******************************************************** 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 ) ) 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