International Settlements Policy Reform, 42625-42631 [2011-17368]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 76, Number 138 (Tuesday, July 19, 2011)]
[Proposed Rules]
[Pages 42625-42631]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-17368]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 0, 43 and 64

[IB Docket No. 11-80; FCC 11-75]


International Settlements Policy Reform

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Communications Commission proposes to remove the 
International Settlements Policy (ISP) from all U.S. international 
routes except Cuba. Eliminating the ISP will enable more market-based 
arrangements between U.S. and foreign carriers on all U.S. 
international routes. The Federal Communications Commission seeks 
comment on a proposal to enable the Commission to better protect U.S. 
consumers from the effects of anticompetitive conduct by foreign 
carriers in instances necessitating Commission intervention. 
Specifically, it seeks comments on proposals and issues regarding the 
application of the Commission's benchmarks policy.

DATES: Submit comments on or before August 18, 2011, and replies on or 
before September 2, 2011.

ADDRESSES: You may submit comments, identified by Docket No. 11-80, by 
any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Federal Communications Commission's Web Site: https://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting 
comments.
     People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by e-mail: FCC504@fcc.gov, phone: 202-418-
0530 or TTY: 202-418-0432.
    For detailed instructions for submitting comments and additional 
information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT: Kimberly Cook, David Krech or James 
Ball, Policy Division, International Bureau, FCC, (202) 418-1460 or via 
the Internet at Kimberly.Cook@fcc.gov, David.Krech@fcc.gov and 
James.Ball@fcc.gov.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking in IB Docket No. 11-80, FCC 11-75, adopted May 
12, 2011, and released May 13, 2011. The

[[Page 42626]]

full text of this document is available for inspection and copying 
during normal business hours in the FCC Reference Center, Room CY-A257, 
445 12th Street, SW., Washington, DC 20554. The document also is 
available for download over the Internet at https://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-11-75A1.pdf. The complete text also may 
be purchased from the Commission's copy contractor, Best Copy and 
Printing, Inc. (BCPI), located in Room CY-B402, 445 12th Street, SW., 
Washington, DC 20554. Customers may contact BCPI at its web site: 
https://www.bcpiweb.com or call 1-800-378-3160.

Comment Filing Procedures

    Pursuant to sections 1.415 and 1.419 of the Commission's rules, 47 
CFR 1.415, 1.419, interested parties may file comments and reply 
comments on or before the dates indicated above. Comments may be filed 
using the Commission's Electronic Comment Filing System (ECFS) or by 
hand delivery. See Electronic Filing of Documents in Rulemaking 
Proceedings, 63 FR 24121 (1998).
     Electronic Filers: Comments may be filed using the 
Commission's Electronic Comment Filing System (ECFS) at https://fjallfoss.fcc.gov/ecfs2/. See Electronic Filing of Documents in 
Rulemaking Proceedings, 63 FR 24121 (1998).
     Paper Filers: Parties who choose to file by paper must 
file an original and one copy of each filing. If more than one docket 
or rulemaking number appears in the caption of this proceeding, filers 
must submit two additional copies for each additional docket or 
rulemaking number.
    Filings can be sent by hand or messenger delivery, by commercial 
overnight courier, or by first-class or overnight U.S. Postal Service 
mail. All filings must be addressed to the Commission's Secretary, 
Office of the Secretary, Federal Communications Commission.
    [cir] All hand-delivered or messenger-delivered paper filings for 
the Commission's Secretary must be delivered to FCC Headquarters at 445 
12th St., SW., Room TW-A325, Washington, DC 20554. The filing hours are 
8 a.m. to 7 p.m. All hand deliveries must be held together with rubber 
bands or fasteners. Any envelopes and boxes must be disposed of before 
entering the building.
    [cir] Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743.
    [cir] U.S. Postal Service first-class, Express, and Priority mail 
must be addressed to 445 12th Street, SW., Washington DC 20554.

Summary of Notice of Proposed Rulemaking

1. Introduction

    In the Notice of Proposed Rulemaking (NPRM), the Federal 
Communications Commission proposes to remove the International 
Settlements Policy (ISP) from all U.S. international routes except 
Cuba. Further, the Commission seeks comment on ways to improve its 
rules and procedures to enhance its ability to prevent and respond to 
anticompetitive behavior by foreign carriers in a timely and effective 
manner. Specifically, the Commission seeks comment on issues and 
proposals related to the Commission's benchmarks policy and competitive 
safeguards against anticompetitive behavior. The Commission believes 
removing the ISP from the remaining international routes will provide 
U.S. carriers greater flexibility to negotiate lower settlement rates 
on those routes. The Notice of Proposed Rulemaking seeks comment on 
whether removal of the ISP from virtually all of the remaining ISP 
routes will, on balance, result in lower rates and otherwise benefit 
U.S. consumers. The Notice of Proposed Rulemaking requests comment on 
whether there are any competitive concerns on a particular U.S. 
international route that we should consider prior to removing the ISP 
from that route.

