FCC 95-498 Federal Communications Commission Record 11 FCC Red No. 4 
Before the 
Federal Communications Commission 
Washington, D.C. 20554 
In the Matter 
SPRINT CORPORATION 
Petition for Declaratory Ruling I-S-P-95-002 
Concerning Section 310(b)(4) and (d) and 
the Public Interest Requirements of the 
Communications Act of 1934, as amended 
DECLARATORY RULING AND ORDER 
Adopted: December 15, 1995; Released: January 11, 1996 
By the Commission: Commissioner Chong approving in 
part and concurring in part; Commissioners Quello, Bar­
rett, Ness and Chong issuing separate statements. 
Table of Contents 
I. INTRODUCTION 
II. BACKGROUND 
III. COMMENTS 
IV. DISCUSSION 
A. Section 310(d) Transfer of Control 
B. Public Interest Analysis 
1. Applicability of the Foreign Carrier 
Paragraphs 
1 
6 
15 
20 
Entry Decision 31 
2. Effective Competitive Opportunities 
Analysis Under Section 214 35 
3. Effective Competitive Opportunities 
Analysis Under Section 310(b)(4) 47 
4. Competitive Concerns 51 
5. Countervailing Factors 61 
a. Liberalization Developments in 
France and Germany 62 
b. Effects on Competition in U.S. Mar-
kets 77 
c. Other Public Interest Factors 89 
6. Conditions and Safeguards 96 
V. CONCLUSION 134 
VI. ORDERING CLAUSES 138 
1 Su Mar~t Emry and RtgulatWn of Follign-affiliattd Emitits, 
Rtport and Order, FCC 95-475 (Nov. 2R, IQQ5) (Foreign Carritr 
EnJry Ordtr). 
1850 
I. INTRODUCTION 
1. In this declaratory ruling and order, we grant, subject 
to certain conditions, Sprint's requests for rulings that the 
proposed alien ownership in Sprint of up to 28 percent is 
not on baJance inconsistent with Section 310(b)(4) of the 
Communications Act (Act), and that the proposed transac­
tion is not otherwise inconsistent with the public interest. 
We also find that 10 percent equity investments each by 
France Telecom (FT) and Deutsche Telekom (DT) in 
Sprint do not result in a transfer of control of Sprint to FT 
and DT and thus do not require prior Commission ap­
proval under Section 310(d) of the Act. 
2. In our recently adopted Foreign Carrier Emry Order, 
we stated that we would evaluate, as an important part of 
our overall public interest analysis under Sections 214 and 
31 O(b )( 4), whether effective competitive opportunities exist 
for U.S. entities in relevant foreign markets.1 France and 
Germany do not now offer effective competitive opportu­
nities to U.S. carriers. FT and DT are monopoly providers 
of basic international telecommunications facilities in these 
countries. Nonetheless, two other important public interest 
factors weigh in favor of granting the petition: (1) the 
current and planned liberalization of the French and Ger­
man telecommunications mar.kets; and (2) the competitive 
benefits for the U.S. telecommunications markets of the FT 
and DT investment in Sprint. 
3. A critical component of our decision is our conclu­
sion that the French and German Governments are com­
mitted to full competition in their telecommunications 
markets, in which U.S. companies will be allowed to par­
ticipate. Since our notice of proposed rulemaking (NPRM) 
on foreign carrier entry was adopted in February 1995, and 
following di~ussions with Commission representatives, 
both the French and German Governments have an­
nounced and begun to implement wide-ranging liberaliza­
tion plans. Moreover, they have committed. in letters from 
senior government representatives filed with the Commis­
sion, to open their telecommunications services and infra­
structure markets to limited competition by July 1996 and 
full competition by January l, 1998. While we do not 
doubt the good faith of these commitments, to protect U.S. 
interests, we find that this transaction is in the public 
interest only if Sprint and the parties' Joint Venture com­
ply with certain strict conditions. These conditions address 
( 1) the potential for FT and DT to use their current de jure 
and de facto monopoly market power to engage in 
anticompetitive conduct because of their financial interests 
in Sprint and the carriers' joint venture and (2) the pos­
sibility that the telecommunications liberalization to which 
France and Germany have committed may not occur on 
the anticipated schedule. 
