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@^t"5@^.Gf\\3==\i.=.3\\\\\\\\\\==iii\zzzzzG\zppzfpzzpp=3=i\=\\Q\Q=\f33\3f\\\GG3fQz\QG@(@i.====IK=\\z\z\z\z\z\zQzQzQzQzQG3G3G3G3f\\\\ffffpQz\\\\pQ\p\z\z\z\zQzQzQzQzQzQ\\\\ffI\G\G=G\\z\p3pKff\zGzKfGfGN@.\\G\\\\\\17\7\7==\\\==\\=\=7t=eeeeooo.Iji2Z\\yeCpj`vZefeloPpPj`e~~tro.................................Gf\\3==\i.=.3\\\\\\\\\\==iii\zzzzzG\zppzfpzzpp=3=i\=\\Q\Q=\f33\3f\\\GG3fQz\QG@(@i..=\\\\=f=....==\\@\=G=..p.G\\\\(\=1\o=\Ie77=j\.=77\\zzzzzzzzzzzGGGGipp\\\\\\\QQQQQ3333\f\\\\\e\ffffQ\ n9B8*XLB7  PT6QP DPC2X}XP7  PT6QXP y>I=.X&I7  PT6Q&Pd!0,Xa0xzP"@QP, y>N=.X#&N7  pTQ& I%,%XVJ,7  PT6QJP B"(!XL,(7  PT6Q,Pj n9C8*X:C7  xTQX j !y>I=.X:&&I7  xTQ&X , "n9G8*X#SG7  pTQ #y>K=.XS7g&K7  xTyQ& n9D8*XSD7  xTyQ$$&=m$m7$gI$=====$Q)=@$QC5I$$$M; y_' X   uP y_'#I2PG;aP##&a\  P6G;&P# #&a\  P6G;&P#Federal Communications Commission`(#jFCC 9973 ă   yx}dddyuQb Before the Federal Communications Commission  y_'&2Washington, D.C. 20554 ă #&a\  P6G;&P#) ) In the Matter of) )  y_h'1998 Biennial Regulatory Review)ppIB Docket No. 98148 Reform of the International Settlements) Policy and Associated Filing Requirements) )  y_ 'Regulation of International )ppCC Docket No. 90337  y_i 'Accounting Rates)pp(Phase II) )  y_ 'Market Entry and Regulation of hhCq)ppIB Docket No. 9522 Foreignaffiliated Entities)  y_j'  REPORT AND ORDER AND ORDER ON RECONSIDERATION Đ\  y_'X` hp x (#%'0*,.8135@8:'country's domestic network by U.S. carriers or their U.S. customers." 47 C.F.R.  63.14(b).(#` k As the Commission stated in the Foreign Participation Order, the No Special Concessions rule is intended to address the concern that an exclusive vertical arrangement between a U.S. carrier and a foreign carrier with market power on the foreign end could  y_ 'result in harm to competition and consumers in the U.S. market./  nZ5!'ԍXForeign Participation Order, 12 FCC Rcd at 23,95565,  150170; see 47 C.F.R. 63.14 (1998).(#ƴ By contrast, the Commission has found it unlikely that an exclusive arrangement between a U.S. carrier and a foreign carrier that lacks  y_7'market power would result in such harm.07 nZ_$'ԍXForeign Participation Order, 12 FCC Rcd at 23,95565,  150170.(#ƌ  y_' 33.` ` The vast majority of commenting parties support our proposal no longer to apply the ISP to arrangements with foreign carriers that lack market power. Ameritech argues, however, that we should maintain the ISP for some arrangements, regardless of whether the foreign carrier possesses"k 0,C)C)UU "  y_'market power.I1 nZh'ԍAmeritech comments at 4.I Ameritech would eliminate the ISP only: "(1) for settlement agreements that affect less than 25 percent of the traffic on a particular route and which are between U.S. carriers and foreign carriers from WTO member countries that permit multiple operator entry to the relevant foreign telecommunications markets; or (2) for routes where transparent, nondiscriminatory, costbased international termination charges are available on both ends of the route, regardless of whether carriers  y_'at either end possess market power."Q2X nZ'ԍXAmeritech comments at 5.(#Q  y_'!34.` ` Ameritech would lift the ISP only in cases where there is competition and/or costbased rates on the foreign end of the international route, regardless of whether the carrier on the foreign end of the international route possesses market power. We agree with Ameritech that costbased termination rates in foreign markets are a desirable goal. Ameritech's limited proposal to relax the ISP, however, is unlikely to achieve its goal of lowering settlement rates to cost. Ameritech would preclude U.S. carriers from entering into arrangements with foreign carriers that lack market power that deviate from the ISP except under the conditions it outlines above. Precluding such arrangements, or limiting the amount of traffic such arrangements may cover, could require U.S. carriers to pay higher termination rates than might otherwise be the case. Moreover, where the foreign carrier lacks market power, there is no need for such restrictions. Furthermore, Ameritech's proposal would do less to bring about costbased rates than the policy adopted by the Commission. In addition, Ameritech's proposal would create a cumbersome regulatory framework. Determining whether there are "transparent, nondiscriminatory, costbased interconnection charges" in the foreign market is likely to require a detailed review of the foreign regulatory regime. Such a review would have similar negative  y_'aspects to the effective competitive opportunities analysis we largely abolished in the Foreign  y_'Participation Order.3 nZ&'ԍXForeign Participation Order, 12 FCC Rcd at 23,90417,  3058.(#Ɛ For these reasons, we decline to adopt Ameritech's proposed standard.  y_8'"35.` ` In the Notice, we proposed to apply our proposal to lift the ISP for arrangements with carriers that lack market power in the foreign market only to arrangements with carriers in WTO  y_'Member countries.e4x nZ'ԍXNotice, 13 FCC Rcd at 15,327,  17.(#e We received comment from several parties urging us to allow U.S. carriers to exchange traffic outside of the ISP with carriers that lack market power in all foreign markets and not to restrict our relaxation of the ISP only to arrangements with foreign carriers that lack market power  y_9'in WTO Member countries.59 nZ'ԍXSee, e.g., Teleglobe comments at 25; MCI WorldCom comments at 3; Cable & Wireless reply at 3; Star Telecom reply at 2.(#ƶ AT&T, however, opposes extending any exemption from the ISP to nonWTO markets. AT&T argues that nonWTO markets present greater competitive concerns than WTO markets and that "provision of additional benefits to countries with membership of the WTO" serves the public interest in opening foreign markets. AT&T cites the Commission's decision in the  y_m'Foreign Participation Order to adopt a different standard for entry into the U.S. market by carriers  y_:'from WTO Members than for carriers from nonWTO Members as support for its position.6:`  nZ:&'ԍXAT&T reply at 27 (citing Foreign Participation Order, 12 FCC Rcd at 23,94445,  12527).(#ƥ  y_'#36.` ` Although we proposed in the Notice to restrict the policies adopted here to WTO" 6,C)C)UU" Member country routes only, we find that such a restriction would not serve the public interest. We find, after considering the comments filed, that there are significant potential benefits to lifting the ISP for arrangements with carriers that lack market power in nonWTO Member countries. Where new entrants exist in nonWTO Member countries, the ISP may be a significant impediment to their ability  y_4'to enter into arrangements with U.S. carriers to terminate U.S. traffic.o74 nZ'ԍXSee supra  ISP NEG INCENT26.(#o Commission policy should encourage U.S. carriers to enter into arrangements with such carriers. At the same time, we find that there are few risks associated with allowing U.S. carriers to enter into such arrangements with foreign carriers that lack market power in nonWTO Member markets. As discussed above, the risks of anticompetitive effects from arrangements between U.S. carriers and foreign carriers that lack market  y_5'power are slight.Y85X nZ- 'ԍXSee supra section III.A.1.(#Y We therefore will remove the ISP for arrangements with foreign carriers that lack market power in all foreign markets.  y_ '$37.` ` WTOAT&T advocates distinguishing between WTO Member and nonWTO Member countries for the purpose of applying the ISP to encourage more countries to seek membership in the  y_6 'WTO.J96  nZ'ԍXAT&T reply at 27.(#J We find it unlikely that the opportunity for nondominant carriers to enter into arrangements with U.S. carriers that need not comply with the ISP would encourage more countries to seek membership in the WTO. The incentive created by such a policy is unlikely to be a strong one because countries introducing competitive telecommunications regimes already have a strong incentive to join the WTO. A policy of requiring all arrangements with carriers from nonWTO Member countries to comply with the ISP may, however, stifle procompetitive arrangements with new entrants from such countries. We find that the costs of such a policy are not justified by any benefit that may arise due to incentives that might be created for a country to join the WTO. We decline, therefore, to  y_'adopt the proposal in the Notice to continue to apply the ISP to settlement arrangements with carriers that lack market power from nonWTO Member countries.  y_' ` ` 2. Market power determination  y_'%38.` `  III.A.2  MKTPWR1 In the Notice, we proposed to adopt a presumption that a foreign carrier lacks market  y_l'power when it possesses less than a 50 percent market share in each of the relevant foreign markets.u:lx nZ'ԍXNotice, 13 FCC Rcd at 15,32728,  1820.(#u  y_9'The Commission adopted this same presumption in the Foreign Participation Order for the purpose of  y_'determining when to apply competitive safeguards.7;x nZ 'ԍXThe Commission does not apply its No Special Concessions rule to arrangements with foreign carriers that lack market power in the relevant foreign markets. The Commission presumes that a carrier lacks  nZ>"'market power if it possess less than 50 percent market share in the relevant foreign markets. See  nZ#'Foreign Participation Order,  12 FCC Rcd at 23,95565,  15070. Likewise, the Commission will regulate U.S. carriers that are affiliated with foreign carriers as dominant unless the foreign carrier  nZ$'possesses less than 50 percent market share in the relevant foreign markets. See Foreign Participation  nZ^%'Order, 12 FCC Rcd at 23,86999,  177239.(#7 The Commission found in the Foreign  y_'Participation Order that the relevant input markets for the purpose of applying our competitive safeguards are the facilities and services markets necessary for provision of U.S. international services. They generally include: international transport facilities or services, including cable landing station"mH ;,C)C)UU" access and backhaul facilities; intercity facilities or services; and local access facilities or services on  y_'the foreign end.< nZ5'ԍXSee Foreign Participation Order, 12 FCC Rcd at 23,9523,  145; see also Foreign Carrier Entry  nZ'Order, 11 FCC Rcd at 3917,  116 ("'Bottleneck services or facilities' are those that are necessary for the provision of international services, including intercity or local access facilities on the foreign end");  nZ'see also, The Merger of MCI Communications Corporation and British Telecommunications plc, GN Docket No. 96245, Memorandum Opinion and Order, 12 FCC Rcd 15,351,  43 (rel. Sept. 24, 1997)  nZ'(BT/MCI Merger Order) (identifying six input markets in its merger review: (1) international transport between the United States and United Kingdom; (2) U.K. cable landing station access; (3) U.K. backhaul; (4) U.K. intercity transport; (5) U.K. terminating access services; and (6) U.K. originating access services).(# We find here that the same markets are relevant for determining whether we should continue to apply the ISP, because market power in any of these markets can give a foreign carrier the power to set unilaterally the rates, terms, and conditions of an arrangement to exchange traffic with a  y_4'U.S. carrier.= 4 nZl 'ԍXWe find below, however, that where there are viable alternatives to terminate U.S. traffic in the foreign market and/or the settlement rates available for service to such a market are low, the benefit of removing the ISP for all arrangements, including those with foreign carriers that have market power,  nZ'outweighs any risk of harm involved. See infra  ISP/ISR 150שISP/ISR 265.(#  y_'&39.` ` We find no basis to modify the presumption the Commission adopted in the Foreign  y_'Participation Order that a carrier that possesses less than 50 percent market share in a foreign market  y_h'lacks the ability to exercise market power in that market, as some commenting parties request.]>h  nZ'ԍXTRA comments at 4; KDD reply at 47.(#] The Telecommunications Resellers Association (TRA) urges us to presume that foreign carriers that possess  y_'less than 25 percent market share in the foreign market lack market power.K? nZ'ԍXTRA comments at 4.(#K KDD urges the Commission to allow deviation from the ISP for arrangements with foreign carriers that: i) lack market power in the local exchange market; ii) face competition from multiple facilitiesbased operators in the  y_i 'foreign market; and iii) are from WTO Member markets.M@i  nZ'ԍXKDD comments at 56.(#M  y_ ''40.` `  MKTPWR2 The Commission recognized the importance, in the Foreign Participation Order, of adopting a standard that enables carriers "to establish quickly and accurately what international  y_ 'transactions, services, and practices are permissible."A 0 nZm 'ԍXForeign Participation Order, 12 FCC Rcd at 23,959,  160 (quoting comments of U S West). (#ƛ The Commission also found, in that Order, that a presumption that a carrier with less than 50 percent market share in each of the relevant foreign  y_7'markets lacks market power is consistent with antitrust legal precedent.B7 nZ#'ԍXSee Foreign Participation Order, 12 FCC Rcd 23,95960 and n. 314,  16061 (citing A.B.A. Section  nZ_$'of Antitrust Law, Antitrust Law Developments at 235236 (4th ed.) (1997)).(# Adopting TRA's proposed 25 percent market share threshold is inconsistent with the relevant case law and would require that we impose restrictions on some arrangements that pose little or no risk of competitive harm. As discussed  y_'above, we find that applying the ISP in circumstances where it is unnecessary can deter competition.yC nZV('ԍXSee supra  HARM 124שHARM 227.(#y "C,C)C)UU;" We also note that the 50 percent market share screen is merely a presumption that may be rebutted by  y_'an interested party.D nZ5'ԍXForeign Participation Order, 12 FCC Rcd 23,95960 and n. 314,  16061.(#Ɠ  y_g'(41.` ` We also decline to adopt the proposal of KDD to find that a carrier lacks market power, for purposes of applying the ISP, where it lacks market power in the local exchange market and faces competition in a WTO Member country. We find that such a standard would be more cumbersome to apply than the one we adopt and would provide less certainty for carriers seeking to determine whether the ISP applies in a given case. Moreover, a presumption by the Commission that a carrier possesses market power in the foreign market based on its market share may be rebutted by an appropriate showing that the carrier nevertheless lacks market power. We thus find that there would be little, if any benefit of substituting KDD's proposed standard for the Commission's existing standard.  y_i ' 3.XProcedures to determine whether a carrier qualifies for exemption from the ISP(#  y_6 '  y_ ' )42.` `  III.A.3 We recognized in the Notice, in light of our proposals to remove the requirement that carriers file contracts with the Commission, that it is necessary to adopt a mechanism to ensure that carriers enter into arrangements that deviate from the ISP only with carriers that lack market power in the foreign market, and that our relaxation of the ISP does not enable U.S. carriers to enter into arrangements that deviate from the ISP with foreign carriers that could exercise their market power to  y_'the detriment of U.S. consumers.nEX nZ'ԍXNotice, 13 FCC Rcd at 15,32930,  23.(#n We thus proposed three alternatives to enable the Commission and interested parties to determine whether a particular settlement arrangement must comply with the ISP: (1) require no filing to substantiate the claim that a particular foreign carrier with which a U.S. carrier corresponds lacks market power; (2) require that a carrier identify the route on which it plans to provide service and file a certification that the carrier on the foreign end of the international route lacks market power; or (3) require a carrier to identify the foreign carrier and publicly file data indicating that the foreign carrier possesses less than 50 percent market share in each of the relevant markets or file a petition for declaratory ruling that a foreign carrier with greater than 50 percent  y_l'market share nevertheless lacks market power.HFl nZ'ԍXId.(#H  y_'*43.` ` PN LIST We decline to adopt any of the proposals set forth in the Notice. Rather, we adopt the proposal of Cable & Wireless, which asserted that the Commission should make an affirmative finding that carriers possess market power in specific foreign markets, and make a list of such carriers  y_m'public.wGmx nZ!'ԍXC&W comments at 1314; see also Star Telecom reply at 3.(#w Carriers would thus be precluded from exchanging traffic outside of the ISP with carriers on  y_:'the list unless otherwise allowed.XH: nZ#'ԍXSee infra, Section III.B.(#X We find that this approach will best advance our policy of allowing U.S. carriers to enter into arrangements with foreign carriers that lack market power with a minimum of regulatory oversight, while maintaining the ISP for certain arrangements with foreign"H,C)C)UU"  y_'carriers that possess market power in the foreign market.I  nZh'ԍXAs discussed below in Section III.B.1, we remove the ISP for all arrangements on routes where U.S. carriers are able to terminate at least 50 percent of their U.S. billed traffic in the foreign market at rates that are 25 percent below the applicable benchmark settlement rate or less, including for arrangements with foreign carriers that possess market power.(#Ƣ As discussed above, the Commission's rules include a presumption that a foreign carrier does not possess market power in a foreign market if  y_'it possesses less than 50 percent market share in each of the relevant foreign markets.*J  nZ'ԍXSee supra  MKTPWR138שMKTPWR240. The relevant markets include: international transport facilities or services, including cable landing station access and backhaul facilities; intercity facilities or services; and local access  nZz 'facilities or services on the foreign end. See Foreign Participation Order, 12 FCC Rcd at 23,9523,  nZB '145; see also Foreign Carrier Entry Order, 11 FCC Rcd at 3917,  116.