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INTRODUCTION  X-1.` ` In this Order, we grant Telstra, Inc. ("TI") authority pursuant to Section 214 of  X-the Communications Act of 1934, as amended,`c7 yO -ԍX47 U.S.C.  214, as amended ("Act").(#` to acquire and operate facilities for the provision of switched and private line service between the United States and Australia, subject to the conditions described below. We also find that TI should be regulated as a dominant carrier on the U.S.Australia route.  X -  II. BACKGROUND AND PLEADINGS ă  X-2.` ` TI, a Delaware corporation, is affiliated with several foreign carriers. TI is an indirect whollyowned subsidiary of Telstra Corporation Limited ("Telstra"), which is 100  X -percent owned by the Commonwealth of Australia and provides local and longdistance service in Australia. TI is authorized to resell certain international telecommunications"!X0*''II "  X-services to various international points, excluding Australia.l {Oy-ԍXSee e.g., Overseas Common Carrier Section 214 Application Actions Taken, Public Notice, Report No. I8987, DA 961410 (1996) (resale of interconnected international private lines to the United Kingdom,  {O -Canada, and Sweden); Telstra, Inc., Order and Authorization, 11 FCC Rcd 20428 (Int'l Bur., 1996) (resale of international message telephone service ("IMTS") and noninterconnected international private  yO-lines between the United States and various international points, excluding Australia). (#l TI is also authorized to resell switched services and international private lines, both interconnected and not interconnected to the public switched network, for the provision of switched services between the United States  X-and Australia.H^| {O -ԍXCable & Wireless, Inc. et al., Memorandum Opinion, Order and Certificate, File Nos. ITC93328, ITC {O -94435, ITC95015, 016, and 185, ITC96182 and 319, DA 972554 (rel. Dec. 17, 1997) ("Australia  {O| -Resale Order").(#H  X-3.` ` On June 10, 1997, TI filed an application to obtain Section 214 authority to provide international facilitiesbased switched and private line services between the United  X_-States and Australia.Z_ yO-ԍXTI Application to Acquire Capacity in Any International Facilities Previously Authorized by the Commission to Provide International Message Telephone Services and International Private Line Service  {OB- Between the United States and Australia, File No. ITC97320 at 2 (July 16, 1997) ("TI Application"). (#Ƌ This authority would allow TI to provide "full" circuits on the U.S.Australia route, enabling it to provide "endtoend" service to end users in both countries. TI certifies that it is affiliated within the meaning of Section 63.18(h)(1)(i) the Commission's  X -rulesW  yO-ԍX47 C.F.R.  63.18(h)(1)(i).(#W with Telstra, Telstra (U.K.) Limited, Telstra (New Zealand) Limited,and Telecom Services Kiribati Limited. TI states, however, that it has no agreement with Telstra for the provision of switched or private line service to Australia or other points and that TI is not  X -seeking authority to establish a nonstandard settlement arrangement with Telstra.L T  yO-ԍXTI Application n.1.(#L  X -4.` ` AT&T filed a petition to deny TI's application, which TI opposed.EX  yO<-ԍXWe grant TI's motion for extension of time to respond to AT&T's petition to deny. In its motion, TI indicated that counsel for AT&T had consented to the extension of time. AT&T did not dispute TI's declaration. TI Motion for Extension of Time (filed July 18, 1997).(#E AT&T filed a reply to TI's opposition. "b0*%%II"  X-3 III. DISCUSSION  X-A.XTI's Application to Provide FacilitiesBased International Service (#  X-5.` ` TI argues that the World Trade Organization ("WTO") commitments of the United States and Australia that will permit access for their facilitiesbased international carriers deserve "substantial, if not controlling weight" in the Commission's assessment of  X_-TI's application.M_ yO-ԍXTI Application at 6.(#M AT&T argues the Commission must review this application under its  XH-existing rules.V HX yOQ -ԍXAT&T Petition to Deny at 12.(#V  X -6.