4. First, Sprint is regulated as a dominant carrier on the 
U.S.-France and U.S.-Germany routes and will continue to 
be so regulated until we find that there is no substantial 
risk of anticompetitive effects in the U.S. international 
services market from Sprint's affiliation with FT and DT. 
Second, we will not allow Sprint to operate newly acquired 
circuits on the U.S.-France and U.S.-Germany routes until 
France and Germany have liberalized two important mar­
kets: alternative infrastructure for already liberalized ser­
vices (which include most non-public voice services) and 
11 FCC Red No. 4 Federal Communications Commission Record FCC 95-498 
basic switched voice resale. Third, Sprint must comply with 
nondiscrimination and reporting requirements. Fourth, 
Sprint must obtain a commitment from FT to lower its 
accounting rate with U.S. carriers to the same range as the 
U.S.-U.K. and U.S.-Germany accounting rates in the near 
future and in no event later than two years from the 
effective date of this Order. Finally, Sprint must report by 
March 31, 1998 whether the anticipated liberalization has 
occurred. If we find it has not, we will take further action, 
including designating for hearing the issue of whether the 
public interest would no longer be served by Sprint's hold­
ing of Section 214 facilities authorizations on the 
U.S.-France and U .S.-Germany routes. 
5. We note that the Department of Justice (Justice De­
partment) has conducted its own review of this transaction 
under its antitrust enforcement responsibilities. The con­
ditions and requirements we impose here reflect our 
broader mandate to protect the public interest and welfare 
of U.S. consumers. So long as the parties comply with 
these conditions and requirements in conjunctio n with this 
transaction, we find that this transaction is in the public 
interest. 
II.BACKGROUND 
6. On October 14, 1994, Sprint Corporation (Sprint) 
filed a petition for declaratory ruling regarding the pro­
posed equity investments by FT and DT in Sprint and the 
proposed joint venture among the three carriers.2 First, 
Sprint seeks a ruling that the investments by FT and OT do 
not result in a transfer of control of Sprint and that prior 
Commission approval thus is not required under Section · 
310(d) of the Act of 1934.3 Second, Sprint requests a ruling 
that alien ownership in Sprint of up to 28 percent, as part 
of the proposed transaction. is not inconsistent with Sec­
tion 310(b)(4) of the Act. Finally, Sprint seeks a ruling that 
the proposed transaction is otherwise consistent with the 
public interest. 
7. Sprint is a publicly-traded U.S. corporation that owns 
or controls subsidiaries that hold domestic common carrier 
microwave licenses, international facility authorizations. ca­
ble landing licenses. and other Commission licenses and 
authorizations .~ Sprint conducts its business through subsid­
iaries. Sprint's long distance subsidiary is the third largest 
U.S. carrier of long distance services, providing voice, data 
and video services over a nationwide digital. fiber optic 
network. Its international services are provided primarily 
via submarine cable systems and satellite facilities . In addi-
2 Sprint Petition for Declaratory Ruling Concerning Sections 
3 IO(b)(4) and (d) and the Public Interest Requirements of the 
Communications Act of ·1934. as Amended. l-S-P-95-002 (filed 
Oct. 14, 19Q4) (Sprint Petition). 
3 Sprint does not seek prior Commission approval of the 
transaction under Section 214 of the Communications Act or 
the Submarine Cable Act. 47 U.S.C. § 34. Sprint sta tes that such 
approval is not required because there is no change in owner­
ship of Section 214 certificates and cable landing licenses held 
by Sprint's subsidiarie$. See Sprint Petition at 2. n. I. 
• All references to Sprint. the Joint Venture. FT. and OT in 
this Order include their respective officers. directors. and em­
ployees, as well as any affiliated companies and their officers, 
directors and employees. 
s The parties agreed that the amount of the proposed invest· 
ment will be reduced to reflect Sprint's loss of assets should it 
divest its U.S. cellular operations. 
1851 
tion, Sprint's subsidiaries provide local telephone and cel­
lular services. Through an affiliate, Sprint 
Telecommunications Venture (STY), Sprint also is a sig­
nificant partner in WirelessCo, a major licensee of 
broadband personal communications services (PCS). 
