 62).| TSC also states that Telmex is required to maintain and provide the Mexican regulator with accounting records that show all transactions for services between Telmex and its subsidiaries and affiliates. In addition, TSC indicates that Cofetel is currently considering whether to impose additional costallocation requirements that  X-will address the allocation of costs between local and long distance services.cC e yO|-ԍxTSC application at 2526; TSC opposition at 1920.c  X-x"35.` ` Petitioners concede that general prohibitions against crosssubsidization exist, but assert that these general prohibitions are insufficient. For example, AmericaTel states that there are no procedures in place for the separation of local service costs from international switched service costs or the allocation of specific costs to each service, nor are there"NC0*%%ZZ"  X-provisions for implementation and enforcement, reporting, record keeping or auditing.De {Oy-ԍxAmericaTel petition at 10; see also MCI petition at 9, AT&T petition at 8. AT&T asserts that because no mandatory accounting separation process exists in Mexico, Telmex has the ability to crosssubsidize its international longdistance services and price  X-these services at below cost.PEZe yO-ԍxAT&T Oct. 23, 1997 letter at 7.P TSC argues that in addition to the specific prohibitions against Telmex engaging in crosssubsidization, Telmex has submitted to the Mexican regulator financial statements audited by Ernst & Young that provide an allocation of costs between local and long distance services. Telmex plans to make these financial statements public in its next annual report. In addition, TSC reiterates that Cofetel is expected to issue detailed cost  XH-allocation rules applicable to Telmex in the near future.IFHe yO -ԍxTSC opposition at 1920.I  X -x#36.` ` Although the absence of detailed costallocation rules may be problematic, we note that none of the petitioners has demonstrated that Telmex has engaged in any crosssubsidization of its competitive services. The fact that Telmex's Concession and the FTL expressly prohibit Telmex from crosssubsidizing any competitive services provides some  X -protection against such anticompetitive behavior.hG ze {O-ԍxSee Telmex Concession at  210; FTL, art. 62.h These existing prohibitions, combined with the anticipated implementation of new costallocation rules, should provide sufficient  X-safeguards against crosssubsidization.H$ e yOM-ԍxOn October 23, 1997, Cofetel published local service rules with the object of introducing competition in  {O-the Mexican local telecommunications market. See Local Service Rules, Official Gazette, October 23, 1997. Among other things, these rules require Cofetel to publish within 180 days the methodology under which local  {O-service concessionaires must implement accounting separation by service. Id. at Fourth Transitory Clause, p. 36. We emphasize, however, that we continue to be concerned about the potential for crosssubsidization which could affect competition in the U.S. market. If, in the future, we find evidence of such activity, we reserve the right to subject TSC's authorization to additional conditions and/or safeguards.  X-x` `  ii) Disclosure of technical network information  X-x$37.` ` TSC states that Cofetel has ensured timely and nondiscriminatory disclosure of technical information that competitors need to use or interconnect with Telmex's network. As evidence of the sufficiency of Mexican requirements, TSC notes that Telmex has entered into more than 50 agreements with its competitors providing them sufficient technical information to allow them to interconnect with Telmex's network. In addition, TSC states that under Cofetel's oversight, and with the advice of Bellcore, numerous industry committees composed"| H0*%%ZZ2" of representatives from all the Mexican carriers implement numbering, signaling and other  X-technical plans, further ensuring the interoperability of competing networks.JIe yOb-ԍxTSC application at 2627.J  X-x%38.` ` Petitioners disagree that Mexican regulations ensure timely and nondiscriminatory disclosure of technical information concerning Telmex's network. AmericaTel argues that TSC fails to describe any regulations or Cofetelprescribed procedures that specifically require Telmex to disclose necessary technical information on a timely and  X_-nondiscriminatory basis.KJ_Xe yOh -ԍxAmericaTel petition at 11.K Similarly, MCI alleges that it understands that Telmex has failed to  XH-produce technical information in a timely manner.CKHe yO -ԍxMCI petition at 9.C In response, TSC argues that the petitioners' arguments are meritless since they do not include a single example of a failure by  X -Telmex to provide sufficient technical information to Telmex's competitors.IL xe yOC-ԍxTSC opposition at 2021.I TSC states that Telmex has not only entered into over 50 separate agreements with competitors, but has also established a separate entity staffed by over 230 people to attend solely to the operational,  X -technical, marketing and other needs of its competitors.IM e yO-ԍxTSC opposition at 2021.I  X -x&39.` ` In the International Bureau's TNZL Order, we stated that a dominant carrier is likely providing competitors with adequate technical information to interconnect if parties do not present any specific evidence to the contrary. We also found that evidence that competitors have achieved significant shares of the international and long distance toll markets provide further assurance that competitors are able to obtain sufficient information to  X6-interconnect. N6e {O-ԍxTelecom New Zealand Limited, Order, Authorization and Certificate, DA 962182 at  28 and footnote  {OI-66 (Int'l Bur., Dec. 31, 1996), application for review pending (TNZL Order).  In this proceeding, none of the petitioners has provided any evidence that Telmex's competitors have been unable to obtain sufficient technical information to interconnect with Telmex's network. For example, MCI provides no examples of instances in which Telmex failed to produce technical information in a timely manner. In addition, the Mexican Government and the applicant have demonstrated, and petitioners have not refuted, that Telmex's competitors have succeeded in obtaining a significant share of the Mexican  X-longdistance and international toll markets.O e {OQ$-ԍxSee e.g., October 22, 1997 SCT letter at 2; Telmex commitment letter at 1. Absent evidence to the contrary, the ability of" O0*%%ZZ" Telmex's competitors to obtain a significant share of the Mexican telecommunications market provides us with a reasonable basis to conclude that facilitiesbased competitors in Mexico have access to adequate technical information to interconnect with Telmex's network.  X-x` `  iii)  Carrier and customer proprietary information  Xx-x'40.` ` TSC states that Mexican law provides adequate protection of carrier and customer proprietary information. Specifically, TSC indicates that Telmex is barred from obtaining access to its competitors' proprietary information because all of the carriers submit such information directly to a jointly selected, neutral, thirdparty database administrator. With respect to customer proprietary information, TSC states that Telmex's Concession prohibits Telmex from disclosing such information without a customer's prior consent. The FTL further requires concessionaires to act on a nondiscriminatory basis in disclosing customer information to affiliates, subsidiaries, and third parties. Finally, TSC states that the FTL also requires Telmex to provide competitors sufficient information to enable them to compile their own telephone directories, and Telmex is subject to sanctions if there are errors  X-in its directory user database information.Pe yO -ԍxTSC application at 27 (citing Telmex Concession at  43, and FTL, arts. 44.X and 71.B.III).  Xd-x(41.` ` AmericaTel and AT&T disagree that Mexican law provides adequate protection of carrier and customer proprietary information, but do not provide any specific evidence of  X6-any actual or potential abuses by Telmex._Q6Xe yO?-ԍxAmericaTel petition at 11; AT&T petition at 8._ In response, TSC states that, in addition to complying with the requirements of Telmex's concession and the FTL, Telmex has put in place specific internal procedures to protect proprietary information, and agreements executed among the Mexican carriers contain further provisions prohibiting Telmex from misusing any  X-customer or carrier proprietary information.FRe yOs-ԍxTSC opposition at 22.F  X-x)42.` ` It appears that Telmex has affirmative obligations under its concession and Mexican law to protect carrier and customer proprietary information. Specifically, Telmex's  X~-Concession prohibits Telmex from disclosing customer proprietary information.YS~xe {O -ԍxSee Telmex Concession at  43.Y The FTL requires concessionaires to act on a nondiscriminatory basis in disclosing customer  XP-information to affiliates, subsidiaries and third parties.JTP e {O $-ԍxSee FTL, art. 44.X.J In addition, we find no basis in this proceeding to question TSC's claim that Telmex's agreements with its competitors safeguard"9T0*%%ZZ" proprietary information. None of the petitioners has identified any instances of abuse by Telmex of customer or carrier proprietary information. Thus, consistent with our findings in  X-the TNZL Order,QUe {OK-ԍxSee TNZL Order at  29.Q we find that sufficient safeguards protect against Telmex disclosure of carrier and customer proprietary information.  X-x*43.