2. ISP

    Removing the ISP from the U.S. international routes except Cuba 
would require amendments to certain Commission rules, and the Notice of 
Proposed Rulemaking seeks comment on alternatives for amending the 
Commission's rules, including sections 64.1001, 64.1002 and 43.51. 
Sections 64.1001 and 64.1002 specify the requirements and procedures 
that implement the ISP. Section 43.51 specifies the contract filing 
requirements that apply to U.S. carriers. The Commission proposes to 
amend section 64.1001 and portions of section 64.1002 which currently 
codify the ISP and related procedures in the Commission's rules. The 
Commission also proposes to modify section 43.51 of our rules to 
reflect the removal of the ISP on all routes except Cuba.

3. Contract Filing

    The Commission proposes to require that U.S. carriers file 
agreements, amendments to agreements (whether written or oral), and 
rates for the provision of services (hereinafter referred to 
collectively as ``agreements'') when the agreed-upon rates are above 
benchmark. The requirement would apply to all U.S. international routes 
involving any foreign correspondent, dominant or non-dominant, for 
which U.S. outbound rates are above benchmark regardless of whether the 
ISP previously had been removed from that route or benchmarks had been 
temporarily achieved at some point in the past. The Commission proposes 
that the filing requirement also apply when any provision in the 
contract has the effect of bringing the settlement rate above benchmark 
even though the stated contract rate is at or below benchmark.
    The Commission would consider actions in response to above-
benchmark situations on an ad hoc basis. Furthermore, upon the filing 
of an agreement implementing an above-benchmark rate, the International 
Bureau would issue a public notice of the filing. Alternatively, rather 
than requiring the filing of an agreement, the Notice of Proposed 
Rulemaking requests comment on requiring U.S. carriers to file a notice 
of any agreement (whether written or oral) that includes rates that are 
above benchmark. This approach would give the Commission the authority 
to require a U.S. carrier to file the agreement in particular 
circumstances, but would not require U.S. carriers to file all 
agreements with the Commission. The Commission might exercise that 
authority where there is a competitive concern on a particular route or 
where the Commission receives a complaint from a carrier or from a 
consumer with respect to that route. The Notice of Proposed Rulemaking 
proposes retaining the Commission's authority to require U.S. carriers 
to file agreements and rates for the provision of services on 
international routes involving any foreign correspondent at any time 
and upon reasonable request. It proposes to retain the current practice 
of considering any such agreement filed pursuant to the ISP available 
for public inspection, and considering all other such agreements not 
routinely available for public inspection.

4. Enhanced Competitive Safeguards

    The Notice of Proposed Rulemaking seeks comment on various 
competitive safeguards, including the presumption of anticompetitive 
behavior, possible procedures to expedite Commission action, and 
remedies for findings of anticompetitive behavior.

[[Page 42627]]

5. Benchmark Issues

    In specific, limited circumstances, the Commission proposes to 
apply benchmark rates to indirect routing arrangements that U.S. 
carriers have with third-party carriers in other countries to provide 
services on U.S. international routes. The Notice of Proposed 
Rulemaking proposes to apply the Commission's benchmark policy on a 
case-by-case basis to indirect routing on international routes that are 
found to be subject to anticompetitive conduct by foreign carriers 
where additional remedies are required. In applying benchmark rates to 
reorigination of traffic under the limited circumstances specified 
above, the Commission would not permit any U.S. carrier serving the 
international route indirectly to pay a fee to a third-party carrier in 
an intermediate country for reorigination of traffic greater than the 
established benchmark rate for termination of traffic to the 
destination country. The Commission would not impose the restriction 
except after prior notice and opportunity for comment. The Commission 
would provide notice and opportunity for comment as part of the order 
suspending U.S. carrier payments for termination services with carriers 
in the destination country. The Commission believes that existing 
benchmark rates would be a sufficient cap on fees paid by U.S. carriers 
for reorigination of traffic to a destination country on an 
international route where there is continuing anticompetitive conduct. 
The notice and comment process described above would give affected 
carriers an opportunity to contest the reasonableness of applying the 
benchmark rate for charges above the benchmark rate applicable to the 
particular destination route subject to the notice. If adopted, the 
restriction would be imposed by order and removed upon a finding that 
the anticompetitive conduct on the international route had ceased or 
under other circumstances that the Commission determined appropriate 
based upon the record in a particular case. The Notice of Proposed 
Rulemaking also requests comment on whether there may be other 
circumstances under which the Commission should apply benchmark rates 
to alternative or indirect routing arrangements. In particular, it 
requests comment on a broader approach than that described above if 
such an approach would allow the Commission to more effectively respond 
to anticompetitive behavior under certain circumstances.