8. FT is the de jure monopoly service provider in France 
of local, long distance and international public switched 
services, and of terrestrial infrastructure for the provision 
of telecommunications services to the public. It also offers 
a range of other telecommunications products and services, 
including private line circuits and cellular services. FT is 
100 percent owned by the French government, and is 
subject to regulation by the French Directorate General of 
Posts and Telecommunications (DGPT). 
9. Similarly, OT is the de jure monopoly service pro­
vider in Germany of local, long distance and international 
public switched services. DT also offers, among other tele­
communications products and services, private line circuits 
and cellular services. It is the monopoly provider of terres­
trial infrastructure for the provision of telecommunications 
services to the public. DT is 100 percent owned by the 
German government, and is subject to regulation by the 
German Federal Ministry for Posts and Telecommunica­
tions (BMPT). 
10. On June 14, 1995, Sprint, FT and DT announced a 
global alliance, which involves FT and DT each acquiring 
up to 10 percent of the voting equity in Sprint. The cost of 
these investments would be based on a complex formula 
designed to anticipate the possible divestment of Sprint's 
U.S. cellular operat ions, and fluctuations in Sprint's public 
stock price. Under this formula, the investment price could 
vary from approximately S3.5 to $4.2 billio~.s The global 
partnership among Sprint, FT and OT also involves the 
creation of "Joint Venture Company" (Joint Venture), an 
alliance to provide enhanced and certain basic telecom­
munications services to multinational corporate and busi­
ness customers on a global basis. These services inctude: (l) 
international data, voice and video; (2) international card­
based services for travellers: and (3) international transport 
services for other carriers. 
11. On July 28, 1995, Sprint filed the final agreements of 
the parties with the Commission." Pursuant to these agree­
ments", the Joint Venture will be run by a Global Partner­
ship Board. Each party will have three equal votes on the 
Board, which will oversee two operating groups, each fo­
cused on specific geographic territories or activities. In 
addition, the parties will create a Global Backbone Net­
work to carry the Joint Venture's services. The Global 
6 Sprint filed it~ Memorandum of Understanding (MOU) with 
FT and OT with its petition for declaratory ruling. See Sprint 
Peiition. Exhibit I. The MOU is superseded by the final agree­
ments of the parties, which include: (i) the Investment Agree­
ment: (ii) the Stockholders' Agreement; (iii) the Joint Venture 
Agreement: (iv) the Standstill Agreement; (v) the Proposed 
Amendments to Sprint's Bylaws: and (vi) the Certificate of 
Amendment to Sprint's Articles of Incorporation. The final 
agreements differ from the MOU in several ways. Most notably, 
the Investment Agreement creates a series of contingencies for 
the pricing and timing of the investment. which will be com­
pleted in one transaction instead of two equal tranches. as 
originally planned. In addition, the final agreements reflect the 
possibility that Sprint will divest its cellular assets. 
_________________ .......... 
FCC 95-498 Federal Communications Commission Record 11 FCC Red No. 4 
Backbone Network will be owned 50 percent by Sprint and 
50 percent by FT and DT through a joint venture between 
FT and DT alone, known as Atlas. In the near term, 
Global Backbone Network functions will be performed by 
two Regional Operating Groups. The operating group serv­
ing Europe (excluding France and Germany), the Rest of 
Europe Group (ROE Group), will be owned one-third by 
Sprint and two-thirds by FT and DT. The unit for 
worldwide activities outside the United States and Europe, 
the Rest of the World Group (ROW Group), will be 50 
percent owned by Sprint and 50 percent owned by FT and 
DT through Atlas. Each carrier will be the sole service 
provider of the Joint Venture's services within its home 
territory. The interests of FT and DT in the Joint Venture 
are expected to be managed by Atlas. 
12. The Atlas joint venture, together with FT's and DT's 
global alliance with Sprint (known as "Phoenix"), are cur­
rently under review by the Directorate General IV (DG 
IV) of the European Commission. DG IV has jurisdiction 
in the European Union to enforce E.U. competition laws. 
On October 18, 1995, DG IV issued a press release stating 
that the French and German Governments had made cer­
tain liberalization commitments which adequately address 
DG IV's competitive concerns about the transaction.7 In 
addition, FT and OT have agreed that their public switched 
data networks, Transpac and Datex-P, respectively. will re­
main separate from Atlas until 1998. The parties anticipate 
that, given this agreement, the European Commission will 
issue a public notice in the near futu re stating its intention 
to approve formally the transaction in mid-1996.8 Based on 
these developments, the parties intend to close their trans­
action in early 1996. 