(#* We thus issue,  y_g'concurrently with the release of this Order, a public notice containing a list of foreign carriers that we believe do not qualify for this presumption, for the purposes of identifying arrangements that are not required to comply with the ISP and the Commission's No Special Concessions rule. This list is based on publicly available information, compiled from official sources, including the International Telecommunication Union (ITU). Interested parties may challenge the inclusion or exclusion of any carrier on the list by submitting a petition for declaratory ruling and the appropriate supporting documentation to demonstrate that a carrier included on the list lacks market power or that a carrier excluded from the list has market power. The Commission may also amend the list on its own motion. The list will be updated periodically and posted on the Commission's web page. Carriers are responsible for ensuring that arrangements they enter into outside of the ISP comply with our rules in the event of additions to the list.  y_ '+44.` ` We find that Cable and Wireless' proposal is the best of the options proposed in the  y_ 'Notice or advocated by commenting parties. The first option suggested in the Notice was to allow carriers to determine themselves whether a particular foreign carrier lacks market power and require no  y_j'filing to substantiate such a claim.hKj nZ'ԍXNotice, 13 FCC Rcd at 15,32930,  23.(#h This option would provide no guidance for the carrier concluding the arrangement and would lack a mechanism for the Commission or other parties to resolve an issue of whether a particular foreign carrier lacks market power. Thus, it would fail to provide certainty to carriers seeking to enter into new arrangements outside of the ISP that such arrangements comply with our rules.  y_8',45.` ` The second option proposed in the Notice is problematic as well. This option would require that a carrier entering into an arrangement with a foreign carrier that lacks market power make a filing with the Commission that identifies the route and certifies that the foreign carrier lacks market  y_'power in all relevant foreign markets.NL(  nZg!'ԍXId.(#N We find that this solution would not provide the carriers concluding the arrangement with sufficient certainty that a particular foreign carrier possesses or lacks market power. This option would depend entirely on the judgement of the carrier entering into the arrangement to determine whether the foreign carrier lacks market power and, unless the certification were public, would provide no mechanism for other interested parties to challenge that judgment. Further, we are concerned that some foreign carriers may be unwilling to enter into procompetitive settlement arrangements with U.S. carriers if their existence could be discerned from publicly available information. " L,C)C)UU"Ԍ y_'-46.` ` We also find the third option proposed in the Notice to be problematic as well. This option would require a carrier that proposes to enter into an arrangement with a foreign carrier that lacks market power to identify the foreign carrier and publicly file data indicating that the foreign carrier possesses less than 50 percent market share in each of the relevant markets or file a petition for declaratory ruling that a foreign carrier with greater than 50 percent market share nevertheless lacks  y_'market power.FM nZi'ԍId.F This option would publicly disclose the existence of an arrangement with a foreign carrier that deviates from the ISP. We find that if the Commission were to adopt such a disclosure requirement some foreign carriers may be unwilling to enter into procompetitive arrangements with U.S. carriers, thus defeating the purpose of exempting arrangements with foreign nondominant carriers  y_5'from the ISP.N5X nZ- 'ԍXWe discuss above how public disclosure requirements can put a chilling effect on innovative settlement  nZ 'arrangements. See supra  CHILLING28.(#  y_'.47.` ` We also find that other options proposed by commenters are problematic. AT&T supports requiring all parties that seek to enter into an arrangement with a foreign carrier that lacks market power to demonstrate to the Commission, with public notice, that the particular foreign carrier lacks market power. If satisfied, the Commission would then include the foreign carrier on a list of approved foreign carriers that lack market power and with which U.S. carriers may enter into  y_ 'arrangements that deviate from the ISP.MO  nZ 'ԍXAT&T reply at 2627.(#M Under AT&T's proposal, a U.S. carrier that seeks to enter into an arrangement with a foreign carrier that had not before been found to lack market power by the Commission would have to identify the foreign carrier and demonstrate, subject to noticeandcomment procedures, that the foreign carrier lacks market power. In many cases, a foreign carrier may decline to agree to such an arrangement if the existence of the arrangement would have to be made public. AT&T's proposal could thus inhibit carriers from entering into procompetitive arrangements. In addition, as commenting parties have suggested, a new prior approval process would "both delay the benefits stemming from the new agreements as well as inhibit the development of emerging U.S. and  y_8'foreign carriers and the additional competition they bring to the market."P8@ nZ'ԍXTeleglobe comments at 6 (footnote omitted); see also SBC reply at 3.(#ƃ  y_'/48.` ` AT&T argues that affirmative findings are required to determine whether a foreign carrier possesses market power. Otherwise, it argues, many "ambiguities" requiring resolution will not  y_l'be raised with the Commission.SQl nZ'ԍXAT&T reply at 2627.(#S We find that providing a list of foreign carriers that do not qualify for the Commission's presumption that they lack market power will provide the affirmative finding sought by AT&T and ample opportunities to address any "ambiguities" that may exist with respect to a specific foreign carrier's market power.  y_m'049.` ` We will amend Sections 43.51 and 64.1001 to remove the ISP and related contract filing requirements for arrangements between U.S. carriers and foreign carriers that lack market power. Section 43.51 will also specify procedures for modifying the list of foreign carriers that do not qualify for the presumption that they lack market power. We also amend our No Special Concessions Rule, Section 63.14, to eliminate the requirement that a carrier seeking to enter into an exclusive arrangement with a foreign carrier that lacks market power submit with the Section 43.51 contract"n` Q,C)C)UU!" filing, which we here eliminate, information to demonstrate that the foreign carrier lacks market  y_'power.dR nZ5'ԍXSee supra  NSC STUFF32.(#d This rule change will permit carriers to rely on the Commission's published list of foreign carriers for purposes of determining which foreign carriers are the subject of the prohibitions contained in Section 63.14.  y_' 4B.` ` Eliminating the ISP on Selected Routes(#`  y_'  y_'` ` 1. Eliminating the ISP (# 4  y_5'150.` `  III.B  III.B.1 ISP/ISR 1ISP REMOVE 1We sought comment in the Notice on whether to remove the ISP completely on selected routes, including for arrangements with foreign carriers that possess market power in the foreign market. We also sought comment on what standard we should use to identify routes where we should no longer apply the ISP. We expressed concern that continued application of the ISP on  y_i 'liberalized routes would impede the development of real competition among U.S. carriers.eSi X nZa'ԍXNotice, 13 FCC Rcd at 15,331,  26.(#e We suggested several standards and tentatively concluded that we should remove the ISP on all routes that  y_ 'comply with the Commission's ISR standard.T  nZ'ԍXThe Commission allows ISR on routes to World Trade Organization (WTO) Member countries where 50 percent of the settled, U.S. billed traffic is settled at or below benchmark settlement rates established  nZ'by the Commission, or where the foreign market offers equivalent resale opportunities. For service to nonWTO Member countries, ISR is authorized only where 50 percent of the traffic is settled at  nZ'benchmark rates, and where the foreign market offers equivalent resale opportunities. See supra  ISR STANDARD15.(#Ƃ We reasoned that where the conditions for allowing ISR are met, there is a significantly reduced threat that U.S. consumers will be injured as a result of allowing U.S. carriers to enter into arrangements with foreign carriers that do not comply with the  y_j'ISP.hUj nZ'ԍXNotice, 13 FCC Rcd at 15,33132,  27.(#h We also sought comment in the Notice on several alternative proposals for determining whether to apply the ISP on a particular route. These alternatives included, for example, removing the ISP only where the foreign carrier settles U.S. traffic at the 8 cent best practices rate, adopted in the  y_'Benchmarks Order,V(  nZ'ԍXBenchmarks Order, 12 FCC Rcd at 19,87071,  134135.(#Ɓ and removing the ISP only on routes where traffic is settled at benchmark rates  y_'and where the foreign market also offers equivalent resale opportunities.W  nZ'ԍXNotice, 13 FCC Rcd at 15,3032,  2531; see also supra, note EQUIVALENCY23 (discussing the Commission's  nZ'equivalency standard).(#  y_8'251.` ` The proposal in the Notice to remove the ISP on all routes approved under the Commission's ISR standard elicited a wide range of views from commenting parties. In general, most parties favor lifting the ISP completely on certain routes. Differences exist, however, on the standard parties advocate for determining whether a route qualifies for removing the ISP. Many parties support  y_l'our proposal to lift the ISP on routes that qualify for ISR.X  l nZ&'ԍXSee, e.g., BTNA comments at 78 (it is superfluous to retain the ISP on ISR routes because carriers are permitted to bypass the ISP by carrying switched traffic over private lines); SBC comments at 8 (where the conditions for allowing ISR are met, the benefits of removing the ISP outweigh the costs of retaining it); Comptel comments at 67 (the ISP appears to have no useful purpose on routes where ISR"t(W,C)C)(" is authorized); Qwest comments at 45 (the ISP is essentially superfluous on routes where ISR has been  nZX'approved, and there is no basis for its retention); see also Telia comments at 5; RSL com comments at  nZ '3; but see AT&T reply at 1617 (parties supporting the proposal ignore "whipsaw risks" that exist  nZ'because of margins between benchmark settlement rates and cost). (# Other parties offered alternative standards"lX,C)C)UU(" for relaxing the ISP and opposed the proposal for relaxing the ISP on ISR routes that was set out in  y_'the Notice.Y nZ'ԍXSee, e.g., AT&T comments at 910 (the ISP only should be lifted where foreign carriers settle at best  nZ'practices rates or where the "ability to obtain viable ISR arrangements exists"); GSA comments at 6, reply at 35 (GSA opposes any move to eliminate the ISP with respect to foreign carriers that possess market power); TRA comments at 58; MCI WorldCom comments at 56 (the ISP should be lifted only for arrangements with foreign carriers from markets that offer equivalent resale opportunities or where at least 50 percent of traffic is settled within 2 cents of the best practices rate).(#Ƨ Still other parties urged the Commission to go further and extend the proposal to remove  y_'the ISP more widely than proposed in the Notice.^Z (  nZb 'ԍXSee, e.g., NTTA.com comments at 10 (The Commission should remove the ISP on all WTO Member routes and rely on GATS dispute resolution and Commission enforcement efforts to deal with any anticompetitive conduct); GTE comments at 9 (GTE supports removing the ISP on all WTO Member routes).(#^  y_4'352.` ` We conclude that it would serve the public interest to remove the ISP completely on certain routes, including for arrangements with foreign carriers that possess market power in the foreign market. We find that lifting the ISP has significant merits where the potential harm due to a foreign carrier's abuse of market power is limited. We decline, however, to adopt the standard  y_h'proposed in the Notice to remove the ISP on all routes where we allow ISR. Instead, as proposed by MCI WorldCom, we remove the ISP completely only on those routes where U.S. carriers have the  y_'ability to settle U.S. traffic at rates that are 25 percent below the benchmark, or less.[ nZ'ԍXLetter to Magalie Roman Salas, Secretary, Federal Communications Commission, from Robert Koppel  nZz'and Scott Shefferman, MCI WorldCom (March 16, 1999) (MCI WorldCom ex parte).(# As discussed below, we believe that the proposal by MCI WorldCom provides the proper balance between, on the one hand, our goal in this proceeding of eliminating regulations that impede the development of competition, and, on the other hand, the longstanding goal of the ISP of preventing anticompetitive  y_6 'behavior that can harm U.S. consumers. We find, in this Order, that on those routes where U.S. carriers have the ability to settle U.S. traffic at rates that are 25 percent below the benchmark, or less, the ISP is no longer necessary in the public interest as a result of meaningful economic competition, pursuant to Section 11(a)(2) of the Act. We therefore repeal this rule, as applied in such cases, as it is  y_j'no longer in the public interest, as required under Section 11(b)._\jh nZr 'ԍX 47 U.S.C.  11(a)(b).(#_  y_'453.` ` We agree with AT&T and MCI WorldCom that the proposal in the Notice to remove the ISP on all routes where we allow ISR would not adequately protect U.S. consumers against the  y_'harmful effects of the exercise of foreign market power.l] nZ6%'ԍXAT&T comments at 89; MCI WorldCom comments at 46.(#l Under the Commission's ISR standard, ISR is approved on routes where at least 50 percent of the traffic is settled at benchmark rates or below. In some markets, settlement rates will fall to benchmark levels not because of competitive pressures, but because of action by the Commission and U.S. carriers to enforce the benchmark settlement rate"],C)C)UU"  y_'requirement.^ nZh'ԍXThe Commission stated in the Benchmarks Order that it would ensure that U.S. carriers satisfy the  nZ0'benchmark requirements. Benchmarks Order, 12 FCC Rcd at 19,848,  85.(# As a result, MCI WorldCom points out, ISR could be approved on routes where there  y_'is a dominant carrier whose market power is not constrained by competitive pressures.Z_  nZ'ԍXMCI WorldCom ex parte at 3.(#Z We are concerned that lifting the ISP on such routes would enable a foreign carrier with market power to exercise its market power to evade our benchmark settlement rates or to engage in oneway bypass  y_4'that would raise the effective rate paid by U.S. carriers to terminate traffic in the foreign market._`4 nZ 'ԍXSee AT&T comments at 810.(#_ On the other hand, it is likely that on routes where rates to terminate traffic are significantly below benchmark levels, competitive forces exist which can constrain the market power of the dominant foreign carrier. These competitive forces may be from within the foreign market or from without, such as may exist when neighboring markets have low rates for terminating international traffic. The existence of competitive forces to restrain the market power of a dominant carrier substantially reduces our concern about the exercise of foreign market power and oneway bypass. We thus conclude that removing the ISP where rates to terminate traffic are significantly below benchmark levels is a preferable standard to removing the ISP on all routes where the Commission allows ISR.  y_6 '554.` ` We find that removing the ISP has significant merit even on those routes where we already allow ISR. Where we allow ISR, U.S. facilitiesbased carriers have the option of negotiating either a traditional settlement arrangement with a foreign carrier under the ISP or an ISR arrangement. Where carriers enter into an ISR arrangement, the arrangement is not bound by the requirements of the ISP. On some routes, U.S. carriers are reluctant to enter into ISR arrangements. One reason for this reluctance may be that under an ISR arrangement, U.S. carriers would not be entitled to allocation of return traffic under the proportionate return regime. As discussed above, we find that proportionate allocation of return traffic can have a detrimental effect on competition where the market power of the  y_'foreign carrier is limited by market forces.a@ nZ~'ԍXSee supra  PORP RETURN 125, PORP RETURN 226.(#Ƈ We find that removing the option of relying on the ISP will foster greater competition among U.S. international carriers by reducing their ability to engage in collusive negotiations with foreign carriers in competitive markets. In addition, on some routes where we allow ISR, foreign carriers are reluctant to enter into ISR arrangements. By removing the ISP, U.S. carriers may have greater leverage in negotiating non-traditional settlement arrangements with the foreign carrier.  y_9'655.` ` We agree with MCI WorldCom that a reasonable threshold for concluding that the ability of a dominant carrier to exercise its foreign market power is constrained by the existence of market forces is where rates to terminate traffic in the foreign market are at least 25 percent below the benchmark level. In addition, this standard provides certainty for parties seeking to interpret our rules. This standard is also straightforward and easy for the Commission to administer. Rates at this level are sufficiently below the benchmark level to indicate that a dominant carrier is facing competitive pressures to lower rates. Unless a dominant carrier were subject to competitive pressures, either from within its own market or from without, it would have little incentive to reduce its rates substantially  y_'below the benchmark levels.Zb nZ''ԍXMCI WorldCom ex parte at 3.