List of Foreign Telecommunications Carriers that Are Presumed to Possess Market Power in Foreign Telecommunications Markets

Federal Communications Commission

DA 04-970

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of

List of Foreign Telecommunications Carriers that

Are Presumed to Possess Market Power in Foreign

Telecommunications Markets

File No. ISP-PDR-20030709-00020

DECLARATORY RULING

Adopted: April 7, 2004

By the Chief, Policy Division, Intemational Bureau

Released: April 8, 2004

1. AT&T Wireless Services, Inc. (AWS)

filed a Petition for Declaratory Ruling requesting that

the Commission amend and correct its "List of foreign Telecommunications Carriers that Are Presumed to

Have Market Power in Foreign Telecommunications Markets"^ to reflect accurately the presence of Cable

&

Wireless pic (C&W)

and its affiliates in various foreign telecommunications markets.^ The Intemational

Bureau placed the AWS Petition on public notice on November 19,2003."* Cable &

Wireless USA, Inc.

(C&W USA)

filed comments that did not oppose AWS's request to amend the Foreign Carriers List and

noted that C&W USA has accepted dominant carrier classification on several routes, including the routes

AWS

listed in its petition. AWS did not reply. As discussed herein, we amend the Foreign Carriers List to

include the C&W

affiliates cited by AWS.

2. Pursuant to the Commission's 1999 ISP Reform Order, the Commission issues a list of carriers

See Public Notice, TJie Intemational Bureau Revises and Reissues the Commission's List of

Foreign Telecommunications Carriers That Are Presumed to Possess Market Power in Foreign

Telecommunications Markets, 18 FCC Red 11073 (Int'l. Bureau 2003), (Foreign Carrier List).

^

AT&T Wireless Services, Inc., Petition for Declaratory Ruling, filed July 9, 2003 (AWS

Petition).

^

Federal Conmiunications Commission, Public Notice, 18 FCC Red 24240 (DA 03-3721,

Noveniber 19, 2003), (Public Notice).

6331

Telecommunications Carriers That Are Presumed to Possess Market Power in Foreign

Telecommunications Markets, 18 FCC Red 11073 (Int'l. Bureau 2003), (Foreign Carrier List).

^

AT&T Wireless Services, Inc., Petition for Declaratory Ruling, filed July 9, 2003 (AWS

Petition).

^

Federal Conmiunications Commission, Public Notice, 18 FCC Red 24240 (DA 03-3721,

Noveniber 19, 2003), (Public Notice).

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Federal Communications Commission

DA 04-970

affiliated with foreign carriers that are presumed to possess market power on a particular overseas route.^

Carriers such as AWS that seek inclusion of a particular foreign carrier in the list must demonstrate that

such 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.®

3. AWS notes that the Commission's current Foreign Carriers List includes some but not all

C&W affiliates that have market power in their respective markets.' AWS asserts that there are C&W

affiliates in 13 coimtries or non-sovereign overseas points that should be added to the list: Based on a

presentation made by C&W, AWS asserts that these affiliates control more than 50 percent of market

share in one or more of the relevant product markets (viz., international transport facilities, intercity

facilities and services, or local access facilities and services on the foreign end) and, thus have market

power in those countries.® These 13 countries (and the C&W affiliate in each country) are Anguilla

(Cable &

Wireless (West Indies) Limited); Ascension Island (Cable &

Wireless (West Indies) Limited);

British Virgin Islands (Cable &

Wireless (West Indies) Limited); Cayman Islands (Cable &

Wireless

(Cayman Islands) Limited); Diego Garcia (C&W); Falkland Islands (Cable &

Wireless Falkland islands);

Fiji (Fiji International Telecommunications Ltd); Guernsey (Cable &

Wireless, Guernsey [formerly

known as Guernsey Telecoms Limited])

d); Ascension Island (Cable &

Wireless (West Indies) Limited);

British Virgin Islands (Cable &

Wireless (West Indies) Limited); Cayman Islands (Cable &

Wireless

(Cayman Islands) Limited); Diego Garcia (C&W); Falkland Islands (Cable &

Wireless Falkland islands);

