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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 ) In Re Application of ) ) KPN US Inc. ) ) Application for Authority under ) File No. ITC-97-382 Section 214 of the Communications ) Act of 1934, as amended, to Provide ) Facilities-based Services and to Resell ) Interconnected Private Lines to Provide ) International Switched Service between ) the United States and the Netherlands ) ) Application for Authority to Resell ) File No. ITC-97-383 International Message Telephone Service ) and International Non-Interconnected ) Private Lines between the United ) States and the Netherlands ) ORDER, AUTHORIZATION AND CERTIFICATE Adopted: January 29, 1998 Released: January 30, 1998 By the Chief, International Bureau: I. INTRODUCTION 1. With this Order, we increase competition in international telecommunications markets by granting KPN US Inc. ("KPN") authority to provide facilities-based services and resell interconnected private lines ("ISR") between the United States and the Netherlands. We also grant KPN authority to resell non-interconnected international private lines ("non-interconnected private line resale") and international message telephone service ("IMTS resale") between the United States and the Netherlands. We conclude that the Netherlands offers U.S. carriers effective competitive opportunities to provide all these services. II. BACKGROUND 2. KPN is a wholly-owned subsidiary of PTT Telecom BV ("PTT Telecom"). PTT Telecom is a Netherlands corporation that provides domestic and international telecommunications services in the Netherlands. KPN requests Section 214 authority to provide international facilities- based services and ISR between the United States and the Netherlands and non-interconnected private line resale and IMTS resale services. We placed each application on public notice. AT&T, Sprint, Esprit, and Viatel filed petitions to deny and KPN filed an opposition to these petitions. Sprint, Esprit and AT&T filed replies to the KPN Opposition. 3. We examine KPN's applications to provide service between the United States and the Netherlands under the framework established in the Foreign Carrier Entry Order. In that order, the Commission determined that foreign carriers seeking to provide U.S. international facilities-based, non-interconnected private line resale and IMTS resale services to destination countries in which they or an affiliate have market power must demonstrate that such countries offer "effective competitive opportunities" ("ECO") for U.S. carriers to offer like services at the time service is authorized or in the near future. The Commission also determined that it would require any carrier seeking to provide ISR to demonstrate that the destination country offers effective competitive opportunities to U.S. carriers to provide ISR at the time the application is granted ("equivalency"). The Commission also determined that it would continue to consider other public interest factors that may weigh in favor of, or against, granting the application. III. DISCUSSION A. EFFECTIVE COMPETITIVE OPPORTUNITIES AND EQUIVALENCY 4. We apply an ECO analysis where the applicant is affiliated with a carrier that has market power. KPN does not contest the fact that PTT Telecom has market power and that an ECO analysis is required. We therefore find it necessary to apply an ECO analysis. Under the ECO and equivalency test for facilities-based and resale entry, we examine first the legal, or de jure, ability of U.S. carriers to enter the destination foreign country and provide international facilities-based service or the particular type of resale services sought by the applicant. Next, we focus on the actual conditions of entry, including the terms and conditions of interconnection, competitive safeguards, and the regulatory framework. We focus on the overall effect of these four elements on the opportunities for viable operations as a facilities-based or resale carrier in the foreign market. 1. Legal Ability to Provide Services 5. The first factor we consider is the legal ability of U.S. carriers to provide the relevant service in the destination market where the applicant's affiliate possesses market power. 6. KPN states that the Netherlands provides U.S. carriers with the legal right to offer competitive international services. U.S. carriers can provide non-interconnected IPLs, IMTS resale service and ISR between the United States and the Netherlands, as well as facilities-based services. Under Articles 7 and 14 of the Dutch Telecommunications Act (the "Dutch Telecom Act"), PTT Telecom's exclusive right to provide public switched voice service expired on July 1, 1997, thus opening every aspect of the Dutch telecommunications market to competition. Applicants seeking to provide international facilities-based service in the Netherlands must register but no authorization is required to provide any resale service. There are no limitations on the number of licenses for infrastructure services. Registration requirements in the Netherlands are the same for foreign- and Netherlands-based applicants and the Netherlands has no foreign ownership restrictions. Presently, three nationwide facilities-based competitors to PTT Telecom have commenced service: Telfort (a joint venture of British Telecommunications plc and the Netherlands railway company), Enertel BV of Utrecht (a consortium of electricity utilities and cable companies) and WorldCom. As of August 25, 1997, 21 authorized carriers were providing international services. These included 11 non-Dutch service providers and eight facilities-based carriers. 