` ` In sum, it appears that Mexico provides, or in the near future will provide, sufficient competitive safeguards to protect against anticompetitive and discriminatory practices affecting resale and facilitiesbased services. Specifically, existing prohibitions against crosssubsidization, combined with the anticipated implementation of new costallocation rules, appear to provide sufficient safeguards against Telmex engaging in crosssubsidization. In addition, facilitiesbased competitors in Mexico appear to have access to adequate technical information to interconnect with Telmex's network. Finally, it appears that sufficient safeguards protect against Telmex disclosure of carrier and customer proprietary information. We reiterate, however, that we remain concerned about any anticompetitive and discriminatory practices that have an adverse effect on the U.S. international service markets. If, in the future, we find evidence of such practices, we reserve the right to subject TSC's authorization to additional conditions and/or safeguards. x` `   Xd-x` `  c. Regulatory framework  X6-x+44.` ` The fourth factor to be reviewed under our ECO analysis is whether there is an effective regulatory framework in Mexico to develop legal requirements, interconnection arrangements and other competitive safeguards. The focus of this prong of the analysis is on whether there is separation between the foreign regulator and the operator of international services, and whether there are fair and transparent regulatory procedures in the destination market. Sufficient separation between the operator and the regulator is necessary to ensure that the regulator is independent, empowered, and does not have a conflict of interest in regulating the operator. Without sufficient separation, there is little reason to believe that the regulator will not favor the operator. Transparent procedures allow competitors to know precisely what obligations are required of the incumbent dominant carrier and what rights they  XP-have to seek enforcement of such obligations.gVPZe {O[-ԍxForeign Carrier Entry Order, 11 FCC Rcd at 3894.g  X"-x,45.` ` In its application, TSC states that Mexico has fair and transparent regulatory procedures administered by a regulatory body that is separate and independent from Telmex  X-and any other telecommunications provider.JWe yO$-ԍxTSC application at 2831.J More specifically, TSC explains that Telmex"|W0*%%ZZ" has been independent from the Mexican government since it was privatized in 1990. Currently, regulation of telecommunications is divided between the Secretariat of Communications and Transport (SCT) and Cofetel. The SCT is a government ministry that, among other things, is responsible for issuing concessions and permits. Cofetel, a telecommunications regulatory commission, reports to the SCT's newly organized Subsecretariat of Communications and is responsible for most of the daytoday regulatory  Xv-duties relating to telecommunications.<X|ve {O-ԍxId. at 2829. According to TSC, Cofetel's duties include, among other things, issuing rules relating to telecommunications; recommending amendments to existing laws and regulations; making recommendations to SCT on applications for the grant, modification, renewal, transfer and revocation of concessions and permits; administering radiofrequency spectrum; promoting and overseeing interconnection of equipment and public telecommunications networks; registering tariffs for telecommunications services and establishing specific obligations relating to tariffs, quality of service, and provision of information by carriers with substantial market  {O -power; and ensuring carriers comply with the obligations set forth in concessions and permits. Id.< TSC maintains that Cofetel operates under fair and transparent procedures. It notes that the FTL establishes guidelines for the conduct of regulatory proceedings, including licensing procedures and the mediation of interconnection disputes. TSC also argues that the FTL requirement that Cofetel maintain a publicly available  X -National Telecommunications Registry ensures transparency of decisionmaking.iY e {O-ԍxId. at 30. The National Telecommunications Registry (available over the internet at http:\\www.sct.gob.mx) contains information relating to: 1) all concessions, permits and frequency assignments; 2) valueadded service providers; 3) all encumbrances imposed on concessions and permits; 4) the transfer of rights and obligations; 5) frequencies authorized in the different zones of the country; 6) interconnection requirements; 7) tariffs to the public for telecommunications services; and 8) other matters concerning concessionaires' and permittees' operations.i Finally, TSC states that in order to ensure fair decisionmaking, the FTL makes clear that actions such as revoking concessions and imposing sanctions must be taken in accordance with Mexico's  X -Federal Law of Administrative Procedure.VZ e {O -ԍxId. at 30 (citing FTL art. 74).V  X -x-46.` ` Petitioners disagree that Mexico provides fair and transparent regulatory  X-procedures.d[e yOY-ԍxAT&T petition at 89; AmericaTel petition at 1214.d For example, AT&T and AmericaTel argue that Mexico fails to provide for sufficient public input into its regulatory procedures because Mexican regulatory bodies are  Xb-not required to seek or take account of public comment.a\be yO!-ԍxAT&T petition at 89; AmericaTel petition at 14.a AmericaTel also argues that Cofetel is an inexperienced regulatory body that lacks authority to act on many regulatory matters. It points out that the SCT, to which Cofetel reports, is the same organization that oversaw Telmex's governmentowned operations until 1990. AmericaTel concludes that the"8\0*%%ZZ " SCT "may" continue to bestow an unfair advantage on Telmex, thereby thwarting the  X-development of effective competitive opportunities.D]e {Ob-ԍxId. at 1213.D  X-x.47.` ` In response, TSC argues that petitioners' arguments are baseless. Specifically, TSC notes that AT&T does not state what types of procedures are lacking to ensure public input. In addition, TSC points out that AmericaTel does not offer a single example of favoritism that the SCT has or could bestow upon Telmex. While acknowledging that the SCT and Cofetel are not carbon copies of the FCC, TSC maintains that Mexico has  XH-established a sound, fair regulatory regime.I^HZe yOS -ԍxTSC opposition at 2526.I  X -x/48.` ` We find that petitioners fail to demonstrate that Mexico lacks sufficient regulatory oversight to protect and promote competition in the Mexican telecommunications market. First, we note that the SCT and Cofetel are legally distinct from Telmex and all  X -other carriers, and that the record does not provide any evidence that either body fails to operate impartially. Second, the SCT and Cofetel have implemented several procompetitive measures that have provided significant opportunities for U.S.affiliated carriers to compete. The SCT has granted a number of concessions to facilitiesbased carriers, many of which are affiliated with U.S. firms. The SCT and Cofetel have also demonstrated they are committed to implementing fair and transparent regulatory procedures. These bodies have solicited public comment and involved all of the carriers in major rulemakings and dispute resolutions. Moreover, actions such as revoking concessions and imposing sanctions must be taken in  X-accordance with Mexico's Federal Law of Administrative Procedure.M_e {O-ԍxSee FTL art. 74.M The SCT and Cofetel have also overseen a rapid rollout of equal access and carrier presubscription throughout Mexico. As a result, competing carriers have been able to capture a significant share of the Mexican long distance and international markets. In light of the expanding list of competitors in the Mexican long distance and international service markets, and the apparent success of at least some of these competitors in taking away substantial market share from Telmex, we conclude that there is adequate regulatory oversight in Mexico.  Xe-x049.` ` Over the past year, Cofetel and the SCT have taken a leadership role in introducing competition in the Mexican telecommunications market. These independent regulatory bodies have taken significant steps to introduce competition into a telecommunications market that was, until recently, a monopoly. Until August 11, 1996, Telmex retained the exclusive right to provide longdistance and international services. Competitors to Telmex were not allowed to interconnect with Telmex's network until January"|_0*%%ZZ<" 1, 1997. Since then, Telmex competitors have, through Cofetel's and the SCT's oversight, captured between 25 and 30 percent of the Mexican longdistance and international services market where presubscription has been introduced. In addition, Cofetel and SCT have overseen an aggressive implementation of equal access and presubscription throughout Mexico in 1997. In the first four months of this year, presubscription was introduced in Mexico's 22 largest cities. To date, the SCT and Cofetel have overseen the introduction of equal access into Mexico's 60 largest cities, accounting for more than 75 percent of Mexico's total access lines. In short, Cofetel and the SCT have taken dramatic, concrete steps to facilitate the introduction of competition in Mexico. x` ` 4. Conclusion  X -x150.` ` In summary, we find that effective competitive opportunities exist for U.S. carriers to provide international services in Mexico. U.S.affiliated carriers have, in a relatively short period of time, captured a significant share of the Mexican longdistance and international markets by providing service on both a facilities and switched resale basis. Although Mexico does not currently offer nonfacilitiesbased U.S. carriers the ability to provide switched resale services, the record indicates, and we expect, that U.S. carriers will be  Xb-able to offer such services in the near future.'