Fiji (Fiji International Telecommunications Ltd); Guernsey (Cable &

Wireless, Guernsey [formerly

known as Guernsey Telecoms Limited]); Macau (Companhia de Telecommunicapoes de Macau

S.A.R.L.); Monserrat (Cable &

Wireless (West Indies) Limited); St. Helena (C&W); Sakhalin (C&W);

and Turks and Caicos Islands (Cable &

Wireless (West Indies) Limited). AWS notes that, while the

Commission has asserted that it will determine listing on a coimtry-by-country basis,® it has already listed

separate geographic markets that are not sovereign countries.'" For this reason, AWS argues that the

1998 Biennial Regulatory Review—Reform of the International Settlements Policy and

Associated Filing Requirements, IB Docket No. 98-148 and CC Docket No. 90-337, Report and Order and Order

on Reconsideration, 14 FCC Red 7963 (1998) {ISP Reform Order). The most recent revision of the Foreign

Carriers List was adopted in 2003. See Public Notice: The International Bureau Revises and Reissues die

Commission's List of foreign Telecommunications Carriers that Are Presumed to Possess Market Power in Foreign

Telecommunications Markets, DA 03-1812 (Int'l Bur., rel. June 5,2003). The list may be foimd on the

commission's website, www.fcc.gov/ib.

®

See Section 43.51 of the Commission's rules, 47 C.F.R. § 43.51, Note 3 to Section 43.51 (2003).

'

AT&T notes that the Commission's Foreign Carriers List includes the C&W affiliates in Antigua

&

Barbuda, Barbados, Bermuda, Dominica, Grenada, Jamaica, Maldives, Panama, St. Kitts and Nevis, St. Lucia,

St. Vincent and the Grenadines, Seychelles, Solomon Islands, Trinidad &

Tobago, Vanuatu, and Yemen

ee Section 43.51 of the Commission's rules, 47 C.F.R. § 43.51, Note 3 to Section 43.51 (2003).

'

AT&T notes that the Commission's Foreign Carriers List includes the C&W affiliates in Antigua

&

Barbuda, Barbados, Bermuda, Dominica, Grenada, Jamaica, Maldives, Panama, St. Kitts and Nevis, St. Lucia,

St. Vincent and the Grenadines, Seychelles, Solomon Islands, Trinidad &

Tobago, Vanuatu, and Yemen.

8

AWS Petition at 3, note 7, citing Chart: C&W Regional—Principal Businesses, included in

Cable & Wireless Regional Overview Presentation by James Cheesewright, COO of Cable &

Wireless Regional,

dated January 24, 2003. See

http:/7cw.com/servlet/docHandler?flD=E8/E8CB0AC59A9744F498EE353608CBCECB.ppt.

'

See International Competitive Carrier Policies, Report and Order, 102 FCC 2d 812,828

(1985), where the Commission noted that, in evaluating market power in the provision of communications services,

"each country constitutes a separate geographic market." Recon. Denied, 60 Rad. Reg. 2d 1435 (1986).

AWS notes that the Commission has already included on the Foreign Carriers List Bermuda, an

overseas territory of the United Kingdom; Reunion, a French department d'outre mer, Mayotte, a French

collective territoriale; the Netherlands Antilles, a Dutch territory; and Hong Kong, a Special Administrative

Region of the People's Republic of china. AWS Petition at 2.

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Federal Communications Commission

DA 04-970

Commission is free to include the twelve geographic markets it cites, even though one or more of them is

not a sovereign country.