13. On July 13, 1995, the Justice_ Department filed a civil 
antitrust complaint under Section 15 of the Clayton Act, 
alleging that the proposed total of 20 percent investment by 
FT and OT in Sprint and the formation of the Joint 
Venture would violate Section 7 of the Clayton Act." The 
Justice Department and the defendants (Sprint and the 
1 See "Atlas-Phoenix: Clearance Possible by Mid-19%." Press 
Release By the European Commission (Oct. 18. 1995). 
8 Letter from John R. Hoffman. Sprint. to Scott Blake Harris. 
Chief, International Bureau (filed Oct. 27. 1995). This notice 
has since been published by the European Commission. Su 
Notice pursuant to Article (19)(3) of Council Regulation No. 17 
and Article 3 of Protocol 21 of the European Economic Area 
Agreement concerning a request for negative clearace or an 
exemption pursuant to Article 85 (3) of the EC Treaty and 
Article 53(3) of the EEA Treaty. Case IV/35.617-Phoenix, 95/C 
337/03 (Dec. 15. 1995). 
9 U.S. v. Sprint Corporation and Joint Venture Company. Civil 
Action No. 95-1304 (D.D.C. filed July 13, 1995): U.S. v. Sprint 
Corporation and Joint Venture Co.; Proposed Final Judgment 
and Competitive Impact Statement, 60 Fed. Reg. 4.io49 ( 1995) 
(Proposed Final Judgment and Competitive Impact Statement). 
For further discussion, see infra , 101. 
IO See U.S. v. MCI CommWlicalions Corp. and BT Forty-Eight 
Co. (NEWCO), Case No. 1:94 CV01317 (0.0.C. filed June 15. 
1994). 
11 Phase II provides, among other things, that Sprint and the 
Joint Venture shall not: (I) provide service in the United States 
that requires use of. FT or OT services or facilities unless 
certain information (e.g., prices and terms of interconnection) is 
reported; (2) receive from FT or OT any non-public proprietary 
information about other carriers; and (3) offer services between 
the United States and France and Germany unless at least one 
other U.S. carrier is authorized or licensed to provide such 
services. See Proposed Final Judgment, 60 Fed. Reg. at .W051-53. 
1852 
Joint Venture), however, have stipulated to the entry of a 
proposed Final Judgment which the Justice Department 
believes · provides an adequate remedy to the antitrust con­
cerns posed by the transaction. The Justice Department has 
concluded that a series of conditions and safeguards, im­
posed in two phases, are sufficient. Section II, which im­
poses many of the same disclosure and confidentialit~ 
requirements set forth in the MCI/BT Final Judgment, 1 
would become effective upon the entry of the Final Judg­
ment and remain in effect for five years after the con­
ditions for the expiration of Section III have been 
satisfied.11 Section III establishes certain operating and dis­
closure requirements and would remain in effect from the 
entry of the Final Judgment until.all prohibitions on com­
petition have been removed and one or more new competi­
tors have been licensed in France and Germany.'2 The 
proposed Final Judgment is subject to approval by the U.S. 
District Court for the District of Columbia. 
14. As in the MCI/BT proceeding,t3 we note that the 
Final Judgment and the accompanying explanatory text of 
the Competitive Impact Statement (CIS) address many of 
our concerns about the potential for discrimination and 
anticompetitive abuse of foreign market power by 
monopoly foreign carriers. 14 Indeed, much of the Final 
Judgment's underlying rationale, as set forth in the CIS, 
echoes this Commission's policy goals, current competitive 
safeguards, and new conditions being imposed in this Or­
der. As the Commission recognized nearly thirty years ago, 
however, "the standards governing [the Justice Department) 
and the action of the Commission are significantly dif­
ferent. The Antitrust Division is charged with the enforce­
ment of the antitrust laws ... , while the Commission is 
charged with effectuating the policies of the Communica­
tions Act." 15 Our responsibilities under the Communica­
tions Act are broader than those of the antitrust enforce-
12 For example, Sprint and the Joint Venture may not: (I) 
own an interest in any FT or OT monopoly facilities or public 
data networks: (2) sell FT or OT monopoly services unless 
other U.S. carriers can obtain them directly from FT or OT; (3) 