7. AT&T questions whether the Netherlands legislation, in fact, meets the de jure prong of the ECO test, stating that it is "interim legislation." AT&T also argues that the legislation is insufficient because it only allows two initial nationwide infrastructure licenses to compete with PTT Telecom. Finally, AT&T contends that we should wait to "see how competition develops" before approving a license application. KPN argues that the limitation on infrastructure licenses is no barrier to entry since facilities-based competition is already allowed. The difference between an infrastructure license and an authorization to provide facilities-based service is that the infrastructure license also provides the licensee with specific rights of way. KPN argues that the fact that service providers are currently building networks in the Netherlands shows that the distinction is not important. 8. We agree with KPN that there are no legal barriers to entry in the Netherlands market for facilities-based or any type of resale service, including ISR. We applaud the actions of the Netherlands in removing restrictions on the provision of voice telephony effective July 1, 1997, six months earlier than required by European Union directives or its commitments resulting from the WTO Basic Telecom Agreement. We find that the current Dutch legislation allows provision of all types of resale and facilities-based services. The limitation in current legislation on two infrastructure licensees affects only the ability to obtain rights of way. It has not kept new entrants from providing facilities-based service; there are currently three nation-wide facilities-based service providers and eight facilities-based international services providers. We therefore conclude that there are no legal barriers to entry into the Netherlands market. 2. Interconnection 9. The second factor we examine as part of the ECO/equivalency test is whether reasonable and nondiscriminatory charges, terms and conditions exist for interconnection to a foreign carrier's domestic facilities for termination and origination of international services, and whether adequate means exist to monitor and enforce these conditions, such as a requirement for published charges. 10. We conclude that the framework for interconnection established by current Dutch legislation and regulations and the fact that there are currently competitors operating in the Netherlands establishes that interconnection is available on reasonable, nondiscriminatory terms and conditions. PTT Telecom is obliged by statute to offer interconnection to infrastructure licensees on a cost-oriented and nondiscriminatory basis. In addition, guidelines published by the Minister of Transport, Public Works and Water Management ("Transport") require PTT Telecom to interconnect with any party offering voice telephony services on a nondiscriminatory, cost-oriented basis. The guidelines prohibit PTT Telecom from refusing to negotiate interconnection terms except in limited circumstances. In addition, PTT Telcom must publish a "standard" supply of interconnection services and rates charged for those services; set nondiscriminatory conditions in interconnection agreements; keep the rates for interconnection proportionate to the costs; and provide the regulator, on request, with any information regarded as relevant. In the event of a dispute between the parties over an interconnection matter, the regulator may intervene. If the parties cannot reach an agreement on the terms and conditions of interconnection, Article 4c of the Act allows them to submit the matter to the Minister of Transport for judgment. The Minister has eight weeks to issue a determination, which can be extended an additional four weeks. KPN points out that PTT Telecom has completed interconnection agreements with the two national facilities-based operators, Enertel and Telfort, with several regional facilities-based operators and a mobile telephony operator. Agreement was reached with Telfort after the Minister of Transport intervened and ordered PTT Telecom to lower its rates. Contrary to AT&T's contention that this interconnection dispute proves PTT Telecom's rates are unreasonable, the decision of the Minister of Transport ordering PTT Telecom to reduce its rates shows that there are adequate means to monitor and enforce interconnection requirements. 