`Zbe {O-ԍxSee Foreign Carrier Entry Order, 11 FCC Rcd at 3891 ("a favorable effective competitive opportunities finding can be made if such opportunities currently exist or if it is reasonably certain that they will be available in the near future.")' In addition, there do not appear to be practical barriers which prevent the provision of international services in Mexico. The charges, terms and conditions under which Telmex provides resale services to its competitors do not appear to be unreasonable or discriminatory. Finally, competitive safeguards and an independent regulatory framework provide checks on the potential for anticompetitive conduct by Telmex in favor of its affiliate, TSC. x` ` 5. Other public interest factors x` `   X-x251.` ` The additional factors we consider relevant to Section 214 public interest analyses include: the general significance of the proposed entry to the promotion of competition in the U.S. communications market; any national security, law enforcement, foreign policy, or trade concerns raised by the Executive Branch; and the presence of cost X7-based accounting rates.Ca7e {O!-ԍxId. at 3897.C " |a0*%%ZZ\"Ԍ X-x352.` ` As noted above, we conclude that TSC's entry will promote competition in the U.S. market, offering significant benefits to consumers. We also note that the Executive Branch has not raised any concerns with respect to this application.  X-x453.` ` Currently, the perminute settlement ratebe yO-ԍxThe settlement rate refers to each carrier's portion of the accounting rate. In almost all cases, the settlement rate is equal to onehalf of the negotiated accounting rate. At settlement, each carrier nets the minutes of service it billed against the minutes the other carrier billed. The carrier that billed more minutes of service pays the other carrier a net settlement payment calculated by multiplying the settlement rate by the number of imbalanced minutes. used to calculate net settlement payments for imbalanced minutes on the U.S.Mexican route for traffic terminated by Telmex is $0.395. This rate is effective through December 31, 1997. In a letter to the Commission dated October 28, Telmex committed to reduce its settlement rate with U.S. carriers to $0.19,  XH-effective January 1, 2000.UcHxe yOq-ԍx Telmex commitment letter at 2.U On October 28, 1997, Sprint filed with the International Bureau a request for a new, significantly reduced settlement rate with Telmex beginning January 1,  X -1998.d e yO-ԍxSprint International Settlements Policy Modification for Change in Accounting Rates for International  yO-Switched Voice Service with Mexico (filed October 28, 1997). Specifically, the request provides for combined average settlement rates of $0.375 in  X -1998, $0.345 in 1999, and $0.19 in 2000.:e ` e {O-ԍxId.:  X -x554.` ` TSC argues that as part of the introduction of competition in Mexico, both the Mexican Government and Telmex have committed to significant accounting rate reductions. Specifically, TSC notes that over the past decade, Telmex has reduced the average settlement rate per minute that it pays U.S. correspondents by almost 60 percent, from $0.98 to $0.395, and it has increased the per minute rate it pays U.S. carriers by almost 36 percent, from $0.291 to parity at $0.395. TSC further assert SRRED s that its entry would increase competition on the U.S.Mexican route and thereby drive settlement rates down even more. TSC  X4-acknowledges, however, that Telmex now receives "sizable" net settlement payments ( more than $875 million in 1996) and will continue to receive substantial payments for the  X-foreseeable future. Nevertheless, TSC asserts that these payments are now "trending down."Mf e yO -ԍxTSC application at 5, 3537.M  X-x655.` ` Petitioners argue that TSC's entry into the U.S. market cannot be deemed consistent with the public interest as long as Telmex maintains excessively large, abovecost settlement rates with U.S. correspondents. Instead, petitioners contend that any grant of" f0*%%ZZp" authorization should be conditioned on Telmex having reduced its settlement rates with U.S. carriers to no more than the applicable benchmark. Absent such a safeguard, petitioners argue that TSC will be able to price its services on the U.S.Mexican route at or below cost while, at the same time, generating substantial profits for Telmex in the form of increased  X-settlements payments received as a result of stimulated southbound traffic.nge {O-ԍxSee e.g., AT&T petition at 915; MCI petition at 1114.n In short, petitioners argue that absent a commitment by Telmex to reduce its settlement rate immediately to the benchmark, TSC will be able to engage in a "price squeeze" of competing U.S. carriers. Under this price squeeze scenario, petitioners allege that TSC will be able to offer service at or below the actual cost of providing service and thereby drive U.S. carriers out of the U.SMexico market. According to the petitioners, TSC could profitably engage in such predatory behavior because TSC's affiliate, Telmex, would receive increased settlement payments from U.S. carriers as a result of the additional traffic stimulated by reduced prices  X -for U.S.Mexico calls.:h Ze {O-ԍxId.:  X -x756.` ` TSC replies that a condition that requires Telmex to reduce its settlement rate to the benchmark is not appropriate. TSC points out that in the past, the Commission has found unpersuasive the petitioners' price squeeze argument. Moreover, TSC argues that in light of the fact that TSC will resell the services of Sprint, which holds half the capital stock of TSC, TSC would not have the ability or incentive to engage in a price squeeze. Rather, Sprint's ownership restricts TSC's ability to price its resold services on the U.S.Mexico route  X4-at or below cost.Ii4e yO-ԍxTSC opposition at 3034.I In addition, in its October 28, 1997 letter, Telmex commits that TSC will not offer its service at an average price that is below the average price at which TSC obtains  X-those services from underlying carriers.Oj|e yO3-ԍxTelmex commitment letter at 3.O  X-x857.` ` We find that Telmex's commitment to reduce its settlement rates with U.S. correspondents to the benchmark rate of $0.19 by January 1, 2000 to be a significant public interest factor weighing in favor of grant of TSC's application. As part of our ongoing effort to move accounting rates to more costbased levels, we recently established caps on the settlement rates that U.S. international carriers may pay foreign carriers for the termination of  Xe-switched traffic from the United States to other countries.Rke e {O"#-ԍxSee Benchmarks Order.R As of January 1, 2000, a U.S."ek0*%%ZZ"  X-international carrier may pay no more than a settlement rate of $0.19 to a carrier in Mexico.Gle {Oy-ԍxId. at  165.G Thus, Telmex's commitment to reduce the U.S.Mexican settlement rate to the applicable  X-benchmark rate by January 1, 2000, is consistent with the Commission's Benchmarks Order. In making this commitment, Telmex demonstrably furthers the Commission's goals with respect to accounting rate reform. Moreover, Telmex explicitly recognizes the public interest benefits that flow from significant reductions in settlement rates, including stimulating call  Xx-volumes. OmxZe yO -ԍxTelmex commitment letter at 2.O  XJ-x958.` ` We particularly welcome Telmex's willingness to commit so far in advance of,  X3-indeed, even before the effective date of the Benchmarks Order, to reach the benchmark rate. Telmex's commitment to lower its settlement rates with U.S. correspondents will allow U.S. and Mexican consumers to receive higher quality service, more service options, and lower prices. Telmex's commitment will also benefit all U.S. and Mexican carriers providing international service by stimulating growth of those services. As settlement rates, and in turn calling prices, are reduced, demand for international services on the U.S.Mexico route will be stimulated.  X}-x:59.` ` We note, however, that Telmex's commitments do not result in strict  Xf-proportionate annual settlement rate reductions in 1998 and 1999. The Commission has stated  XO-that a settlement rate agreement reached prior to January 1, 1998, the effective date of the  X:-Benchmark Order, could be found to be in the public interest even if it does not strictly  X%-comply with the  Benchmark Order's call for proportionate annual reductions. Telmex has,  X-prior to the effective date of the Commission's Benchmarks Order, committed to enter into agreements with U.S. carriers that reach the benchmark rate by the end of the specified  X-transition period and in accordance with other terms of the Benchmarks Order, with  X-significant reductions during the interim years.Xne {Oj-ԍxSee Benchmarks Order at  190.X We accordingly find Telmex's commitment to reduce its settlement rate to the applicable benchmark in a timely manner to be a public interest factor weighing in favor of grant of TSC's application.  Xs-x;60.` ` To put these commitments in context, Telmex has received substantial settlement payments from U.S. carriers as a result of the high settlement rates on the U.S.Mexico route. In fact, Mexico is by far the largest recipient of U.S. settlement payments, "E|n0*%%ZZ"  X-having received more than $875 million in net settlement payments in 1996. oZe {Oy-ԍxSee Preliminary 1996 International Telecommunications Data at Table A1, page 3 (CCB, Indus.Anal.Div., October, 1997) (indicating that Telmex received $878,208,475 in settlement payments from U.S. carriers).  