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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 ) ) Telmex/Sprint Communications, L.L.C.) ) Application for Authority under ) File No. ITC-97-127 Section 214 of the Communications) Act for Global Authority to Operate as an ) International Switched Resale Carrier) Between the United States and ) International Points, Including Mexico) ORDER Adopted: August 21, 1998 Released: August 21, 1998 By the Chief, International Bureau: I. INTRODUCTION 1. In this Order, we deny AT&T Corp.'s ("AT&T") application to stay the October 30, 1997 TSC Order. We also deny Americatel Corporation's ("Americatel") application to stay the August 7 Order. II. BACKGROUND 2. On February 27, 1997, TSC filed an application to obtain Section 214 authority to provide international switched resale services between the United States and all international points, including Mexico. TSC proposed to resell Sprint's facilities-based services. On October 30, 1997, the International Bureau granted TSC's authorization, subject to satisfaction of certain conditions. On August 7, 1998, the International Bureau determined that the conditions precedent to the effectiveness of TSC's Section 214 authorization had been met and authorized TSC to commence service. 3. On August 10, 1998, AT&T filed a petition to stay the TSC Order pending the Commission's review of AT&T's application for review of that Order. Americatel and MCI Communications Corp. ("MCI") filed comments supporting the AT&T Petition. Americatel filed a petition to stay the August 7 Order and a petition for review of that Order on August 13, 1998. TSC filed an opposition to the AT&T Petition. III. DISCUSSION 4. The Commission generally employs a four-part test under the standard set forth in Virginia Petroleum Jobbers in determining whether to grant motions for stay. Under this standard, the Commission considers whether: 1) petitioner is likely to prevail on the merits; 2) petitioner will suffer irreparable injury if a stay is not granted; 3) other interested parties will be harmed if the Commission grants the requested relief; and 4) the public interest favors grant of the stay. The most important of these factors is irreparable harm, without which other factors need not be considered. 5. As discussed below, none of the potential harms cited by Americatel or AT&T constitute irreparable harm. Irreparable harm must be more than economic loss. Competitive harm is merely a type of economic loss, and "revenues and customers lost to competition which can be regained through competition are not irreparable." Americatel's arguments that it will suffer substantial economic losses and loss of customers and customer good will constitute allegations of "competitive harm" and, thus, fail to meet the standard for showing irreparable harm. 6. AT&T argues that the TSC Order significantly alters the competitive landscape on the U.S.-to-Mexico route by: 1) impairing the ability of AT&T and other U.S. carriers to negotiate lower settlement rates with Telmex and 2) subjecting AT&T and other U.S. carriers to a price squeeze by TSC. These harms, according to AT&T, are impossible to quantify and could not be remedied if AT&T ultimately prevails on the merits. Courts have stated that, even if the alleged harm is not fully remediable, the irreparable harm factor is not satisfied absent a demonstration that the harm is "both certain and great; . . . actual and not theoretical." Because harms claimed by AT&T lack the requisite certainty, AT&T has not shown irreparable harm. 7. The TSC Order authorizes TSC to provide switched resale from the United States to Mexico. AT&T has not shown that provision of that limited service will affect AT&T's or other U.S. carriers' ability to negotiate a mutually satisfactory accounting rate with Mexico. In fact, the Commission has supported U.S. carriers' efforts to obtain significant annual reductions in the accounting rates on the U.S.-Mexico route for 1998 and 1999. Moreover AT&T's share of the U.S.-Mexican market is nearly 50 percent, which gives it substantial leverage in the bargaining process. AT&T's price squeeze argument is even more theoretical. As TSC notes, the Commission has rejected the notion that a price squeeze could result from a switched reseller's provision of service to an affiliated market. AT&T does not present any additional information in its Petition that would cause us to reconsider the Commission's conclusion about the potential harms of switched resale. 8. AT&T bases much of its argument on the Commission's recent Ameritech Order, in which the Commission granted AT&T's request for a "standstill order" against Ameritech. We find that AT&T's reliance on the Ameritech Order is misplaced. Ameritech's actions, which the Commission stayed, had not been previously authorized by the Commission so the Commission had never addressed the question raised by AT&T of whether Ameritech's actions violated the Telecommunications Act of 1996. In this case, TSC is providing service under Commission authority. Ameritech also involved the entry of a regional bell operating company into the long-distance market, which presented much greater potential competitive issues than those presented by TSC's provision of switched resale services. 9. Because AT&T and Americatel have failed to demonstrate that they would suffer irreparable harm, we need not address their remaining arguments concerning the other three parts of the test governing a motion for stay. IV. ORDERING CLAUSES 10. Accordingly, it is HEREBY ORDERED that the motions for stay filed by AT&T and Americatel ARE DENIED. 11. This order is effective upon adoption. Petitions for reconsideration under Section 1.106 of the Commission's rules may be filed within 30 days of the public notice of this order (see Section 1.4(b)(2) of the Commission's rules). FEDERAL COMMUNICATIONS COMMISSION Regina M. Keeney Chief, International Bureau