4. AWS cites a number of factors on which it bases its argument that the C&W and/or its

affiliates have market power in the 13 subject markets. First, AWS notes that C&W itself provides

communications in two of the 13 cited markets, Diego Garcia and St. Helena. AWS asserts that C&W is

the de jure monopoly provider of international, domestic and mobile telecommunications and Internet

services in St. Helena, a U.K. overseas territory

which it bases its argument that the C&W and/or its

affiliates have market power in the 13 subject markets. First, AWS notes that C&W itself provides

communications in two of the 13 cited markets, Diego Garcia and St. Helena. AWS asserts that C&W is

the de jure monopoly provider of international, domestic and mobile telecommunications and Internet

services in St. Helena, a U.K. overseas territory. Additionally, AWS argues that C&W is the monopoly

provider of international telecommunications services in Diego Garcia, part of the British Indian Ocean

Territory and therefore a U.K. overseas territory. Next, AWS argues that Cable and Wireless (West

Indies) Limited (C&W West Indies), an indirect wholly-owned subsidiary of C&W,

has a dejure

monopoly for the provision of international, domestic and mobile telecommunications and Intemet

services in three of the cited markets, Anguilla," Ascension Island*^ and Montserrat," and a de facto

monopoly over such services in the Turks and Caicos Island,''' all U.K. overseas territories. Additionally,

AWS asserts that C&W West Indies has a dejure monopoly over international and domestic wireline

telecommimications and Intemet services in the British Virgin Islands,'' also an U.K. overseas territory.

AWS asserts that other C&W affiliates have market power in an additional three U.K. overseas

territories. AWS asserts that Cable &

Wireless (Cayman islands), an indirect wholly-owned subsidiary

of C&W is the de jure monopoly provider of international, domestic and mobile telecommimications and

Intemet services in the Cayman Islands;" that Cable &

Wireless Falkland Islands, a branch office of

C&W,

is the monopoly provider of international, domestic and mobile telecommunications and Intemet

services in the Falklands;" that Cable &

Wireless Guemsey'® is the dominant provider of intemational,

domestic and mobile telecommunications and Intemet services in the Bailiwick of Guemsey."

5. In addition to the overseas U.K

an Islands;" that Cable &

Wireless Falkland Islands, a branch office of

C&W,

is the monopoly provider of international, domestic and mobile telecommunications and Intemet

services in the Falklands;" that Cable &

Wireless Guemsey'® is the dominant provider of intemational,

domestic and mobile telecommunications and Intemet services in the Bailiwick of Guemsey."

5. In addition to the overseas U.K. points, AWS argues that C&W has market power in a

number of other points. AWS asserts that C&W indirectly owns 49 percent of Fiji Intemational

Telecommunications Ltd (FINTEL), the dejure monopoly provider of intemational telecommunications

AWS

Petition at 3.

12

13

M

15

16

17

18

Limited, until May 2002, when C&W bought 100 percent of the shares from the State of Guernsey (the name of the

government of the Bailiwick of Guernsey, a British Crown dependency), and renamed it in September 2002. Id.

"

AWS notes that the State of Guernsey opened Guernsey telecommunications services market to

conqjetition in July 2002, and the network market in December 2002, but the Guernsey regulator, the Guernsey

Office of Utility Regulation, continues to regulate Cable and Wireless Guernsey as dominant in fixed and mobile

telecommunications due to its "commanding market share in Guernsey." AWS Petition at 7.

Id. at 4.

Id. at 8.

Id. at 10.

Id. at 4.

Id. at 5.

Id. at 6.

Id. at?. .

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Federal Communications Commission

DA 04-970

services in Fiji.^'' AWS also asserts that C&W indirectly owns 51 percent of Companhia de

Telecommunica96es de Macau S.A.R.L.(CTM), the dejure monopoly provider of international and

domestic wireline telecommunications services in Macau, a Special Administrative Region of the

People's Republic of China. In fact, AWS asserts that CTM holds a monopoly on all fixed-line services

in Macau until 2011

0

services in Fiji.^'' AWS also asserts that C&W indirectly owns 51 percent of Companhia de

Telecommunica96es de Macau S.A.R.L.(CTM), the dejure monopoly provider of international and

domestic wireline telecommunications services in Macau, a Special Administrative Region of the

People's Republic of China. In fact, AWS asserts that CTM holds a monopoly on all fixed-line services

in Macau until 2011. Finally, AWS asserts that C&W holds "substantial interests" in two carriers in

Saldialin, a unit of the Far Eastern Federal District of the Russian Republic,^' which AWS notes that the