` ` We agree with AT&T that because no new rules are in effect, we will analyze this application under our current regulatory framework. Because TI is a foreign carrier  X -within the meaning of Section 63.18(h)(1)(ii) of the Commission's rules,X  yO-ԍX47 C.F.R.  63.18(h)(1)(ii).(#X we must examine  X -TI's application under the framework established in the Foreign Carrier Entry Order.  x {O-ԍXMarket Entry and Regulation of Foreignaffiliated Entities, Report and Order, 11 FCC Rcd 3873 (1995)  {O-("Foreign Carrier Entry Order"), recon. granted in part, denied in part, and deferred in part in Rules and Policies on Foreign Participation in the U.S. Telecommunications Market, Market Entry and  {OZ-Regulation of ForeignAffiliated Entities, Report and Order and Order on Reconsideration, IB Docket  {O$-Nos. 97142, 9522, FCC No. 97398 (rel. Nov. 26, 1997) ("Foreign Participation Order"). (#ƆFPO In that Order, the Commission determined that foreign carriers seeking to provide U.S. international services to destination countries in which they have market power must demonstrate that such destination countries offer "effective competitive opportunities" ("ECO") for U.S. carriers to offer like services. The Commission stated it would apply the ECO analysis only to Section 214 applications from foreign carriers, or certain affiliates of foreign carriers, with market power in destination countries that potentially can be leveraged to the  X6-detriment of unaffiliated U.S. carriers providing service to those countries.Q 60  {O-ԍXId. at 3912.(#Q The Commission also determined that it would continue to consider other public interest factors that may weigh  X-in favor of, or against, granting the application.T   {O{!-ԍXId. at 389697.(#T "T 0*%%II"  X-X 1.X` ` Analysis of TI's Market Power (#`  X-7.` ` The Foreign Carrier Entry Order defines "market power" as "the ability of the carrier to act anticompetitively against unaffiliated U.S. carriers through the control of  X-bottleneck services or facilities on the foreign end."Q {O-ԍXId. at 3917.(#Q Bottleneck services or facilities are "those that are necessary for the provision of international services, including intercity or  Xx-local access facilities on the foreign end."HxZ {O -ԍXId.(#H  XJ-8.` ` TI contends that Telstra is no longer treated as dominant in Australia. TI also argues that Telstra does not possess market power in the domestic longdistance and local  X -access markets.M  yO-ԍXTI Application at 8.(#M In response, AT&T asserts that the Australian regulator has not concluded that Telstra lacks market power. AT&T argues that Telstra is the governmentowned, dominant provider of telephone access, local, domestic, longdistance, and international services in Australia. AT&T asserts that Telstra controls approximately 80 percent of the  X -U.S.Australia route and has the only ubiquitous facilitiesbased local exchange network. | yO-ԍXAT&T Petition to Deny at 25; AT&T Reply to Opposition to Petition to Deny at 24.(#Ƌ  X-9.` ` In our recent Australia Resale Order granting Telstra the authority to resell switched services, and international private lines (both interconnected and not interconnected  Xf-to the public switched network) for the provision of switched services, we found that Telstra controls the only ubiquitous local exchange network in Australia. Accordingly, we found that  X8-Telstra possesses market power in Australia.a8  {O-ԍXAustralia Resale Order at  52.(#a We find no reason to alter our determination  X!-in this order. Therefore, under the Foreign Carrier Entry Order, we must determine whether U.S. carriers have effective competitive opportunities to provide facilitiesbased switched and private line services in Australia.  X-X 2.X` ` Public Interest Analysis (#`  X- 10.` ` Under the ECO test for facilitiesbased entry, we examine first the legal, or de  X-jure, ability of U.S. carriers to enter the destination foreign country and provide international facilitiesbased service. Next, we focus on the actual conditions for entry, including the terms and conditions of interconnection, competitive safeguards, and the regulatory framework. We focus on the overall effect of these four elements on the opportunities for viable operation as"A0*%%II" a facilitiesbased carrier in the foreign market. If, however, any of the factors of the ECO test are completely absent, we will deny authority to provide facilitiesbased service on that route, unless other public interest factors warrant a different result. We also consider as  X-relevant any evidence of existing competition in international facilitiesbased services.o {O4-ԍXForeign Carrier Entry Order, 11 FCC Rcd at 3890.