6. Other Issues

    Finally, the Notice of Proposed Rulemaking notes that some 
commenters to the 2005 Notice of Inquiry and commenters in the 
proceeding regarding the U.S.-Tonga route argued that U.S. carriers 
have failed to decrease retail calling rates in proportion to the 
decrease in settlement rate reductions. Commenters argued that this 
alleged failure to decrease retail calling rates in proportion to any 
settlement rate reduction harms U.S. consumers and carriers in foreign 
countries because U.S. consumers pay higher rates than necessary, which 
results in lower traffic volumes and reduced terminating revenues 
received by foreign carriers on the international route. U.S. carriers 
disputed this argument. The Notice of Proposed Rulemaking noted that 
section 43.61 traffic and revenue data filed by U.S. carriers show 
that, on average, U.S. carriers appear to have been flowing through 
settlement rate reductions in U.S. international calling rates. From 
1996 to 2009 (comparing the year before the FCC adopted benchmarks to 
the most recent year for which data are available), the average IMTS 
settlement rate paid by U.S. carriers decreased by $0.37 per minute, 
while the average IMTS revenue per minute (an estimate of the average 
U.S. international calling rate) decreased by $0.66 per minute, more 
than flowing through settlement rate reductions. The Commission 
recognizes that this data has certain limitations and may underestimate 
the level of U.S. international calling rates to some degree. For 
instance, the IMTS revenue per minute figure is based on revenue 
reported by facilities-based carriers and, therefore, reflects a mix of 
wholesale and retail rates. Also, some carriers may not have included 
non-route-specific calling plan revenue in their revenue figures. We 
also note that the figures cited above are average numbers and that 
settlement rates reductions may not have been flowed through uniformly 
to all segments of the retail market. There is evidence that some U.S. 
carriers, between 1985 and 2000, increased the retail ``basic rates'' 
they charged consumers. Nevertheless, the section 43.61 data covers the 
entire U.S. facilities-based IMTS industry and all international 
routes, and shows average IMTS revenue per minute falling much more 
than the average settlement rate payout. The Commission seeks comment 
on this issue. In addition to the decrease in the average IMTS 
settlement rate paid by U.S. carriers as well as a decrease in the 
average IMTS revenue per minute received by U.S. carriers, the 
Commission seeks comment on what other data or factors it should 
consider in evaluating whether U.S. carriers are passing on reductions 
in settlement rates to the retail rates they charge consumers. The 
Commission seeks comment on what action, if any, the Commission should 
consider taking with respect to these issues.

7. Paperwork Reduction Act of 1995 Analysis

    The Notice of Proposed Rulemaking proposes new and modified 
information collection requirements. The Commission, as a part of its 
continuing effort to reduce paperwork burdens, invites the general 
public and the Office of Management and Budget (OMB) to comment on the 
information collection requirements contained in this document, as 
required by the Paperwork Reduction Act of 1995 (PRA), Public Law 104-
13. In addition, pursuant to the Small Business Paperwork Relief Act of 
2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we seek specific 
comment on how we might ``further reduce the information collection 
burden for small business concerns with fewer than 25 employees.''

8. Initial Regulatory Flexibility Analysis

    As required by the Regulatory Flexibility Act (RFA),\1\ the 
Commission has prepared this present Initial Regulatory Flexibility 
Analysis (IRFA) of the possible significant economic impact on small 
entities by the policies and rules proposed in this Notice of Proposed 
Rulemaking (NPRM). Written public comments are requested on this IRFA. 
Comments must be identified as responses to the IRFA and must be filed 
by the deadlines for comments provided on the first page of this NPRM. 
The Commission will send a copy of this NPRM, including the IRFA, to 
the Chief Counsel for Advocacy of the Small Business Administration 
(SBA).\2\ In addition, the NPRM and IRFA (or summaries thereof) will be 
published in the Federal Register.\3\
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    \1\ See 5 U.S.C. 603. The FRA, see 5 U.S.C. 601-612 has been 
amended by the Small Business Regulatory Enforcement Fairness Act of 
1996 (SBREFA), Public Law 104-121, Title II, 110 Stat. 857 (1996).
    \2\ See 5 U.S.C. 603(a).
    \3\ See id.
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A. Need for, and Objectives of, the Proposed Rules
    In recent years there has been increased participation and 
competition in the U.S. international marketplace, decreased settlement 
and end-user rates, and growing liberalization and