11. Parties opposing the applications argue that interconnection, in fact, is not available on cost-based, nondiscriminatory terms and conditions. AT&T and Esprit claim that PTT Telecom's interconnection rates will not be officially established until sometime in 1998 since it must complete an accounting system and submit it to the regulator. KPN states categorically, however, that the final rates will apply retroactively and KPN will have to compensate its customers for the difference in tariffs. We agree with KPN that interconnection rates are available at cost-based, nondiscriminatory terms and conditions. 12. Viatel argues that there is no way to verify that the interconnection rates published by PTT Telecom are being applied on a nondiscriminatory basis. We agree with Viatel that all interconnection agreements should be publicly available. It is not sufficient to simply publish reference interconnection terms and conditions. We note, however, that PTT Telecom's published rates compare favorably with those of other carriers recently authorized to provide service to the United States. In addition, other aspects of the Netherlands' interconnection regime help protect against discriminatory conduct and weigh in favor of finding that the Netherlands satisfies this factor of the Commission's ECO/equivalency standard. These include the fact that there is an independent regulatory body which oversees interconnection and is charged with ensuring nondiscriminatory treatment of competitors. In the event of a dispute over interconnection terms or conditions, or if the regulator determines that PTT Telecom is not fulfilling its obligations, it has authority to act. The regulator can also impose terms and conditions if the parties cannot agree on their own. 13. Viatel also contends that PTT Telecom does not satisfy the interconnection component of the ECO analysis because it delayed providing capacity to Viatel, refused to provide Viatel with normal interconnection rates and required a bank guarantee. These actions by PTT Telecom, however, took place prior to July 1, 1997, when PTT Telecom had no interconnection obligations. Viatel presents no evidence that such problems have recurred. 14. We do not find that other arguments raised to support the notion that interconnection is not currently available and enforceable are valid. Esprit argues that interconnection charges and tariffs are excessive, non-transparent, discriminatory and not reviewable by the regulator in the Netherlands. It cites as examples an activation charge which favors nation-wide facilities-based carriers over smaller new entrants; failure to allow interconnection at lower level switches, forcing new entrants to use and pay for more of PTT Telecom's network than they need; higher tariffs for call origination than call termination; and imposition of penalties if a carrier deviates from its forecasted interconnection capacity requirements. In addition, Esprit states that PTT Telecom discriminates against small market entrants by offering interconnection services only via dedicated trunk groups and favors its affiliate, Unisource, by providing some services only to Unisource and not others. . 15. KPN points out, however, that current legislation and Ministry guidelines give all service providers the right to obtain from PTT Telecom interconnection at cost-based, nondiscriminatory tariffs, even at points other than those offered to most users. Ministry guidelines, issued after public consultations, incorporate the principles of non-discrimination, cost-orientation, unbundling and transparency. The guidelines, based on public comment, prohibit PTT Telecom from including the costs for the access network in setting charges for termination, with the result that call termination costs less than call origination. The regulator also reviews tariffs for private line and IMTS resale and other tariffs are subject to dispute resolution by the regulator. Finally, PTT Telecom has waived for two years any penalty for inaccurate traffic forecasts by new entrants, such as Esprit. 16. Esprit has described a number of problems with accessing PTT Telecom's network, such as access to dedicated transport facilities and lower level switches, different activitation charges and provision of bulk discounts to large carriers. We note that Esprit has informed the Commission that PTT Telecom is addressing Esprit's concerns in good faith. In addition, we do not agree that the fact that PTT Telecom imposes different activation charges and provides bulk discounts to large carriers invalidates our conclusion that interconnection is available on nondiscriminatory terms. KPN states that interconnection is available at any one of 20 access points and the interconnection testing charge is cost-based. Due to cost considerations, the fee is less for testing at additional access points. The Dutch regulator has ordered PTT Telecom to offer unbundled access to the local loop. In addition, U.S. carriers have several options for obtaining access to PTT Telecom's network and have access to networks of PTT Telecom's competitors. If a carrier chooses PTT Telecom, the carrier will pay a cost-based rate approved by the regulator. In addition, there are a number of carriers providing both non-interconnected private lines and IMTS resale services. 