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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 ) ) Telefonica Larga Distancia de Puerto Rico,) US Sprint Communications Company Limited) Partnership, AT&T, MCI International, Inc.) St. Thomas and San Juan Telephone ) SCL-92-002 Company, Inc., TRT/FTC Communications, Inc.) GTE Hawaiian Telephone Company Inc., ) World Communications, Inc. ) ) ) Telefonica Larga Distancia de Puerto Rico,) AT&T, MCI International, Inc. ) St. Thomas and San Juan Telephone ) SCL-95-008 Company, Inc., Sprint Communications ) SCL-95-012 Company, Inc., GTE Hawaiian Telephone ) Company Inc., World Communications, Inc., ) Pacific Gateway Exchange, IDB Worldcom ) Services, Telecommunicaciones Ultramarinas ) de Puerto Rico ) ORDER Adopted: May 11, 1998 Released: May 19, 1998 By the Chief, Telecommunications Division: I. INTRODUCTION 1. In this Order, we deny the petition of Lambda Communications, Inc. ("Lambda") to require Puerto Rico Telephone Company ("PRTC") to divest its interests in the corporation that operates the Isla Verde Cable Station. We remind PRTC and the operator of the cable landing station that we have the right to take action to ensure the most efficient use of the relevant cables, if necessary. II. BACKGROUND 2. Lambda provides a full array of local and interstate telecommunications services in Puerto Rico and is building a fiber optic network in Puerto Rico. In order to provide interstate transport and switching services to long distance or interexchange carriers, Lambda sought to locate equipment at the Isla Verde Cable Station, a landing point in Puerto Rico for the Taino Carib Cable and the Antillas I Cable. Lambda's goal was to compete with PRTC, the incumbent local exchange carrier in Puerto Rico. The Isla Verde Cable Station is owned and operated by Telecomunicaciones Ultramarinas de Puerto Rico ("TUPR"). TUPR is owned by the Puerto Rico Telephone Authority, which also owns PRTC. 3. On September 20, 1996, Lambda filed a petition with the Commission stating that PRTC is using its ownership and control of TUPR to discriminatorily and anticompetitively preclude Lambda from offering its service to long distance carriers and to deny these carriers a competitive alternative to PRTC. Lambda pointed to a long history commencing in January 1995 during which it sought to collocate its equipment at the Isla Verde Cable Station. Lambda requested the Commission to modify the cable landing licenses for the Taino Carib Cable and Antillas I Cable to require that the Isla Verde Cable Station not be owned or controlled by PRTC and to order PRTC to lease the requested space to Lambda. PRTC and TUPR filed comments on the petition, denying Lambda's allegations of deliberate delay and obstruction. Lambda filed a reply. On April 14, 1997, Lambda notified the Commission that TUPR, PRTC and Lambda had executed an agreement to lease space at the Isla Verde Cable Station to Lambda. Nonetheless, Lambda reiterated its request to the Commission to modify the cable landing licenses to include a condition that the cable station must not be owned or controlled by PRTC. III. DISCUSSION 4. Lambda has obtained facilities in the Isla Verde Cable Station and therefore we do not need to consider whether the Commission should order TUPR to lease the requested space to Lambda. We therefore turn to whether the Commission should prohibit PRTC from owning or controlling the Isla Verde cable landing station in order to promote competition in the interstate market. The Submarine Cable Landing Act ("SCLA") requires the Commission to grant licenses for the operation of submarine cables. The SCLA authorizes the Commission to grant licenses "upon such terms as shall be necessary to assure just and reasonable rates and service in the operation and use of cables so licensed." In licensing submarine cables, the Commission often imposes conditions on the cable owner and operator. In approving the Taino Carib Cable and the Antillas I Cable, the Commission prohibited the licensees or their affiliates from acquiring or exercising any right for the purpose of handling traffic to or from the United States that is denied to other carriers. 5. This condition gives the Commission the right to take action to ensure non- discriminatory access to the cable and cable landing station, where necessary. However, we choose not to exercise this authority at this time to order PRTC to divest its interest in TUPR or for TUPR to divest its interest in the cable landing station. Lambda has reached an agreement to collocate its equipment at the cable landing station and there is no evidence in the record that Lambda has been prevented from using its equipment or providing service to the long distance carriers as it planned. 6. In addition, in a related Order, adopted today, the Bureau rejected Lambda's request that we deny a Section 214 application from an affiliate of PRTC on the grounds that PRTC acted anticompetitively with respect to Lambda's request for access to the Isla Verde Cable Station. In that Order, we noted PRTC's representation that TUPR is "pleased to provide service to Lambda and to any other party that so requests, but in complying with such requests, TUPR will not violate any of its other obligations to other parties." Given this representation and the complexities of collocating equipment in the cable landing station, we found that Lambda's arguments were not sufficient to deny the Section 214 license. We reiterate, though, that we retain jurisdiction over the operation of the cable landing station through the cable landing license and we are prepared to exercise that jurisdiction if necessary. IV. CONCLUSION 7. For the reasons stated above, we deny Lambda's request to require Puerto Rico Telephone Company to divest its interests in the corporation that operates the Isla Verde Cable Station. FEDERAL COMMUNICATIONS COMMISSION Diane J. Cornell Chief, Telecommunications Division