Although we commend Telmex for reducing its settlement rates as much as it has over the past few  X-years,Xpe {Om-ԍxSee supra   SRRED54 .X Telmex's latest commitment should bring even greater benefits to U.S. consumers in the form of lower prices.  X-x<61.` ` We disagree with petitioners that grant of this application should be conditioned on Telmex reducing its settlement rate to benchmark or costbased rates immediately. As TSC points out, the Commission rejected the petitioners' price squeeze argument in the  XH-Foreign Carrier Entry Order and declined to impose costbased accounting rates as a  X3-condition of entry.pq3|e {O`-ԍxSee Foreign Carrier Entry Order, 11 FCC Rcd at 38983899.p Thus, under our current rules, we do not condition switched resale authorizations to serve an affiliated market (in this case, Mexico) on the affiliated carrier (in  X -this case, Telmex) offering U.S. international carriers a costbased settlement rate.r e yO-ԍxThe Commission, however, recently decided to impose a settlement rate condition on authorizations to provide international facilitiesbased switched or private line service from the United States to an affiliated  {OT-market. See Benchmarks Order at  231. Specifically, the Commission stated that any such authorizations to serve an affiliated market will be conditioned on the affiliated carrier offering U.S. international carriers a  {O-settlement rate for the affiliated market at or below the relevant benchmark adopted in the Benchmarks Order.  {M-Id.Ħ  X -However, in the Foreign Participation proceeding, the Commission is currently considering whether a benchmark condition should apply to authorizations to provide switched resale  X -service on affiliated routes.$s e {O-ԍxId. at  230 (deferring consideration of whether to apply a benchmark condition to authorizations to  {O-provide switched resale service to affiliated markets to the Foreign Participation proceeding).$ Any final rules adopted in the Commission's Foreign  X -Participation proceeding regarding switched resale service will apply to TSC's authorization to provide service to Mexico.  Xj-x=62.` ` Finally, we accept TSC's commitment that it will not offer its service at an average price that is below the average price at which TSC obtains those services from underlying carriers. This commitment pr SQUEEZE ovides additional assurance that TSC will not engage in behavior that could distort the market for U.S.Mexico international services. We will thus specifically condition grant of this application on TSC not offering its service at an average"s0*%%ZZ" price that is below the average price at which TSC obtains those services from underlying  X-carriers.te yOb-ԍxWe note that we have the ability to determine whether TSC is complying with this commitment by reviewing whatever arrangements TSC has with underlying carriers to obtain services.  X-x>63.` ` We conclude that the public interest supports grant of TSC's application. First, the Executive Branch has not raised with us any concerns about TSC's application. Second, we believe that U.S. consumers will benefit from the additional competition on the U.S.Mexico route. Finally, Telmex's commitment to reduce its settlement rates with U.S. correspondents to the benchmark rate of $0.19 by January 1, 2000, and to accept significant reductions in the interim, provides substantial support for finding that grant of TSC's application is in the public interest. x` ` 6. Regulatory treatment  X -x?64.` ` Under the Commission' rules, switched resellers are presumed nondominant on routes where they are affiliated with a foreign carrier that controls bottleneck services or facilities in the destination country, provided they resell only the switched services of  X-unaffiliated U.S. facilitiesbased carriers.Lu e yOa-ԍx47 C.F.R.  63.10(a)(4).L TSC proposes, however, to resell the switched services of its affiliate Sprint (a U.S. facilitiesbased carrier) to all points, including Mexico. As we found above, TSC's affiliate, Telmex, has bottleneck control over local and intercity  XM-facilities in Mexico.OvMe {O-ԍxSee supra  14.O Therefore, TSC is not entitled to the presumption of nondominance for international services to Mexico. Moreover, TSC states in its application that it is not seeking nondominant regulatory status at this time. We must therefore regulate TSC as dominant on the U.S.Mexico route because the applicant has not attempted to demonstrate that its affiliate lacks the ability to affect adversely competition in the U.S. market by discriminating against unaffiliated U.S. international carriers through control of bottleneck  X-services or facilities in Mexico.w Be yO-ԍxUnder our rules, we must regulate TSC as dominant on the U.S.Mexico route because: 1) it is affiliated with a foreign carrier that controls bottleneck services or facilities; 2) it proposes to provide service to the destination market in which its affiliate controls bottleneck services or facilities; and 3) it proposes to resell its U.S. affiliate's switched resale services.   X-x@65.` ` As a dominant carrier on the U.S.Mexico route, TSC will be required to do the following: (1) file tariffs on no less than 14days notice; (2) maintain complete records of provisioning and maintenance of basic network facilities and services procured from the"g* w0*%%ZZ" foreign carrier affiliate; (3) obtain Commission approval pursuant to 47 C.F.R.  63.18 before adding or discontinuing circuits; and (4) file quarterly traffic and revenue reports of messages  X-and number of minutes of both originating and terminating traffic.x&e {OK-ԍx47 C.F.R.  63.10. We note that the Commission's Foreign Participation Notice proposes, among other  {O-things, to modify our current safeguards applicable to carriers regulated as dominant. Foreign Participation  {O-Notice at  92104. Once the Commission adopts final dominant carrier regulations in that proceeding, TSC will be fully subject to those requirements.  Because TSC has no other affiliations with foreign carriers as defined by Section 63.18(h)(1)(i) of the  X-Commission's rules,Oye yO -ԍx47 C.F.R.  63.18(h)(1)(i).O we will regulate TSC as nondominant on all other routes.  Xv-xA66.` ` Carriers such as TSC must also comply with certain reporting requirements.PzvFe {Om -ԍxSee 47 C.F.R.  43.51.P As we discuss below, TSC's affiliate, Sprint, has not complied with some of these reporting  XH-requirements with respect to agreements it has entered with TSC's other affiliate, Telmex.l{He {O-ԍxSee infra   REP188 ש REP291 .l Consequently, we find it necessary to reiterate the reporting requirements applicable to TSC and its affiliates under the Commission's rules and condition TSC's authorization on compliance with these requirements. As we explain below, we also condition grant of this application on TSC filing with the Commission copies of any contracts (or adequate summaries) that it enters into with any carrier under which TSC resells that carrier's service.  X -xB67.` ` In its application, TSC proposes to resell Sprint's facilitiesbased services.  X-Consistent with Section 43.51 of the Commission's rules,F|j e yO-ԍx47 C.F.R.  43.51.F TSC must file with the Commission copies of all contracts, agreements and arrangements, whether written or oral, with any other carrier, including Telmex, Sprint, and any of their respective affiliates, relating to services and traffic on all routes, including the U.S.Mexico route. In addition, if TSC resells another carrier's service pursuant to a contract, or if any carrier resells TSC's service,  X-the underlying carrier (i.e., the carrier whose services are being resold) must file publicly with  X-the Commission a copy of that contract or an adequate contract summary.} e {O -ԍxSee 47 U.S.C.  203 and Competition in the Interexchange Marketplace, 6 FCC Rcd 5880, 5902 (1991). The underlying carrier must also make the services provided to the reseller pursuant to a contract generally available to similarly situated customers at the same terms, conditions and rates. Thus, if  X-TSC resells Sprint's facilities as proposed in TSC's application,F~ e yO%-ԍxTSC Application at 8.F Sprint must file with the"~0*%%ZZ" Commission a copy (or adequate summary) of the relevant contract. In addition, other  X-similarly situated customers (e.g.,other carriers or business customers) must be able to obtain the same services on the same terms and conditions, and at the same rates, that Sprint provides to TSC.  X-xC68.` ` We specifically condition TSC's authorization on compliance with the reporting  Xx-requirements specified under Section 43.51 of the Commission's rulesFxe yO-ԍx47 C.F.R.  43.51.F by TSC and its affiliates. We also condition the grant on TSC filing with the Commission copies of any  XJ-contracts or contract summaries under which any other carrier resells TSC's services.JXe {OS -ԍxSee 47 U.S.C.  203 and Competition in the Interexchange Marketplace, 6 FCC Rcd 5880, 5902 (1991). In order to monitor whether TSC is engaging in marketdistorting behavior in the U.S. X -international services market,Z e {O-ԍxSee supra  SQUEEZE62.Z we also condition grant of this application on TSC filing with the Commission copies of any contracts (or adequate summaries) that it enters into with any carrier under which TSC resells that carrier's service. We find that this condition is also appropriate in light of the fact that TSC's affiliate, Sprint, has not consistently complied with its reporting requirements regarding service agreements it has entered into with TSC's other  X -affiliate, Telmex.u |e {O-ԍxSee infra   REP188 ש REP291 .u  X{-xD69.