******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) MFS International, Inc. ) File No. SCL-97-005 ) Application for a License to Land and Operate ) in the United States a Common Carrier ) Fiber Optic Submarine Cable Extending ) Between the United States and Australia ) and New Zealand ) CABLE LANDING LICENSE Adopted: February 11, 1998 Released: February 13, 1998 By the Chief, Telecommunications Division: I. Introduction 1. In this Cable Landing License, we grant the application of MFS International, Inc. (MFSI) under the Cable Landing License Act for authority to land and operate a fiber optic submarine cable system to be called the Southern Cross cable system (Southern Cross) extending between the United States mainland (and Hawaii), Australia, and New Zealand. The cable will be operated on a common carrier basis. We find that MFSI has provided sufficient information under our rules to comply with the Cable Landing License Act and therefore grant the cable landing license subject to the conditions discussed below. II. Application and Pleadings 2. MFSI, a Delaware corporation, is a wholly-owned subsidiary of MFS Network Technologies, Inc. (MFSNT), a Delaware corporation. MFSNT is a wholly-owned subsidiary of MFS Communications Company, Inc., (MFSCCI), a Delaware corporation. MFSCCI is a wholly-owned subsidiary of WorldCom, Inc., a Georgia corporation. 3. MFSI proposes to land and operate Southern Cross as a common carrier system owned by MFSI and by entities authorized to land and operate an international fiber optic cable system in Australia and New Zealand. The proposed Southern Cross will extend between landing points on the U.S. mainland (California), Hawaii, Australia, and New Zealand. Original ownership interests with equity and voting ownership in the facilities will be available to any authorized common carrier willing to purchase interests before the closing date for receipt of project financing. Once that closing occurs, authorized common carriers will be permitted to acquire capacity on an Indefeasible Right of Use (IRU) basis. MFSI will own 100 percent of both U.S. mainland landing station facilities. Southern Cross is scheduled to go into initial service in mid-1999. 4. Southern Cross is planned as a ring system with three main traffic loops. The planned capacity for the Northern Ring (U.S. Mainland to Hawaii traffic) is 50 Gigabits per second (Gbps). The planned capacity for the Southern Ring (Australia/New Zealand traffic) is 10 Gbps. The planned capacity for the North South Ring (U.S. Mainland/Hawaii to Australia/New Zealand traffic) is 30 Gbps. It is expected that the minimum design capacity for any segment would be 2.5 Gbps per fiber pair. The system is expected to be Wavelength Division Multiplex (WDM)-capable. III. Discussion 5. The Southern Cross application was placed on public notice on October 24, 1997. No comments were received. Pursuant to Section 1.767(b) of the Commission's rules, the Cable Landing License Act, and Executive Order 10530, we informed the Department of State of the application. The Department of State, after coordinating with the Department of Commerce's National Telecommunications and Information Administration and the Department of Defense, stated it approves the granting of the cable landing license to MFSI. 6. As required by the Commission's rules, MFSI has certified that it has not agreed and will not agree in the future to accept special concessions directly or indirectly from any foreign carrier. MFSI further certifies that it is affiliated with a number of foreign carriers. MFSI is not affiliated with any carrier in either Australia or New Zealand. 7. Section 63.18(e)(6) of our rules requires that applications for cable landing licenses include a list of the proposed owners of the cable, and their voting interests and ownership interests by segment in the cable. We find that MFSI has provided us with sufficient information about the ownership interests of the U.S. mainland, Australia, and New Zealand cable landing stations and the submarine cable. The two U.S. mainland cable landing stations will be owned and operated exclusively by MFSI, including the electronics and cable segments between the landing station and the territorial limits of the United States. Telecom New Zealand Limited (TNZL) and Optus Communications Pty, Ltd. (Optus) will each own 100 percent of the landing stations, electronics, and cable segments between the landing stations and the territorial limits of their respective home countries. MFSI will own 10 percent of the special purpose corporation that will own the remaining wet segments of the cable, and the other 90 percent will be owned by Optus and TNZL. As for the Hawaii landing station, MFSI informs us that the ownership of this landing station has not yet been determined. To ensure that the Commission has detailed information about the ownership and voting interests for the entire cable system before MFSI lands and operates the proposed cable, we condition final grant of this license upon MFSI's filing of specific ownership and voting interests for the Hawaii landing station. We will give public notice of this information and this condition will be considered satisfied unless the Commission issues a public notice to the contrary no later than sixty days after receipt of this information. 8. Consistent with prior decisions, we also find MFSI's statement that the proposed landing station location sites in the continental United States will be on the Pacific Coast with at least one landing station located in California, Hawaii, Australia, and New Zealand sufficient to determine whether the proposed cable would comply with the provisions of the Cable Landing License Act and Commission rules. Section 1.767(a) of the Commission's rules permits applicants in their initial application to provide a general description of the landing points. It requires that grant of cable landing license applications be conditioned upon final approval of a specific description of landing points no later than ninety days prior to construction. The Commission will give public notice of this description, and grant of the license will be considered final unless we issue a public notice to the contrary no later than sixty days after receipt of the specific description of the landing points. 