(#o  X- 11.` ` Legal Ability to Enter. We agree with the parties that there are no legal  Xv-barriers to entry in the Australian market for international telecommunications services.vZ {O -ԍXSee e.g., TI Application at 1112; AT&T Petition to Deny at 45.(# Applicants seeking to provide facilitiesbased service in Australia must obtain a license from the Australian Communications Authority ("ACA"). There are no restrictions, however, on the number of new carriers that can enter the market or on the foreign ownership of new carriers.  X - 12.` ` During the pleading cycle, TI informed us that the Australian affiliate of Primus Telecommunications Group, Inc. (Primus), a U.S. international carrier, was granted a license to own and operate domestic and international network facilities and provide a full range of services. At that time, TI estimated that applications from about 20 other companies, including affiliates of other U.S. carriers, were currently pending before the ACA and should  Xy-be granted shortly.ey yO-ԍXTI Opposition to AT&T Petition to Deny at 3.(#e Recently, TI advised us that as of December 8, 1997, the ACA has  Xb-granted a total of 12 carrier licenses in Australia. b| yO-ԍXThose carriers are: Telstra, Optus, Optus Mobile Pty Ltd, Vodafone Pty Ltd, AAP Telecommunications Pty Ltd, Primus Telecommunications Pty Ltd, Optus Vision Pty Ltd, Telstra Multimedia, Horizon Telecommunications Pty Ltd, OMNIconnect Pty Ltd, United Energy Telecommunications Pty Ltd, and  {O-Windytide Pty Ltd. See Australian Communications Authority, Telecommunications Act 1997 List of Licensed Carriers. TI advised us that in addition to Primus, Windytide Pty Ltd. is indirectly owned by a U.S. company. Letter from Gregory C. Staple, Counsel for TI, to Joanna S. Lowry, Int'l Bur., FCC  {OA-(Dec. 8, 1997). See also Glenn Manoff, Regulation Beats a Retreat: Price Plunge in Australia, Com.  yO -Week Int'l (July 14, 1997) (discussing carriers' announced plans to construct alternative distribution networks in Australia).(#ƽ To date, we have no information that any applicant has been denied a carrier license. This information bolsters our conclusion that there are no legal barriers to entry in Australia.  X- 13.` ` Actual Conditions for Entry. In the Australia Resale Order the International Bureau found that Australia affords U.S. carriers opportunities to resell international private lines to provide switched services which are equivalent to those offered in the United States. Specifically, the International Bureau concluded that Australia affords U.S. carriers the legal right to provide switched services over resold private lines interconnected to the public"P 0*%%IIR" switched network at both ends; U.S. carriers are able to obtain reasonable and nondiscriminatory interconnection charges, terms, and conditions; Australia's laws provide sufficient protection against anticompetitive practices; and there is sufficient regulatory oversight to protect and promote competition.  X- 14.` ` We find no evidence in this record to alter our determinations about U.S. carriers' actual ability to enter the Australian telecommunications market. AT&T argues that the Australian market fails ECO because: (1) Telstra is not required to offer published, nondiscriminatory interconnection rates; (2) Telstra is permitted to engage in secret interconnection rate deals; (3) Australia relinquishes important regulatory powers to an  X -industry forum, the Telecommunications Access Forum ("TAF");"  yO -ԍXThe Telecommunications Act 1997 regulates two categories of telecommunications service providers: (1) "carriers," which are comparable to the FCC's facilitiesbased carriers; and (2) "carriage service  {O# -providers," which are equivalent to the FCC's resale carriers. See Australia Resale Order at n.35. The TAF's membership is open to all carriers and carriage service providers.