` ` As an authorized U.S. carrier, TSC will also be subject to our "no special concessions" requirement. That is, TSC will be prohibited from agreeing to accept "special  XM-concessions" from any foreign carrier (including Telmex).RMe {O -ԍxSee 47 C.F.R.  63.14. R We currently define "special concessions" as "any arrangement that affects traffic or revenue flows to or from the United States that is offered exclusively by a foreign carrier or administration to a particular U.S. international carrier and not also to similarly situated U.S. international carriers authorized to  X-serve a particular route."Je yOB-ԍx47 C.F.R.  63.18(i)(1). The Commission recently clarified that the "no special concessions" requirement also prohibits a U.S. carrier from entering into an exclusive "grooming arrangement" with a foreign  {O -carrier. See Regulatory Treatment of LEC Provision of Interexchange Services Originating in the LEC's Local  {O!-Exchange Areas and Policy and Rules Concerning the Interstate, Interexchange Marketplace, Second Report and  {Of"-Order, CC Docket No. 96149, and Third Report and Order, CC Docket No. 9661, FCC 97142 at  137, 140  {O0#-(April 18, 1997) (LEC InRegion Interexchange Order). Thus, TSC, and its affiliate, Sprint, are prohibited from entering into any exclusive grooming arrangements with Telmex that does not comply with our International  {O$-Settlements Policy. See infra   ISP70 . We note that in our Foreign Participation Notice, we propose to"0*%%ZZ" give greater specificity to our "no special concessions" requirement by delineating the types of  X-conduct that we consider to be prohibited by this requirement.fe {Ob-ԍxSee Foreign Participation Notice at  117. f Any rules adopted in this proceeding regarding the "no special concessions" requirements will apply to TSC.  X-xE70.` ` Finally, we reiterate that TSC, and its affiliate, Sprint, will be subject to the Commission's international settlISPements policy. This policy, which prevents foreign monopolies from using their market power to obtain discriminatory rate concessions from  X_-competing U.S. carriers (i.e.,"whipsawing") requires: (1) equal division of accounting rates; (2) nondiscriminatory treatment of U.S. carriers; and (3) proportionate return of inbound  X3-traffic.@8 3Ze {O> -ԍxSee Implementation and Scope of the International Settlements Policy for Parallel Routes, Report and  {O -Order, 51 Fed. Reg. 4736 (Feb. 7, 1986), modified in part on recon., 2 FCC Rcd 1118 (1987), further recon., 3  {O -FCC Rcd 1614 (1988). See also Regulation of International Accounting Rates, Report and Order, 6 FCC Rcd  {O-3552 (1991), on recon., 7 FCC Rcd 8049 (1992). In the Commission's recent Flexibility Order, it stated that we would allow for entirely new alternatives to the traditional correspondent accounting rate model where competitive markets exist in both the originating and terminating markets. Regulation of International  {O-Accounting Rates, Phase II, Fourth Report and Order,11 FCC Rcd 20063 (1996) (Flexibility Order). Pursuant to  {O-the Accounting Rate Flexibility Order, U.S. carriers may negotiate alternative international settlement payment arrangements that deviate from the requirements of our ISP where appropriate market and regulatory conditions  {OR-permit. Id., 11 FCC Rcd at 200069. However, we emphasize that the services offered by TSC and Sprint will be governed by our ISP until such time as TSC or Sprint proposesand we approvean alternative arrangement  {O-under our Flexibility Order. We will examine such requests on a casebycase basis after interested parties have had a full opportunity to comment.@ xD. Other Issues  X -xF71.` ` Petitioners have raised other issues related to the status of competition in the Mexican telecommunications market. More specifically, certain petitioners have raised arguments concerning: 1) Telmex's provisioning of circuits to competitors; 2) the 58 percent settlement rate surcharge that competitors must pay Telmex to terminate international traffic on Telmex's network; 3) the method by which proportionate return obligations are calculated among the various carriers on the U.S.Mexican route; 4) Mexican regulation of accounting rate negotiations; 5) the ability of unaffiliated carriers to enter into crossborder service agreements with Telmex; and 6) allegations that Telmex acted anticompetitively by unlawfully cutting a competitor's crossborder cable. Although these issues fall outside of the scope of the ECO analysis for switched resale services, we address the petitioners' concerns as they bear generally on competition along the U.S.Mexico route. "Z 0*%%ZZ5"Ԍx` ` 1. Telmex provisioning of circuits to competitors  X-xG72.` ` MCI and AT&T allege that Telmex has discriminated against its Mexican competitors (namely, AT&T's and MCI's affiliates, Alestra and Avantel, respectively) by failing to provide interconnection and private (or direct access) circuits and private lines to the  X-competitors in a reasonable and timely fashion.}"e {O-ԍxSee e.g., MCI petition at 67; MCI reply comments at 5; AT&T reply at 11. "Interconnection circuits" are used by Telmex competitors to interconnect with Telmex's switched network. "Direct access" or "private" circuits are used by Telmex competitors to connect their customers directly to the competitors' points of presence.} More specifically, MCI asserts that Telmex increased its rates exorbitantly for these facilities to coincide with the entry of competitors in the Mexican long distance market. AT&T asserts that Telmex is able to restrict competition by charging rates that are above economic costs for these facilities and does not make them available in increments that are small enough to serve small and mediumsize business  X -customers.R e yO}-ԍxAT&T Oct. 23, 1997 letter at 34.R MCI also asserts that Telmex has hampered the ability of its competitors to compete against Telmex by imposing significant installation delays for the Telmex facilities they need for their operations. In fact, MCI contends that Telmex has failed to meet its  X -obligations under its concession to provide these facilities in 35 days.I Be yO-ԍxMCI reply comments at 5.I  X -xH73.` ` TSC replies that, since January 1, 1997, Telmex has undertaken a major effort to install competitors' orders for interconnection and private circuits. With respect to the interconnection circuits, TSC explains that the provision of these circuits is governed by the Mexican carriers' negotiated schedule for the implementation of presubscription throughout Mexico. TSC maintains that Telmex fulfilled its obligation to provide interconnection circuits on a timely basis in all 60 cities scheduled to undergo presubscription. TSC notes, however, that Telmex received additional requests from Mexican competitors which required additional installation time. TSC states that Telmex has put forth its best effort to reduce the delays resulting from these additional, unexpected orders and that Telmex is now on schedule to  X-fulfill these additional orders.Ae yO[-ԍxTSC letter at 3.A MCI does not appear to contest that Telmex is now  X-complying with its obligations to provide interconnection circuits.MZb e {O!-ԍxSee, e.g., Letter from John M. Scorce, Senior Counsel, MCI to William F. Caton, Acting Secretary, FCC at Exhibit A (indicating that Telmex has made "notable progress" in provisioning of switched interconnection circuits and ports) (August 20, 1997) (August 20, 1997 MCI letter).M " 0*%%ZZp"Ԍ X-xI74.` ` With respect to private circuit provisioning, TSC maintains that the installation of these circuits is governed by Telmex's concession and is actively overseen by Cofetel. According to TSC, Condition 41 and Annex 1 of Telmex's Concession require Telmex to install 80 percent of long distance private circuits within 30 days and 97 percent within 45 days, provided that facilities are available on Telmex's network and the party requesting circuits has executed a contract with Telmex, paid the installation costs, and prepared its premises for installation. Also, TSC states that Telmex is complying with Condition 73 of its Concession and a July 27, 1995 letter from the SCT requiring it to submit monthly reports to Cofetel detailing its compliance with these deadlines. In addition, TSC states that Cofetel requested on April 18, 1997 that Telmex provide it with additional specific information relating to the provision of all private circuits during the 199697 period, which Telmex provided on May 7, 1997. Finally, TSC states that Telmex is now "on schedule" in delivering  X -direct connection circuits to its competitors.Q e yOe -ԍxJuly 16, 1997 TSC letter at 34.Q In reply, MCI disagrees that Telmex is now "on schedule" in provisioning private line circuits. Rather, MCI states that delivery of DSO, EO and E1 circuits has been delayed by 60 to 250 days beyond the specified delivery times,  X -and that of the 1573 DSO circuits requested, Telmex has installed just over 500.Y Xe yO-ԍxAugust 20, 1997 MCI letter at Exhibit A.Y  Xy-xJ75.` ` In its commitment letter, Telmex indicates that it has fulfilled all of its  Xb-competitors' orders on backlog for interconnection and private circuits.Obe yO-ԍxTelmex commitment letter at 2.O Telmex also states that it will continue to comply with the circuit provisioning deadlines set forth in its concession and its obligation to report to Cofetel on a monthly basis on its compliance with  X-these deadlines.:xe {OF-ԍxId.: Finally, Telmex states that on October 10, 1997, Telmex and Avantel executed an agreement governing the terms and conditions, including the timing, under which  X-Telmex will provide private line circuits to Avantel.z e {O-ԍxId. at 2 and Attachment A (copy of the TelmexAvantel agreement). z Among other things, the agreement contains a binding facilitiesinstallation schedule that applies to Telmex, as long as it has the  X-requested facilities available for installation.e yO!