(#Z At the same time, the 25 percent threshold is not so low as to retain the ISP in markets where the dominant carrier is subject to competitive pressures from both within and"n` b,C)C)UU!" without its market. For example, countries that currently qualify under this standard are Canada, the United Kingdom, Sweden, Germany, France, Hong Kong, the Netherlands, Denmark, and Norway. Each of these countries have competitive telecommunications markets, with low interconnection rates. In addition, we note that where settlement rates are below benchmark levels, but not 25 percent or more below the benchmark, carriers remain free to exchange traffic with foreign carriers pursuant to an ISR arrangement.  y_'756.` ` We further find that removing the ISP on routes where settlement rates are at least 25 percent below the benchmark levels will more effectively protect U.S. consumers against the harmful  y_5'effects of oneway bypass than removing the ISP on all routes that meet the ISR standard.c5 nZ 'ԍXThe term "oneway bypass" traditionally refers to oneway bypass of the settlements system, whereby U.S.inbound traffic is routed outside the ISP into the U.S. to terminate at low rates, while a foreign carrier uses its market power to require that outbound traffic be settled pursuant to a high accounting rate. We use this term more broadly here to refer to any practice by which a foreign carrier terminates U.S. inbound traffic at low rates and exercises its market power to require that U.S. carriers pay much  nZ 'higher rates to terminate traffic in the foreign market. See supra  ONE WAY BYPASS14.(#Ƽ As the  y_'Commission recognized in the Benchmarks Order, the settlement rate benchmarks are substantially  y_'abovecost.od@ nZ'ԍXBenchmarks Order, 12 FCC Rcd at 19,827,  44.(#o As a result, a foreign carrier still has an incentive to engage in oneway bypass on  y_ 'routes where U.S. carriers are paying benchmark rates to terminate traffic in the foreign market.e  nZ 'ԍXThe Commission addressed this concern in the Benchmarks Order by adopting a mechanism to detect oneway bypass on ISR routes. The Commission adopted a presumption that oneway bypass is occurring if the percentage of outbound traffic relative to inbound traffic increases by 10 percent or  nZd'more in two successive quarterly measurement periods. Benchmarks Order, 12 FCC Rcd at 19,91922,  248257.(# This could raise the costs U.S. carriers' incur to terminate traffic on a route and, ultimately, raise the calling prices U.S. consumers pay. The extent to which U.S. consumers may be harmed by oneway bypass is directly related to the difference between the rate at which U.S. carriers can terminate traffic in the foreign market and the cost of terminating foreign traffic in the United States. Where a foreign carrier charges substantially abovecost rates to terminate U.S. traffic in the foreign market, and the foreign carrier can terminate foreignoriginated traffic in the United States at low, more costbased rates, there is a significant risk of harm due to oneway bypass. The lower the differential between the rate to terminate traffic in the foreign market and the U.S. rate, however, the lower the incentive the foreign carrier has to engage in oneway bypass. In addition, the lower this differential, the lower the potential increased cost to U.S. carriers due to the loss of return traffic. Thus, where the foreign termination rate is substantially below the benchmark rate, there is a limit on the extent to which U.S. carriers' costs of providing international service could increase as a result of oneway bypass made possible by removing the ISP. Where rates to terminate traffic are at benchmark levels, however, there is a greater risk that consumers will be harmed by oneway bypass because there remains a significant differential between the rate to terminate traffic in the foreign market and the cost of terminating traffic in the U.S. market.  y_'857.` ` We further find that removing the ISP where U.S. carriers are able to terminate traffic at rates that are at least 25 percent below the benchmark will provide a significant incentive for foreign carriers to lower their settlement rates below benchmark levels. As competitive pressures develop in foreign markets, foreign carriers will have an incentive to lower their rates to take advantage of increased opportunities to enter into innovative arrangements as a result of lifting the": e,C)C)UU"  y_'ISP.Zf nZh'ԍXMCI WorldCom ex parte at 3.(#Z  y_'958.` ` We remove the ISP on all routes where settlement rates are 25 percent below the benchmark settlement rate, or less, regardless of whether the foreign country is a WTO Member or a nonWTO Member country. We find that there is unlikely to be a risk of harm due to the exercise of a foreign carrier's market power from a settlement arrangement conducted outside the ISP where settlement rates are at least 25 percent below the benchmark, regardless of membership in the WTO. In both WTO and nonWTO Member countries, the existence of settlement rates that are at least 25 percent below the applicable benchmark rate, is an indication that competitive market forces exist to constrain the ability of a foreign carrier to exercise market power. For the reasons discussed above, we also find that it is unlikely that restricting this policy only to WTO members countries would  y_'encourage foreign countries to join the WTO.egX nZ 'ԍXSee supra,   WTO37 .(#e  y_i ':59.` ` AT&T urges us to remove the ISP only where foreign carriers settle at best practices  y_6 'rates or where the "ability to obtain viable ISR arrangements exists."`h6  nZ'ԍXSee, e.g., AT&T comments at 910.(#` Although it subsequently modified its position, MCI WorldCom argued in its initial comments that the ISP should be lifted only for arrangements with foreign carriers from markets that offer equivalent resale opportunities or where  y_ 'at least 50 percent of traffic is settled within 2 cents of the best practices rate.]i x nZ'ԍXMCI WorldCom comments at 56. In a subsequently filed ex parte, MCI WorldCom proposed an alternative standard to "strike [the] balance" between the Commission's "goal of removing the ISP on all routes where it is no longer necessary while at the same time preventing competition distortion in the  nZ 'United States." MCI WorldCom ex parte at 2. MCI WorldCom's alternative standard is the one we adopt here, to remove the ISP on routes where rates to terminate traffic are at least 25 percent below the benchmark rates.(#] Each of the parties that suggests a more stringent standard for identifying routes on which we should lift the ISP justifies its proposed standard on the need to guard against oneway bypass of the settlements process and/or  y_'whipsawing.|j  nZ'ԍXSee, e.g., AT&T comments at 1315; TRA comments at 58.(#| We find, however that these more restrictive standards would maintain the ISP under circumstances in which competitive pressures constrain foreign carriers' market power and in which the potential harm to consumers is slight or nonexistent. Adopting the standards proposed by these parties  y_k'would thus unnecessarily limit the routes for which the ISP would be lifted. kk  nZ 'ԍXUnder AT&T's proposed standard, only 4 countries (Canada, Hong Kong, the Netherlands and Sweden) would currently qualify as having settlement rates lower than the 8 cent "best practices" rate, adopted in  nZ"'the Benchmarks Order. Under MCI WorldCom's proposed standard, only 6 countries would currently qualify as having rates that are lower than 2 cents plus the best practices rate (the four listed above plus Germany and the United Kingdom).(#  We therefore decline to  y_8'adopt the standards proposed by AT&T and MCI WorldCom.|l80 nZ&'ԍXSee AT&T comments at 1014; MCI WorldCom comments at 6.(#|  y_';60.` ` We find that the standard we adopt here will adequately address the concerns of parties that suggest more restrictive standards for removing the ISP. Moreover, we find that adopting"l,C)C)UUK" a more restrictive standard would be unnecessary and could inhibit competition. We note that there are significant costs associated with maintaining the ISP on routes where it is not necessary to prevent the exercise of foreign market power that could harm U.S. consumers. Precluding U.S. carriers from negotiating arrangements with foreign carriers outside of the nondiscrimination and proportionate return requirements of the ISP will limit opportunities for small U.S. carriers that do not carry substantial volumes of outbound traffic. As discussed above, the proportionate return requirement can limit opportunities for small carriers to compete with carriers that carry substantial amounts of  y_'traffic.dm nZ'ԍXSee supra  PORP RET.26.(#d Indeed, Cable & Wireless notes that the proportionate return requirement can act as an entry  y_h'barrier for new carriers seeking to enter the market.KnhX nZ` 'ԍXC&W comments at 5.(#K In addition, removing the nondiscriminatory settlement rate requirement may further promote competition among U.S. international carriers by creating greater uncertainty regarding U.S. carriers' costs. This uncertainty should lead to more aggressive negotiating by U.S. carriers, which may result in lower rates for terminating international  y_ 'traffic for U.S. carriers.o  nZ$'ԍXSee supra  ISP HARM 124שISP HARM 227.(#ƀ Such uncertainty regarding U.S. carriers' costs can also create incentives for U.S. carriers to compete more aggressively in the retail market.  y_ '<61.` ` We find that it is not necessary to require all traffic that is terminated in a foreign market to be settled at 25 percent below the applicable benchmark settlement rate, or less, in order to lift the ISP. Rather, we find that removing the ISP where at least 50 percent of U.S.billed traffic is terminated at such rates will ensure that the ISP is maintained only where it is necessary. In the  y_7'Benchmarks Order, we imposed a condition that limited ISR to only those routes where settlement rates for at least 50 percent of the settled, U.S. billed traffic are at or below the appropriate  y_'benchmark.ppx nZ'ԍXBenchmarks Order, 12 FCC Rcd at 12,917,  243.(#p We found that it was not necessary to require that all traffic on a particular route be settled at benchmark rates because any carrier, or combination of carriers, that carried at least 50 percent of traffic on a particular route would likely have the capacity to handle all traffic from U.S.  y_8'carriers.pq8 nZ'ԍXBenchmarks Order, 12 FCC Rcd at 12,918,  244.(#p Likewise here, we find that the ability of U.S. carriers to terminate at least 50 percent of the U.S.billed traffic in the foreign market at rates that are 25 percent below the benchmark rate or less is convincing evidence that competitive pressures exist in the foreign market to constrain the market power of the foreign carrier. We thus find that where at least 50 percent of traffic is terminated at rates 25 percent lower than the benchmark, or less, a foreign carrier is unlikely to have the ability to exercise market power to harm U.S. consumers and that the ISP is thus unnecessary.  y_' =62.` ` We find that it continues to be necessary to maintain a distinction between routes the Commission approves for ISR and routes on which the Commission removes the ISP. Carriers providing service to WTO Member countries where settlement rates are below the benchmark may enter into arrangements with foreign carriers in such markets outside of the ISP, even where settlement  y_'rates are not at least 25 percent below the benchmark.r nZ?&'ԍXFor a description of ISR, see supra,  ISR DEFINITION13.(#Ƅ In the Notice, we stated, in support of our tentative conclusion to remove the ISP on all ISR routes, that deviation from the ISP is already allowed on ISR routes as long as traffic flows over private lines. Upon further consideration, we find"( r,C)C)UU^" that this point does not support removing the ISP on all ISR routes. Where the Commission approves  y_'ISR, carriers providing service on the route are subject to a safeguard, adopted in the Benchmarks  y_'Order, that compares on a routespecific basis, the volume of U.S. inbound and outbound minutes that  y_g'are settled under the ISP._sXg nZ'ԍXBenchmarks Order, 12 FCC Rcd at 19,91920,  247250 (adopting a safeguard that presumes a market distortion has occurred if the ratio of outbound (U.S.billed) to inbound (foreignbilled) settled traffic increases 10 or more percent in two successive quarterly measuring periods).(#_ As MCI WorldCom points out, if we remove the ISP completely on a particular route, this safeguard would effectively be nullified, as no traffic would be settled under the ISP. We believe, as pointed out by MCI WorldCom, that this safeguard has a "significant deterrent effect," and is useful in detecting actions by foreign carriers that could increase costs for U.S.  y_'carriers.Vt nZ# 'ԍXMCI WorldCom comments at 56.(#V Thus, without this safeguard on routes where we remove the ISP, there is no effective deterrent to prevent foreign carriers from engaging in oneway bypass or otherwise acting to exercise their market power to the disadvantage of U.S. carriers. We thus find that removing the ISP poses a greater risk, generally, than allowing ISR on a particular route. We therefore decline to adopt our proposal to remove the ISP completely on all ISR routes and instead remove the ISP only where the settlement rate is significantly below the benchmark.  y_6 '>63.` ` Some commenting parties urge the Commission to go further than the proposal in the  y_ 'Notice and to remove the ISP completely on all routes between the United States and WTO Member  y_ 'countries.u  x nZ'ԍXSee, e.g., NTTA.com comments at 58; GTE comments at 9 (suggesting that the Commission should create a presumption that the ISP does not apply unless necessary to overcome a very high risk to  nZx'competition); see also Comptel comments at 78 (urging the Commission to conduct an inquiry within 12 months on whether the ISP is necessary on any WTO country routes).(# We find that these proposals would open U.S. carriers and consumers to potential abuse from foreign monopoly carriers and therefore decline to adopt them. We disagree with the contention of GTE that U.S. carriers can negotiate with alternative carriers in "most" WTO markets when faced by an attempt at whipsawing. U.S. carriers have the option of negotiating with alternative carriers in many WTO Member markets, but some markets of WTO Member countries remain closed to competition. We are aware, as GTE points out, that "services and technologies that bypass the settlements regime," such as refile, are available for carriers seeking to avoid the legal monopoly of a  y_k'foreign incumbent carrier in some countries that are legally closed to competition.Kvk`  nZk'ԍXGTE comments at 8.(#K We find it encouraging that such activity is putting pressure on settlement rates in those countries. Such methods of termination may not be a realistic alternative, however, for the termination of large amounts of  y_'traffic, particularly where termination of traffic in such a manner is illegal in the foreign country.wX  nZb!'ԍXInternet telephony is a promising means of bypassing the traditional settlements system. At present, however, such services remain cumbersome for the average user and account for a minimal amount of international voice traffic.(# Moreover, in countries that have high settlement rates with U.S. carriers, the potential harm to U.S. consumers from oneway bypass and/or whipsawing could be significant. In cases where settlement rates are high, and the foreign market does not offer equivalent resale opportunities, the risk of harm from lifting the ISP is great, and is not outweighed by the potential procompetitive effects of lifting the ISP on such routes. We therefore find that the benefits of removing the ISP for service to all WTO Member markets, as GTE proposes, are outweighed by the risks."w,C)C)UUA"Ԍ y_'ԙ?64.` ` Some commenting parties urge the Commission to allow U.S. carriers to exchange  y_'limited amounts of traffic outside of the ISP on all routes.x nZ5'ԍXSee, e.g., Level 3 comments at 34 (10%); Sprint comments at 5 (25%).(#Ɗ For instance, Sprint urges us to lift the ISP and all filing requirements for arrangements that affect less than 25 percent of the traffic on a route. Again, we find that lifting the ISP on all routes, even for arrangements affecting limited amounts of traffic, would expose U.S. carriers to significant risk with little corresponding benefit. Foreign markets where there are not equivalent resale opportunities and where settlement rates are above the benchmark pose a significant potential risk of oneway bypass and/or whipsawing by the dominant foreign carrier. Further, if agreements are not filed with the Commission, there would be no effective means to prevent a foreign carrier with market power from diverting substantial volumes of traffic through multiple arrangements with different U.S. carriers, each affecting amounts of traffic below the applicable threshold. We therefore do not adopt the proposals for removing the ISP from all routes for limited amounts of traffic.  y_i '@65.` ` ISP/ISR 2We will amend our rules establishing procedures for carriers seeking to enter into an arrangement that does not comply with the ISP with a foreign carrier that possesses market power on a route for which the ISP has not previously been lifted. Such carriers must file a petition for declaratory ruling that at least 50 percent of U.S.billed traffic on the route is terminated in the foreign  y_ 'market at rates that are 25 percent below the benchmark settlement rate, or less.y X nZ'ԍXThe rate for terminating traffic includes all rates for terminating traffic, including settlement rates and ISR rates.