WPC! 2MBERKZ3|X  X4#o\  PCynXP#"i~'^09CSS999S]+9+/SSSSSSSSSS//]]]Ixnnxg]xx9?xgxx]xn]gxxxxg9/9MS9ISISI9SS//S/SSSS9?/SSxSSIP!PZ9+ZM999+999999S9S/xIxIxIxIxIlnIgIgIgIgI9/9/9/9/xSxSxSxSxSxSxSxSxSxSxIxSxRxSxSxS]SxIxIxInInInZnIxigIgIgIgIxSxSxSxZxSxZxS9/9S999Su]ZZxSg/gCg9g9g/xSbxSxSxSxSxn9n9n9]?]?]?]ZgFg/gMxSxSxSxSxSxSxxZgIgIgIxSg9xS]?g9xSi+SS88WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN/>/>/>/x]SSSSx]x]x]x]xSxSx]SSxSxSf]xSxSxSxIxIxWxIx{nInInInISSSWS]a?/?]?9?]]WW]n/nKn9nCn/x]xx]x]SSxxIxIxI]?]?]?]WnUn9nax]x]x]x]x]x]xxWnInInIx]n9x]]?n9xSz+SS8-8WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN8HH"&H>XHH8HB8>HH^HH>"".2",2,2,"222N2222"&22H22,006"6."""""""""2"2H,H,H,H,H,XAB,>,>,>,>,""""H2H2H2H2H2H2H2H2H2H2H,H2H1H2H2H282H,H,H,B,B,B6B,H?>,>,>,>,H2H2H2H6H2H6H2""2"""2F866H2>>(>">">H2;H2H2H2H2XHB"B"B"8&8&8&86>*>>.H2H2H2H2H2H2^HH6>,>,>,H2>"H28&>"H2?22!!WFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN$<<$.2",2222`2 LL2 LL2L"",,2d""\4  pG;7jC:,ynXj\  P6G;XP7nC:, ',N(N(ZZ" "those that are necessary for the provision of international services, including intercity or  X-local access facilities on the foreign end."V(07 {Ob-ԍXx Id. at  116.(#V  X-x29.` ` If we determine that an applicant does have market power in the destination  X-market, we examine the legal, or de jure, ability of U.S. carriers to have ownership interests in submarine cables landing in that market. If no explicit legal restrictions on ownership exist, we will examine other factors to determine whether U.S. carriers have the practical or  Xa-de facto ability to have ownership interests in cable facilities in the destination market(s).  X5-x30.` ` Finally, we will determine whether there are other factors that weigh in favor of, or against, granting this application under the Cable Landing License Act. We will make this determination whether or not the applicant or its affiliate has market power in the destination market of the relevant cable.  X -x31.` ` TLD, which is affiliated with Telefonica de Espa9a, is applying to have ownership interests as a licensee in a submarine cable landing in both the United States and its home market, Spain. The ownership interests consist of three minimum investment units  X}-("MIUs") from the United States to Spain to be jointly owned with Telefonica de Espa9a.)}Z07 yO-ЍXxA MIU is the minimum unit of investment for ownership in COLUMBUS II. Each MIU contains 30 64 Kbit/s voice paths.(#Ƶ  XO-x32.` ` As discussed above, at present, U.S. carriers are forbidden from having  X8-ownership interests in the Spanish end of international submarine cable systems.*"807 {O-ЍXxSee e.g., 1996 State Letter; AT&T Opposition to Application for Review, File Nos. ITC93029, ITC93030, SCL93001, SCL93002 at 23, 8 (filed Sept. 9, 1993). In addition, TLD has not disputed the fact that foreign carriers are legally forbidden from having ownership interests in the Spanish end of international submarine cable systems.(#Ɵ If we grant this application, Telefonica de Espa9a, through its control of TLD, will have ownership interests at both ends of the cable with monopoly control at the Spanish end. No equivalent rights exist for U.S. carriers to have ownership interests in submarine cables in Spain. The Spanish market, therefore, does not pass the first prong of our analysis that looks at the legal,  X-or de jure, ability of U.S. carriers to have ownership interests in submarine cables landing in Spain.  X-x 33.` ` Even though the Spanish market does not pass the first prong of our analysis, we will examine whether other countervailing reasons exist for us to grant this application. In its comments, TLD argued, among other things, that Puerto Rican consumers could enjoy considerable public interest benefits, including economic benefits, if TLD were to gain access"= *,N(N(ZZ"  X-to new facilities such as COLUMBUS II.&+X07 yOy-ЍXxTLD Response to AT&T's Comments, Joint Section 214 Applications for Submarine Cable Landing Licenses for COLUMBUS II and AMERICAS1 Cable Systems, File Nos. ITC93029, ITC9330, SCL93001, SCL93002 at 710 (June 27, 1994).(#& We do not believe that TLD has demonstrated that its ownership in COLUMBUS II facilities serving Spain, a single destination point of the cable, would yield significant economic benefits to Puerto Rican consumers that would outweigh our concerns about the lack of effective competitive opportunities for U.S. carriers to have ownership and operation rights in the Spanish market. Therefore, we do not find sufficient countervailing reasons for us to grant this application.  X_-x C. Section 214 Application for Service to Spain  XH-  X1-x!34.` ` InIN addition to applying for a submarine cable landing license TLD also proposes to provide service between the United States and Spain. Therefore, under Section  X -214 we will examine this application in light of our ruling in the Foreign Carrier Entry  X -Order.   