17. Finally, we do not agree with Esprit that the method of resolving interconnection disputes gives PTT Telecom an incentive to implement unreasonable tariffs, terms and conditions. The dispute settlement system established by Dutch law and regulation appears to be effective and does not favor PTT Telecom. As noted above, the system has already produced a decision ordering PTT Telecom to reduce its rates. In addition, the time frame for resolution of disputes -- a maximum of 12 weeks -- appears reasonable to us. In sum, we conclude that interconnection in the Netherlands appears to be available on cost-based, nondiscriminatory terms and conditions. 3. Competitive Safeguards. 18. The third factor we examine is whether safeguards exist in the Netherlands to protect against anticompetitive practices. The safeguards we consider important include: (1) existence of cost-allocation rules to prevent cross-subsidization; (2) timely and nondiscriminatory disclosure of technical information needed to use, or interconnect with, carriers' facilities; and (3) protection of carrier and customer proprietary information. a. Cost Allocation Rules 19. KPN states that the Netherlands provides competitive safeguards to protect against anticompetitive conduct. It refers to a ministerial Telecommunications General Directive Decree ("BART"), which prohibits PTT Telecom from cross-subsidizing any other activities with its mandatory telecommunications services and requires PTT Telecom to establish a cost accounting system which must be approved by the Minister of Transport. The system is subject to an annual audit. Regulations applicable to PTT Telecom require it to separate its financial accounts and to establish an allocation system for its costs and revenues. Given that rules have been adopted and no party disputes their adequacy, we find that cost allocation rules exist in the Netherlands to protect against cross-subsidization. b. Disclosure of Network Information 20. PTT Telecom is required by regulation to publish information regarding the technical characteristics, tariffs and terms of delivery of its services. In addition, technical information is disclosed through publication of standard interconnection terms and conditions. The withholding of such information would be actionable under Dutch competition law, if a competitor had grounds to claim that such conduct impaired its ability to compete effectively. Esprit argues that PTT Telecom does not provide technical information in a timely and nondiscriminatory manner and often uses its control over such information to the disadvantage of new entrants. The only example that Esprit provides relates to an access code that, according to KPN, did not exist at the time of Esprit's request. This type of information is now available. The obligations of PTT Telecom to disclose network information, together with the fact that there is no evidence in the record that carriers are not currently receiving the network information required for interconnection, lead us to conclude that there are adequate requirements in the Netherlands to ensure that carriers receive the technical information required for interconnection. c. Safeguards for Carrier and Customer Proprietary Information 21. KPN contends that Netherlands law protects customer proprietary network information, as do the terms and conditions of PTT Telecom's interconnection agreements. The BART requires PTT Telecom to ensure the privacy of the information it obtains in the course of providing service. In addition, the Global Data Protection Act contains general data protection principles, limiting use of data to ways that are compatible with the original purpose of collecting the data. Again there is no evidence in the record that Netherlands law is insufficient to safeguard carrier and customer proprietary information. 22. In sum, we find that the competitive safeguards implemented in the Netherlands are sufficient to protect U.S. carriers against anticompetitive practices, and to ensure cost allocation, timely and nondiscriminatory disclosure of network technical information and protection of carrier and customer proprietary information against unauthorized disclosure. 4. Regulatory Framework. 23. The fourth factor to be reviewed under the ECO/equivalency analysis is whether there is an effective regulatory framework in the Netherlands to develop, implement and enforce legal requirements, interconnection arrangements and other competitive safeguards. The focus of this factor is on whether there is separation between the foreign regulator and the operator of international facilities-based services, and whether there are fair and transparent regulatory procedures in the destination market. Esprit argues that the regulator has only been in existence since August 1, 1997 and that its powers will not be sufficient to perform its intended function until proposed legislation is passed. 