(#Ư For upper income routes, 25 percent below the benchmark rate is 11.25 cents; for upper middle income routes, 25 percent below the benchmark rate is 14.25 cents; and for lower income routes, 25 percent below the benchmark rate is 17.25 cents. Carriers filing such petitions should include the appropriate supporting documentation demonstrating that the route qualifies for exemption from the ISP. Such documentation may include settlement rate or other data published by the Commission. The Commission will issue a public notice upon the filing of such a petition and may, in each case, determine an appropriate deadline for filing comments. Unopposed requests may be granted by public notice. We will publish and periodically update a list of international routes exempt from the ISP on our web page.  y_' ` `  ISP/ISR2 2. Filing Requirements  y_9'A66.` `  III.B.2  FILING Section 43.51 of our rules currently requires that all U.S. carriers file, within 30 days  y_'of execution, a copy of certain arrangements entered into with a foreign carrier.zX nZV'ԍX47 C.F.R.  43.51. This requirement applies to all arrangements entered into with foreign carriers for the exchange of service, the interchange or routing of traffic, and matters concerning rates, accounting  nZ'rates, division of tolls, or the basis of settlement of traffic balances. Id.  43.51(a)(1)(2).(#Ɗ This requirement applies to all arrangements with foreign carriers for the exchange of traffic, regardless of whether such arrangements concern traffic settled in a traditional manner, pursuant to a flexible settlement  y_m'arrangement, or under an ISR arrangement.Q{m nZ#'ԍX47 C.F.R.  43.51(a).(#Q In addition, Section 64.1001 of our rules requires that carriers file with the Commission detailed information regarding changes in accounting rates entered  y_'into with foreign carriers.|`  nZ''ԍX47 C.F.R.  64.1001; see also Regulation of International Settlement Rates, CC Docket 90337, Phase I,  nZ''Report and Order, 6 FCC Rcd 3552 (1991).(#" |,C)C)UU"Ԍ y_'ԙB67.` ` In the Notice, the Commission sought comment on whether it should remove the Section 43.51 contract filing requirement and the Section 64.1001 accounting rate filing requirement for arrangements on routes where the Commission has removed the ISP. We noted that requiring public filing of contracts could preclude carriers from negotiating some arrangements that could be procompetitive. We also noted, however, that a carrier with market power in the foreign market may  y_'have the ability to exercise market power, even on routes where we remove the ISP.e} nZi'ԍXNotice, 13 FCC Rcd at 15,332,  30.(#e In section III.A.1, above, we remove the requirement that carriers file contracts and related information for arrangements with foreign carriers that lack market power. We conclude here that we should amend the Commission's filing requirements to allow that settlement rate information and copies of contracts required to be filed under Section 43.51 be filed confidentially for arrangements with foreign carriers that possess market power on routes where we remove the ISP.  y_ 'C68.` ` Commenting parties express concern that confidential agreements with foreign carriers that possess market power in the foreign market can permit the foreign carrier to leverage its market  y_6 'power to the detriment of U.S. consumers and competition.e~6 X nZ.'ԍXSee, e.g., MCI WorldCom comments at 8.(#e Other parties, however, argue that public disclosure of arrangements conducted outside of the ISP is not necessary and could stifle  y_ 'competition on routes that the Commission has approved for ISR.u  nZX'ԍXSee, e.g., C&W comments at 89; Qwest comments at 56.(#u Cable & Wireless states that rates currently disclosed for service provided on ISR routes are not indicative of actual prices carriers pay to terminate traffic in the foreign market and that disclosure of inaccurate information may actually harm  y_7'competition.M7x nZO'ԍXC&W comments at 89.(#M  y_'D69.` `  FILING 2 We find that requiring carriers to file copies of arrangements entered into with foreign carriers that possess market power in the relevant foreign telecommunications markets provides a valuable tool to ensure that U.S. carriers do not enter into arrangements that would allow the foreign carrier to exercise its market power to the detriment of U.S. consumers. We also find, however, that public disclosure of such contracts may have a chilling effect on procompetitive termination arrangements because parties may be more reluctant to conclude arrangements that must be disclosed  y_'publicly. nZG'ԍXSee BTNA comments at 9 (filing requirements inhibit U.S. carriers from entering into innovative  nZ'arrangements that would be procompetitive and could reduce rates for U.S. customers); see also  nZ'Comptel comments at 10 (Comptel supports removing filing requirements "because the benefits to be gained from lifting the requirements overwhelmingly outnumber any theoretical justification for their   retention ").(# Our goal in this proceeding is to balance these two competing concerns of promoting  y_l'competition, while precluding the abuse of foreign market power.wl  nZ#'ԍXWe note that our concerns regarding public disclosure of rates, terms and conditions are different in this context than in the retail context. In a recent item, we removed tariffs on domestic interexchange service completely. We also required, however, that carriers disclose their rates, terms and conditions in  nZ&'order to meet the needs of consumers. See Policy and Rules Concerning the Interstate, Interexchange  nZ&'Marketplace, CC Docket No. 9661, Order on Further Reconsideration and Erratum, FCC 99-47 (rel. March 31, 1999).(#w We find that these two goals can be accommodated by amending our filing requirements to allow confidential treatment of information"90,C)C)UU" for arrangements to which we no longer apply the ISP. We will therefore amend Section 43.51 and section 64.1001 of the Commission's rules to require carriers that exchange traffic with foreign carriers that possess market power on routes where we have lifted the ISP to file information on rates paid for the origination and/or termination of international traffic and copies of their contracts with these foreign carriers with the Commission. Such information may be filed with the Commission under  y_'confidential seal.  nZi'ԍXUnder the rules adopted in this Order, carriers entering into arrangements with foreign carriers that possess market power on routes that are exempt from the ISP are required to file accounting rate information as specified in new Section 43.51(f). Such information should be filed with the  nZ'Commission, as well as with the Chief, International Bureau. See infra, Appendix B.(# This filing requirement covers all arrangements between U.S. and foreign carriers that possess market power, including arrangements currently classified as ISR arrangements and alternative settlement arrangements.  y_5'E70.` ` ISP REMOVE 2We decline to adopt the proposal of MCI WorldCom that we require that U.S. carriers continue to file publicly arrangements with affiliated foreign carriers and nonequity joint venture  y_'partners where the affiliate or partner possess market power.T nZ'ԍXMCI WorldCom comments at 8.(#T We find that a confidential filing requirement will adequately deter the kind of anticompetitive conduct in which affiliated carriers or joint venture partners could engage. We recognize, however, that the potential exists for a foreign carrier with market power to leverage its market power into the U.S. market through a U.S. affiliate.  y_ 'We thus adopt a safeguard below to address this issue. @ nZ'ԍXSee infra,  AFF SAFEGUARD71שAFF SAFEGUARD 272.(#ƅ  y_ ' 3.` ` Competitive Safeguard for Affiliated Carriers  y_7'F71.` ` AFF SAFEGUARDIn the Notice, we sought comment on whether we should adopt additional safeguards to prevent a competitive distortion in the market for U.S. international services that could occur as a result of lifting the ISP. We also recognized, however, that any safeguards we adopt may, to the extent they are not necessary, preclude carriers from responding to market influences and concluding  y_k'arrangements that may bring settlement rates closer to cost.ok nZ'ԍXSee Notice, 13 FCC Rcd at 15,337,  42.(#o  y_'G72.` `  III.B.3 AFF SAFEGUARD 2We recognize that arrangements between U.S. carriers and affiliated carriers and joint venture partners that possess market power in the foreign market pose special competitive concerns. The Commission has adopted a set of foreignaffiliated dominant carrier safeguards that apply to carriers affiliated with foreign carriers that possess market power. Our dominant carrier safeguards also apply to joint ventures or other arrangements that present a substantial risk of anticompetitive  y_'effects in the U.S. international services market. `  nZ#'ԍXSee Foreign Carrier Entry Order, 11 FCC Rcd at 3969,  253; see also Foreign Participation Order, 12 FCC Rcd 23,98724,030,  21586. The dominant carrier safeguards applicable to foreign affiliated U.S. carriers include: a limited structural separation requirement and quarterly reporting requirements on  nZ^%'traffic and revenue, provisioning and maintenance, and circuit status.(# Removing the ISP could exacerbate the concern about anticompetitive behavior by allowing a foreign carrier to adopt a strategy that would raise the costs of its U.S. affiliate's rivals and thus improve the position of the joint enterprise. Such a strategy could take the form of a foreign carrier with market power charging unaffiliated carriers significantly"mH ,C)C)UU" higher rates to terminate traffic in the foreign market. A foreign carrier could also route substantially all of its return traffic to its affiliate, thereby depriving the unaffiliated carriers of settlement credits they receive from terminating foreignoriginated traffic and raising their costs to terminate traffic in the foreign market. We find, for the reasons discussed above, however, that on routes where we remove  y_4'the ISP, the danger of harm from such action, generally, is significantly reduced.Y4 nZ'ԍXSee supra Section III.B.1.(#Y Nevertheless, we find that there is heightened concern about anticompetitive arrangements between U.S. carriers and their affiliates and joint venture partners. We thus find it necessary to adopt an additional safeguard to deter such arrangements. We adopt a safeguard that prohibits U.S. carriers that are affiliated or nonequity joint venture partners with foreign carriers that possess market power in the foreign market from entering into arrangements that may present a significant adverse impact on competition on the  y_'international route. X nZ 'ԍXCf. 1998 Biennial Regulatory Review Review of International Common Carrier Regulations, IB  nZ 'Docket No. 98118, FCC 9951, (rel. March 23, 1999), at  23  (delegating to the International Bureau the authority to further scrutinize a streamlined application where it presents "a significant potential impact on competition").(#ơ If we find that carriers have entered into such arrangements, we reserve the right to take appropriate action to remedy the situation, including reimposing the ISP on the route.  y_ ' #footnote reference#  y_i 'C.` ` Expanding the Current ISR Policy  y_ '  H73.` `  III.C We sought comment in the Notice on whether we should permit authorized carriers to provide service via ISR on more routes to encourage alternatives to the international accounting rate system, in order to put pressure on abovecost settlement rates. We noted that our current policy places significant limits on the routes on which carriers may route traffic via ISR, in order to prevent  y_7'oneway inbound bypass.o7@ nZ'ԍXNotice, 13 FCC Rcd at 15,33435,  3738.(#o Many commenting parties with affiliates that possess market power in foreign markets and other small carriers favor the proposal to permit ISR on more routes, either for all  y_'WTO countries or for limited amounts of traffic. nZA'ԍXSee, e.g., C&W comments at 4; NTTA.com comments at 12; GTE comments at 13; PrimeTEC  nZ 'comments at 10; Star Telecom reply at 6; see also TRA comments at 8; ACTA reply at 7.(# All large U.S. international carriers oppose an expansion of the routes on which we permit ISR. These carriers argue that the risk of oneway bypass is substantial on routes that fail to qualify under our current ISR rules. They state that there would be little procompetitive benefit from removing the ISP on such routes because most lack a means of  y_'terminating international traffic other than through the incumbent international carrier.(  nZ'ԍXAT&T comments at 2833; MCI WorldCom comments at 9; Sprint comments at 1011.(#Ɔ  y_'I74.` ` We agree with the commenting parties that argue that it is premature to expand the ISR standard to additional routes, even for limited amounts of traffic. We find that the other steps we  y_9'take in this Order are likely to have a significant procompetitive impact in the U.S. international services market. Removing the ISP for all arrangements with foreign carriers that lack market power in the foreign market is likely to have a significant procompetitive impact on routes that we have not approved for ISR. On such routes, U.S. facilitiesbased carriers will be authorized to provide service outside the ISP in correspondence with foreign carriers that lack market power. In addition, we allow U.S. private line resellers to engage in ISR in correspondence with foreign carriers that lack market": ,C)C)UU"  y_'power. nZh'ԍXSee infra  NONDOM ISR 1105שNONDOM ISR 2109.(#Ɔ Thus, the effect of loosening our ISR rules on routes that do not qualify for ISP relief would only be to increase the extent to which U.S. carriers could enter into arrangements with foreign carriers that possess market power. We find that where settlement rates are high, and/or where the foreign market does not provide equivalent opportunities for ISR, the risk of oneway inbound bypass is too great to authorize ISR with a carrier with market power in a foreign market, even for limited amounts of traffic. We thus decline to modify our standard for providing ISR.  y_'f  IV. Alternative Settlement Arrangements ă  y_5'J75.` `  FLEX 1  FLEX1 IVIn 1996, the Commission adopted the Flexibility Order, which established a framework for permitting flexibility in our accounting rate policies w IV.A here appropriate market and regulatory  y_'conditions exist.dX nZ 'ԍXFlexibility Order, 11 FCC Rcd 20,063.(#d Under the flexibility policy, the Commission maintains a presumption in favor of allowing flexible settlement arrangements with carriers in WTO Member markets that can be rebutted only by a showing that the foreign carrier that is a party to the flexible settlement arrangement does  y_6 'not face competition from multiple facilitiesbased carriers.g6  nZ'ԍXSee Foreign Participation Order, 12 FCC Rcd at 24,02430,  297313. For arrangements between U.S. carriers and foreign carriers in nonWTO Member markets, the Commission applies the "effective  nZN'competitive opportunities" (ECO) test. We note that the Flexibility policy was modified in the Foreign  nZ'Participation Order to remove the ECO test for arrangements between U.S. carriers and foreign carriers  nZ'in WTO Member markets. Id. at 24,02630,  302313.(#g Even where the presumption is rebutted, the Commission could approve a flexible settlement arrangement where it finds the arrangement "promotes marketoriented pricing and competition, while precluding the abuse of market power by the  y_ 'foreign correspondent."p  nZ'ԍXFlexibility Order, 11 FCC Rcd at 20,080,  40.(#p Under the flexibility policy, carriers must file with the Commission, subject to notice and comment procedures, a petition for declaratory ruling requesting authority to enter into a particular flexible arrangement with a foreign carrier. The flexibility policy also includes  y_'safeguards to guard against anticompetitive arrangements.(  nZ'ԍXThe Commission adopted two safeguards in the Flexibility Order. First, flexible settlement arrangements that affect over 25 percent of the traffic on the route must be publicly disclosed and not contain unreasonably discriminatory terms and conditions. Second, arrangements between U.S. carriers  nZ$'and foreign affiliates and joint venture partners must be publicly disclosed.  Flexibility Order, 11 FCC Rcd at 20,08183,  4451.(#  y_'K76.` ` In the Notice, we observed that, to the extent the ISP does not apply to arrangements with particular foreign carriers on particular routes, our flexibility policy would be irrelevant. We thus sought comment on whether any modifications to our flexibility policy were necessary in light of the  y_'exemptions to the ISP that we proposed in the Notice. We also put forth two proposals to modify our  y_'flexibility policy safeguards and filing requirements in the event we retained the flexibility policy. nZJ%'ԍXNotice, 13 FCC Rcd at 15,334,  36. We proposed to limit the filing of commercial information on routes that qualify for flexible treatment by removing the requirement that carriers reveal the terms and  nZ&'conditions of arrangements that do not trigger the flexibility policy's safeguards. Id.  35. Second, we sought comment on whether we should remove the requirement that arrangements between affiliated carriers be made public where the foreign affiliate lacks market power in the relevant foreign markets."j(,C)C)p("  nZ'Id.  36.(#"X,C)C)UUn"Ԍ y_'ԙL77.` ` AT&T and MCI WorldCom both addressed the issue of whether we should maintain the flexibility policy. AT&T questions whether we should maintain the flexibility policy if we adopt  y_'the proposals in the Notice. It states that removal of the ISP for arrangements on certain routes and with certain foreign carriers, as the Commission proposed, would "largely achieve the flexibility  y_4'originally sought in adopting the original Flexibility Order in 1996."M4X nZ,'ԍXAT&T comments at 18.