-ԍxUnder the schedule for 1997, Telmex must install 85 percent of private lines within 20 days, and 97 percent of private lines within 35 days. In 1998, Telmex must install 95 percent of private lines within 20 days, and 99 percent of private lines within 35 days. Also under the schedule for 1997, Telmex must install 80 percent of private circuits within 30 days, and 97 percent of private circuits within 45 days. In 1998, Telmex  {O.$-must install 95 percent of private circuits within 30 days, and 99 percent of private circuits within 45 days.  Id., Attachment A at 23. The agreement also requires Telmex to pay" 0*%%ZZ" Avantel specified contractual damages in the event that it fails to comply with the installation  X-schedule.:e {Ob-ԍxId.:  Finally, Telmex commits to enter into substantially the same agreements with  X-other carriers as well.@Ze {O-ԍxId. at 2.@  X-xK76.` ` Telmex's agreement with Avantel and its willingness to enter into substantially the same agreements with other Mexican competitors should enhance the ability of U.S.affiliated carriers operating in Mexico to compete in both the Mexican long distance and international telecommunications markets. In the absence of such agreements, we would be concerned that Telmex would have the ability and incentive to discriminate against its competitors serving the U.S.Mexico route. That is, Telmex could fulfill its own circuit orders while delaying the delivery and installation of private circuits to its competitors. By engaging in this form of discriminatory conduct, Telmex could stifle competition along the U.S.Mexico route. These commitments help assure that Telmex will no longer be able to favor its own long distance affiliate over its competitors in the provisioning of circuits. In addition, these commitments should allow for increased competition on the U.S.Mexican route, leading in turn to lower prices for U.S. and Mexican consumers. Consequently, we find that Telmex's agreement with Avantel to offer circuit provisioning in a consistent, timely and nondiscriminatory fashion to be an indication that Mexico affords reasonable and nondiscriminatory charges, terms and conditions for the provision of resale and facilitiesbased services in Mexico. We also find that these commitments are a positive public interest factor weighing in favor of grant of this application. x` ` 2. 58 percent settlement rate surcharge  X-xL77.` ` Petitioners state that under Mexico's domestic interconnection regulations, Telmex's competitors must pay Telmex 58 percent of the settlement rate (or approximately $0.23 per minute) on all inbound international traffic that is terminated on the Telmex network, in addition to domestic interconnection charges of approximately $0.025 per  X|-minute.W|e yO-ԍxAT&T petition at 7; MCI petition at 8.W Petitioners argue that this charge is a discriminatory inbound access charge that subsidizes Telmex's operations at the expense of its competitors. They further argue that this charge restricts the ability of the new carriers to compete with Telmex in the provision of  X7-international services.y7|e yOd#-ԍxAT&T petition at 7, footnote 20; MCI reply at 9; WorldCom petition at 6.y Petitioners argue that any grant of authority to TSC should be conditioned on the elimination of the 58 percent surcharge." ! 0*%%ZZ"Ԍ X-ԙxM78.` ` TSC disagrees that Telmex's interconnection charges are unreasonable or discriminatory. TSC explains that Mexican regulators, after working closely with all of the Mexican carriers, determined in 1996 that the perminute interconnection charge generally should fall within the $0.05$0.055 range. Accordingly, the SCT decided in its April 1996  X-Rate OrderHXe yO-ԍx"Administrative Order by which the Secretariat of Communications and Transportation Establishes the Rate Regulation Applicable to Interconnection Services by Public Telecommunications Networks Authorized to Provide Long Distance Services," April 26, 1996 (April 1996 Rate Order).H to allocate that amount between $0.023$0.024 per minute interconnection charge and an amount equal to 58 percent of the per minute settlement payment that Mexican carriers receive for terminating international traffic in Mexico. TSC states that the two charges result in a weighted average interconnection charge of $0.0563 per minute, which is  XH-more than the Mexican competitors sought but less than Telmex sought.FHe yO -ԍxTSC opposition at 17.F In its commitment letter, Telmex explains that the interconnection charges are scheduled to decrease to $0.041 in  X -1998 and $0.031 in 1999. Telmex asserts that the level of the 58 percent component will rapidly decrease because as settlement payments decrease, the 58 percent payment will also  X -decrease.Q xe yO-ԍxTelmex commitment letter at 23.Q TSC also points out that Telmex Long Distance must also pay the 58 percent charge, as well as other interconnection charges, to Telmex Local or to any other local service  X -concessionaire to interconnect international switched calls to a local network.R e yOw-ԍxJuly 16, 1997 Telmex letter at 6.R  X-xN79.` ` We share petitioners' concerns that the 58 percent surcharge discriminates against the new facilitiesbased international carriers operating in Mexico. In essence, it results in Telmex paying itself 58 percent of the settlement rate for each minute of inbound international traffic, while competitors must turn over that 58 percent to Telmex. The result is a disproportionate percentage of interconnection charges being recovered from international traffic, which has a discriminatory impact on Telmex's competitors providing international services. We note, however, that the 1996 Rate Order imposes the 58 percent surcharge only  X-for 1997 and 1998, and requires the surcharge to be paid to any local carrier terminating an  X-international call (not just Telmex).Le yO# -ԍxApril 1996 Rate Order at 4.L In addition, as Telmex observes, the level of the 58 percent component will decrease as settlement payments decrease during 1998, and we expect it to be phased out by January 1, 1999.  X~-xO80.` ` Under these circumstances, although we find this measure to have a discriminatory impact on carriers providing international service on the U.S.Mexico route,"g"( 0*%%ZZ" our expectation that it will be phased out and soon eliminated allows us to find that grant of TSC's application is in the public interest. In the event that Mexico does not does not eliminate the 58 percent surcharge in the near future, we reserve the right to revisit this issue to determine whether TSC's authorization should be revoked or, alternatively, whether TSC's authorization should be subject to additional conditions and/or safeguards. x` ` 3. Methodology for calculating proportionate return  XH-xP81.` ` Petitioners have criticized the method by which proportionate return obligations are calculated among the various carriers on the U.S.Mexican route under the current  X -operating agreements." e {O -ԍxSee e.g., Letter from John Scorce, Senior Counsel, MCI, to William F. Caton, Acting Secretary, FCC at Attachment A, p. 4 (June 12, 1997); August 20, 1997 MCI letter at Exhibit A; and Letter from Judy Simonson, Government Affairs Vice President, AT&T, to William F. Caton, Acting Secretary, FCC at 4 (June 9, 1997) (June 9, 1997 AT&T letter). More specifically, MCI alleges that current operating agreements between U.S. and Mexican carriers require the carriers to adjust the percentage of return traffic every four months ("4/4/4 methodology") while Mexican regulations require such an adjustment among competing Mexican carriers on a monthly basis ("1/1/1 methodology"). MCI and AT&T allege that Telmex has refused to amend its operating agreements with U.S. carriers to incorporate the 1/1/1 methodology and, as a result, is able to discriminate against the new Mexican entrants. This discrimination allegedly occurs through Telmex's ability to delay apportioning return traffic to the new carriers, resulting in losses in traffic and revenue for the new carriers. The petitioners raised this issue with TSC at the June 17, 1997, status conference.  X-xQ82.` ` In response, TSC explains that the current operating agreements between Telmex and its U.S. correspondents require that, in order to allocate traffic between U.S. carrier switches and Mexican carrier switches, the carriers must adjust each other's percentage of return traffic once every four months. At the same time, Mexican regulations require Mexican carriers to readjust incoming call attempts among each other on a monthly basis. In its letter following the status conference, TSC stated that Telmex is willing to amend its agreements with its U.S. correspondents to establish a 1/1/1 methodology for the distribution of traffic. As for complying with the 1/1/1 methodology within Mexico, TSC states that Cofetel is currently in the process of clarifying the procedures and methodology for carriers to implement 1/1/1. Once Cofetel makes a final determination, TSC states that Telmex will  X7-implement the 1/1/1 methodology.O7e yO"-ԍxJuly 16, 1997 TSC letter at 5.O Finally, in its commitment letter, Telmex states that it is willing to amend its operating agreements with U.S. carriers to implement the 1/1/1 methodology. Telmex also agrees to comply with the Mexican proportionate return" #B0*%%ZZ=" regulations under which Mexican carriers must readjust incoming southbound call attempts  X-among each other on a monthly basis.Oe yOb-ԍxTelmex commitment letter at 2.O  X-xR83.