[[Page 42628]]

privatization in foreign markets. Because of this increase, the 
Commission believes that it is an appropriate time to re-examine its 
International Settlements Policy (ISP) and accounting rate policies. In 
this proceeding, the Commission expects to obtain further information 
about the competitive status of the U.S. international marketplace. In 
addition, the Commission solicits comment on a wide variety of 
proposals to reform its current application of the ISP, benchmark and 
settlement rate policies.
B. Legal Basis
    The Notice of Proposed Rulemaking is authorized under 47 U.S.C. 
151, 152, 154(i), 154(j), 201-205, 208, 211, 214, 303(r), 309, and 403.
C. Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules Will Apply
    The RFA directs agencies to provide a description of and, where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules, if adopted.\4\ The RFA generally 
defines the term ``small entity'' as having the same meaning as the 
terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' \5\ A small business concern is one which: 
(1) Is independently owned and operated, (2) is not dominant in its 
field of operation, and (3) satisfies any additional criteria 
established by the SBA.\6\
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    \4\ 5 U.S.C. 603(b)(3).
    \5\ 5 U.S.C. 603(6).
    \6\ 5 U.S.C. 603(3) (incorporating by reference the definition 
of ``small business concern'' in 15 U.S.C. 632). Pursuant to the 
RFA, the statutory definition of a small business applies ``unless 
an agency, after consultation with the Office of Advocacy of the 
Small Business Administration and after opportunity for public 
comment, establishes one or more definitions of such term which are 
appropriate to the activities of the agency and publishes such 
definition(s) in the Federal Register.'' 5 U.S.C. 601(3).
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    The proposals contained in the Notice of Proposed Rulemaking may 
directly affect up to approximately 38 facilities-based U.S. 
international carriers providing IMTS traffic. In the 2009 annual 
traffic and revenue report 38 facilities-based and facilities-resale 
carriers reported approximately $5.8 billion in revenues from 
international message telephone service (IMTS). Of these, three 
reported IMTS revenues of more than $1 billion, eight reported IMTS 
revenues of more than $100 million, 10 reported IMTS revenues of more 
than $50 million, 20 reported IMTS revenues of more than $10 million, 
25 reported IMTS revenues of more than $5 million, and 30 reported IMTS 
revenues of more than $1 million. Based solely on their IMTS revenues 
the majority of these carriers would be considered non-small entities 
under the SBA definition.\7\ Neither the Commission nor the SBA has 
developed a definition of ``small entity'' specifically applicable to 
these international carriers. The closest applicable definition 
provides that a small entity is one with 1,500 or fewer employees.\8\ 
We do not have data specifying the number of these carriers that are 
not independently owned and operated and have fewer than 1,500 
employees. Furthermore, because not all agreements between the U.S. and 
foreign carriers are required to be filed at the Commission, it is 
difficult to determine how many of these 38 carriers might have 
agreements with foreign carriers. The Notice of Proposed Rulemaking 
solicits comments on a wide variety of proposals, and the proposals are 
intended to promote market-based policies and reduce unnecessary 
regulatory burdens on all facilities-based U.S. international carriers 
regardless of size.
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    \7\ See 13 CFR 121.201, NAICS Code at Subsector 517--
Telecommunications.
    \8\ See 13 CFR 121.201, NAICS codes 513310 and 513322.
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D. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements
    The NPRM seeks a wide variety of information on the Commission's 
ISP, benchmarks and international settlement rates policies. In 
developing these policies, the Commission implemented various reporting 
requirements to monitor possible anticompetitive behavior and protect 
the public interest. The NPRM proposes retaining reporting requirements 
when carriers agree to above-benchmark rates. The NPRM reserves the 
right to require the filing of particular contracts when presented with 
evidence of a violation of the ``No Special Concessions'' rule or of 
other anticompetitive behavior related to these matters on a particular 
route. The NPRM solicits comment on whether the Commission should 
retain, eliminate or develop new/additional reporting requirements. The 
NPRM seeks comment on possible safeguards that could be implemented to 
address specific competitive concerns.
E. Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered
    The RFA requires an agency to describe any significant alternatives 
that it has considered in reaching its proposed approach, which may 
include the following four alternatives (among others): (1) The 
establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities.\9\
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    \9\ See 5 U.S.C. 603(c).
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    The proposals in this NPRM are designed to provide the Commission 
with information to determine whether its existing regulatory regime 
may inhibit the benefits of lower calling process and greater service 
innovations to consumers. Because the NPRM is broad and proposals would 
likely affect only 38 facilities-based carriers, it would be difficult 
to adopt specific alternatives for the small facilities-based entities. 
The proposals contained in the NPRM would benefit all entities, 
including small entities.
    The NPRM proposes steps that would minimize the economic impact on 
all entities, including small entities. For example, the NPRM seeks 
comment on whether to remove the ISP from certain remaining routes. 
This proposal would eliminate the burden of seeking prior Commission 
approval before a carrier could enter into arrangements with foreign 
carriers. Any changes to our existing policies and rules will expand 
the ability of all entities, including small entities, to reap the 
economic benefits of competition. Thus, the NPRM does not propose any 
exemption for small entities.
F. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rule
    None.

