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June 22, 2000

Separate Statement of Commissioner Susan Ness

Re: Review of Commission Consideration of Applications under the Cable Landing License Act

Last July, the Commission granted a submarine cable landing license for the Japan-U.S. Cable Network ("JUS CN").(1) During the proceeding, it was alleged that the entities involved in the consortium controlled key inputs for other undersea cable systems serving the same routes, including access to landing stations, backhaul facilities, and local interconnection.(2) It was also alleged that such entities had the incentive and ability to deter construction of additional capacity. In granting the JUS CN cable license,(3) the Commission recognized the value of commencing a broader proceeding to examine the licensing of submarine cables and the best manner to promote competition and benefit consumers.(4)

The recent increase in submarine cable capacity has been a tremendous success story, driven by the desire of more and more carriers to provide international data and Internet access services. Undersea cable capacity on transatlantic and transpacific routes has been increasing exponentially between 1995 and 1998.(5) Such capacity growth is expected to continue at least for the next few years.(6) At the same time, market prices for both transatlantic and transpacific bandwidth have fallen dramatically with increased supply.(7) It therefore seems truly appropriate to adopt policies that would streamline our procedures to expedite granting cable landing authority.

For these reasons, I support this initiation of a proceeding to identify ways to promote competition in the operation of undersea cable systems, and at the same time streamline our submarine cable licensing process. The International Bureau has expended significant thought and effort in crafting very specific proposals that would permit more expeditious authorization of certain cable landing applications. I do not view these proposals as the end product of our process. Instead, in opening this proceeding, I hope that comment on these proposals will result in a simpler, and more extensive, streamlining of our processes. The Commission should try to avoid inadvertently raising the costs of entering the undersea cable market in the course of "streamlining" its processes. Thus, in addition to commenting on the efficacy of these proposals, I encourage parties to suggest ways to make these streamlining efforts more expansive.

1    AT&T Corp. et al., 14 FCC Rcd. 13066 (1999) (JUS Order).

2    Id. at 13070-13073 9-18.

3    The Commission granted JUS CN its authorization after the applicants amended their Construction and Management Agreement to reduce the potential for competitive harms arising from the consortium structure. Id. at 13076-13079 28-32.

4    Id. at 13079 36.

5     FCC International Bureau, Report No. IN99-36, 1998 Section 43.82 Circuit Status Data, at 33-34 (1999).

6     Id.

7     See, e.g., Bandwidth Index compiled by Band-X (http://www.band-x.com/bandwidth_1.cfm). Band-X runs an independent virtual market for international wholesale telecom capacity, maintaining price indices for bandwidth and switched minutes (http://www.band-x.com).