24. In August 1997, the Netherlands established a regulatory body, the Independent Post and Telecommunications Authority ("OPTA"), separate from the Ministry of Transport and from PTT Telecom. OPTA assumes former Ministerial responsibilities for granting licenses and permits; supervising holders of licenses and permits and other service providers; implementing the administration and allocation of numbers and rendering administrative decisions relating to permits, licenses, approvals and exemptions; and mediating and settling interconnection disputes. Members of the governing body of OPTA are appointed by the Minister of Transport. As an agency independent of Ministry control, we find that OPTA is sufficiently separate from the carriers it regulates, including PTT Telecom. 25. We are not persuaded by Esprit's argument that OPTA's powers are insufficient and find that Dutch regulatory policies are fair and transparent. OPTA has the power to order interconnection and must do so within 20 weeks of a request. The proposed legislation which Esprit refers to codifies existing regulatory practice and adds minimal powers, such as the ability to publish interconnection agreements. In addition to OPTA actions and powers, EU and Dutch competition law constrains the ability of PTT Telecom to act anticompetitively. Under EU law and, as of January 1, 1998, Dutch law, PTT Telecom may not abuse a dominant position. We conclude that the powers of OPTA and general EU and Dutch competition law, taken together, are sufficient to create an effective regulatory environment to develop, implement and enforce legal requirements, interconnection agreements and other competitive safeguards. 5. Other Issues Raised by Petitioners 26. Petitions to deny KPN's applications have cited other difficulties in the Netherlands' market that petitioners claim prevent U.S. carriers from enjoying effective competitive opportunities. Esprit argues that PTT Telecom is using its control over submarine cables to inhibit competition from new entrants. Viatel states that, while it can obtain capacity on a cable that lands in the Netherlands, PTT Telecom is charging exorbitant rates for it. Esprit and Viatel also argue that PTT Telecom discriminates in its provision of backhaul facilities, charging higher rates to new entrants and failing to provide needed capacity. Esprit states that U.S. carriers are disadvantaged because they do not have equal access to subscribers in the Netherlands. Finally, Sprint argues that PTT Telecom's applications should be denied until PTT Telecom credits Sprint for its proportionate share of return traffic for the third and fourth quarters of 1996. 27. We are concerned that issues raised by petitioners evidence the advantages of incumbency and the difficulty of entering new markets. We do not believe, however, that they prevent us from concluding that effective competitive opportunities exist in the Netherlands for U.S. carriers. Given the presence of facilities-based competitors to PTT Telecom, there are alternative ways for U.S. carriers to obtain backhaul facilities. We also note that Esprit has informed the Commission that PTT Telecom and Esprit have reached a tentative arrangement to provide additional submarine cable capcity. Nonetheless, we will closely monitor PTT Telecom's practices in providing backhaul facilities. We continue to believe that swift implementation of equal access is necessary to eliminate the unfair competitive advantage of a former monopoly. The Commission, however, has previously concluded that the lack of equal access does not preclude a finding of ECO or equivalency. Finally, we understand that PTT Telecom and Sprint have resolved their accounting rate dispute. In sum, we find that the Netherlands offers U.S.-based carriers effective competitive opportunities at this time for the types of services at issue in the pending applications. B. ADDITIONAL PUBLIC INTEREST FACTORS 28. The additional public interest factors that we consider in assessing these applications include cost-based accounting rates, the general significance of the proposed entry to the promotion of competition in the U.S. communications market, and any national security, law enforcement, foreign policy and trade concerns raised by the Executive Branch. 29. AT&T opposes KPN's entrance in the U.S. service market through any arrangement unless KPN is subject to the safeguards adopted in the Foreign Participation Order and PTT Telecom provides U.S. carriers with cost-based accounting rates. 30. We agree with AT&T that KPN, like any other carrier, will be subject to the rules and policies established in the Foreign Participation Order and Benchmarks Order. In our discussion of the regulatory treatment of KPN, we note that the conditions adopted in the Foreign Participation Order for dominant carriers will apply to KPN when they are effective. We do not agree, however, that PTT Telecom must adopt settlement rates below those required in the Benchmarks Order as a condition of grant of its applications. In that Order, we concluded that AT&T's proposals to require cost-based interconnection as a condition to the provision of facilities- based service or ISR would be an overreaction to the potential for anticompetitive activity and that our authority to take enforcement action would provide a strong deterrent to such activity. 