July 9, 1999

Re: Joint Application for a License to Land and Operate a Submarine Cable Network Between the United States and Japan

I am pleased that AT&T and the other members⁽¹⁾ of the Japan-U.S. Cable Network consortium finally were granted permission to land and operate their submarine cable system in the United States. These companies and their customers were forced to wait far too long for approval to provide important trans-Pacific communications services.

I did not participate in the FCC's decision, however, because I believe that this Commission has no legal authority to receive, review, or grant applications for submarine cable landing/operating licenses. Congress directed the President, not the FCC, to perform these functions. Although an extant executive order purportedly delegates the President's duties to the FCC, I believe the purported delegation is unlawful and invalid because the President may not, without specific statutory authority, delegate any functions to an independent regulatory agency such as this Commission, nor may an independent agency lawfully accept any extra-statutory delegations from the President. Indeed, in the absence of statutory authority, the FCC could accept a delegation only if the Commission were found to be an executive branch agency subordinate to the President. Such a finding, of course, would be absurd.

This is not merely an academic criticism; the Commission's unlawful actions have serious consequences for submarine cable operators, carriers, and their customers, including individual American consumers and businesses. Applicants for submarine cable licenses routinely are subjected to intolerable FCC and State Department delays, as well as onerous conditions (both explicit and implicit) and other forms of regulatory arm-twisting. In the current instance, the applicant was subjected to nearly eight months of delay, implied conditions that affect the applicant's private contractual arrangements, and possibly an extorted promise to send some traffic over a competitor's submarine cable system. As if this weren't bad enough, the FCC also plans to examine the agency's "submarine-cable policies" in a rulemaking proceeding that, according to the FCC, may lead to retroactive imposition of new rules on licensees.

I have discussed the submarine cable issue at considerable length with the Commission's Office of General Counsel ("OGC"), which assures me that my concerns about FCC authority to receive, review, or grant applications for landing/operating licenses are unfounded. Simply put, OGC believes there are no statutory or constitutional impediments to FCC action in this area. I continue to disagree and, in a full statement released today, describe my reasons in detail.

Hopefully, in the future, the Commission will cease to act under the unlawful delegation and, thereby, relieve cable operators, carriers, and their customers from delay and other regulatory burdens. At a minimum, the FCC should formally investigate the legality of its actions in this area. This investigation should include seeking an opinion from the Office of Legal Counsel in the Department of Justice and, if an FCC rulemaking proceeding is undertaken, addressing the Commission's legal authority as a threshold matter.

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1.      In addition to AT&T Corporation, consortium members include Com Tech International Corporation, Frontier Communications Services, Inc., GTE Hawaiian Tel International, Incorporated, GTE Inelligent Network Services Incorporated, International Exchange Networks Ltd., Level 3 International, LLC, MCI WorldCom, Inc., PCI Communications, Inc., Pacific Gateway Exchange (Bermuda), Ltd., PRIMUS Telecommunications, PSINet, Inc., Qwest Communications Corporation, RSL COM U.S.A., Inc., SBCI-Pacific Networks, Inc., Sprint Communications Company, L.P., Teleglobe USA Inc., Telegroup, Inc., and VIATEL Inc.