accept FT or OT services on a discriminatory basis: (4) benefit 
rrom discounts offered by FT or OT conditioned upon selection 
of Sprint as the U.S. carrier: (5) accept correspondent traffic 
from FT or OT except consistent with this Commission's pro­
portionate return policies; {b) receive subsidies from FT or OT 
monopoly services: or (7) provide FT or OT data services in the 
United States unless FT and OT continue to offer a standard­
ized interface to other carriers. See Proposed Final Judgment, 60 
Fed. Reg. at 44053-55. · 
l3 MCI CommWlications, lncJBritish Ttlecommwiications, Plc., 
9 FCC Red 3960 (1994) (MCI/BT). . 
1 ~ In the Foreign Carrier Entry proceeding, we defined the term 
"foreign market power" as the ability to act anticompetitively 
against unaffiliated U.S. carriers through the control of bot­
tleneck services or facilities on the foreign end. See Foreign 
Carrier Entry Order at , 116. 
15 ABC Cos. Inc., 7 F.C.C.2d 2-'5. 249 ( 1%6): U.S. v. FCC, 652 
F.2d 72, 88 (citations omitted); accord, Town of Concord v. 
Boston Edison Co., 915 F.2d 17, 22 (1st Cir. 1990), cert. denied, 
499 U.S. 391 (1991): U.S. v. AT&T, 498 F. Supp. 353, 364 
(0.0.C. 1980); see also Northeast Utilities Service Co. v. FERC, 
933 F.2d 937, 947-48 (!st Cir. 1993). 
11 FCC Red No. 4 Federal Communications Commwion Record FCC 95-498 
. 
ment agencies, for we are "entrusted with the responsibility 
to determine when and to what extent the public interest 
would be served by competition in the industry." 16 
Ill. COMMENTS 
15. We placed Sprint's petition on public notice.17 AT&T 
Corp. (AT&T), ACC Global Corp. (ACC), and MFS Inter­
national, Inc. (MFSI) fi led oppositions. BT North America 
Inc. (BT NA) and MCI Telecommun ications (MCI) filed 
comments which generally oppose the petition. AirTouch 
Communications (AirTouch) filed comments in support of 
Sprint's petition. ACC, AT&T, BT NA and Sprint filed 
reply comments. C. Fred Bergsten, the German Association 
of Private Telecommu nications Operators (APTO), Interna­
tional Brotherhood of E lectrical Workers (IBEW), and the 
Information Technology Industry Council (ITI) filed ex 
parte letters. 
16. We also placed the final agreements and related 
documents on public notice.18 AT&T, Esprit U.K. (Esprit) 
and MCI filed oppositions. BTNA, Communications Work­
ers of America/IBEW (CWNIBEW) and MFSI filed com­
ments. ACC, AT&T, DT, Esprit, FT, and Spr int filed reply 
comments. In addition, the French and German Govern­
ments filed ex parte letters. ACC. AT&T, BT NA, the U.K.'s 
Office of Telecommunications (OFTEL), U.S. Senator Bob 
Dole, and WorldCom, Inc. (WorldCom) also filed ex parte 
submissions. 
17. Only AT&T argues that the terms and conditions of 
the Memorandum of Understanding (subsequently incor­
porated in the final agreements of the parties, including the 
Joint Venture and Investment Agreements) results in a 
transfer of control of Sprintto FT and DT under Section 
310(d) of the Act. 19 Generally, the commenters maintain 
that the proposed transaction raises conce rns about poten­
tial d iscrimination (e.g.,leveraging of foreign market power) 
and asymmetrical market access in France and Germany. 
and the potential for exclusive dealing in enhanced and 
basic services through the Joint Venture. 
18. AT&T, BTNA and CWNIBEW maintain that the 
transaction is not in the public interest under Section 
310(b)(4) until France and Germany offer effective market 
access to U.S. carriers.zo ACC states that the Commission 
should not grant Sprint's petition until, among other 
things. France and Germany permit the resale of interna­
tional private lines for the provision of public switched 
·services. Esprit opposes approval of Sprint's petition before 
t6 U.S. v. FCC, 652 F.2d at 88. 