(#M MCI WorldCom agrees that the "Flexibility Policy will be largely superseded if the Commission modifies its ISP rules," but nonetheless urges the Commission to retain the flexibility policy. It states that there may be unique, unforeseen circumstances for allowing a waiver of the ISP even though the standard for removing the  y_h'ISP has not been met.Th nZ 'ԍXMCI WorldCom comments at 8.(#T  y_'M78.` ` We find that the changes we make in this Order to exempt from the ISP arrangements between U.S. and foreign carriers that lack market power, and between U.S. and all foreign carriers on routes that allow U.S. carriers to terminate at least 50 percent of their traffic at rates that are at least 25 percent below the applicable benchmark settlement rate largely supersede the  y_6 'policies adopted in the Flexibility Order. We therefore find that maintaining the flexibility policies and procedures would needlessly complicate our accounting rate policies. As more carriers enter the market for international services, it is increasingly important that the Commission's policy on the exchange of international traffic be easy to administer and understand.  y_7'N79.` ` The flexibility policy has been a valuable first step in reforming our international  y_'settlements policy. With the other actions we take in this Order, however, we go far beyond the  y_'incremental steps we took in the 1996 Flexibility Order. The flexibility policy allows for limited exceptions to the ISP and requires U.S. carriers to obtain advance approval from the Commission for  y_k'arrangements that deviate from the ISP.  The policies we adopt in this Order, on the other hand, exempt all arrangements from the ISP, except those with foreign carriers with market power in markets where U.S. carriers are unable to terminate at least 50 percent of their traffic at rates that are 25 percent below the benchmark or lower. The flexibility policy would thus be relevant, in WTO  y_'Member markets, for only a limited class of arrangements. We find that maintaining the flexibility policy's detailed and complex procedures and standards for exempting settlement arrangements from the ISP makes little sense in light of the limited application it would have upon adoption of the new  y_'rules we adopt in this Order.  y_'O80.` ` We agree with MCI WorldCom, however, that there may be "unforeseen circumstances" in which it may be in the public interest to allow an arrangement with a foreign carrier with market power to deviate from the ISP, even though the standard for removing the ISP has not been met. We will therefore entertain waivers of the ISP for individual settlement arrangements. Among the factors we will consider are whether granting such a waiver would promote the public interest in achieving costbased rates for terminating international traffic, while precluding the abuse of  y_n'foreign market power.nx nZ%'ԍX The Commission has ample authority to waive its rules. See, e.g., BellSouth v. FCC, 162 F.3d 1215.(#Ʃ  y_ 'P81.` `  FLEX 2  FLEX2 Finally, because we abolish the flexibility policy, we decline to adopt any of the  y_ 'proposals in the Notice for modifying the filing requirements and safeguards applicable to flexible" ,C)C)UUw!" settlement arrangements. We also note that all settlement arrangements that we have in the past approved under our flexibility policy would either qualify for exemption from the ISP under our new rules or the route that the arrangement concerns would be eligible for ISR. Therefore, arrangements approved under our flexibility policy will remain in effect.  y_4'  y_'& V. Competitive Safeguards ă  y_'  y_')footnote reference)#footnote reference# A. ` ` The No Special Concessions Rule  y_5'Q82.` ` VV.BThe "No Special Concessions" rule prohibits a U.S. international carrier from agreeing to accept special concessions from a foreign carrier that has sufficient market power in the destination  y_'market to affect competition adversely in the United States.Rx nZ7 'ԍXThe No Special Concessions rule prohibits a U.S. international carrier from agreeing to accept special concessions with respect to traffic or revenue flows directly or indirectly from any foreign carrier that  nZ 'possesses market power in the foreign market.  See Foreign Participation Order, 12 FCC Rcd at 23,95765,  156170 (1997). A "special concession" is defined as "any arrangement that affects traffic or revenue flows to or from the United States that is offered exclusively by a foreign carrier or administration to a particular carrier and not also to similarly situated U.S. international carriers  nZ'authorized to serve a particular route."  Id.; see also Foreign Carrier Entry Order, 11 FCC Rcd 3873.(#R The Commission has found that special concessions granted to a particular U.S. carrier by a foreign carrier with market power pose an  y_i 'unacceptable risk of anticompetitive harm in the U.S. international services market.i  nZ'ԍXForeign Carrier Entry Order, 11 FCC Rcd at 397172,  256259.(#Ƅ Prior to  y_6 'adoption of the Foreign Participation Order, the Commission prohibited the acceptance of special  y_ 'concessions from all foreign carriers. In the Foreign Participation Order, the Commission modified the rule so that it applies only to U.S. carrier dealings with foreign carriers that possess market power  y_ 'in the foreign market.  nZ'ԍXSee Foreign Participation Order, 12 FCC Rcd at 23,95665,  150170.(#Ɗ The Commission reasoned that special concessions granted by a foreign carrier that does not possess market power can serve the public interest, for example, by allowing  y_7'carriers to offer innovative services that reduce rates for U.S. consumers.s7(  nZ'ԍXSee id., 12 FCC Rcd at 23,957,  156.(#s  y_'R83.` ` NO_SPEC_CONCIn the Notice, we sought comment on the extent to which the No Special Concessions  y_'Rule should apply on routes where we remove the ISP.)1footnote reference)#footnote reference#o R9 nZ'ԍXNotice, 13 FCC Rcd at 15,33537,  3943.(#o#&J\  P6Q&P# We also sought comment in the Notice on two specific issues concerning the interplay of the No Special Concessions rule and the ISP.  y_'S84.` ` First, we sought comment on whether the No Special Concessions rule should apply to the terms and conditions under which traffic is settled, including the allocation of return traffic, on a route where we remove the ISP. We tentatively concluded that it should not. We noted that the No Special Concessions rule would still prohibit exclusive arrangements with carriers that possess market power regarding interconnection of international facilities, private line provisioning and maintenance,  y_'as well as quality of service on routes where we remove the ISP.)"=footnote reference)#footnote reference#eH R9 nZ&'ԍXNotice, 13 FCC Rcd at 15,336,  41.(#e#&J\  P6Q&P# All parties commenting on the" ,C)C)UU"  y_'issue agreed with our tentative conclusion.)FAfootnote reference)#footnote reference#R9 nZ'ԍXSee, e.g., Telia comments at 6; MCI WorldCom comments at 10; FT comments at 6; AT&T comments at 15.(#Ƣ#&J\  P6Q&P#  y_'T85.` ` We agree with the commenting parties and find that there is no valid reason to apply the No Special Concessions rule to the terms and conditions under which traffic is settled, including the allocation of return traffic, on a route where we remove the ISP. We agree that it makes no sense for the No Special Concessions rule to impose a nondiscrimination requirement for settlement arrangements on routes where we remove the ISP. The point of removing the ISP is to allow market forces to determine the types of arrangements into which carriers enter. We therefore will amend Section 63.14 of the Commission's rules to clarify that the No Special Concessions rule does not apply to the terms and conditions under which traffic is settled, including the allocation of return traffic, on routes where we remove the ISP. We discuss below application of the No Special Concessions rule to other matters on routes where we remove the ISP.  y_i 'U86.` ` Second, we sought comment on whether the No Special Concessions rule should apply to interconnection of international facilities, private line provisioning and maintenance, and quality of  y_ 'service on routes where we remove the ISP.  h  nZ'ԍXNotice, 13 FCC Rcd at 15,33536,  40.(#h Most parties that commented on the matter argued that, with respect to matters other than the terms and conditions under which traffic is settled, the No Special Concessions rule should continue to apply to arrangements with foreign carriers that possess  y_j'market power in the foreign market, even where we no longer apply the ISP.  j nZ'ԍX See, e.g., BTNA comments at 910; Ameritech comments at 7; MCI WorldCom comments at 10; GSA comments at 11.(#ư We agree with the commenting parties that there is still a risk of anticompetitive conduct for arrangements with foreign carriers that possess market power, even on routes where we remove the ISP. We disagree with the comments of SBC, which argues that continued application of the No Special Concessions rule on  y_'routes where we remove the ISP would be unnecessary and counterproductive.  Y nZF'ԍXSee SBC comments at 1920.(#Y Even on routes where we remove the ISP, foreign carriers may retain significant market power that could enable them to discriminate among U.S. carriers. As PrimeTEC notes, discrimination with respect to "interconnection terms, private line provisioning, quality of service and the like" can undermine  y_'competition significantly.X nZ 'ԍXSee PrimeTEC reply at 10.(#X   We find that removing the ISP will accord U.S. carriers adequate freedom to negotiate with foreign carriers for the exchange of international traffic. We therefore will maintain the No Special Concessions rule, as modified above, on all routes, regardless of whether the ISP applies.  y_'V87.` ` SBC urges us to modify the manner in which we apply the No Special Concessions rule. The rule currently prohibits a carrier from accepting an exclusive arrangement from a foreign carrier that possesses market power in any of the relevant foreign markets identified by the Commission. The relevant markets generally include: international transport facilities or services,  y_'intercity facilities or services, and local access facilities or services on the foreign end.  (  nZ''ԍXSee Foreign Participation Order, 12 FCC Rcd at 19,953,  145.(# SBC argues"! ,C)C)UU" that the No Special Concessions rule should apply only to exclusive arrangements "affecting facilities, services or functions in the particular market in which the carrier has market power." SBC states that limiting the No Special Concessions rule in this manner would "eliminate unnecessary and anticompetitive restrictions on U.S. carriers' ability to negotiate efficient arrangements for the exchange  y_4'of international traffic with foreign carriers." O4 nZ'ԍXSBC comments at 1920.(#O  y_' W88.` `  SBC ARG We decline to adopt the change that SBC proposes because we find that it would be a  y_'significant change in our policies that was not raised in the Notice and that inadequate record support exists for such a change. SBC urges us to adopt a change that would significantly alter the manner in which the Commission applies the No Special Concessions rule. No party other than SBC addressed  y_'this issue in their comments and the issue was not raised in the Notice. We therefore find that this issue is beyond the scope of this proceeding. We therefore decline, at this time, to adopt SBC's proposal.     y_4 ' B.` ` "Grooming" of International Traffic  y_ '  y_ 'X89.` ` V.C In the Notice, we sought comment on whether removing the ISP and related filing requirements may allow carriers to enter into arrangements that may have anticompetitive effects. In particular, we noted that U.S. carriers have, in the past, expressed concern regarding whether their  y_+'competitors may negotiate arrangements to accept "groomed" traffic, i.e. traffic that terminates in particular geographic regions. We sought comment on whether such arrangements present a potential for anticompetitive effects, particularly with respect to arrangements between incumbent local  y_'exchange carriers (ILECs) and foreign carriers with market power.eX nZ'ԍXNotice, 13 FCC Rcd at 15,337,  43.(#e  y_"'Y90.` ` Several parties oppose allowing ILECs to engage in grooming arrangements with  y_'foreign carriers that possess market power on routes where we remove the ISP. nZu'ԍXSee, e.g., MCI WorldCom comments at 10, reply at 79; PrimeTEC comments at 9, reply at 11; Star Telecom reply at 56. (#Ƶ They argue generally that grooming arrangements between U.S. carriers with market power in local exchange markets and carriers with market power in foreign markets can lead to anticompetitive effects. AT&T and MCI WorldCom make two specific arguments for prohibiting grooming arrangements between ILECs and foreign carriers with market power. They argue that abovecost access charges give ILECs  y_'the ability to "subsidize entry into the international market or raise other U.S. carriers' costs."f@ nZ'ԍXAT&T comments at 33; MCI WorldCom reply at 8.(#f ILECs could achieve this end, according to AT&T, first by offering foreign carriers unfairly low rates  y_z'to terminate traffic in their region, subsidized by abovecost access charges.Pz nZ"'ԍXAT&T comments at 3334.(#P Second, AT&T argues  y_E'that ILECs could raise their rivals costs by "distorting the mix of traffic available to other carriers."fE`  nZE%'ԍXAT&T comments at 33; MCI WorldCom reply at 8.(#f AT&T also argues that ILECs could raise rivals costs by offering foreign carriers lower rates to terminate U.S. inbound traffic, which would deprive established carriers of return traffic that U.S."" ,C)C)UU"  y_'carriers rely on to offset abovecost settlements payments on outbound traffic. S nZh'ԍXAT&T comments at 33.(#S  y_'Z91.` ` We find that the danger of anticompetitive effects of grooming arrangements cited by AT&T and MCI WorldCom are unlikely. First, we find that it would be irrational for an ILEC to offer "a lower inbound rate than other carriers," because of its "lower cost for access," as AT&T  y_'argues.MX nZ'ԍXAT&T comments at 33.(#M AT&T's argument ignores the opportunity cost of access charge revenue the ILEC would forego if it carried traffic over its own international termination facilities, instead of receiving the traffic in its local network from an unaffiliated international carrier. If an ILEC agrees to transport and terminate groomed international traffic in its local exchange service area, the ILEC would carry traffic that otherwise would be handled by a competing international carrier. The ILEC's competitor, however, would have handed the traffic to the ILEC, and would have paid the ILEC an access charge for doing so. By terminating the groomed international traffic itself, therefore, the ILEC forfeits a payment it otherwise would have received from its competitor. Thus, the ILEC has an opportunity cost it must consider when determining the price it will charge a foreign carrier for terminating traffic in the ILEC's region. If it agrees to terminate traffic at a rate that fails to take into account the opportunity cost of lost access charge revenue, it would earn a lower profit than it would if it had let another international carrier terminate the traffic. If it is assumed that the ILECs seek to maximize their profits, then any pricing strategy for terminating international traffic that does not recover the access charge would not be a rational strategy. We thus conclude that allowing ILECs to accept "groomed" traffic does not provide them with the economic incentive to engage in the anticompetitive strategy described by AT&T and MCI WorldCom. We therefore find that a prohibition against ILECs accepting "groomed" international traffic is unnecessary.  y_='[92.` ` AT&T and MCI's second argument also is unpersuasive. They argue that an ILEC would raise U.S. carriers' costs by terminating lowcost traffic in its local exchange service area at low rates, which would leave other U.S. international carriers with only highcost traffic to terminate outside of the ILEC's region. We conclude that this scenario does not present a significant danger. So long as grooming arrangements are limited to routes where we remove the ISP, all carriers will have the freedom to negotiate rates with foreign carriers for the termination of U.S. inbound traffic on those routes. Thus, if the cost of terminating traffic in the U.S. market increases for some carriers because an ILEC negotiates an arrangement to terminate lowcost foreign traffic in its region, carriers left with only higher cost traffic to terminate outside of the ILEC's region may negotiate a termination rate which reflects such increased costs.  y_'\93.` ` Finally, we reject AT&T's argument that, because ILECs will agree to terminate the traffic of foreign carriers at low rates on routes where we remove the ISP, grooming arrangements will harm other U.S. carriers by depriving them of settlement revenue used to offset the cost of outbound service. We find that this argument bears little relation to the grooming of international traffic by an ILEC because any carrier has an incentive to capture inbound traffic by offering low rates, except a carrier that already receives return traffic subject to a bilaterally agreed settlement arrangement. We find above that allowing carriers freely to negotiate agreements for the exchange of international traffic  y_ 'on routes where we remove the ISP will lead to procompetitive benefits.W  nZ &'ԍXSee supra Section III.B.(#W We therefore find that it is not in the public interest to adopt a broad prohibition on the geographic selection of inbound international traffic by incumbent LECs on routes where we remove the ISP. ""#x,C)C)UU#"Ԍ y_']94.