Commission has already treated as a "distinct geographic market for purposes of [its] market [power

analysis."^^ First, AWS asserts that C&W indirectly owns 60 percent of the shares of Sakhalin Telecom,

the principal provider of international telecommunications services and a provider of domestic

telecommunications services in Sakhalin.^' Additionally, AWS asserts that C&W indirectly owns 38

percent of Sakhalin Svyaz, the incumbent domestic telecommunications carrier in Sakhalin, that controls

the Sakhalin public switched telephone network and also provides intemational telecommunications

services.^" AWS argues that the C&W interests shown above give it control of more than 50 percent of

the telecommunications in all 13 of the cited markets and that C&W thus qualifies for inclusion on the

Commission's Foreign Carriers List.

6. In addition to these amendments, AWS asks the Commission to correct its Foreign Carrier

List to update the name of the C&W affiliates in seven geographical markets already included in that

List

interests shown above give it control of more than 50 percent of

the telecommunications in all 13 of the cited markets and that C&W thus qualifies for inclusion on the

Commission's Foreign Carriers List.

6. In addition to these amendments, AWS asks the Commission to correct its Foreign Carrier

List to update the name of the C&W affiliates in seven geographical markets already included in that

List. First, AWS notes that the name of the C&W affiliate in Antigua and Barbuda, of which C&W

indirectly owns ICQ percent of the stock, has been changed to Cable and Wireless (West Indies)

Limited.^^ Second, AWS notes that the C&W affiliate in Dominica, previously known as

Telecommunications of Dominica, of which C&W owns 80 percent of the stock, was renamed Cable &

Wireless Dominica Limited in 1997.^^ Third, AWS notes that the C&W affiliate in Grenada, previously

known as Grenada Telecommunications, was renamed Cable &

Wireless Dominica, a company of which

C&W owns 70 percent of the stock.^^ Fourth, AWS notes that, on June 5, 1997, C&W acquired a 49-

percent interest in Instituto Nacional de Telecommunicaciones, S.A., the carrier in Panama, and renamed

it Cable &

Wireless Panama S.A. Fifth, AWS notes that C&W indirectly owns 65 percent of the shares

of the carrier in St. Kitts and Nevis, which is now named Cable &Wireless St. Kitts and Nevis Limited.

Sixth, AWS noted that C&W indirectly owns 100 percent of the shares of the carrier in St. Lucia and that

AWS

Petition at 6.

Id. at 9.

Id., quoting Cable & Wireless, Inc., Order, Authorization &

Certificate, DA-98-628, 13 FCC

Red 6671, 6673, para. 9

(Infl Bur, 1998) {C&WSakhalin Order).

AWS

Petition at 9.

Id. AWS further asserts that the Commission has already determined that C&W's affiliates in

Sakhalin collectively control approximately 70 percent of Sakhalin's intemational telecommunications, citing

C&W Sakhalin Order, 13 FCC Red at 6673, paras. 8-9

ess, Inc., Order, Authorization &

Certificate, DA-98-628, 13 FCC

Red 6671, 6673, para. 9

(Infl Bur, 1998) {C&WSakhalin Order).

AWS

Petition at 9.

Id. AWS further asserts that the Commission has already determined that C&W's affiliates in

Sakhalin collectively control approximately 70 percent of Sakhalin's intemational telecommunications, citing

C&W Sakhalin Order, 13 FCC Red at 6673, paras. 8-9. AWS states that "to AWS's knowledge, Sakhalin Telecom

and Sakhalin Svyaz have retained comparable market shares ...." AWS Petition at 9.

25

26

27

AWS

Petition at 11.

Id.

Id.

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Federal Communications Commission

DA 04-970

it is now named Cable &

Wireless (West Indies) Limited. Finally, AWS notes that C&W indirectly owns

100 percent of the shares of the carrier in St. Vincent and the Grenadines and that it is now named Cable

&

Wireless (West Indies) Limited.

