FCC requirements for international carriers Cable landing rights application Classification as dominant or non-dominant Section 214 application Reporting requirements

Cable landing rights Cable landing license act of 1921 Authority delegated to the FCC in 1954 State department approval required Issues considered in decision to grant or deny include security interests of the nation, issues of reciprocity, pricing

Recent decision to expedite process FCC decided to grant streamlined approval (45 days) if following conditions are met: –Applicants with no affiliation with carrier with market power in cable’s destination market –Applicants with affiliation with a market power carrier in a WTO market are eligible if agree to competitive safeguards (file reports and not enter into discriminatory arrangements regarding collocation and access to backhaul)

Dominant versus Non-dominant Status Status is route specific Dominant carriers file tariffs; maintain separate books of account from its foreign affiliate; have to apply for every new circuit with full Section 214 process; file quarterly traffic and revenue reports Non-dominant carriers are relieved of much of this burden; don’t file tariffs, have expedited Section 214 filings, don’t need to file Section 214 applications to add circuits to existing routes

Who is and who isn’t dominant? For US carriers –US carrier with no affiliation with a carrier in a destination country is non-dominant –US carrier with affiliation with a monopoly carrier in a destination country is dominant on that route –US carrier with affiliation with non-monopoly carrier in destination country faces burden of proof “dominant”—50% market share in international transport and local access at the foreign end of the route –If destination country is a WTO member, presumption of non-dominance

Non-US carriers Must specify whether the applicant is a foreign carrier in the country or whether applicant controls a foreign carrier in that country (25% ownership) Must show whether foreign country is WTO member; whether foreign carrier lacks market power in named foreign country; whether foreign country provides Competitive Opportunities for US carriers

Section 214 Filing Extension of lines or discontinuance of service; certificate of public convenience and necessity Notification of secretary of defense, secretary of state, and state governor

Applicant must provide Statement showing how grant of authority will serve the public interest, convenience and necessity Must list –Name of each applicant; ownership percentages –Government or state or territory under which corporation or partnership applicant is organized –Any affiliations with foreign carriers, by country –Category for which authority is sought Global facilities based Global resale

Definition of carrier Facilities-based carrier: holds an ownership, Indefeasible Right of Use (IRU), or leasehold interest in bare capacity in the US end of an international facility, regardless of whether underlying facility is common carrier or private, cable or satellite system Resale carrier: no ownership interests, etc.

Required reports Contracts and concessions Traffic and revenue data divided by service and by whether billed in US or elsewhere (annual) Quarterly traffic data International circuit status report

Foreign ownership restrictions 47 U.S.C. 310 –License ownership restrictions—no broadcast, common carrier or aeronautical en route or aeronautical fixed radio station license-- 310(a) no holding by foreign government 310(b) no holding by alien or foreign corporation 310© exception for amateur radio licenses 310(d) transfer of control of licenses

Foreign corporation? –Any corporation of which an officer or director is an alien or over 20% of capital stock is owned by aliens or foreign corporation –Any corporation directly or indirectly controlled by any other corporation of which any officer or more than 25% of the directors are aliens, or of which more than 25% of capital stock is owned by aliens or foreign corporations.

FCC discretion Individuals and entities from WTO countries –Rebuttable presumption that do not pose competitive concern in US market –If showing of risk, can impose conditions on the individual or entity or can deny license Individuals and entities from non-WTO country –Apply the effective competitive opportunities (ECO) test if entity wishes to exceed 25% limitation