9. Ordering Clauses

    It is ordered that, pursuant to the authority contained in 47 
U.S.C. 151, 152, 154(i), 154(j), 201-205, 208, 211, 214, 303(r), 309 
and 403 this Notice of Proposed Rulemaking is adopted.
    It is further ordered that notice is hereby given of the proposed 
regulatory changes to Commission policy and rules described in this 
Notice of Proposed Rulemaking and that comment is sought on these 
proposals.
    It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Notice of Proposed Rulemaking,

[[Page 42629]]

including the Initial Regulatory Flexibility Analysis, to the Chief 
Counsel for Advocacy of Small Business Administration.

List of Subjects in 47 CFR Parts 0, 43 and 64

    Communications, Communications common carriers, Telecommunications, 
Telephone.

Federal Communications Commission.
Bulah P. Wheeler,
Deputy Manager.

    For the reasons discussed in the preamble, the Federal 
Communications Commission proposes to amend 47 CFR Parts 0, 43 and 64 
of the Commission rules as follows:

PART 0--COMMISSION ORGANIZATION

    1. The authority citation for part 0 continues to read as follows:

    Authority: Secs. 5, 48 stat. 1068, as amended; 47 U.S.C. 155.

    2. Section 0.453 is amended by revising paragraph (e)(6) to read as 
follows:


Sec.  0.453  Public reference rooms.

* * * * *
    (e) * * *
    (6) Contracts and other arrangements filed under Sec.  43.51(b)(3) 
of this chapter, except for those that are filed with a request for 
confidential treatment (see Sec.  0.459) or are deemed confidential 
pursuant to sec. 412 of the Communications Act (see also Sec.  
0.457(c)(3)).
* * * * *
    3. Section 0.457 is amended by revising paragraph (d)(1)(v) to read 
as follows:


Sec.  0.457  Records not routinely available for public inspection.

* * * * *
    (d) * * *
    (1) * * *
    (v) The rates, terms and conditions in any agreement between a U.S. 
carrier and a foreign carrier that govern the settlement of U.S. 
international traffic, including the method for allocating return 
traffic, except for any agreement with a foreign carrier presumed to 
have market power, and subject to the international settlements policy 
set forth in Part 64, Subpart J of this chapter.
* * * * *

PART 43--REPORTS OF COMMUNICATION COMMON CARRIERS AND CERTAIN 
AFFILIATES

    4. The authority citation for part 43 continues to read as follows:

    Authority: 47 U.S.C. 154; Telecommunications Act of 1996, Pub. 
L. 104-104, secs. 402(b)(2)(B), (c), 110 Stat. 56 (1996) as amended 
unless otherwise noted, 47 U.S.C. 211, 219, 220 as amended.

Alternative 1 for Sec.  43.51

    5. Section 43.51 is amended by revising paragraphs (a)(1) 
introductory text, (a)(2), and (b)(3), adding paragraph (b)(4), 
revising paragraphs (d) through (f) and Note 3, and by removing Note 4 
to read as follows:


Sec.  43.51  Contracts and concessions.