9. Based on the information provided by MFSI and pursuant to the Commission's procedures implementing the National Environmental Policy Act of 1969, we conclude that the grant of the requested authorization would not significantly affect the environment. Consequently, MFSI is not required to submit an environmental assessment, and this application is categorically excluded from environmental processing. 10. Accordingly, we conclude that U.S. interests under the Cable Landing License Act will be served by grant of the license to MFSI to land and operate Southern Cross, as conditioned below. IV. Ordering Clauses 11. Consistent with the foregoing, we hereby GRANT AND ISSUE MFSI a license to land and operate a fiber optic submarine cable system extending between landing points at cable landing stations in the west coast of the United States, Hawaii, Australia, and New Zealand under the provisions of the Cable Landing License Act and Executive Order 10530. The planned capacity for the Northern Ring (U.S. Mainland to Hawaii traffic) is 50 Gbps. The planned capacity for the Southern Ring (Australia/New Zealand traffic) is 10 Gbps. The planned capacity for the North South Ring (U.S. Mainland/Hawaii to Australia/New Zealand traffic) is 30 Gbps. This grant is subject to all rules and regulations of the Federal Communications Commission; any treaties or conventions relating to communications to which the United States is or may hereafter become a party; any action by the Commission or the Congress of the United States rescinding, changing, modifying or amending any rights accruing to any person hereunder; and the following conditions: (1) The location of the cable system within the territorial waters of the United States of America, its territories and possessions, and upon its shore shall be in conformity with plans approved by the Secretary of the Army, and the cables shall be moved or shifted by the Licensee at its expense upon the request of the Secretary of the Army, whenever he or she considers such course necessary in the public interest, for reasons of national defense, or for the maintenance or improvement of harbors for navigational purposes; (2) The Licensee shall at all times comply with any requirements of United States government authorities regarding the location and concealment of the cable facilities, buildings, and apparatus for the purpose of protecting and safeguarding the cables from injury or destruction by enemies of the United States of America; (3) The Licensee or any persons or companies controlling them, controlled by them, or under direct or indirect common control with them do not enjoy and shall not acquire any right to handle traffic to or from the United States, its territories, or its possessions unless such service be authorized by the Commission pursuant to Section 214 of the Communications Act, as amended; (4) The Licensee or any persons or companies controlling them, controlled by them, or under direct or indirect common control with them shall not acquire or enjoy any right for the purpose of handling or interchanging traffic to or from the United States, its territories, or its possessions to land, connect, or operate cables or landlines, to construct or operate radio stations, or to interchange traffic that is denied to any other United States company by reason of any concession, contract, understanding, or working arrangement to which the Licensee or any persons controlling them, controlled by them, or under direct or indirect common control with them are parties; (5) Neither this license nor the rights granted herein shall be transferred, assigned, or in any manner either voluntarily or involuntarily disposed of or disposed of indirectly by transfer of control of the Licensee to any persons, unless the Federal Communications Commission shall give prior consent in writing; (6) The Licensee shall notify the Commission in writing of the precise locations at which the cables will land no later than ninety days prior to commencing construction of cable landing stations at those locations. The Licensee shall also notify the Commission in writing of the specific ownership interests of the Hawaii landing station, including a description of the proposed owners and its voting interests. The Commission will give public notice of the filing of these descriptions, and grant of this license will be considered final unless the Commission issues a notice to the contrary no later than sixty days after receipt of the specific descriptions of the landing points and the specific ownership interests of the Hawaii landing station; (7) The Commission reserves the right to require the Licensee to file an environmental assessment or environmental impact statement should it determine that the landing of the cables at those locations and construction of necessary cable landing stations would significantly affect the environment within the meaning of Section 1.1307 of the Commission's procedures implementing the National Environmental Policy Act of 1969; this license is subject to modification by the Commission upon its review of any environmental assessment or environmental impact statement that it may require pursuant to its rules; (8) This license is revocable by the Commission after due notice and opportunity for hearing pursuant to section 2 of "An Act Relating to the Landing and Operation of Submarine Cables in the United States," 47 U.S.C.  35, or for failure to comply with the terms of the authorizations; (9) The Licensee shall notify the Commission in writing of the date on which the cable is placed in service, and this license shall expire 25 years from such date, unless renewed or extended upon proper application, and, upon expiration of this license, all rights granted under it shall be terminated; and (10) The terms and conditions upon which this license is given shall be accepted by the Licensee by filing a letter with the Secretary, Federal Communications Commission, Washington, D.C. 20554 within 30 days of the release of the cable landing license. 12. This Order is issued under Section 0.261 of the Commission's rules, 47 C.F.R.  0.261, and is effective upon release. Petitions for reconsideration under Section 1.106 or applications for review under Section 1.115 of the Commission's rules, 47 C.F.R.  1.106, 1.115, may be filed within 30 days of the date of public notice of this order (see 47 C.F.R.  1.4(b)(2)). FEDERAL COMMUNICATIONS COMMISSION Diane J. Cornell Chief, Telecommunications Division International Bureau