17 Report No. 1-7054 (Oct. 19, 1994). 
18 The August 4, 1995 public notice requested comment on 
"developments since the original pleading cycle ... and/or 
issues which arise from differences between the parties· memo­
randum or understanding and the final agreements and docu­
ments." Report No. 1-8084 (Aug. 4. 1995). 
19 AT&T Opposition at 18-23 (filed Nov. 18, 1994). 
20 AT&T Supplemental Opposition at 17-30 (filed Sep. I, 
1995): BTNA Supplemental Comments at 8-12 (filed Sep. I, 
1995): CWA/IBEW Comments at o-8 (filed August 30. 1995). 
21 Esprit Opposition at 4-7 (filed Sep. I. 1995). 
22 MFSI Comments at 6-7 (filed Sep. I, 1995). 
23 Letter from Don Cruickshank, Director General, OFTEL, to 
Reed E. Hundt. Chairman. Federal Communications Commis­
sion (filed Dec. 2, 1995). 
24 Letter from Robert S. Koppel, Vice President. International 
.switched voice telephony competition is introduced in 
France and Germany, and independent regulatory bodies 
are established that can and will effectively enforce regula­
tions to protect against anticompetitive conduct.21 MFSI 
states that it does not oppose u ltimate approval of the 
transaction if adequate safeguards are in place and comreti ­
tion is sufficiently deve loped in France and Germany.2 
1853 
19. OFTEL expresses concern about the lack of indepen­
dent regulatory authorities in France and Germany to 
ensure that the alliance among Sprint, FT and DT does not 
resu lt in discriminatory behavior against other market par­
ticipants.23 WorldCom states that developments in France 
and Germany require the imposition of certain conditions 
to safeguard against discrimination and u nreasonable prac­
tices by FT and DT.24 AT&T adds that, unlike the equity 
investment by FT and DT in Sprint, the Joint Venture 
should be approved by the Commission with appropriate 
conditions. These conditions include certain operating and 
disclosu re requirements, in addition to those imposed in 
the MCUBT proceeding, together with the requirement that 
FT and DT set cost-based accounting rates with U.S. car­
riers .25 
IV. DISCUSSION 
A. Section 3 / 0(d) Transfer of Control 
20. Sprint seeks a declaratory ruling that the proposed 
investments will not result in a transfer of control of 
Sprint's licenses to FT and DT under Section 3 lO{d) of the 
Act.26 According to Commission precedent. whether an 
entity holding a minority stock interest controls a corpora­
tion primarily depends on whether the minority 
shareholder has the ~ower to "dominate" the management 
of corporate affairs. 7 A minority shareholder does not 
control a corporation unless it exercises influence to a 
degree that "determines" the company's policies and oper­
ations, or "dominates" the company's corporate affairs. 
Thus, the facts of a particular situation (e.g., who has the 
power to direct the company·s operations. who determines 
the make-up of the Board of Directors), are relevant to 
determining who controls the company.~8 
21. Pursuant to the final agreements. FT and DT will 
each acquire up to a 10 percent equity interest in Sprint by 
purchasing a new class of Sprint common stock (Class A). 
The total purchase will yield approximately 86.2 million 
Regulatory Affairs. WorldCom, to Willia.m F. Caton. Acting 
Secretary. Federal Communications Commission (filed Nov. 28. 
1995). 
25 AT&T Supplemental Opposition at 31-38. 26 Section 310(d) provides. in pertinent part. that "lnlo ... 
station license, or any rights thereunder. shall be transferred, 
assigned or disposed or in any manner . . .. or by transfer or 
control or any corporation holding such permit or license. to 
any person except upon application 10 the Commission and 
upon finding by the Commission that the public interest, con­
venience. and necessity will be served thereby." 47 U.S.C. § 
3 IO(d). 
27 Be11jami11 L . Dubb, 16 F.C.C. 27~. 28Q (11151). 
ze Metromedia, Inc., 98 F.C.C.2d 299. 306 ( 11184). 
---------------------
FCC 95-498 Federal Communications Commission Record 11 FCC Red No. 4 
shares of Sprint Class A common stock. FT and OT each 
will own approximately 10 percent of the resulting total of 
Sprint common stock. 