` ` We find that Telmex's offer to amend its operating agreements with U.S. carriers to implement a more effective calculation of proportionate return obligations should help foster greater competition on the U.S.Mexican route. In addition, Telmex's commitment to comply with Mexican proportionate return regulations should also enable the new Mexican competitors to compete more effectively. Combined, these measures should benefit U.S. and Mexican consumers through the lower prices resulting from greater competition along the U.S.Mexico route. We find that these commitments are a positive public interest factor weighing in favor of grant of this application. To ensure the realization of these public interest benefits, we specifically condition the grant of this application on a demonstration by TSC that Telmex has offered to amend its operating agreements with U.S. carriers to implement the 1/1/1 methodology. TSC's authorization will not be effective until TSC makes this demonstration. We do not find it necessary to impose any specific conditions concerning Telmex compliance with Mexican proportionate return regulations. We have no reason to doubt that the Mexican regulators will ensure that Telmex complies with its commitment to abide by these Mexican regulations.  XK-x` ` 4. Mexican regulation of accounting rate negotiations   X-xS84.` ` According to petitioners, Mexican international interconnection regulations require that only the carrier that holds the largest outgoing longdistance market share during the past six months with a specific country shall be the one to negotiate accounting rates with correspondents from that country. In addition, all international carriers in Mexico are required  X-to maintain the same accounting rates.Xe {O-ԍxAT&T petition at 12 (citing Rules 13 and 10 of Mexico's International Interconnection Rules); MCI petition at 1314. Thus, petitioners state that these regulations effectively permit only Telmex to negotiate accounting rates with foreign correspondents. As a result, petitioners argue that the new competitors in Mexico cannot exert any pressure on  X~-Telmex to reduce the accounting rate on the U.S.Mexico route.:~e {O-ԍxId.: Instead, these regulations prevent U.S. carriers and the new Mexican competitors from providing effective competition on the U.S.Mexican route, while assuring Telmex the ability to continue to receive abovecost accounting rates. Petitioners conclude that the existence of these rules prohibit a public interest finding that Telmex should be permitted to enter the U.S. market. " $D0*%%ZZ["Ԍ X-xT85.` ` TSC does not disagree with petitioners' interpretations of these Mexican regulations. Instead, TSC asserts that the requirement that only the carrier holding the largest share of the international long distance market may negotiate accounting rates is "nothing  X-more than a reflection of reality."Se yO4-ԍxTSC opposition at 30, footnote 85.S TSC argues that in the United States, AT&T, as the carrier with the largest share of U.S.Mexico traffic, is effectively the sole negotiator for all U.S. carriers. TSC further asserts that the Mexican requirement that all other carriers maintain the same accounting rates is no different than the nondiscrimination requirements  X_-that apply under the Commission's International Settlements Policy.:_Xe {Oh -ԍxId.:  X1-xU86.` ` In response, AT&T states that there is no comparison between the roles of Telmex and AT&T in accounting rate negotiations. First, AT&T points out that all U.S. carriers can and do negotiate accounting rates independently. Second, although the nondiscrimination requirements of the Commission's International Settlements Policy allow U.S. carriers to take advantage of rates negotiated by other carriers, any U.S. carrier may always seek to negotiate a more favorable rate. In contrast, in Mexico, only the carrier with  X -the largest amount of traffic is permitted to negotiate with U.S. correspondents.Q e yOB-ԍxAT&T reply at 910, footnote 18.Q  Xy-xV87.` ` We agree with petitioners that these Mexican regulations inhibit competition on the U.S.Mexico route. If all competitors were authorized to negotiate accounting rates independently, it is likely that market forces would drive settlement rates closer to the actual cost of terminating traffic. We find that the inability of carriers other than Telmex to negotiate accounting rates impacts negatively on the development of competition on the U.S.Mexican route. We would prefer that the regulations be modified so as to allow all carriers to negotiate their own accounting rates (subject to nondiscrimination requirements). In the absence of Telmex's commitments to lower its settlement rates with U.S. correspondents, we would find that these regulations weighed against grant of the TSC application. Because Telmex has committed to reducing its settlement rates to the benchmark rate by January 1, 2000, and because modification of Mexican regulations is beyond Telmex's control, we find that, on balance, these regulations do not prevent us from finding that the grant of the TSC authorization is in the public interest.  XN-x  X7-x` ` 5. Crossborder service agreements  X -xW88.` ` Petitioners argue that Telmex discriminates against unaffiliated carriers through its refusal to enter into certain crossborder service agreements that it now has with its"%z0*%%ZZ<"  X-affiliate Sprint.,Ze {Oy-ԍxSee e.g., MCI petition at 1011; MCI August 20 letter at Exhibit A; Letter to William F. Caton, Acting  yOC-Secretary, FCC from Judy Simonson, Government Affairs Vice President, AT&T (June 9, 1997) at 4 (AT&T June 9 letter)., More specifically, MCI assert REP1 s that Telmex has discriminated in favor of Sprint by giving it the exclusive ability to offer its customers services that other U.S. carriers are not allowed to offer. For example, MCI states that it has been unsuccessful in obtaining from Telmex the same "Paid800" service agreement Telmex has with Sprint to provide access to U.S. tollfree numbers from points in Mexico. In addition, MCI states that it has tried unsuccessfully to enter into the same "onestop shopping" agreement for correspondent, crossborder private line services with Telmex, despite the fact that Telmex has such an  X_-agreement with Sprint.a_e yO -ԍxMCI petition at 11, MCI reply comments at 1011.a  X1-xX89.` ` At the July 16, 1997, status conference, the parties discussed the petitioners' allegations concerning Telmex's refusal to enter into the same Paid800 and onestopshopping agreements that Telmex now has with Sprint. In TSC's followup letter to the status conference, TSC states first that neither of the agreements that Telmex has with Sprint is exclusive. TSC also asserts that Telmex has not discriminated against MCI and AT&T by entering into these agreements with Sprint (and not AT&T and MCI) because "those carriers are free to enter into similar agreements with their own Mexican affiliates, Alestra and  X-Avantel."Oze yO-ԍxTSC July 16, 1997 letter at 4.O Nevertheless, TSC committed, in its followup letter, to offer AT&T and MCI these same service agreements on terms and conditions identical to those offered to Sprint. In response, MCI states that it has been negotiating final agreements with Telmex but the process has been slow. MCI requests that any grant of operating authority to TSC be conditioned on MCI and Telmex entering into binding agreements for onestopshopping and Paid800  X-services.a e yO-ԍxMCI August 20 letter at Exhibit A, Attachment A.a  X-xY90.` ` We disagree with TSC that Telmex has not discriminated against unaffiliated U.S. carriers through its refusal to enter into similar service agreements with unaffiliated carriers that it has with Sprint. Although the agreements with Sprint may not have been explicitly exclusive, Telmex's apparent refusal to enter into these agreements with AT&T and MCI makes it appear that Telmex granted Sprint certain "special concessions," in violation of  X|-our rules.g|e {O#-ԍx See 47 C.F.R.  63.14 and 63.18(i).g In its commitment letter, Telmex states that it either has made or will make available to all U.S. carriers Paid800 and onestop shopping agreements on the same terms"e&, 0*%%ZZ" and conditions as it has made such agreements available to Sprint. Moreover, Telmex acknowledges that, consistent with our no special concessions rule, Telmex is required to  X-make these agreements available to U.S. carriers on a nondiscriminatory basis.Pe yOK-ԍxTelmex commitment letter at 2. P  X-xZ91.` ` We find this commitment to be a public interest factor favoring grant of this application. To ensure the realization of these public interest benefits, we specifically condition the grant of the TSC application on a demonstration by TSC that T REP2 elmex has offered to other carriers with which it has operating agreements the identical Paid800 and onestop shopping agreements that it has entered into with Sprint. TSC's authorization will not be effective until TSC has made this demonstration.  X -  X -x` ` 6. City of Laredo  X -x[92.