    (a)(1) Any communication common carrier described in paragraph (b) 
of this section must file with the Commission, within thirty (30) days 
of execution, a copy of each contract, agreement, concession, license, 
authorization, operating agreement or other arrangement to which it is 
a party and amendments thereto (collectively hereinafter referred to as 
``agreement'' for purposes of this rule) with respect to the following:
* * * * *
    (2) If the agreement is made other than in writing, a certified 
statement covering all details thereof must be filed by at least one of 
the parties to the agreement. Each other party to the agreement which 
is also subject to these provisions may, in lieu of also filing a copy 
of the agreement, file a certified statement referencing the filed 
document. The Commission may, at any time and upon reasonable request, 
require any communication common carrier not subject to the provisions 
of this section to submit the documents referenced in this section.
    (b) * * *
    (3) A carrier, other than a provider of commercial mobile radio 
services, that is engaged in foreign communications, if the agreement 
is for an international route on the Commission's ``Exclusion List,'' 
and the agreement is with a foreign carrier that is presumed to have 
market power on the foreign end of the route, pursuant to Note 3 to 
this section. The Commission's ``Exclusion List'' identifies countries 
and facilities that are not covered by the grant of global section 214 
authority under Sec.  63.18(e)(1) of this chapter. This list is 
available at https://www.fcc.gov/ib/pd/exclusion_list.pdf; or
    (4) A carrier, other than a provider of commercial mobile radio 
services, that is engaged in foreign communications and enters into an 
agreement with a foreign carrier, if the agreement provides for a 
settlement rate above the applicable benchmark rate, or any provision 
in the contract has the effect of bringing the settlement rate above 
the applicable benchmark rate. The Commission established applicable 
benchmark rates in International Settlement Rates, IB Docket No. 96-
261, Report and Order, FCC 97-280, 12 FCC Rcd 19806, 19860 para. 111 
(1997) (Benchmarks Order); Report and Order on Reconsideration and 
Order Lifting Stay, 14 FCC Rcd 9256 (1999) (Benchmarks Reconsideration 
Order); aff'd sub nom. Cable & Wireless P.L.C. v. FCC, 166 F.3d 1224 
(D.C. Cir. 1999).
* * * * *
    (d) Agreements between a carrier and a foreign carrier that are not 
included in paragraph (b) of this section are not required to be filed 
with the Commission pursuant to paragraph (a) of this section, but each 
U.S. carrier subject to such an agreement shall maintain a copy of it, 
and upon request by the Commission, shall promptly forward individual 
agreements to the Commission.
    (e) Other filing requirements for carriers providing service on a 
U.S. international route that is subject to the international 
settlements policy as set forth in Sec.  64.1002 of this chapter:
    (1) If a U.S. carrier files an agreement with a foreign carrier 
pursuant to paragraph (a) and (b)(3) of this section to begin providing 
switched voice service between the United States and the foreign point, 
the carrier must also file with the International Bureau a modification 
request under Sec.  64.1001 of this chapter. The operating or other 
agreement cannot become effective until the modification request has 
been granted under paragraph Sec.  64.1001(e) of this chapter.
    (2) If a U.S. carrier files an amendment pursuant to paragraph (a) 
and (b)(3) of this section, to an existing operating or other agreement 
with a foreign carrier to provide switched voice service between the 
United States and a foreign point, and the amendment relates to the 
exchange of services, interchange or routing of traffic and matters 
concerning rates, accounting rates, division of tolls, the allocation 
of return traffic, or the basis of settlement of traffic balances, the 
carrier may need to file with the International Bureau a modification 
request under Sec.  64.1001 of this chapter. The amendment to the 
operating or other agreement cannot become effective until the 
modification request has been granted under Sec.  64.1001(e) of this 
chapter.
    (f) Confidential treatment. (1) Agreements filed with the 
Commission pursuant to the requirements of paragraphs (a) and (b)(3) of 
this section shall be considered as routinely available for public 
inspection under

[[Page 42630]]

Sec.  0.453(e)(6) of this chapter. Carriers may request confidential 
treatment under Sec. Sec.  0.457 and 0.459 of this chapter for the 
rates, terms and conditions that govern the settlement of U.S. 
international traffic.
    (2) Carriers requesting confidential treatment of agreements filed 
pursuant to paragraphs (a) and (b)(3) of this section must include the 
information specified in Sec.  64.1001(c) of this chapter. Such filings 
shall be made with the Commission, with a copy to the Chief, 
International Bureau. The transmittal letter accompanying the 
confidential filing shall clearly identify the filing as responsive to 
Sec.  43.51(f).
    (3) Agreements filed with the Commission pursuant to the 
requirements of paragraphs (a) and (b)(4) of this section shall be 
considered as not routinely available for public inspection pursuant to 
Sec.  0.457(d)(1)(v) (Any request that these materials be made 
available for public inspection must be under the provisions of Sec.  
0.461 of this chapter).
* * * * *

    Note 3 to Sec.  43.51: Carriers shall rely on the Commission's 
list of foreign carriers that do not qualify for the presumption 
that they lack market power in particular foreign points for 
purposes of determining which of their foreign carrier contracts are 
subject to the contract filing requirements set forth in paragraphs 
(a) and (b)(3) of this section. The Commission's list of foreign 
carriers that do not qualify for the presumption that they lack 
market power in particular foreign points is available from the 
International Bureau's World Wide Web site at https://www.fcc.gov/ib. 
The Commission will include on the list of foreign carriers that do 
not qualify for the presumption that they lack market power in 
particular foreign points any foreign carrier that has 50 percent or 
more market share in the international transport or local access 
markets of a foreign point. A party that seeks to remove such a 
carrier from the Commission's list bears the burden of submitting 
information to the Commission sufficient to demonstrate that the 
foreign carrier lacks 50 percent market share in the international 
transport and local access markets on the foreign end of the route 
or that it nevertheless lacks sufficient market power on the foreign 
end of the route to affect competition adversely in the U.S. market. 
A party that seeks to add a carrier to the Commission's list bears 
the burden of submitting information to the Commission sufficient to 
demonstrate that the foreign carrier has 50 percent or more market 
share in the international transport or local access markets on the 
foreign end of the route or that it nevertheless has sufficient 
market power to affect competition adversely in the U.S. market.