31. In the Benchmarks Order, the Commission established benchmarks that will govern the international settlement rates between U.S. carriers and foreign carriers. The Commission also adopted conditions that apply to authorizations to provide facilities-based services and ISR. With respect to the provision of facilities-based switched or private line services, the settlement rate of the applicant's foreign affiliate must be at or below the relevant benchmark on the affiliated route at the time service is commenced. In order to provide ISR, the Benchmarks Order requires that settlement rates for 50 percent of the settled U.S.-billed traffic between the United States and that country are at or below the benchmark. The Benchmarks Order set a settlement rate of U.S. $0.15 per minute with the Netherlands. PTT Telecom's settlement rate is U.S. $0.13 per minute as of January 1, 1998 and will drop to U.S. $0.115 per minute on July 1, 1998. Thus, both the condition for facilities-based service to an affiliate and the benchmark target for ISR have been met. 32. Finally, the Executive Branch has not raised any national security, law enforcement, foreign policy, or trade concerns with these applications. We find that this authorization will benefit U.S. consumers calling the Netherlands by adding an additional carrier, and thus increasing competition on that route. Accordingly, we find no additional public interest factors that warrant denial of these applications. C. OTHER MATTERS 1. Competitive Safeguards 33. KPN has agreed to be regulated as a dominant carrier. Petitioners argue that the Commission should impose on KPN and PTT Telecom, in addition to the conditions imposed on dominant carriers, a number of other conditions. These include requiring PTT Telecom to provide reasonable, nondiscriminatory, cost-oriented interconnection arrangements promptly to competitors and publish its actual interconnection rates, terms and conditions with other carriers. Petitioners also request that the Commission: 1) require KPN to file regular reports regarding Dutch progress in implementing telecommunications reform, specifically reports on the status of all interconnection agreements between PTT Telecom and its competitors; 2) prohibit KPN from purchasing capacity of any cable serving the Netherlands unless similar amounts of capacity are also made available to competing unaffiliated carriers; 3) prohibit KPN from terminating Netherlands-U.S. traffic from PTT Telecom that is not in compliance with the European Union equal access requirements; and 4) require KPN to file quarterly records on provisioning and maintenance of facilities and services received from PTT Telecom and Unisource. Esprit argues that its proposed conditions are derived from conditions placed on the initial authorization of British Telecommunications plc to acquire an ownership interest in MCI and on the authorization of France Telecom and Deutsche Telekom's investment in Sprint. Sprint asks the Commission to impose a number of conditions on PTT Telecom relating to settlement of traffic terminating in the Netherlands. 34. As a dominant carrier on the U.S.-Netherlands route, KPN will be required to comply with Section 63.10 of our rules. Section 63.10 requires carriers regulated as dominant on a particular route due to a foreign carrier affiliation to: 1) file tariffs on no less than 14-days notice; 2) maintain complete records of the provisioning and maintenance of basic network facilities and services procured from the foreign carrier affiliate; 3) obtain Commission approval pursuant to  63.18 before adding or discontinuing circuits; and 4) file quarterly reports of revenue, number of messages, and number of minutes of both originating and terminating traffic. We note, however, that upon the effective date of the Foreign Participation Order, dominant carriers will be subject to revised rules. At that time, KPN will be required to: 1) file tariffs one day in advance of effectiveness; 2) maintain a limited form of structural separation between it and PTT Telecom; 3) file quarterly reports of revenue, number of messages, and number of minutes of both originating and terminating traffic; 4) file quarterly reports on provisioning and maintenance services provided by PTT Telecom; and 5) file quarterly circuit status reports. In addition, as a carrier affiliated with a foreign carrier that possesses market power in the foreign market, KPN will have to comply with certain reporting requirements regarding provision of switched resale services in the United States when the rule becomes effective. 35. We imposed conditions relating to interconnection on Telecom New Zealand because we had certain concerns with New Zealand's regulatory regime. In BT/MCI I, we found that "unique aspects of the transaction" required additional reporting requirements. In the Sprint Order, we found that effective competitive opportunities did not yet exist in France or Germany and therefore the Commission required additional conditions. None of these specific concerns apply here. KPN is a new entrant in the U.S. market, and we have determined that effective competitive opportunities currently exist in the Netherlands. Accordingly, we find that our current rules are sufficient to address the concerns of Esprit and Viatel. Because Sprint and PTT Telecom have resolved their accounting rate dispute, the conditions requested by Sprint are not necessary. 