X -x"35.` ` As an initial matter, we note that in the Foreign Carrier Entry Order we stated that, although the analysis we adopted would not apply to existing Section 214 authorizations to provide international service held by foreignaffiliated carriers, all such carriers would have  X-their future or pending applications subject to the standards adopted in the Foreign Carrier  Xj-Entry Order.m,j07 {O-ԍXxForeign Carrier Entry Order at  109.(#m Because TLD's Section 214 application was pending at the time of our ruling  XU-in the Foreign Carrier Entry Order, TLD's application is now subject to the analysis adopted  X@-in the Foreign Carrier Entry Order.P-@z07 yOk-ЍXxWe note that on February 15, 1996, 69 countries signed a World Trade Organization ("WTO") agreement on basic telecommunications. Spain, like the United States, is one of the countries that has committed to open its market, although Spain will phase in full liberalization of its market by December 1, 1998. The U.S. commitments in the WTO do not enter into force until January 1, 1998. Therefore, we apply our current rules -- which include an analysis of Spain's current market conditions -- to the application before us.(#P  X-x#36.` ` In performing our ECO analysis on TLD's Section 214 application, we must  X-examine the legal, or de jure, ability of U.S. carriers to offer international message telephone service ("IMTS") in Spain. If no explicit legal restrictions on entry exist, we must examine  X-the other factors of the ECO analysis to determine whether carriers have the practical or de  X-facto ability to enter. Finally, we must determine whether there are other public interest factors that weigh in favor of, or against, granting the application.  Xy-x$37.` ` At present, U.S. carriers are barred from providing IMTS service to Spanish customers. If we were to grant this application Telefonica de Espa9a would be permitted to provide service to U.S. customers using this facility. No equivalent right exists for U.S."K -,N(N(ZZ" carriers to enter the communications market in Spain. The Spanish market, therefore, does  X-not pass the first prong of our ECO analysis that looks at the legal, or de jure, ability of U.S. carriers to enter the foreign market.  X-x%38.` ` Even though the Spanish market does not pass our ECO analysis, under the  X-analysis adopted in the Foreign Carrier Entry Order we must determine whether other countervailing reasons exist for us to grant this application. As stated above, TLD has argued that granting this application would serve the public interest. We find, however, that our concerns about the inability of U.S. carriers to enter the communications market in Spain outweigh the potential public interest benefits from granting this application.  X -x&39.` ` We are also very concerned about Telefonica de Espa9a's high accounting rates for traffic between the United States and Spain. As discussed above, these rates are much higher than other European countries' rates. In addition, Telefonica de Espa9a's affiliates'  X -rates to the United States are also quite high.[. 07 {O;-ЍXxSee supra  22.(#[ We declined in the Foreign Carrier Entry  X -Order to make costbased accounting rates a precondition to entry. Instead, we determined that we would consider the presence of costbased accounting rates as part of our overall  X-public interest analysis.y/Z07 {O-ԍXxForeign Carrier Entry Order at  7172.(#y Accordingly, we view the abovecost accounting rate of Telefonica de Espa9a as another negative factor in our overall public interest analysis. Therefore, under our Section 214 public interest analysis, we deny TLD's Section 214 application to provide  X<-service to Spain using circuits on COLUMBUS II.  "%/,N(N(ZZ"  X- IV. ORDERING CLAUSES ă  X-x'40.` ` ITIT IS ORDERED that File No. SCL93001 for TLD's proposed ownership interests in the COLUMBUS II Cable System for circuits to Spain is DENIED pursuant to the Submarine Cable Landing License Act, 47 U.S.C.  3439 (1994) and Executive Order  X-10530, reprinted as amended in 3 U.S.C.A.  301 at 1052 (1985).  Xa-x(41.` ` IT IS FURTHER ORDERED that File No. ITC93029 for TLD's proposed Section 214 authorization for service to Spain on the COLUMBUS II Cable System is DENIED pursuant to the Communications Act of 1934, as amended, 47 U.S.C.  214.  X -x)42.` ` IT IS FURTHER ORDERED that any payments that TLD has made with regard to the capacity held in reserve for TLD in the COLUMBUS II Cable System for service to Spain shall be refunded to TLD with interest, and without financial penalties as provided in Telefonica Larga Distancia de Puerto Rico, Inc., 9 FCC Rcd 4041 at  25 (1994). XxX` ` X XXhhX@FEDERAL COMMUNICATIONS COMMISSION(# XxX` ` X XXhhX@William F. Caton(# XxX` ` X XXhhX@Acting Secretary(#