Policies and Rules for Alternative Incentive Based Regulation of Comsat Corporation

FEDERAL COMMUNICATIONS COMMISSION

47 CFR 61

[IB Docket No. 98-60; FCC 98-78]

Policies and Rules for Alternative Incentive Based Regulation of

Comsat Corporation

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Commission has issued a notice of proposed rulemaking to

consider replacing traditional rate of return regulation with an

alternative incentive based regulation plan for Comsat Corporation

(``Comsat'') with respect to Comsat's provision of INTELSAT switched

voice, private line and occasional-use video services to those markets

where the Commission finds it dominant. The Commission believes that

its current rate of return regulation that would be applicable to

Comsat's dominant markets may no longer be an efficient or effective

means of regulating Comsat's rates and may not create adequate

efficiency incentives for Comsat. Therefore, the Commission invites

interested parties to file comments in response to the Commission's

tentative conclusions set forth in the notice of proposed rulemaking

regarding alternative incentive based regulation for Comsat's dominant

markets.

DATES: Interested parties may file comments by May 26, 1998 and reply

comments by June 5, 1998.

ADDRESSES: Office of the Secretary, Federal Communications Commission,

1919 M Street, NW., Washington, D.C. 20554.

FOR FURTHER INFORMATION CONTACT: Daniel Connors, International Bureau,

Satellite Policy Branch, (202) 418-0755; or Kathleen Campbell,

International Bureau, Satellite Policy Branch (202) 418-0753.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice

of Proposed Rulemaking in IB Docket No. 98-60 that is contained in the

Commission's Order and Notice of Proposed Rulemaking; FCC 98-78,

adopted April 24, 1998, and released April 28, 1998. The complete text

of the Order and Notice of Proposed Rulemaking is available for

inspection and copying during normal business hours in the FCC

Reference Center (Room 239), 1919 M Street, NW. Washington, D.C., and

from the Commission's world-wide-web page on the Internet (http://

www.fcc.gov), and also may be purchased from the Commission's copy

contractor, International Transcription Service, (202) 857-3800, 2100 M

Street, NW., Suite 140, Washington, D.C. 20037. Because this Notice of

Proposed Rulemaking contains information collections that affect less

than 10 persons and, therefore, is not subject to the Paperwork

Reduction Act of 1995, Public Law 104-13. As required by section 603 of

the Regulatory Flexibility Act, the Commission has prepared an Initial

Regulatory Flexibility Certification certifying that the proposed rule

will not impact small entities.

1. The Initial Regulatory Flexibility Certification necessary to

comply with the Regulatory Flexibility Act, 5 U.S.C. Sec. 601 et seq.,

is set forth below.

2. The Paperwork Reduction Act does not apply to the rules adopted

herein because such rules apply to less than 10 persons.

Initial Regulatory Flexibility Certification

3. The Regulatory Flexibility Act (``RFA'') requires that an

initial regulatory flexibility analysis be prepared for notice-and-

comment rulemaking proceedings, unless the agency certifies that ``the

rule will not, if promulgated, have a significant economic impact on a

substantial number of small entities.'' U.S.C. Sec. 605(b). The RFA

generally defines ``small entity'' as having the same meaning as the

terms ``small business,'' ``small organization,'' and ``small

governmental jurisdiction.'' Id. Sec. 601(6). In addition, the term

``small business'' has the same meaning as the term ``small business

concern'' under the Small Business Act. Id. Sec. 601(3). A small

business concern is one which: (a) is

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independently owned and operated; (b) is not dominant in its field of

operation; and (c) satisfies any additional criteria established by the

Small Business Administration (``SBA''). See 15 U.S.C. Sec. 632.

4. The Order and Notice of Proposed Rulemaking is an order

reclassifying Comsat as a non-dominant common carrier in certain

INTELSAT markets. The Order and Notice of Proposed Rulemaking contains

a notice of proposed rulemaking (``Notice``) proposing rules that will

apply to Comsat. The Notice indicates that the Commission will consider

replacing the current rate of return regulations applicable to Comsat's

INTELSAT switched voice, private line and occasional-use video services

in the markets, where Comsat continues to be subject to dominant common

carrier regulation, with an alternative form of incentive based

regulation similar to a price cap. The Notice tentatively concludes:

(a) that any alternative incentive based regulation plan that the

Commission adopts for Comsat with respect to its services in dominant

markets remain in effect for an indefinite period of time, rather than

expiring after three years; and (b) that any alternative incentive

based regulation plan that the Commission adopts for Comsat with

respect to its services in dominant markets allow all users of Comsat's

service in dominant markets to benefit from a competitive or

``transaction'' rate rather than the non-discounted tariffed rate that

would result from Comsat's uniform pricing commitment. The Notice

invites Comsat and other interested parties to comment on these

tentative conclusions. If commenters believe that the proposed rules

discussed in the in Notice require additional RFA analysis, they should

include a discussion of this in their comments.

5. The Commission has not developed a definition of small entities

applicable to satellite service licensees. Therefore, the applicable

definition of small entity is the definition under the SBA rules

applicable to Communications Services ``Not Elsewhere Classified.''

This definition provides that a small entity is one with $11 million or

less in annual receipts. 13 CFR Sec. 121.201. The proposed rules will

apply only to Comsat's INTELSAT services in markets where the

Commission finds Comsat dominant. Comsat's 1996 INTELSAT revenues were

in excess of $11 million. Thus, Comsat does not qualify as a small

entity under the SBA's definition. We therefore certify that the

proposed rules in this Notice will not apply to any small entities.

6. The Commission's Office of Public Affairs, Reference Operations

Division, will send a copy of this Notice, including this

certification, to the Chief Counsel for Advocacy of the SBA.

List of Subjects in 47 CFR 61

Satellites.

Federal Communications Commission.

Magalie Roman Salas,

Secretary.

[FR Doc. 98-12406 Filed 5-8-98; 8:45 am]

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