` ` Given our conclusion that grooming arrangements are not a cause for concern on routes where we have removed the ISP, we remove here the condition that the International Bureau has imposed on BOC international Section 214 certificates that requires these carriers to obtain prior  y_a'Commission approval of grooming arrangements.a nZ'ԍXSee, e.g., Bell Atlantic Communications, Inc. and NYNEX Long Distance Company, Order, Authorization and Certificate, DA 97285 (Int'l Bur. rel. Feb. 7, 1997) (requiring that "any agreements that BACI and NYNEX LD negotiate with foreign carriers to route U.S. inbound switched traffic to their respective inregion service areas via their authorized international private lines are subject to our Section 43.51(d) filing requirements").(#  y_'v" VI. Accounting Rate Filings ă     y_'^95.` ` VIUnder the procedures set out in the Commission's rules, carriers must seek approval for changes in accounting rates. Carriers seeking such approval must file either a modification request  y_J'or a notification.)Bfootnote reference)#footnote reference#PJx9 nZ'ԍ47 C.F.R  64.1001 (1998).P#&J\  P6Q&P# The notification requirement applies to simple reductions in the applicable accounting rate. Such notifications must be filed prior to the effective date of the change in the accounting rate and go into effect one day after filing. The accounting rate modification filing procedures apply to all other changes in accounting rates (except flexibility filings), including retroactive changes in the applicable accounting rate. Modification filings are automatically granted 21 days after filing if the filing is unopposed and the International Bureau has not notified the applicant that approval of the modification may not serve the public interest. Where a filing is not automatically  y_2 'granted, approval is only granted by formal action of the International Bureau.  y_'_96.` ` The Commission sought comment in the Notice on whether it should continue to afford carriers the option of filing either a notification or a modification notice for simple changes in  y_'accounting rates negotiated with foreign carriers.u nZ:'ԍXNotice, 13 FCC Rcd at 15,33739,  4449. (#u We observed in the Notice that the existence of two procedures for accounting rate filings has caused confusion and that few filings are made under  y_B'the notification procedure.)zfootnote reference)#footnote reference##&J\  P6Q&P# For instance, in many cases carriers seek to use notification filing procedures for accounting rate arrangements that should be filed under modification procedures, causing increased staff workload and additional paperwork for filing parties. We thus noted that having two procedures for accounting rate filings has made our accounting rate filing policies more complicated than they need to be. We therefore tentatively concluded that we should remove the option of filing a notification and require that all accounting rate filings be governed under the existing  y_R'procedures for accounting rate modifications.)lfootnote reference)#footnote reference#\R9 nZA!'ԍXId. at 15,338,  46.(#\#&J\  P6Q&P#  y_'`97.` ` Few commenting parties addressed this issue. MCI WorldCom supported our  y_'proposal, and Sprint opposed it.)footnote reference)#footnote reference#( 9 nZY%'ԍXSprint comments at 13; MCI WorldCom comments at 1112.#XP\  P6Q}XP#(#Ɩ#&J\  P6Q&P# Sprint argues that it is useful to have the option of filing an accounting rate notification to allow accounting rate changes to go into effect on one day's notice. It argues further that the fact that our policy is confusing does not justify removing it. We find, contrary to Sprint's contention, that our desire to simplify a confusing regulatory construct does, indeed, justify"b$ ,C)C)UU" removing the notification procedure. We find that adopting our tentative conclusion to maintain a single procedure for accounting rate changes will simplify our regulatory structure and avoid confusion for parties seeking to make the required filings with the Commission.  y_`'a98.` ` We also note that there will be little practical impact from our decision to maintain a single procedure for accounting rate changes, the modification procedure. As discussed above, few carriers have taken advantage of our notification procedures. In 1997, the Commission received seven notification filings and 808 modification filings. In addition, although accounting rate modification filings cannot go into effect until after a 21 day comment period, all modification filings may be drafted or negotiated to have retroactive effect. There is therefore little practical difference between the modification procedures, which entail a 21 day delay before the modification is effective, and the notification procedures, which entail only a one day delay.  y_ 'b99.` ` We also sought comment on the extent to which we should continue to require that carriers making accounting rate filings serve every carrier that provides service on the international route with a copy of the filing. We noted that the number of international carriers is growing on many routes and sought comment on whether another approach is warranted. We also noted that we had been urged to require that accounting rate filings be placed on public notice, as is required for petitions seeking approval of flexible settlement arrangements. Further, we noted that the Commission has introduced an electronic filing mechanism for accounting rate filings, and that information  y_'contained in such filings would be available on the Commission's web site.u nZH'ԍXNotice, 13 FCC Rcd at 15,33840,  4749.(#u  y_'c100.` ` The Commission's electronic filing system for accounting rate filings was introduced  y_h'very recently.XhX nZ`'ԍXInternational Bureau OnLine Reports and Electronic Filing Pilot Program, Public Notice, Report No.: IBFS990001, Feb. 10, 1999; (announcing a two month pilot program for electronic filing of accounting rate information).(# We have had insufficient experience with the system to determine whether the information available on the Commission's web site will be an adequate substitute for the existing service requirement. We therefore decline to remove the existing service requirement at this time. We anticipate, however, that we may remove the service requirement in the near future, as the Commission implements the new electronic filing system. We will therefore eliminate the existing service requirement within 3 months of the release of this Order. We delegate to the Chief, International Bureau the authority to implement this change and direct the Bureau to issue a Public Notice at that time to make this change in our rules.  y_' VII. Issues on Reconsideration  y_'A.` ` Petitions for Reconsideration in CC Docket 90337  y_'  y_`'d101.` `  IV.B 7.AIn the Notice, we stated that we would address in this proceeding the petitions for  y_8'reconsideration of the Flexibility Order.hX8x nZP&'ԍXNotice, 13 FCC Rcd at 15,33940,  5051; AT&T Petition for Reconsideration in CC Docket 90337;  nZ''PB Comm Petition for Reconsideration in CC Docket 90337; NYNEX Petition for Reconsideration in CC Docket 90337; TMI Petition for Reconsideration in CC Docket 90337.(#h  The petitioners urged us to modify in various ways the"8%,C)C)UUQ"  y_'competitive safeguards the Commission adopted in the Flexibility Order. We sought comment on the petitioner's proposals in light of the changes we proposed to the ISP. In light of our decision to abolish the flexibility policy, we decline to adopt any of the petitioner's proposals. We therefore deny  y_'the petitions for reconsideration of the Flexibility Order.#&a\  P6G;&P#  y_8'  B. ` ` Petitions for Reconsideration in IB Docket 9522  y_'  y_'e102.` ` 7.BWe also have pending two remaining issues on reconsideration of the Foreign Carrier  y_'Entry Order.I nZ( 'ԍXWorldCom, Inc. Petition for Reconsideration in IB Docket No. 9522 [hereinafter WorldCom Petition]; BT North America Inc. Petition for Reconsideration in IB Docket No. 9522 [hereinafter BTNA  nZ 'Petition]. We stated in the Foreign Participation Order that we would address these issues in the  nZ 'instant Flexibility Order reconsideration proceeding (CC Docket No. 90337). See Foreign Participation  nZH 'Order, 12 FCC Rcd at 24,055,  383. (#I In that order, we adopted the requirement that U.S. facilitiesbased carriers obtain separate Section 214 authority and demonstrate that equivalency exists when such carriers seek to  y_p'provide ISR over their facilitiesbased U.S. international private lines.px nZ'ԍXSee Foreign Carrier Entry Order, 11 FCC Rcd at 393136,  153164. See also supra  ISR DEFINITION13. Our rule governing the provision of ISR by U.S. facilitiesbased carriers is currently codified at 47 C.F.R.   nZ'63.18(e)(4). We recently reorganized our part 63 rules governing international common carriers and  nZ'moved this portion of the rules to new Section 63.22(e)(2). See 1998 Biennial Regulatory Review  nZ'Review of International Common Carrier Regulations, IB Docket No. 98118, FCC 9951, (rel. March  nZp'23, 1999). The rule changes become effective on May 19, 1999.(# This action conformed the treatment of facilitiesbased private lines to that adopted for resold private lines used to provide switched, basic services via ISR. We adopted an exception to this general rule, however, to permit a carrier to use its U.S. facilitiesbased private lines to carry switched traffic without demonstrating equivalency where two conditions are met: (1) the private line is interconnected to the public switched network on one end only " either the U.S. end or the foreign end; and (2) the foreign correspondent with which the U.S. facilitiesbased carrier is interchanging switched traffic is not the owner of the  y_X'underlying foreign private line halfcircuit.X  nZ'ԍXForeign Carrier Entry Order, 11 FCC Rcd at 393335  157161. See also Foreign Participation  nZ'Order, 12 FCC Rcd at 24,054,  382.  (# This general rule, and its exception, remain in effect, although we have since modified our standard for permitting ISR by both facilitiesbased carriers and  y_'private line resellers._H  nZ'ԍSee supra  ISR STANDARD15._  y_' f103.` ` WorldCom asks that we allow a carrier to interconnect its U.S. facilitiesbased private line with the public switched network at one end without demonstrating that our ISR standard is met, even if the foreign correspondent owns the foreign private line halfcircuit, whenever the foreign  y_@'correspondent is a "nondominant U.S.affiliated" carrier.`@ nZ$'ԍXSee generally, WorldCom Petition.(#` Our rule on oneend interconnection currently prohibits such an arrangement with any carrier that owns the foreign halfcircuit, whether or not the foreign carrier has market power or is affiliated with a U.S. carrier. The policy we adopted, WorldCom argues, has the unintended result of preventing U.S. carriers or their affiliates from buying"&h,C)C)UU>"  y_'foreign halfcircuits in order to provide oneend interconnection services.n nZh'ԍXReply of WorldCom, Inc. (IB Docket No. 9522) at 12.(#n Impsat supports WorldCom's proposal but would not limit it to U.S.affiliated foreign carriers; it suggests that we allow a U.S. facilitiesbased carrier to interconnect its private line with the public switched network at one end, without demonstrating that our ISR standard is met, even if the foreign correspondent owns the  y_`'foreign halfcircuit, as long as that correspondent lacks market power.d`X nZX'ԍXImpsat Comments (IB Docket No. 9522) at 3.(#d AT&T opposes WorldCom's proposal, arguing that it would limit the Commission's protections against oneway bypass of the settlements process. Any facilitiesbased carrier in the foreign market, AT&T argues, should be encouraged to grant costbased settlement rates and should not be granted greater opportunities to  y_'benefit from oneway settlements bypass than any other carrier.f nZH 'ԍXAT&T Opposition (IB Docket No. 9522) at 56.(#f  y_p'g104.` ` We have allowed U.S. facilitiesbased private line carriers to provide oneend interconnection service without demonstrating that our ISR standard is met in order to promote competitive entry in foreign markets and ultimately lower prices for U.S. consumers. Our intent, in limiting the carriers with whom U.S. carriers could exchange switched traffic, was to prevent incumbent foreign carriers from sending their switched traffic into the United States outside the settlements process. Such conduct would exacerbate the settlements deficit without promoting new entry into the foreign market. In an environment where foreign governments now are permitting new entrants to obtain ownership interests in international facilities, however, the standard we adopted for oneend interconnection service is not tailored to accomplish our goals. Indeed, as we have already concluded based on the entire record of this proceeding, there are significant public interest benefits to permitting U.S. facilitiesbased carriers to provide switched services, without limitation, outside the  y_'ISP in correspondence with foreign carriers that lack market power.x nZ'ԍXWe find no support in the record, moreover, for limiting this conclusion to U.S.affiliated foreign carriers that lack market power in the foreign country. (# In light of this conclusion, the  y_'provision we adopted in the Foreign Carrier Entry Order permitting oneend interconnection by U.S. facilitiesbased carriers is superfluous. Removing the ISP for arrangements with carriers that lack market power allows U.S. facilitiesbased carriers to carry switched traffic over international circuits interconnected on one or both ends in correspondence with foreign carriers that lack market power. Our decision to lift the ISP for all U.S. carrier arrangements with foreign carriers that lack market power thus effectively subsumes our rule that permits oneend interconnection by U.S. facilitiesbased  y_'carriers.' nZ!'ԍXWe are aware that the current rule on oneend interconnection could be construed to permit a U.S. facilitiesbased carrier to exchange switched traffic outside the ISP with a foreign carrier that leases the foreign private line halfcircuit from the incumbent provider of international services but that has market power in the foreign country's local access market. Unless the U.S. international route is approved for ISR, this arrangement would not be permitted under the policy we adopt in this order of lifting the ISP for U.S. arrangements with foreign carriers that lack market power in each relevant market in the foreign destination country, including the local access market. We find it reasonable to prohibit such arrangements given our finding in this proceeding that a carrier with market power in the local access and transport market of a foreign country could well affect the market for termination of international  nZ('services. See supra  SBC ARG88. (#' We therefore eliminate that rule."'h,C)C)UU"Ԍ y_'ԙh105.` ` NONDOM ISR 1BTNA seeks reconsideration of our decision not to allow resellers on the U.S. end to  y_'offer oneend interconnection services.:X nZ@'ԍXBTNA Petition at 24. In a later filing, BTNA appears to limit its request to routes where the reseller is not affiliated with a foreign carrier that has market power. BTNA Reply (IB Docket No. 9522) at 4. Our response to this request would be the same.(#: Allowing resellers to offer the service, BTNA argues, would  y_'bolster our efforts to open foreign markets, and any harm to U.S. facilitiesbased carriers would be de  y_'minimis because those carriers would continue to earn revenue from provision of the private line halfcircuit to the reseller and would be able to compete to provide the service themselves. BTNA also sees no reason to presume that all oneend interconnection traffic will flow inbound to the United  y_'States. AT&T responds that BTNA has not shown why its request would serve the public interest.f nZ 'ԍXAT&T Opposition (IB Docket No. 9522) at 34.(#f It contends that lost settlement revenues would not be sufficiently offset by revenues facilitiesbased carriers would receive from the provision of the underlying private line halfcircuit.  y_p'i106.` ` We find merit to BTNA's argument that U.S. private line resellers should be accorded the same regulatory freedom as U.S. facilitiesbased carriers to exchange switched traffic in  y_ 'correspondence with foreign carriers that lack market power. We found in the Foreign Carrier Entry  y_ 'Order that allowing resellers to offer oneend interconnection services would allow resellers to gain at the direct expense of facilitiesbased carriers without creating any avenue for facilitiesbased carriers to  y_ 'recoup lost settlement revenues from return traffic.y x nZ'ԍXForeign Carrier Entry Order, 10 FCC Rcd at 3934,  158.(#y We note, however, that our decision here to lift the ISP for U.S. carrier arrangements with foreign carriers that lack market power means that no U.S. facilitiesbased carrier is assured of any return traffic from such foreign carriers to offset the U.S. carrier's payments for terminating its U.S.outbound traffic. Indeed, allowing private line resellers to engage in ISR in correspondence with nondominant foreign carriers would create additional competition to U.S. facilitiesbased carriers, thereby exerting increased downward pressure on rates paid by U.S. consumers.  y_h'j107.` ` We also agree with BTNA that any harm to U.S. facilitiesbased carriers from lost  y_@'settlement revenues they would otherwise receive for handling inbound traffic would be de minimis, because: private line resellers would be limited to corresponding with foreign carriers that lack market power; facilitiesbased carriers would earn revenues on the provision of the underlying U.S. private line halfcircuits; and it is unlikely that U.S. private line resellers would have any undue advantage in negotiating with nondominant foreign carriers for the termination of foreignoriginated traffic. We see no reason, moreover, to expect that permitting private line resellers to compete for the termination of traffic originated by nondominant foreign carriers will afford the foreign carriers any ability to  y_('whipsaw U.S. facilitiesbased carriers.