(# and (4) Telstra's  X -accounting rate with U.S. carriers far exceeds economic cost.V  yOf-ԍXAT&T Petition to Deny at 23.(#V Even if the Commission determines that Australia passes our ECO analysis, AT&T argues that TI and Telstra should  X -be made subject to the conditions and safeguards in the Commission's Benchmarks Order B {O-ԍXInternational Settlement Rates, Report and Order, IB Docket No. 96261, FCC 97280 (rel. Aug. 18,  {O-1997), recon. pending ("Benchmarks Order").(#  X -and the Commission's Foreign Participation Order.  {O-ԍXForeign Participation Order, supra note  FPO11 . (#Ɗ  X-15.` ` In our Australia Resale Order, we found no basis for concluding that Telstra is providing or may provide a discriminatory interconnection rate for international traffic on the  Xh-U.S.Australia route.hh0  {OI-ԍXAustralia Resale Order at  2830.(#h We expressed concern about the lack of publication of interconnection  XQ-agreements, but found that other aspects of Australia's interconnection regime (i.e., the current interconnection prices, the ACCC's ability to require continuation of those prices, and the  X%-ACCC's general regulatory powers) help protect against discriminatory conduct.[%  {O -ԍXId. at  3234.(#[ Below, we will address some additional arguments raised by AT&T in this proceeding regarding the arbitration of interconnection disputes, the TAF, and Telstra's accounting rate. "T 0*%%II"Ԍ X-16.` ` AT&T argues that, because there is no legal requirement for nondiscriminatory prices, an arbitration that deals with the pricing of interconnection is meaningless because there is no price against which an arbitrator can resolve a pricing dispute. In addition, AT&T argues that because Australia does not require the publication of negotiated interconnection agreements, a carrier that is dissatisfied with the price of access will not have the essential evidence upon which to pursue a contested complaint, that is, knowledge of the price in an unpublished negotiated agreement. Carriers therefore will not be able adequately to determine  X_-whether or not they are the object of price discrimination.m_ yO-ԍXAT&T Reply to Opposition to Petition to Deny at 78.(#m  X1-17.` ` In the Australia Resale Order we found that Telstra's current prices for interconnection for originating or terminating switched access for almost all of the  X -international calls compare favorably with rates in New Zealand and the United States. X {O-ԍXAustralia Resale Order at  2829 (current rate for originating or terminating switched access is approximately U.S. $0.02 (peak) and U.S. $0.01 (offpeak)).(# We also noted that although the current interconnection prices are only guaranteed until January 1998, the Australian Competition and Consumer Commission ("ACCC") has the power to  X -continue to require Telstra to provide interconnection at these prices beyond January 1998.  yO#-ԍXThe ACCC is the governmental agency responsible for administering the telecommunications competitionrelated laws, including interconnection. (# We also noted that if a dispute arises during a commercial negotiation, either side may notify the ACCC that a dispute exists. Once notified, the ACCC has the power to determine the  X{-terms and conditions of access.a {  {O6-ԍXAustralia Resale Order at  33.(#a Thus, to determine if it is an object of price discrimination, a carrier may compare the price it is offered for interconnection with the current price for originating or terminating switched access. If the offered price is above the current price or if for another reason the carrier believes it is an object of discrimination it may notify the ACCC and the ACCC will arbitrate the dispute.  X-18.` ` AT&T also argues that the new law relies on an industry forum, the Telecommunications Access Forum ("TAF"), to establish standard terms and conditions for interconnection and to selfregulate interconnection terms and conditions. Such selfregulation, AT&T argues, brings with it the potential for entrenched incumbents to seek delay  X-in order to forestall competition.V! yO"-ԍXAT&T Petition to Deny at 56.(#V "~, !0*%%II2"Ԍ X-19.