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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) TELEF NICA LARGA DISTANCIA DE ) File No. SCL-93-001(M) PUERTO RICO, INC. ) ) Application for a License to Land and Operate ) in the United States a digital submarine system ) extending between the United States and Spain, ) the COLUMBUS II Cable System ) MODIFICATION OF CABLE LANDING LICENSE Adopted: May 12, 1998 Released: May 15, 1998 By the Chief, Telecommunications Division: I. Introduction 1. In this Cable Landing License, we modify the cable landing license granted to several parties for authority to land and operate a digital submarine cable system, COLUMBUS II Cable System ("COLUMBUS II"). We grant the application of Telef˘nica Larga Distancia de Puerto Rico, Inc. ("TLD") under the Cable Landing License Act to add TLD as a licensee of COLUMBUS II for the provision of service between the United States and Spain. COLUMBUS II operates on a common carrier basis and extends between landing points in the United States, Mexico, Portugal, Spain, Italy. We find that TLD has provided sufficient information under the Commission's rules to comply with the Cable Landing License Act and therefore grant the cable landing license modification subject to the conditions discussed below. II. Application and Pleadings 2. TLD is a corporation organized under the laws of the Commonwealth of Puerto Rico. The Puerto Rico Telephone Authority ("PRTA") owns 19% of TLD's stock. Another 2% in TLD is held in an employee stock ownership plan. The remaining 79% of TLD is owned by Telef˘nica International Holding, B.V. ("TI Holding"). TI Holding, a Netherlands corporation, is a wholly-owned subsidiary of Telef˘nica de Espa¤a, S.A. ("TI"), a corporation organized under the laws of Spain. TI is 100% owned by Telef˘nica de Espa¤a, S.A. ("Telef˘nica de Espa¤a"), which provides domestic and international communications services in Spain. 3. TLD proposes to acquire 3 half-Minimum Investment Units ("MIU") in COLUMBUS II for service between the United States and Spain. TLD will use the 3 half-MIUs to correspond with Telef˘nica de Espa¤a. These interests together with TLD's other ownership interests in COLUMBUS II (which have already been approved by the Commission), will bring TLD's total ownership interest in COLUMBUS II to 1.47421 percent. Carriers, including non-owners, may acquire capacity in COLUMBUS II by indefeasible rights of user ("IRUs"), lease, or other mutually agreed upon arrangements. 4. COLUMBUS II extends between landing points on the U.S. mainland (West Palm Beach, Florida), St. Thomas, U.S. Virgin Islands; Cancun, Mexico; Funchal, Portugal; Sardina, Spain; and Palermo, Italy. COLUMBUS II consists of nine main segments: six cable stations and three cables connecting the stations. III. Background 5. On November 10, 1992, eight U.S. carriers, including TLD's predecessor, LD, filed joint Section 214 and submarine cable landing license applications for authority to construct and operate the COLUMBUS II and AMERICAS-1 Cable Systems. On July 26 and 28, 1993, the Common Carrier Bureau approved the Joint Applications for these cable systems for seven U.S. carriers but deferred action on TLD's application pending a determination by the full Commission. On August 8, 1994, the Commission granted TLD's request for authority to participate in the construction, acquisition of capacity in, and operation of COLUMBUS II, but deferred ruling on TLD's request for a cable landing license until the views of the State Department were received. 6. On May 2, 1997, the Commission denied TLD's application to acquire ownership interests in COLUMBUS II. The Commission found that U.S. carriers were denied effective competitive opportunities ("ECO") to have ownership interests in cable facilities landing in Spain. 7. On January 30, 1998, TLD filed the instant application to land and operate a digital submarine cable system between the United States and Spain. We placed TLD's application on public notice on February 11, 1998. On March 11, 1998 Sprint Communications Company, L.P. ("Sprint") filed comments requesting that the Commission condition any grant of TLD's application for a cable landing license upon compliance with the Commission's accounting rate benchmarks and other competitive safeguards. The Commission addresses Sprint's comments in the order granting TLD's application for Section 214 authority to provide service to Spain via COLUMBUS II. IV. Discussion 8. Pursuant to Section 1.767(b) of the Commissions rules, the Cable Landing License Act, and Executive Order 10530, we informed the Department of State of the application. The Department of State, after coordinating with the Department of Commerce's National Telecommunications and Information Administration and the Department of Defense, advised the Commission that it has no objection to the modification of the cable landing license. 9. TLD certifies that it is affiliated with a foreign carrier in Spain. Thus, we evaluate this application under the policies adopted by the Commission in its recent Foreign Participation Order. In that Order, the Commission decided to apply its open entry policies to applications to land and operate submarine cables between the United States and World Trade Organization ("WTO") Member Countries. Because Spain is a WTO Member Country, we do not apply our ECO analysis, and we presume that there is no competition-based reason to deny TLD's application. No party has suggested that this presumption should be rebutted for this application. Therefore, we find that TLD's foreign affiliation does not raise concerns that could persuade us to deny the application under Section 2 of the Cable Landing License Act. 10. Accordingly, we conclude that U.S. interests under the Cable Landing License Act will be served by grant of the modification to TLD to land and operate COLUMBUS II, subject to all of the terms and conditions in the original cable landing license. V. Ordering Clauses 11. In consideration of the foregoing, IT IS ORDERED that the application, File No. SCL-93-001(M) is GRANTED. The COLUMBUS II cable landing license, SCL-93-001, is MODIFIED to add Telef˘nica Larga Distancia de Puerto Rico, Inc., as a licensee. This grant is subject to all rules and regulations of the Federal Communications Commission; any treaties or conventions relating to communications to which the United States is or may hereafter become a party; any action by the Commission or the Congress of the United States rescinding, changing, modifying or amending any rights accruing to any person hereunder; and the conditions contained in the cable landing license, SCL-93-001. 12. TLD shall accept the terms and conditions of this license by filing a letter with the Secretary, Federal Communications Commission, Washington, D.C. 20554 within 30 days of the release of this modification. 13. This Order is issued under Section 0.261 of the Commissions rules, 47 C.F.R.  0.261, 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, 47 C.F.R.  1.106, 1.115, may be filed within 30 days of the date of public notice of this order (see 47 C.F.R.  1.4(b)(2)). FEDERAL COMMUNICATIONS COMMISSION Diane J. Cornell Chief, Telecommunications Division International Bureau