( nZ"'ԍXWe find above that foreign carriers that lack market power pose little or no danger of whipsawing U.S.  nZ#'carriers. See supra  NO WHIPSAW22.(#  y_'k108.` ` For the foregoing reasons, we modify our rules to permit U.S.authorized private line resellers to interconnect their private lines to the public switched network, at one or both ends, for the provision of switched basic services, and thus, to engage in ISR in either of the following circumstances: (1) on any route where the resale carrier exchanges switched traffic with a foreign"`(` ,C)C)UUt" carrier that lacks market power; or (2) on any route for which the Commission has authorized the  y_'provision of ISR.d nZ@'ԍXSee Appendix A,  63.23 (d).(#d This rule supersedes the condition that appears in the Section 214 authorizations of private line resellers that limits their ability to resell interconnected private lines to routes for which  y_'we have authorized ISR.xX nZ'ԍXFor example, the "Actions Taken" Public Notice that serves as the international Section 214 certificate of applications granted under the streamlined procedures contained in Section 63.12 of the Commission's rules provides that: "the carriers may not and their tariffs must state that their customers may not connect their private lines to the public switched network at either the U.S. end or foreign end, or both, for the provision of international switched basic services, unless the Commission has authorized the provision of switched services over private lines to the particular country at the foreign end of the private line."(#Ƹ  y_8'l109.` ` NONDOM ISR 2We also direct all U.S. private line carriers to amend their international private line tariffs to track the policy and rules we adopt in this order. In particular, we shall require that a carrier's tariff explicitly state our policy that the private line user may engage in resale of the international private line for the provision of a switched, basic telecommunications service upon authorization from the Commission under Section 214 of the Communications Act of 1934, as amended, and provided that the private line is used only (1) on a route where the resale carrier exchanges switched traffic with a foreign carrier that the Commission has determined lacks market  y_ 'power;  nZX'ԍXAs discussed supra   PN43 , the Commission will maintain on its web page a Public Notice containing a list of foreign carriers that do not meet our presumption that they lack market power.(# or (2) on any route for which the Commission has authorized the provision of  &[ switched services over international private lines &[ . Carriers will be required to amend their international private line tariffs within ten days after the effective date of the rules adopted in this order.  y_ '  I VIII. Administrative Matters  y_X'  y_0' A.` ` Final Regulatory Flexibility Certification  y_'m110.` ` VII The Regulatory Flexibility Act (RFA)JX  nZp'ԍXThe RFA, see 5 U.S.C.  601 et. seq., has been amended by the Contract With America Advancement Act of 1996, Pub. L. No. 104121, 110 Stat. 847 (1996) (CWAAA). Title II of the CWAAA is the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).(#J requires that a regulatory flexibility analysis be prepared for noticeandcomment rulemaking proceedings, unless the agency certifies that "the rule will not, if promulgated, have a significant economic impact on a substantial number of small  y_h'entities."Fh nZ#'ԍ5 U.S.C.  605(b).F The RFA generally defines "small entity" as having the same meaning as the terms "small  y_@'business," "small organization," and "small governmental jurisdiction."G@ nZ%'ԍId.  601(6).G In addition, the term "small"@)0,C)C)UU"  y_'business" has the same meaning as the term "small business concern" under the Small Business Act. nZh'ԍXId.  601(3) (incorporating by reference the definition of "small business concern" in Small Business Act, 15 U.S.C.  632).(# A small business concern is one which: (1) is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business  y_'Administration (SBA).X  nZH'ԍSmall Business Act, 15 U.S.C.  632.X  y_8'n111.` ` In the Notice in this proceeding, we certified that the proposed rules "[would] not, if  y_'promulgated, have a significant economic impact on a substantial number of small entities."h nZ` 'ԍXSee Notice, 13 FCC Rcd 15,339,  48. (#h No comments were received concerning this certification. The purposes of this proceeding are to eliminate some regulatory requirements and to simplify and clarify other existing rules. These rule changes will affect facilitiesbased international telecommunications carriers exclusively in  y_p'particular, approximately 10 facilitiesbased international telecommunications carriers. Neither the Commission nor SBA has developed a small business definition specifically applicable to such international carriers; therefore, we will utilize the definition under the SBA rules for Communications  y_ 'Services, Not Elsewhere Classified (NEC). @ nZ'ԍX13 CFR  120.121, SIC code 4899. Pursuant to 5 U.S.C.  601(3), the statutory definition of a small business applies "unless an agency, after consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and publishes such definition(s) in the Federal Register."(# Under this definition, a small business is one with $11.0  y_ 'million or less in annual receipts.<  nZ`'ԍId. < Based on information filed with the Commission, the subject facilitiesbased international telecommunications carriers do not fall within the above definition of "small business" because they each have more than $11.0 million in annual receipts. The rule modifications at issue do not impose any additional compliance burden on persons dealing with the Commission, including small entities. Rather, this action removes filing requirements in scaling back application of the Commission's International Settlements policy. Accordingly, we certify, pursuant to the RFA, that the rules adopted herein will not have a significant economic impact on a substantial  y_'number of small entities. The Commission will send a copy of the Report and Order and Order on  y_'Reconsideration, including a copy of this final certification, in a report to Congress pursuant to the  y_h'Small Business Regulatory Enforcement Fairness Act of 1996, see 5 U.S.C. 801(a)(1)(A). In  y_@'addition, the Report and Order and Order on Reconsideration and this certification will be sent to the  y_'Chief Counsel for Advocacy of the Small Business Administration, and will be published in the  y_'Federal Register. See 5 U.S.C. 605(b).  y_' B.XSupplemental Final Regulatory Flexibility Analysis (# "x* ,C)C)UU"Ԍ y_'o112.` ` As required by the Regulatory Flexibility Act (RFA),hX nZh'ԍXSee 5 U.S.C.  603. The RFA, see 5 U.S.C.  601 et. seq., has been amended by the Contract With America Advancement Act of 1996, Pub. L. No. 104121, 110 Stat. 847 (1996) (CWAAA). Title II of the CWAAA is the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).(#h an Initial Regulatory  y_'Flexibility Analysis (IRFA) was incorporated in the Notice in IB Docket No. 9522,g nZ`'ԍNotice, 13 FCC Rcd at 15,34041,  5354.g and a Final  y_'Regulatory Flexibility Analysis (FRFA) was incorporated into the Report and Order in that docket.px nZ'ԍForeign Carrier Entry Order, 11 FCC Rcd at 399596.p This present Supplemental Final Regulatory Flexibility Analysis (Supplemental FRFA) conforms to the  y_`'RFA.O` nZ 'ԍSee 5 U.S.C.  604. O  y_8'  y_' p113.` ` Need for, and Objectives of, the Present Action. This action creates greater opportunities for U.S. international private line resellers to carry U.S. international traffic outside of the settlements process. It also harmonizes the treatment of private line resellers with that of facilitiesbased carriers.  y_H 'q114.` ` Summary of Significant Issues Raised by Reconsideration Petitions. No petitions were  y_ 'received in direct response to the FRFA in the Report and Order, nor were small business issues raised.  y_ 'r115.` ` Description and Estimate of the Number of Small Entities to which the Rules Will  y_ 'Apply. As noted in the associated Final Regulatory Flexibility Certification in IB Docket No. 98148,  y_X'supra, the RFA directs agencies to provide a Regulatory Flexibility Analysis in noticeandcomment rulemaking proceedings, unless the agency certifies that "the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities." Our action on reconsideration in IB Docket No. 9522 will affect telecommunications resellers, including resellers that are small  y_'businesses; therefore, we incorporate this present Supplemental FRFA into our Report and Order and  y_'Order on Reconsideration.  y_@'s116.` ` In our reconsideration of the petitions in IB Docket No. 9522, we modify our rules to allow U.S. international private line resellers to carry switched traffic over international private line circuits in correspondence with foreign carriers that lack market power. We expect that these changes will allow U.S. private line resellers, including small entities, to take advantage of new opportunities in  y_'the international telecommunications marketplace. As noted in the associated certification, supra, in instances where neither the Commission nor the SBA has developed a small business definition specifically applicable to the entities potentially affected by our action, we utilize the pertinent  y_('definition under the SBA rules. ( nZ`$'ԍXPursuant to 5 U.S.C.  601(3), the statutory definition of a small business applies "unless an agency, after consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and publishes such definition(s) in the Federal Register."(# Here, neither the Commission nor the SBA has developed a definition of small entities specifically applicable to resellers. The closest applicable SBA definition"+ ,C)C)UUA" for a reseller is a telephone communications company other than a radiotelephone (wireless)  y_'company. nZh'ԍX13 C.F.R. 121.201, SIC code 4813. See also Executive Office of the President, Office of  nZ0'Management and Budget, Standard Industrial Classification Manual (1987).(# Below, we describe available statistics for telecommunications entities generally, including resellers, then give more particular information on resellers.  y_`'t117.` ` The SBA has developed a small business definition for establishments engaged in providing "Telephone Communications, Except Radiotelephone" (wireless) to be such businesses  y_'having no more than 1,500 employees.:H nZ'ԍId.: The U.S. Bureau of the Census reports that there were 2,321  y_'such telephone companies in operation for at least one year at the end of 1992.V nZ` 'ԍ1992 Census at Firm Size1-123.V All but 26 of the 2,321 nonradiotelephone companies listed by the Census Bureau were reported to have fewer than 1,000 employees. Thus, even if all 26 of those companies had more than 1,500 employees, there would still be 2,295 non-radiotelephone companies that might qualify as small entities. We do not have data specifying the number of these carriers that are not independently owned and operated, and thus are unable at this time to estimate with greater precision the number of wireline carriers and service providers that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that fewer than 2,295 small telephone communications companies other than radiotelephone companies are small entities that may be affected by present action.  y_X'u118.` ` The most reliable source of information regarding the total numbers of certain common carrier and related providers nationwide, as well as the numbers of commercial wireless entities,  y_'appears to be data the Commission publishes annually in its Telecommunications Industry RevenueĄ  y_'report, regarding the Telecommunications Relay Service (TRS).h nZ'ԍXFCC, Telecommunications Industry Revenue: TRS Fund Worksheet Data, Figure 2 (Number of Carriers Paying Into the TRS Fund by Type of Carrier) (Nov. 1997).(# According to TRS data, 339  y_'reported that they were engaged in the resale of telephone service (including debit card providers).G nZ'ԍId. at Figure 2.G We do not have data specifying the number of these carriers that are not independently owned and operated or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of resellers that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are fewer than 339 small entity resellers that may be affected by the proposed rules, if adopted.  y_'v119.` ` Steps Taken to Minimize Significant Economic Impact on Small Entities, and  y_x'Significant Alternatives Considered. In our reconsideration of the petitions in IB Docket No. 9522, we modify our rules to allow U.S. private line resellers to carry switched traffic over international private line circuits in correspondence with foreign carriers that lack market power. We expect that these changes will expand the ability of U.S. private line resellers, including small entities, to reap economic benefits by taking advantage of new opportunities in the international telecommunications marketplace.  y_`'w120.` ` Description of Projected Reporting, Recordkeeping, and Other Compliance"`,P ,C)C)UU"  y_'Requirements. As discussed above, in our reconsideration of the petitions in IB Docket No. 9522, we modify our rules to allow U.S. private line resellers to carry switched traffic over international private line circuits in correspondence with foreign carriers that lack market power. Authorized private line resellers will be subject to no reporting, recordkeeping, or compliance requirements in order to carry switched traffic over international private line circuits in correspondence with foreign carriers that lack market power.  y_'x121.` ` Report to Congress. The Commission will send a copy of the Report and Order and  y_'Order on Reconsideration, including this Supplemental FRFA, in a report to be sent to Congress  y_'pursuant to the Small Business Regulatory Enforcement Fairness Act of 1996, see 5 U.S.C.   y_p'801(a)(1)(A). In addition, the Commission will send a copy of the Report and Order and Order on  y_H 'Reconsideration, including this Supplemental FRFA, to the Chief Counsel for Advocacy of the Small  y_ 'Business Administration. A copy of the Report and Order and Order on Reconsideration and  y_ 'Supplemental FRFA (or summaries thereof) will also be published in the Federal Register. See 5 U.S.C.  604(b).  y_ ' C.Paperwork Reduction Act of 1995 Analysis  y_X'  y_0'y122.` `  This Report and Order contains either a new or modified information collection. As part of its continuing effort to reduce paperwork burdens, we invite the general public and the Office of Management and Budget (OMB) to take this opportunity to comment on the information collections contained in this order, as required by the Paperwork Reduction Act of 1995, Pub. L. No. 10413. Public and agency comments are due 60 days from date of publication of this Order in the Federal Register. Comments should address: (a) whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or  y_'other forms of information technology. Written comments must be submitted on the proposed and/or modified information collections on or before 60 days after date of publication in the Federal Register. In addition to filing comments with the Secretary, a copy of any comments on the information collections contained herein should be submitted to Judy Boley, Federal Communications Commission, Room 1C804, 12th Street S.W., Washington, DC 20554, or via the Internet to jboley@fcc.gov. For  y_'additional information concerning the information collections contained in the Report and OrderĄ contact Judy Boley at 2024180214.  y_`' <IX. Ordering Clauses ă  y_ ' VIII z123.` ` XAccordingly, IT IS ORDERED that, pursuant to Sections 1, 2, 4(i), 201, 203, 205, 214, 303(r), and 309 of the Communications Act of 1934, as amended, 47 U.S.C.  151, 152, 154(i), 201, 205, 214, 303(r), 309, the policies, rules, and requirements discussed herein ARE ADOPTED and Parts 43 and 63 of the Commission's rules, 47 C.F.R. Secs. 43, 63, ARE AMENDED as set forth in Appendix A.  y_ %'{124.` ` IT IS FURTHER ORDERED that the petitions for reconsideration in CC Docket No. 90337 ARE DENIED.  y_''|125.` ` IT IS FURTHER ORDERED that the petitions for reconsideration in IB Docket No."'-,C)C)UUJ&" 9522 ARE GRANTED IN PART and DENIED IN PART, as discussed herein.  y_'}126.` ` IT IS FURTHER ORDERED that the Commission's Office of Public Affairs,  y_'Reference Operations Division, SHALL SEND a copy of this Report and Order and Order on  y_`'Reconsideration, including the Final Regulatory Flexibility Certification and the Supplemental Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.  y_'~127.` ` IT IS FURTHER ORDERED that the policies, rules, and requirements established in this decision shall take effect thirty days after publication in the Federal Register or in accordance with the requirements of 5 U.S.C. 801(a)(3) and 44 U.S.C. 3507. ` `  hhCqFederal Communications Commission ` `  hhCqMagalie Roman Salas ` `  hhCqSecretary "X.,C)C)UU "  y_'   _Appendix A '_Final Rules  y_`' Parts 0, 43, 63, and 64 of the Commission's Rules and Regulations (Chapter I of Title 47 of the Code of Federal Regulations) are amended as follows:  y_' PART 0 " COMMISSION ORGANIZATION 1. The authority citation for part 0 continues to read as follows: Authority: Secs. 5, 48 Stat. 1068, as amended; 47 U.S.C. 155. 2. Section 0.457 is amended by adding paragraph (d)(1)(vi) to read as follows:  y_ '  0.457 Records not routinely available for public inspection.  y_X'*****  y_'(d) ***  y_'(1) *** (vi) The rates, terms and conditions in any agreement between a U.S. carrier and a foreign carrier that govern the settlement of U.S. international traffic, including the method for allocating return traffic, if the U.S. international route is exempt from the international settlements policy under  43.51(g) of this chapter.  