` ` The City of Laredo (Laredo) filed a petition to condition any TSC authorization to prohibit Telmex/Sprint from engaging in anticompetitive conduct as proscribed by  X -applicable U.S. law or policy.F Xe yO-ԍxLaredo petition at 1.F Laredo indicates that such a condition is required in light of alleged anticompetitive conduct by Telmex. Specifically, Laredo states that it owns the U.S.half of the JuarezLincoln bridge which connects Laredo, Texas to Mexico. Laredo states that it owns six telecommunications conduits that it leases to carriers, including AT&T's affiliate, Alestra. According to Laredo, in early March 1997, Alestra notified Laredo that Telmex employees had cut Alestra's cable running through the JuarezLincoln conduits and welded closed access to the conduits on the Mexican side of the river. Laredo further states that, in order to continue operating these circuits, Alestra was forced to fabricate a temporary installation to restore its telephone circuits. Laredo reported this incident to the FCC and spoke with Telmex's Washington, DC counsel. Laredo states that on March 27, 1997, Telmex's counsel assured Laredo that Telmex would not again cut a competitor's cable without first receiving authorization from Cofetel. Nevertheless, Laredo argues that absent a conditional grant of TSC's application, Telmex will continue to be able to engage in this form  X|-of anticompetitive behavior in the future.|e {O-ԍxId. at 23; see also Laredo Supplement to Petition Condition (filed July 18, 1997).  XN-x\93.` ` In response, TSC indicates that Telmex has admitted that its representative cut an Alestra cable. TSC also states, however, that Telmex took this action because it found that Alestra had installed its cable illegally and damaged Telmex's property. TSC further indicates that Telmex has reinstalled Alestra's cable and implemented a stringent procedure to ensure that Telmex does not cut any competitor's cable in the future without proper authorization"'z0*%%ZZ<"  X-from a court or competent regulatory authority.e yOy-ԍxTSC opposition at 24. TSC also notes the fact that AT&T did not mention this matter in its own petition demonstrates that this matter is resolved. In its reply, AT&T states that its failure to reference this incident is the result of the fact that Alestra operates separately and independently of AT&T. AT&T also states that the incident is the subject of a complaint by Alestra now pending before Cofetel. AT&T reply at 1011 and footnote 19. TSC also argues that the proper forum for Laredo (and other interested parties) to raise these complaints is before the Mexican  X-regulatory bodies.xe yO-ԍxLetter from Gary M. Epstein and Teresa D. Baer, counsel for TSC to William F. Caton, Acting Secretary, FCC at 2 (July 25, 1997). Finally, on August 11, 1997, TSC submitted to the FCC copies of a circular signed by Telmex's Director General, Jaime Chico Pardo, and distributed to all directors and divisional subdirectors, relating to Laredo's concerns. Among other things, the circular expressly prohibits any cutting of competing carriers' cables and charges Telmex's Subdirector of Legal and Regulatory Affairs with the responsibility for carrying out this  X_-policy._e yO-ԍxLetter from Gary M. Epstein and Teresa D. Baer, counsel for TSC to William F. Caton, Acting Secretary, FCC (Aug. 11, 1997).  X1-x]94.` ` From the record, it appears that Telmex engaged in anticompetitive conduct by cutting of Alestra's cable. Although we do not condone such behavior, even if taken in response to an allegedly illegal act by a competitor, it appears that Telmex has taken sufficient measures to ensure that such actions are not taken in the future. In addition, we have no reason to doubt that the SCT and Cofetel are better able to address the merits of Alestra's complaint. Consequently, we do not find it necessary to impose any additional conditions that would specifically address this incident.  Xy-} IV. CONCLUSION  Xb-TP  XK-x^95.` ` We conclude that the public interest supports grant of TSC's application to provide international switched resale services to all points, including Mexico, subject to the conditions described above. We find that U.S. carriers have effective competitive opportunities to provide international services in Mexico. Indeed, the record indicates that Telmex's competitors have made substantial gains in the market in a short period of time, having captured up to 30 percent of the markets in areas where presubscription has been introduced in less than a year. Although Mexico does not currently offer nonfacilitiesbased U.S. carriers the ability to provide switched resale services, we expect that U.S. carriers will be able to offer such services in the near future. Competitive safeguards and an independent regulatory framework provide adequate checks on the potential for abuse of market power by Telmex. Finally, TSC's entry will provide additional competition in the U.S. international"e(( 0*%%ZZ" service market, particularly on the U.S.Mexico route. More specifically, TSC's entry should significantly lower the prices that U.S. consumers pay for calls from the United States to Mexico.  X-x_96.` ` Other commitments made by Telmex during the course of this proceeding provide additional support for finding that grant of TSC's application is in the public interest. Specifically, Telmex's commitment to reduce its settlement rates with U.S. carriers to the applicable benchmark rate of 19 cents by January 1, 2000 provides significant public interest benefits. That commitment, in conjunction with Telmex's commitment to significant reductions in settlement rates during the years 1998 and 1999, should bring immediate benefits to U.S. consumers in the form of lower prices for calls on the U.S.Mexico route. In addition, Telmex's recent private circuit and private line provisioning agreement with Avantel, and its commitment to offer the same agreement to all other Mexican carriers, are in the public interest. Telmex's commitment to amend its operating agreements with U.S. carriers to implement a more effective calculation of proportionate return obligations should help foster greater competition on the U.S.Mexican route. Also, Telmex's commitment to distribute southbound traffic according to the 1/1/1 methodology required under Mexican regulation should enable the new Mexican competitors to compete more effectively, which again should help bring prices that U.S. consumers pay to a more competitive level. Finally, Telmex's commitment to offer all U.S. carriers substantially the same crossborder service agreements that it has entered into with Sprint should further promote competition on the U.S.Mexico route.  X- x` `   X- 6 V. ORDERING CLAUSES ĐTP  X-x`97.` ` Accordingly, IT IS HEREBY CERTIFIED that the present and future public interest, convenience and necessity require a grant of the present application and IT IS ORDERED that application File No. ITC 97127 is granted, and TSC is authorized to provide international switched resale services between the United States and all international points, including Mexico.  X7-xa98.` ` IT IS FURTHER ORDERED that TSC shall be regulated as a dominant carrier on the U.S.Mexico route pursuant to Section 63.10 of the Commission's rules, 47 C.F.R. 63.10, and TSC shall comply with the requirements of paragraph (c) of that section.  X-xb99.` ` IT IS FURTHER ORDERED that grant of this authorization will be conditioned on Telmex complying with its October 10, 1997, agreement with Avantel concerning private circuit and private line provisioning (attached to TSC's commitment letter). IT IS FURTHER ORDERED that this authorization will be conditioned on Telmex offering similar agreements to other Mexican competitors. "h$)0*%%ZZ(#"Ԍ X-xc100.` ` IT IS FURTHER ORDERED that grant of this authorization WILL BE EFFECTIVE after TSC demonstrates that Telmex has offered to amend its operating agreements with U.S. carriers to implement the 1/1/1 proportionate return methodology for the redistribution of southbound traffic.  X-xd101.` ` IT IS FURTHER ORDERED that grant of this authorization WILL BE EFFECTIVE after TSC demonstrates that Telmex has offered other U.S. carriers the Paid800 and onestop shopping agreements on the same terms and conditions as it has made such agreements available to Sprint.  X -xe102.` ` IT IS FURTHER ORDERED that grant of this authorization is conditioned on TSC not offering its service at an average price that is below the average price at which TSC obtains those services from underlying carriers.  X -xf103.` ` IT IS FURTHER ORDERED that we may impose additional conditions or safeguards on TSC's authorization if we find TSC is able to distort competition in the U.S. market.  Xb-xg104.` ` IT IS FURTHER ORDERED that TSC will be subject to all applicable rules  XK-adopted in the Commission's Foreign Participation Proceeding, IB Docket No. 97142.  X-xh105.` ` IT IS FURTHER ORDERED that grant of this authorization is conditioned upon compliance with the reporting requirements specified under Section 43.51 of the Commission's rules, 47 C.F.R.  43.51, by TSC and its affiliates. IT IS FURTHER ORDERED that grant of this authorization is conditioned upon TSC filing with the Commission copies of any contracts or contract summaries under which any other carrier resells TSC's services. IT IS FURTHER ORDERED that grant of this authorization is conditioned upon TSC also filing with the Commission copies of any contracts (or adequate summaries) that it enters into with any carrier under which TSC resells that carrier's service. x  XP-xi106.` ` IT IS FURTHER ORDERED that the Petitions to Deny of AmericaTel, AT&T, MCI and WorldCom ARE DENIED. " *0*%%ZZ"  X-xj107.` ` 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  X-public notice of this order (see Section 1.4(b)(2)). x x` ` x` `  hhFEDERAL COMMUNICATIONS COMMISSION x x` `  hhRegina M. Keeney  X -x` `  hhChief, International Bureau x` `