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                            Before the
                Federal Communications Commission
                      Washington, D.C. 20554

In the Matter of                )
                                )
Cable & Wireless, Inc.          )       FCN-97-006
                                )
Notification pursuant to        )
Section 63.11 of Foreign Carrier Affiliation)          
                                 

                              ORDER


          Adopted:  June 26, 1998            Released:  June 29, 1998

By the Chief, Telecommunications Division:

                         I.  Introduction

     1.   In this Order, we reclassify Cable and Wireless Inc. (CWI) as a dominant carrier on the
U.S.-Panama route due to its affiliation with Instituto Nacional de Telecomunicaciones SA (Intel) of
Panama, which now does business as Cable & Wireless Panama (CWP).  We find that CWI has not met its
burden of demonstrating that it warrants continued regulation as a non-dominant carrier on this route. 
Accordingly, CWI will be subject to the Commission's dominant carrier regulations for service to Panama,
as set forth in Section 63.10 of the Commission's rules.

                         II.  Discussion

     2.   CWI is a wholly-owned subsidiary of Cable and Wireless, plc (C&W plc).  CWI is
authorized as a non-dominant carrier to provide facilities-based switched and private line and resold, non-
interconnected private line services to Panama.  On June 27, 1997, pursuant to Section 63.11 of the
Commission's rules, CWI informed the Commission of its recent acquisition of an "affiliation" with CWP. 
Specifically, on May 27, 1997, CWI's ultimate corporate parent, C&W plc, consummated a transaction
resulting in C&W plc controlling 49 percent of CWP.  On July 24, 1997, the Commission issued a Public
Notice requesting interested parties to file comments concerning this affiliation.  No comments were
received.  On January 30, 1998, the Commission requested that CWI submit additional information to
demonstrate that it continues to qualify for regulation as a non-dominant carrier on the U.S.-Panama route. 
CWI submitted additional information on March 3, 1998.

     3.    CWI states that CWP is the monopoly provider of basic voice services in Panama. 
Under Section 63.10 (a)(2) of the rules, a U.S. international carrier that acquires an affiliation with a
monopoly carrier is presumptively classified as dominant for the provision of international communications
services on the affiliated route.  Accordingly, CWI is presumptively dominant on the U.S.-Panama route.  

     4.   CWI argues that it should retain its non-dominant status on the U.S.-Panama route
because of its inability to exercise majority control of its affiliate in Panama.  CWI argues that it  shares
control with the Panamanian government and cannot affect the exclusivity of its basic services license in
Panama, which is due to expire in 2003.  Thus, CWI argues it is unable to unilaterally discriminate against
U.S. carriers by engaging in anticompetitive conduct.

     5.   In the Foreign Carrier Entry Order, the Commission concluded that a "greater than 25
percent" ownership affiliation standard, rather than a control standard, is appropriate.  In departing from
earlier findings, the Commission found that, even in the absence of control, a greater than 25 percent
interest in a foreign carrier by a U.S.-authorized carrier, or a controlling shareholder, can provide both
carriers with the incentive and ability to engage in anticompetitive conduct on the affiliated route.  Thus,
the fact that CWI's controlling shareholder, C&W plc, does not exercise majority control of CWP does not
overcome the presumption of dominance.  Accordingly, we will regulate CWI as dominant on the U.S.-
Panama route.  

                      III.  Ordering Clauses

     6.   Accordingly,  IT IS ORDERED that CWI shall be regulated as a dominant carrier on the
U.S.-Panama 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.  The quarterly traffic reports filed pursuant to Section 63.10(c) must include the information
required by Section 43.61 of the Commission's rules, 47 C.F.R.  43.61, for "resale of international
switched services" on the U.S.-Panama route.

     7.   This Order is issued under Section 0.261 of the Commission's rules, 47 C.F.R.  0.261,
and is effective upon release.  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