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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 ) ) fONOROLA FIBER DEVELOPMENT INC. ) ) LEDCOR INDUSTRIES INC. ) ) File No. SCL-AMD-19980831-00015 Application for modification of License to land and ) operate in the United States a private fiber optic ) submarine cable system extending between the ) United States and Canada ) MODIFICATION OF CABLE LANDING LICENSE Adopted: December 17, 1998 Released: December 21, 1998 By the Chief, Telecommunications Division: I. Introduction 1. In this Order, we modify the cable landing license recently granted to fONOROLA Fiber Development Inc. (fONOROLA Fiber) and Ledcor Industries Inc. (Ledcor). That license authorized fONOROLA Fiber and Ledcor, under the Cable Landing License Act, to land and operate a fiber optic submarine cable system to be called "America-Canada-1" or "AmeriCan-1," extending between the United States and Canada. AmeriCan-1 will be operated on a non-common carrier basis. We here grant the licensees' request to modify the license to: (1) increase the capacity of the cable system; (2) change the ownership of AmeriCan-1; and (3) set aside the requirement that the licensees seek Commission approval prior to the sale or transfer to a foreign entity of five percent or more in the aggregate of indirect ownership in the licensees. II. Comments 2. The application was placed on public notice on September 4, 1998. No comments were received. Pursuant to Section 1.767(b) of the Commission's rules, the Cable Landing License Act, and Executive Order No. 10530, we informed the Department of State of the application. The Department of State, after coordinating with the National Telecommunications and Information Administration and the Department of Defense, stated that it has no objection to issuance of the cable landing license, provided that no party may acquire direct or indirect control of the cable system without prior approval by the Commission. 3. The application requests that the Cable Landing License be amended as follows: a. To increase the capacity of the cable from three bundles of 12 strands each to four bundles of twelve strands each, for a total of 48 strands; b. To change the ownership of the cable to allow fONOROLA Fiber to own an undivided 62.5 percent interest in the landing stations and cable (30 of 48 strands) and to allow Ledcor to own the remaining 37.5 percent undivided interest in the landing stations and cable (18 of 48 strands); and c. To modify condition (9) of the license, which, among other things, requires prior approval by the Commission to sell or transfer to a foreign entity five percent or more of indirect ownership in the licensees. III. Discussion 4. We grant the applicants' request to increase the capacity of the cable. If the applicants had initially requested four bundles of twelve strands each, we would have had no reason not to grant their request. We also grant the applicants' request to modify the ownership of the submarine cable and cable landing stations. The proposed ownership structure does not alter the licensees' ability to control the cable system. Accordingly, we see no reason not to grant the applicants' request to modify the ownership structure. 5. Finally, we grant the applicants' request to modify condition (9) of the original license. The applicants state that because fONOROLA's parent, Call-Net Enterprises, Inc., (Call-Net) is a publicly- traded Canadian corporation the licensees have no control over nor ability to obtain prior Commission approval for indirect transfers of ownership of five percent or more. 6. We have not routinely imposed this restriction on indirect ownership in the past, nor did we intend the consequences envisioned here. We are satisfied that the remaining restrictions in the cable landing license, as herein modified, are sufficient to protect the public interest in this case. For example, there can be no transfer of control of the licensees without prior Commission consent, and any change of direct ownership of five percent or more requires prior Commission consent. Accordingly, we remove the words "or indirect" from the ninth condition attached to the cable landing license. That is, we will not require fONOROLA Fiber or Ledcor to obtain Commission approval prior to the acquisition of five percent or more of Call-Net's shares by one or more foreign entities. We will, however, maintain the requirement that fONOROLA Fiber and Ledcor obtain Commission approval before the sale or transfer of five percent or more of direct ownership of the Licensees. IV. Ordering Clauses 7. Consistent with the foregoing and pursuant to the Cable Landing License Act and Executive Order 10530, IT IS ORDERED that application, File No. SCL-AMD-19980831-00015, is GRANTED and the AmeriCan-1 landing license is MODIFIED to: (1) increase the capacity of the cable system to four bundles of 12 fibers each; (2) alter the ownership such that fONOROLA Fiber would own an undivided 62.5 percent interest in the cable landing stations and the cable (30 of 48 strands) and Ledcor would own the remaining 37.5 percent undivided interest in the cable landing stations and the cable (18 of 48 strands); and (3) set aside, in part, one condition imposed in the license granted to fONOROLA Fiber and Ledcor to land and operate AmeriCan-1 a non-common carrier cable system, DA 98-1668. Specifically, we remove the words "or indirect" from the ninth condition attached to that license as paragraph 16(9). That condition now provides as follows: (9) The Licensees shall, by application, obtain Commission approval prior to the sale or transfer to a foreign entity of five percent or more in the aggregate of direct ownership in the licensees." 8. This Modification of Cable Landing License does not modify any other terms or conditions imposed in the license issued on August 21, 1998. 9. This Order is issued under Section 0.261 of the Commission's 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