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                            Before the
                Federal Communications Commission
                     Washington, D.C.  20554
                                                                 
                                                                 

In the Matter of                        )
                                   )           IB Docket No. 96-261
International Settlement Rates                    )
                                 

                              Order

Adopted:  March 27, 1998                Released:  March 30, 1998

By the Commission:

     1.   On August 7, 1997, the Commission adopted a Report and Order in the above-captioned
proceeding, in which it established benchmarks for the international settlement rates that U.S. carriers pay
foreign carriers to terminate international traffic originating in the United States.  In the Benchmarks
Order, the Commission also adopted conditions related to these benchmarks for certain types of Section
214 authorizations.  These conditions address potential distortions in the U.S. market for international
message telephone service (IMTS) created by above-cost settlement rates.  One of these conditions requires
that, before a U.S.-licensed carrier may provide international facilities-based switched or private line
service from the United States to an affiliated foreign market, the foreign affiliate of the U.S.-licensed
carrier must offer U.S. international carriers a settlement rate for the affiliated market that is at or below
the relevant benchmark adopted in the Benchmarks Order.

     2.   The Commission required that existing Section 214 authorization holders (i.e., those that
were authorized to provide service prior to the January 1, 1998 effective date of the Benchmarks Order)
comply with this condition by having their foreign affiliates negotiate with U.S. international carriers a
settlement rate for affiliated routes that complies with the appropriate benchmark and is in effect within
ninety days of the January 1, 1998 effective date of the Benchmarks Order.  Existing Section 214
authorization holders that do not comply with the benchmark condition by this deadline will be required to
cease providing facilities-based or private line service on the affiliated route.

     3.   MCI Telecommunications Corporation (MCI) filed a Petition for Clarification or
Reconsideration of the R&O in which it requested the Commission to reconsider its requirement that
existing Section 214 authorization holders comply with this benchmark condition.  In its Petition, MCI
proposes that the Commission require existing Section 214 authorization holders to comply with the
benchmark condition only where the traffic on the affiliated route between the Section 214 holder and its
foreign affiliate is greater than 25 percent of the total inbound or outbound traffic on the route and where
the carrier or its foreign affiliate controls bottleneck services or facilities on either the U.S. or foreign end
of the route.  In its Reply, MCI argues that its proposal should apply to both existing and future Section
214 authorization holders.

     4.   The Commission is still considering the merits of MCI's Petition.  In the meantime, we are
concerned that, should the Commission ultimately decide to modify the benchmark condition as it applies to
existing Section 214 authorization holders, some carriers may unnecessarily have had to cease providing
service or find alternative means of providing service on an affiliated route.  This could result in disruption
of existing contractual arrangements and cause confusion among customers of existing Section 214
authorization holders.  Therefore, on our own motion, and in the public interest, we are issuing a temporary
stay of the effectiveness of the benchmark condition as it applies to Section 214 certificate holders that
were authorized to provide service prior to January 1, 1998.  By this action, we will not require
compliance with the benchmark condition by these carriers until the Commission acts on MCI's pending
petition.

     5.   Accordingly, IT IS HEREBY ORDERED, pursuant to Sections 1 and 4(i) of the
Communications Act, 47 U.S.C.  151 and 154(i), that effectiveness of the benchmark condition as it
applies to Section 214 authorization holders that were authorized to provide service prior to January 1,
1998 IS STAYED pending Commission action on MCI's Petition for Clarification or Reconsideration filed
in this proceeding.

     6.   IT IS FURTHER ORDERED that this order is effective upon release.

                    FEDERAL COMMUNICATIONS COMMISSION



                    Magalie Roman Salas
                                        Secretary