y_' PART 43 " REPORTS OF COMMUNICATION COMMON CARRIERS AND CERTAIN  y_x'AFFILIATES 3. The authority citation for part 43 continues to read as follows: Authority: 47 U.S.C. 154; Telecommunications Act of 1996, Pub. L. 104104, secs. 402(b)(2)(B), (c), 110 Stat. 56 (1996) as amended unless otherwise noted. 47 U.S.C. 211, 219, 220 as amended. 4. Section 43.51 is amended by revising paragraphs (a), (b) and (e), and by adding paragraphs (f) and (g) and Note 1 to read as follows:  y_!'  43.51 Contracts and concessions.  y_"' (a) Any communications common carrier that: is engaged in domestic communications and has not been classified as nondominant pursuant to  61.3 of this chapter or, except as provided in paragraphs (f)(g) of this section, is engaged in foreign communications, and enters into a contract with another carrier, including an operating agreement with a communications entity in a foreign point for the provision of a common carrier service between the United States and that point; must file with the Commission, within thirty (30) days of execution, a copy of each contract, agreement, concession,"'/,C)C)UU&" license, authorization, operating agreement or other arrangement to which it is a party and amendments thereto with respect to the following: (1) The exchange of services; (2) Except as provided in paragraph (c) of this section, the interchange or routing of traffic and matters concerning rates, accounting rates, division of tolls, or the basis of settlement of traffic balances; and (3) The rights granted to the carrier by any foreign government for the landing, connection, installation, or operation of cables, land lines, radio stations, offices, or for otherwise engaging in communication operations.  y_ '(b) *** The Commission may, at any time and upon reasonable request, require any communication common carrier not subject to the provisions of this section to submit the documents referenced in this section.  y_X' ***** (e) International settlements policy. (1) Except as provided in paragraph (g) of this section, if a carrier files an operating agreement (whether in the form of a contract, concession, license, etc.) referred to in paragraph (a) of this section to begin providing switched voice, telex, telegraph, or packet-switched service between the United States and a foreign point and the terms and conditions of such agreement relating to the exchange of services, interchange or routing of traffic and matters concerning rates, accounting rates, division of tolls, the allocation of return traffic, or the basis of settlement of traffic balances, are not identical to the equivalent terms and conditions in the operating agreement of another carrier providing the same or similar service between the United States and the same foreign point, the carrier must also file with the International Bureau a modification request under  64.1001 of this chapter. Unless a carrier is providing switched voice, telex, telegraph, or packet-switched service between the United States and a foreign point pursuant to an operating agreement that is exempt from the international settlements policy under paragraph (g) of this section, the carrier shall not bargain for or agree to accept more than its proportionate share of return traffic. (2) Except as provided in paragraph (g) of this section, if a carrier files an amendment to the operating agreement referred to in paragraph (a) of this section under which it already provides switched voice, telex, telegraph, or packet-switched service between the United States and a foreign point, and other carriers provide the same or similar service to the same foreign point, and the amendment relates to the exchange of services, interchange or routing of traffic and matters concerning rates, accounting rates, division of tolls, the allocation of return traffic, or the basis of settlement of traffic balances, the carrier must also file with the International Bureau a modification request under  64.1001 of this chapter. (f) Confidential treatment. (1) A carrier providing service on an international route that is exempt from the international settlements policy under paragraph (g)(2) of this section, but that is required by paragraph (a) or (b) of this section to file a contract covering that route with the Commission, may request confidential treatment under  0.457 of this chapter for the rates, terms and conditions that govern the settlement of U.S. international traffic. "'0,C)C)UUJ&"Ԍ(2) Carriers requesting confidential treatment under this paragraph must include the information specified in  64.1001(c) of this chapter. Such filings shall be made with the Commission, with a copy to the Chief, International Bureau. The transmittal letter accompanying the confidential filing shall clearly identify the filing as responsive to  43.51(f). (g) Exemption from the international settlements policy and contract filing requirements. (1) A carrier that enters into a contract, including an operating agreement, for the provision of a common carrier service between the United States and a foreign point with a carrier that lacks market power in that foreign market is not subject to the requirements of paragraphs (a)(b) or (e) of this section. (i) A foreign carrier lacks market power for purposes of paragraph (g)(1) of this section if it does not appear on the Commission's list of foreign carriers that do not qualify for the presumption that they lack market power in particular foreign points. The list of foreign carriers that do not qualify for the presumption that they lack market power in particular foreign points is available from the International Bureau's World Wide Web site at http://www.fcc.gov/ib. (ii) The Commission will include on the list of foreign carriers that do not qualify for the presumption that they lack market power in particular foreign points any foreign carrier that has 50 percent or more market share in the international transport or local access markets of a foreign point. A party that seeks to remove such a carrier from the Commission's list bears the burden of submitting information to the Commission sufficient to demonstrate that the foreign carrier lacks 50 percent market share in the international transport and local access markets on the foreign end of the route or that it nevertheless lacks sufficient market power on the foreign end of the route to affect competition adversely in the U.S. market. A party that seeks to add a carrier to the Commission's list bears the burden of submitting information to the Commission sufficient to demonstrate that the foreign carrier has 50 percent or more market share in the international transport or local access markets on the foreign end of the route or that it nevertheless has sufficient market power to affect competition adversely in the U.S. market. (2) A carrier that enters into a contract, including an operating agreement, with a carrier in a foreign point for the provision of a common carrier service between the United States and that point is not subject to the international settlements policy in paragraph (e) of this section if the foreign point appears on the Commission's list of international routes that the Commission has exempted from the international settlements policy. The list of exempt routes is available from the International Bureau's World Wide Web site at http://www.fcc.gov/ib. (i) A party that seeks to add a foreign market to the list of markets that are exempt from the international settlements policy must show that U.S. carriers are able to terminate at least 50 percent of U.S.billed traffic in the foreign market at rates that are at least 25 percent below the benchmark settlement rate adopted for that country in IB Docket No. 96-261. (ii) A party that seeks to remove a foreign market from the list of markets that are exempt from the international settlements policy must show that U.S. carriers are unable to terminate at least 50 percent of U.S.billed traffic in the foreign market at rates that are at least 25 percent below the benchmark settlement rate adopted for that country in IB Docket No. 96-261. Note 1 to 43.51: The Commission's benchmark settlement rates are available in International  y_''Settlement Rates, IB Docket No. 96-261, Report and Order, 12 FCC Rcd 19,806, 62 FR 45758"'1,C)C)UU0&" (August 29, 1997).  y_' PART 63 " EXTENSION OF LINES AND DISCONTINUANCE, REDUCTION, OUTAGE AND IMPAIRMENT OF SERVICE BY COMMON CARRIERS; AND GRANTS OF  y_8'RECOGNIZED PRIVATE OPERATING AGENCY STATUS 5. The authority citation for part 63 continues to read as follows: Authority: 47 U.S.C. 151, 154(i), 154(j), 160, 161, 201205, 218, 403, 533 unless otherwise noted. 6. Section 63.14 is amended to revise paragraphs (a) and (c), to delete paragraph (d), and to add Note 1 to read as follows:  y_ '  63.14 Prohibition on agreeing to accept special concessions.  y_ ' (a) Any carrier authorized to provide international communications service under this part shall be prohibited, except as provided in paragraph (c) of this section, from agreeing to accept special concessions directly or indirectly from any foreign carrier with respect to any U.S. international route where the foreign carrier possesses sufficient market power on the foreign end of the route to affect competition adversely in the U.S. market and from agreeing to accept special concessions in the future.  y_@'(b) *** (c) This section shall not apply to the rates, terms and conditions in an agreement between a U.S. carrier and a foreign carrier that govern the settlement of international traffic, including the method for allocating return traffic, if the international route is exempt from the international settlements policy under  43.51(g)(2) of this chapter.  y_(' Note 1 to  63.14: Carriers may rely on the Commission's list of foreign carriers that do not qualify for the presumption that they lack market power in particular foreign points for purposes of determining which foreign carriers are the subject of the prohibitions contained in this section. The Commission's list of foreign carriers that do not qualify for the presumption that they lack market power is available from the International Bureau's World Wide Web site at http://www.fcc.gov/ib. 7. Section 63.16 is amended by revising paragraph (a) to read as follows:  y_ '  63.16 Switched services over private lines. (a) Except as provided in  63.22 (e)(2) and 63.23(d)(2), a carrier may provide switched basic services over its authorized private lines if and only if the country at the foreign end of the private line appears on a Commission list of destinations to which the Commission has authorized the provision of switched services over private lines. The list of authorized destinations is available from the International Bureau's World Wide Web site at http://www.fcc.gov/ib.  y_'' ***** "'2,C)C)UU~&"Ԍ8. Section 63.22 is amended by revising paragraph (e) to read as follows:  y_'  63.22 Facilitiesbased international common carriers.  y_`' ***** (e)(1) Except as provided in paragraph (e)(2) of this section, the carrier may provide switched basic services over its authorized facilitiesbased private lines if and only if the country at the foreign end of the private line appears on a Commission list of countries to which the Commission has authorized the provision of switched services over private lines. See 63.16. If at any time the Commission removes the country from that list or finds that market distortion has occurred in the routing of traffic between the United States and that country, the carrier shall comply with enforcement actions taken by the Commission. (2) The carrier may use its authorized facilitiesbased private lines to provide switched basic services in circumstances where the carrier is exchanging switched traffic with a foreign carrier that lacks market power in the country at the foreign end of the private line. (3) A foreign carrier lacks market power for purposes of paragraph (e)(2) of this section if it does not appear on the Commission's list of foreign carriers that do not qualify for the presumption that they lack market power in particular foreign points. This list is available from the International Bureau's World Wide Web site at http://www.fcc.gov/ib.  y_h' ***** 9. Section 63.23 is amended by revising paragraph (d) to read as follows:  y_'  63.23 Resalebased international common carriers.  y_x' ***** (d)(1) Except as provided in paragraph (d)(2) of this section, the carrier may provide switched basic services over its authorized resold private lines if and only if the country at the foreign end of the private line appears on a Commission list of countries to which the Commission has authorized the provision of switched services over private lines. See 63.16. If at any time the Commission removes the country from that list or finds that market distortion has occurred in the routing of traffic between the United States and that country, the carrier shall comply with enforcement actions taken by the Commission. (2) The carrier may use its authorized resold private lines to provide switched basic services in circumstances where the carrier is exchanging switched traffic with a foreign carrier that lacks market power in the country at the foreign end of the private line. (3) A foreign carrier lacks market power for purposes of paragraph (d)(2) of this section if it does not appear on the Commission's list of foreign carriers that do not qualify for the presumption that they lack market power in particular foreign points. This list is available from the International Bureau's World Wide Web site at http://www.fcc.gov/ib. "'3,C)C)UUq&"Ԍ y_' *****  y_' PART 64 " MISCELLANEOUS RULES RELATING TO COMMON CARRIERS 10. The authority citation for part 64 continues to read as follows: Authority: 47 U.S.C. 160, 201, 218, 226, 228, 332 unless otherwise noted. 11. Section 64.1001 is amended by revising paragraphs (a) through (g) and by removing paragraphs (h) through (l) to read as follows:  y_H ' 1. 1. 1. a.(1)(a) i) a) 1. a. i.(1)(a)(i) 1) a)  64.1001 International settlements policy and modification requests.  y_ ' *****  y_ ' (b) If the international settlement arrangement in the operating agreement or amendment referred to in  43.51(e)(1) or (e)(2) of this chapter differs from the arrangement in effect in the operating agreement of another carrier providing service to or from the same foreign point, the carrier must file a modification request under this section unless the international route is exempt from the international settlements policy under  43.51(g) of this chapter. (c) A modification request must contain the following information:  (1) The applicable international service; (2) The name of the foreign telecommunications administration; (3) The present accounting rate (including any surcharges); (4) The new accounting rate (including any surcharges); (5) The effective date; (6) The division of the accounting rate; and (7) An explanation of the proposed modification(s) in the operating agreement with the foreign correspondent.  y_ ' (d) A modification request must contain a notarized statement that the filing carrier:  (1) Has not bargained for, nor has knowledge of, exclusive availability of the new accounting rate;  (2) Has not bargained for, nor has any indication that it will receive, more than its proportionate share of return traffic; and  (3) Has informed the foreign administration that U.S. policy requires that competing U.S. carriers have access to accounting rates negotiated by the filing carrier with the foreign administration"'4,C)C)UUd&" on a nondiscriminatory basis. (e) An operating agreement or amendment filed under a modification request cannot become effective until the modification request has been granted under paragraph (g) of this section. (f) Carriers must serve a copy of the modification request on all carriers providing the same or similar service to the foreign administration identified in the filing on the same day a modification request is filed.  y_' (g) All modification requests will be subject to a twenty-one (21) day pleading period for objections or comments, commencing the date after the request is filed. If the modification request is not complete when filed, the carrier will be notified that additional information is to be submitted, and a new 21 day pleading period will begin when the additional information is filed. The modification request will be deemed granted as of the twenty-second (22nd) day without any formal staff action being taken: provided (1) No objections have been filed, and (2) The International Bureau has not notified the carrier that grant of the modification request may not serve the public interest and that implementation of the proposed modification must await formal staff action on the modification request. If objections or comments are filed, the carrier requesting the modification request may file a response pursuant to  1.45 of this chapter. Modification requests that are formally opposed must await formal action by the International Bureau before the proposed modification can be implemented. 12. Section 64.1002 is removed.  y_' Section 64.1002 Alternative settlement arrangements. [Removed] "P5,C)C)UUm"  y_'` Appendix B  y_'?Commenting Parties ă  y_`'Parties filing comments AT&T Ameritech Bell Atlantic BellSouth BT North America Cable & Wireless USA, Inc. (C&W) Competitive Telecommunications Association (Comptel) Deutsche Telekom AG and Deutsche Telekom, Inc. (DT)   France Telecom (FT) GTE General Services Administration (GSA) Level 3 MCIWorldCom NTTA.com PrimeTEC International. Qwest RSL Com USA SBC Sprint Teleglobe Telia North America Telecommunications Resellers Association (TRA) Telegroup TMI Communications  y_P'Parties filing reply comments  y_('America's Carriers Telecommunication Association (ACTA) Ameritech AT&T Bell Atlantic C&W GSA GTE Kokusai Denshin Denwa Co. Ltd. (KDD) MCI WorldCom PrimeTEC International RSL com SBC Star Telecommunications Telia N.A. Telefonica International S.A.