Alternative 2 for Sec.  43.51

    6. Section 43.51 is amended by revising paragraphs (a)(1) 
introductory text, (a)(2), (b)(3), (d) through (f) and Note 3, and by 
removing Note 4 to read as follows:


Sec.  43.51  Contracts and concessions.

    (a)(1) Any communication common carrier described in paragraph (b) 
of this section must file with the Commission, within thirty (30) days 
of execution, a copy of each contract, agreement, concession, license, 
authorization, operating agreement or other arrangement to which it is 
a party and amendments thereto (collectively hereinafter referred to as 
``agreement'' for purposes of this rule) with respect to the following:
* * * * *
    (2) If the agreement is made other than in writing, a certified 
statement covering all details thereof must be filed by at least one of 
the parties to the agreement. Each other party to the agreement which 
is also subject to these provisions may, in lieu of also filing a copy 
of the agreement, file a certified statement referencing the filed 
document. The Commission may, at any time and upon reasonable request, 
require any communication common carrier not subject to the provisions 
of this section to submit the documents referenced in this section.
    (b) * * *
    (3) A carrier, other than a provider of commercial mobile radio 
services, that is engaged in foreign communications, if the agreement 
is for an international route on the Commission's ``Exclusion List,'' 
and the agreement is with a foreign carrier that is presumed to have 
market power on the foreign end of the route, pursuant to Note 3 to 
this section. The Commission's ``Exclusion List'' identifies countries 
and facilities that are not covered by the grant of global section 214 
authority under section 63.18(e)(1) of the Commission's rules. This 
list is available at https://www.fcc.gov/ib/pd/exclusion_list.pdf.
* * * * *
    (d) A carrier, other than a provider of commercial mobile radio 
services, that is engaged in foreign communications, and enters into an 
agreement with a foreign carrier, must notify the International Bureau 
of any agreement within 30 days of the execution of the agreement, if 
the agreement provides for a settlement rate above the applicable 
benchmark rate, or any provision in the contract has the effect of 
bringing the settlement rate above the applicable benchmark rate. The 
Commission has the authority to require the U.S. carrier providing 
service on U.S. international routes to file a copy of each agreement 
to which it is a party. The Commission established applicable benchmark 
rates in International Settlement Rates, IB Docket No. 96-261, Report 
and Order, FCC 97-280, 12 FCC Rcd 19806, 19860 para. 111 (1997) 
(Benchmarks Order); Report and Order on Reconsideration and Order 
Lifting Stay, 14 FCC Rcd 9256 (1999) (Benchmarks Reconsideration 
Order); aff'd sub nom. Cable & Wireless P.L.C. v. FCC, 166 F.3d 1224 
(D.C. Cir. 1999).
    (e) Other filing requirements for carriers providing service on 
U.S. international routes that are subject to the international 
settlements policy as set forth in Sec.  64.1002 of this chapter:
    (1) For routes subject to the international settlements policy set 
forth in Sec.  64.1002 of this chapter, if a U.S. carrier files an 
operating or other agreement with a foreign carrier pursuant to 
paragraph (a) of this section to begin providing switched voice, telex, 
telegraph, or packet-switched service between the United States and a 
foreign point, the carrier must also file with the International Bureau 
a modification request under Sec.  64.1001 of this chapter. The 
operating or other agreement cannot become effective until the 
modification request has been granted under paragraph Sec.  64.1001(e) 
of this chapter.
    (2) For routes subject to the international settlements policy, if 
a carrier files an amendment, pursuant to paragraph (a) of this 
section, to an existing operating or other agreement with a foreign 
carrier to provide switched voice, telex, telegraph, or packet-switched 
service between the United States and a foreign point, and the 
amendment relates to the exchange of services, interchange or routing 
of traffic and matters concerning rates, accounting rates, division of 
tolls, the allocation of return traffic, or the basis of settlement of 
traffic balances, the carrier must also file with the International 
Bureau a modification request under Sec.  64.1001 of this chapter. The 
amendment to the operating or other agreement cannot become effective 
until the modification request has been granted under Sec.  64.1001(e) 
of this chapter.
    (f) Confidential treatment. (1) Agreements filed with the 
Commission pursuant to the requirements of paragraphs (a) and (b)(3) of 
this section shall be considered as routinely available for public 
inspection under Sec.  0.453(e)(6) of this chapter. Carriers may 
request confidential treatment under Sec.  0.457 of this chapter for 
the rates, terms and conditions that govern the settlement of U.S. 
international traffic.
    (2) Carriers requesting confidential treatment under this paragraph 
must

[[Page 42631]]

include the information specified in Sec.  64.1001(c) of this chapter. 
Such filings shall be made with the Commission, with a copy to the 
Chief, International Bureau. The transmittal letter accompanying the 
confidential filing shall clearly identify the filing as responsive to 
Sec.  43.51(f).
* * * * *