7. In its comments, C&W USA notes that it has already accepted dominant carrier classification

on several routes, including all those listed in the AWS Petition.^® C&W USA further notes that it will

continue to abide by the Commission's regulations regarding foreign carrier affiliation and dominant

carrier classification.^® C&W USA, however, challenges what it construes as AWS's contention that

C&W's characterization of some of the cited markets as "competitive" is misleading. C&W USA states

that the purpose of C&W presentation cited by AWS was to show the degree of liberalization in markets

where C&W has an affiliate. C&W USA argues that it is not misleading to label markets that have

introduced some degree of liberalization as "competitive."^" C&W USA also states that in a few cases

AWS

did not cite the correct name for the C&W affiliate

"competitive" is misleading. C&W USA states

that the purpose of C&W presentation cited by AWS was to show the degree of liberalization in markets

where C&W has an affiliate. C&W USA argues that it is not misleading to label markets that have

introduced some degree of liberalization as "competitive."^" C&W USA also states that in a few cases

AWS

did not cite the correct name for the C&W affiliate. C&W USA states that the correct name for the

C&W affiliate in Ascension Island is Cable &

Wireless pic Branch, the name of the affiliate in Diego

Garcia is Cable &

Wireless pic Branch, the name of the affiliate in the Falkland Islands is Cable &

Wireless pic Branch, the name of the affiliate in Fiji is Fiji International Telecommunications Limited,

the name of the affiliate in Sakhalin is Sakhalin Telecom Limited, the name of the affiliate in St. Helena

is Cable &

Wireless pic Branch, and the name of the affiliate in St. Kitts and Nevis is Cable &

Wireless

St. Kitts &

Nevis Limited.

8. Because C&W USA does not challenge AWS's assertion that the Cable &

Wireless affiliates

in the 13 cited markets have market power, we agree that we should amend the Commission's Foreign

Carrier List to add those entities. Further, we agree with both AWS and C&W USA that we should

amend the Foreign Carrier List to list the correct current name of the C&W affiliate in the markets cited

by AWS. Accordingly, we shall amend the Foreign Carrier List, relying upon the list of C&W affiliates

C&W USA included in its Comments as Attachment A and Set forth as an attachment to this Order.

9. Accordingly, IT IS ORDERED that the Commission's Foreign Carrier List is amended to

include the names of the C&W affiliates listed in the Attachment to this Order.

Federal Communications Commission

Janies L. Ball,

CMief, Policy Division

International Bureau

C&W USA Comments at 1.

"

Id.

Id. at 2.

6335

C&W USA included in its Comments as Attachment A and Set forth as an attachment to this Order.

9. Accordingly, IT IS ORDERED that the Commission's Foreign Carrier List is amended to

include the names of the C&W affiliates listed in the Attachment to this Order.

Federal Communications Commission

Janies L. Ball,

CMief, Policy Division

International Bureau

C&W USA Comments at 1.

"

Id.

Id. at 2.

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Federal Communications Commission

DA 04-970

ATTACHMENT

Destination Market

Anguilla

Antigua and Barbuda

Ascension Island

British Virgin Islands

Cayman Islands

Diego Garcia

Dominica

Falkland Islands

Fiji

Grenada

Guernsey

Macau

Montserrat

Panama

Sakhalin

St. Helena

St. Kitts and Nevis

St. Lucia

St. Vincent and the Grenadines

Turks and Caicos

Name of Affiliated Carrier

Cable and Wireless (West Indies) Limited

Cable and Wireless (West Indies) Limited

Cable &

Wireless pic Branch

Cable and Wireless (West Indies) Limited

Cable &

Wireless (Cayman Islands) Limited

'Cable and Wireless pic Branch

Cable &

Wireless Dominica Limited

Cable and Wireless pic Branch

Fiji International Telecommunications Limited

Cable &

Wireless Grenada Limited

Cable and Wireless Guernsey Ltd

Companhia de Telecomunicacoes de Macau S.A.R.L.

Cable and Wireless (West Indies) Limited

Cable &

Wireless Panama S.A.

Sakhalin Telecom Limited

Cable and Wireless pic Branch

Cable& Wireless St. Kitts &

Nevis Limited

Cable and Wireless (West Indies) Limited

Cable and Wireless (West Indies) Limited

Cable and Wireless (West Indies) Limited

6336