2. No Special Concessions 36. Esprit argues that the Commission should also impose a requirement that KPN accept no special concessions from PTT Telecom. We currently prohibit all U.S. carriers, regardless of their regulatory status or whether they have a foreign affiliate, from agreeing to accept special concessions from any foreign carrier or administration. We also note that in the Foreign Participation Order, the Commission gives greater specificity to the "No Special Concessions" rule by delineating the types of prohibited conduct. KPN will be subject to our current "No Special Concessions" rule, as well as any modification to that rule once it becomes effective. IV. CONCLUSION 37. Because we find that the Netherlands offers equivalent private line resale opportunities to U.S.-based carriers for the provision of switched services, as well as effective competitive opportunities to provide facilities-based service and other resale services, we grant the applications before us in this proceeding. We conclude that the availability of additional services between the United States and the Netherlands will promote competition and the introduction of new international telecommunications services. V. ORDERING CLAUSES 38. In view of the foregoing, IT IS HEREBY CERTIFIED that the present and future public convenience and necessity require grant of these applications. 39. Accordingly, IT IS HEREBY ORDERED that File Nos. ITC-97-382 and ITC-97-383 ARE GRANTED and KPN US, Inc. is authorized to: a) acquire and operate 3 STM-1s for the provision of switched, private line and other authorized services between the United States and the Netherlands; b) resell international private lines interconnected to the public switched network for the provision of switched services, including voice, date and facsimile; c) resell international private lines not interconnected to the public switched network for the provision of international private line services between the United States and the Netherlands; and d) provide international switched resale services between the United States and the Netherlands. 40. IT IS FURTHER ORDERED that the authority granted herein to resell international private lines between the United States and the Netherlands for the provision of switched services is limited to the provision of such services between the United States and the Netherlands only -- that is, private lines which carry traffic that originates in the United States and terminates in the Netherlands, or traffic that originates in the Netherlands and terminates in the United States. This restriction is subject to the following exceptions: (a) KPN may engage in "switched hubbing" through the Netherlands consistent with Section 63.17 of the Commissions rules, 47 C.F.R.  63.17; and (b) KPN may provide U.S. inbound or outbound switched basic service over its authorized private lines extending between the United States and the United Kingdom, Sweden, New Zealand, and Australia provided that KPN also is authorized to provide switched basic service using resold private lines between the United States and those countries. 41. IT IS FURTHER ORDERED that KPN will be regulated as a dominant carrier on the U.S.-Netherlands route, pursuant to Section 214 of the Act, 47 U.S.C.  214, and Section 63.10 of the Commission's rules, 47 C.F.R.  63.10, and will comply with the requirements of paragraph (c) of that section. The quarterly traffic reports filed pursuant to Section 63.10(c) must include the information required by Section 43.61 of the Commission's rules, 47 C.F.R.  43.61, for "facilities resale" on the U.S.-Netherlands route. 42. IT IS FURTHER ORDERED that KPN will comply with Sections 63.21 of the Commission's rules, 47 C.F.R.  63.21 and shall also file the information required by Section 43.61 for "facilities resale" on the U.S.-Netherlands route on a semi-annual basis not later than September 30 for the prior January through June period and March 31 for the second six-month calendar period, for the first three calendar years after this equivalency finding. 43. IT IS FURTHER ORDERED that grant of these authorizations are conditioned upon the Netherlands' continuing to afford resale opportunities to U.S.-based carriers equivalent to those afforded under U.S. law. 44. This Order is issued under Section 0.261 of the Commission's rules, 47 C.F.R.  0.261 (1996), and is effective upon adoption. Petitions for reconsideration under Section 1.106 of the Commission's rules, 47 C.F.R.  1.106 (1996), or applications for review under Section 1.115 of the Commission's rules, 47 C.F.R.  1.115 (1996), may be filed within 30 days of the date of public notice of this Order, Authorization and Certificate (see 47 C.F.R.  1.4(b)(2)). FEDERAL COMMUNICATIONS COMMISSION Regina M. Keeney Chief, International Bureau