    Note 3 to Sec.  43.51: Carriers shall rely on the Commission's 
list of foreign carriers that do not qualify for the presumption 
that they lack market power in particular foreign points for 
purposes of determining which of their foreign carrier contracts are 
subject to the contract filing requirements set forth in paragraphs 
(a) and (b)(3) of this section. The Commission's list of foreign 
carriers that do not qualify for the presumption that they lack 
market power in particular foreign points is available from the 
International Bureau's World Wide Web site at https://www.fcc.gov/ib. 
The Commission will include on the list of foreign carriers that do 
not qualify for the presumption that they lack market power in 
particular foreign points any foreign carrier that has 50 percent or 
more market share in the international transport or local access 
markets of a foreign point. A party that seeks to remove such a 
carrier from the Commission's list bears the burden of submitting 
information to the Commission sufficient to demonstrate that the 
foreign carrier lacks 50 percent market share in the international 
transport and local access markets on the foreign end of the route 
or that it nevertheless lacks sufficient market power on the foreign 
end of the route to affect competition adversely in the U.S. market. 
A party that seeks to add a carrier to the Commission's list bears 
the burden of submitting information to the Commission sufficient to 
demonstrate that the foreign carrier has 50 percent or more market 
share in the international transport or local access markets on the 
foreign end of the route or that it nevertheless has sufficient 
market power to affect competition adversely in the U.S. market.

PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS

    7. The authority citation for part 64 continues to read as follows:

    Authority: 47 U.S.C. 154, 254(k); secs. 403(b)(2)(B), (c), 
Public Law 104-104, 110 Stat. 56. Interpret or apply 47 U.S.C. 201, 
218, 225, 226, 228, and 254(k) unless otherwise noted.

    8. Section 64.1001 is amended by revising paragraph (a) to read as 
follows:


Sec.  64.1001  Requests to modify international settlements 
arrangements.

    (a) The procedures set forth in this rule apply to carrier requests 
to modify international settlement arrangements on any U.S. 
international route listed on the Commission's ``Exclusion List.'' See 
https://www.fcc.gov/ib/pd/exclusion_list.pdf. Any operating agreement 
or amendment for which a modification request is required to be filed 
cannot become effective until the modification request has been granted 
under paragraph (e) of this section.
* * * * *
    9. Section 64.1002 is amended by revising the introductory text of 
paragraph (a), removing and reserving paragraph (b) and revising 
paragraphs (c) and (d) to read as follows:


Sec.  64.1002  International settlements policy.

    (a) A common carrier that is authorized pursuant to part 63 of this 
chapter to provide facilities-based switched voice service on a U.S. 
international route that is listed on the Commission's ``Exclusion 
List'' (https://www.fcc.gov/ib/pd/exclusion_list.pdf), and that enters 
into an operating or other agreement to provide any such service in 
correspondence with a foreign carrier that does not qualify for the 
presumption that it lacks market power on the foreign end of the route, 
must comply with the following requirements:
* * * * *
    (b) [Reserved].
    (c) A carrier that seeks to exempt from the international 
settlements policy an international route on the ``Exclusion List'' 
must make its request to the International Bureau, accompanied by a 
showing that a U.S. carrier has entered into a benchmark-compliant 
settlement rate agreement with a foreign carrier that possesses market 
power in the country at the foreign end of the U.S. international route 
that is the subject of the request. The required showing shall consist 
of an effective accounting rate modification, filed pursuant to Sec.  
64.1001, that includes a settlement rate that is at or below the 
Commission's benchmark settlement rate adopted for that country in IB 
Docket No. 96-261, Report and Order, 12 FCC Rcd 19,806, 62 FR 45758, 
Aug. 29, 1997, available on the International Bureau's World Wide Web 
site at https://www.fcc.gov/ib.
    (d) A carrier or other party may request Commission intervention on 
any U.S. international route for which competitive problems are alleged 
by filing with the International Bureau a petition, pursuant to this 
section, demonstrating anticompetitive behavior that is harmful to U.S. 
customers. The Commission may also act on its own motion. Carriers and 
other parties filing complaints must support their petitions with 
evidence, including an affidavit and relevant commercial agreements. 
The International Bureau will review complaints on a case-by-case basis 
and take appropriate action on delegated authority pursuant to Sec.  
0.261 of this chapter. Interested parties will have 10 days from the 
date of issuance of a public notice of the petition to file comments or 
oppositions to such petitions and subsequently 7 days for replies. In 
the event significant, immediate harm to the public interest is likely 
to occur that cannot be addressed through post facto remedies, the 
International Bureau may impose temporary requirements on carriers 
authorized pursuant to Sec.  63.18 of this chapter without prejudice to 
its findings on such petitions.
* * * * *
 [FR Doc. 2011-17368 Filed 7-18-11; 8:45 am]
BILLING CODE 6712-01-P