` ` We do not agree that the new law relies on the TAF to selfregulate interconnection terms and conditions. The TAF submits a draft "access code" with model terms and conditions for interconnection for approval by the ACCC. The final regulatory approval, therefore, is not with the TAF, an industry forum, but rather with the ACCC.  X-20.` ` Other Public Interest Factors. We also note that AT&T makes a number of arguments with regard to Telstra's accounting rate. AT&T argues that Telstra's current accounting rate is substantially above cost and Telstra is not obligated to disclose any rates it charges carriers from other countries. If we grant this application, AT&T argues, Telstra will have no incentive to reduce its accounting rate. AT&T also argues that if Telstra is required to provide its competitors costbased access to Telstra's bottleneck facilities at all technically feasible points as a condition of entry, the ability to leverage abovecost settlement rates  X -would be removed."  {Oe -ԍXId. at 712; AT&T Reply to Opposition to Petition to Deny at 910.(#Ɓ  X -21.` ` In the Benchmarks Order, the Commission amended its rules, effective January 1, 1998, to require that applications for authority to provide facilitiesbased switched and private line service to affiliates would be conditioned on the affiliated carrier offering U.S.  X{-international carriers a settlement rate for the affiliated carrier at or below the benchmark.\#{Z {O-ԍXBenchmarks Order at  231.(#\ Current settlement rates for Australia are $.21 which is above the benchmark rate of $.15 for high income countries. Thus, as of January 1, 1998, TI, as an affiliate of Telstra, will be subject to this condition.  X- B.XRegulatory Status (#  X-22.` ` TI does not concede that it is a dominant carrier in Australia but agrees to be  X-regulated as dominant on the U.S.Australia route.M$ yO`-ԍXTI Application n.22.(#M Therefore, we do not need to address  X-this issue further, and we will regulate TI as dominant on the U.S.Australia route.  X (#  X~-}/ IV. CONCLUSION  XP- 23.` ` We conclude that grant of TI's application for facilitiesbased service on the U.S.Australia route is in the public interest. We find that U.S. carriers have effective competitive opportunities to provide international facilitiesbased service in Australia. Further, we will regulate TI as a dominant carrier on the U.S.Australia route.  X- "|$0*%%II<"Ԍ X-6V. ORDERING CLAUSES ă  X-24.` ` Accordingly, IT IS HEREBY CERTIFIED that the present and future public convenience and necessity require a grant of the present application, and IT IS ORDERED that application File No. ITC97320 is GRANTED, and Telstra, Inc. ("TI") is authorized to acquire and operate facilities for the provision of switched, private line, and other authorized services between the United States and Australia. #}   XH-25.#} ` ` ` ` IT IS FURTHER ORDERED that the grant of this application is conditioned upon Telstra Corporation Limited negotiating with U.S. international carriers a settlement rate that is in effect and is at or below the relevant benchmark settlement rate adopted in the  X -Benchmarks Order within 90 days of the effective date of that Order. See also Benchmarks  X -Order at  224227.  X -26.55` ` 87DOMIT IS FURTHER ORDERED that TI shall be regulated as a dominant carrier on the U.S.Australia route, pursuant to Section 214 of the Act, 47 U.S.C.  214, and Section 63.10 of the Commission's rules, 47 C.F.R.  63.10, and shall comply with the requirements of paragraph (c) of that section.  XO-27.` ` IT IS FURTHER ORDERED that TI shall comply with Sections 43.51, 43.61, and 43.82 of the Commissions rules, 47 C.F.R.  43.51, 43.61, and 43.82.  X -28.` ` IT IS FURTHER ORDERED that AT&T's Petition to Deny IS DENIED.  X- 29.` ` This Order is issued under Section 0.261 of the Commission's rules, 47 C.F.R.  0.261 (1996), and is effective upon adoption. Petitions for reconsideration under Section 1.106 of the Commission's rules, 47 C.F.R.  1.106 (1996) or applications for review under  #} Section 1.115 of the Commission's rules, 47 C.F.R.  1.115 (1996), may be filed within 30 days of the date of public notice of this Memorandum Opinion, Order and Certificate (see 47 C.F.R.  1.4(b)(2)).  X;- ` `  hh,FEDERAL COMMUNICATIONS COMMISSION  X- ` `  hh,Regina M. Keeney ` `  hh,Chief, International Bureau