22. Sprint is now controlled by its public shareholders 
through a 15-member Board of Directors. Under the pro­
posed transaction, FT and DT would be able to designate 
up to three Board members.29 Thus, a 20 percent equity 
interest would translate into 20 percent representation on 
the Board.30 A majority of the 15 di rectors must satisfy 
certain specified criteria as independent directors.31 Because 
Sprint's public shareholders will maintain the majority 
voting interest in Sprint and will elect 80 percent of the 
Board (the Sprint and Independent Directors), FT's and 
DT's directors will remain a minority. Sprint will continue 
to conduct business by a simple majority vote on all mat­
ters considered by the Board. 
23. In our MCI/BT Order, we found that the acquisition 
of a 20 percent minority interest, and the accompanying 
proportionate representation on the Board of Directors, did 
not itself constitute a transfer of control.32 We similarly 
find that FT's and DT's acquisition of a 20 percent ag­
gregate interest in Sprint and up to 20 percent representa­
tion on the Sprint Board does not itself constitute a 
transfer of control. 
24. We also must determine whether the voting and 
consent rights in the parties' agreements would give FT 
and OT the right to control Sprint. In addition to its voting 
rights, FT's and OT's Class A stock incorporates certain 
consent rights, including the right to prohibit certain cor­
porate actions by Sprint without their consent. These ac­
tions include any transaction that would result in the 
issuance of 30 percent or more shares in Sprint.33 Other 
transactions over which FT and DT have consent rights 
include those that would: (1) adversely affect the rights 
afforded DT and FT by their ownership of Class A stock; 
(2) result in mergers or other business combinations in 
which Sprint would not be the surviving corporation; (3) 
result in the sale of Sprint's long distance assets, the fair 
market value of which is in excess of certain threshold 
percentages; or (4) result in the acquisition of a IO percent 
or larger holding in Sprint by a major competitor of OT or 
FT.J4 
25. In the J1C/IBT Order, we found similar consent 
rights to be typical protections against extraordinary cor­
porate actions that could disadvanta~e a minority 
stockholder's interest in the corporation.3 We concluded 
that such restrictions simply constituted a minority 
shareholder's protection and did not rise to the level of 
transfer of control. In addition, the Investment Agreement 
safeguards Sprint's control over the use of the proceeds 
from the investment by giving its Board the ultimate au-
zq Certificate of Amendment of Sprint's Articles of 
Incorporation at 3-5. 
30 Sprint Petition at 12-13. 
31 Generally. a director is considered "independent" if 
unaffiliated with either Sprint's management or with FT or OT. 
See Certificate of Amendment of Sprint's Articles of 
Incorporation at 89-QO. 
32 MCI/BT, 9 FCC Red at 3962-63. 
33 Certificate of Amendment of Sprint Articles of 
Incorporation at 43. 
34 ld. at 38-44. 
35 See MCI/BT, 9 FCC Red at 3962-63. 
36 See Investment Agreement at 91: MOU at Annex A. 
1854 
thority to determine how Sprint will use the proceeds.36 In 
the absence of any contrary evidence, we similarly find the 
negative rights accorded FT and OT are mere protections 
of FT's and DT's investments as minority shareholders. 
26. AT&T also argues that Sprint will transfer oper­
ational control of its domestic operations since Sprint must 
conform these operations to the strategies and operations o f 
the Global Venture Board,37 in which FT and OT will have 
two representatives to Sprint's one.38 We disagree that such 
conformance indicates a transfer of operational con tro l. 
AT&T incorrectly bases its argument on the premise that 
Sprint may always be outvoted by FT and OT on the 
Global Venture Board.39 To the contrary, no action may be 
taken by the Global Venture Board without the affirmative 
vote of all of the parties.40 Thus, Sprint, FT and DT each 
have veto power and will not be controlled by the other 
parties on the Board, whether in the conduct of their 
respective domestic operations or otherwise. 
27. Moreover, all of the parties, including FT and OT, 
have made the same commitment to conform their domes­
tic operations to the Global Venture Board's policies. Giv­
en that each party is obligated to provide Joint Venture 
services in its home country, it is not surpr ising that the 
parties would deem a conformance commitment from each 
party necessary to ensure the delivery of these services 
according to uniform standards. Again, notwithstanding 
these commitments, Spr int retains negative control to de­
feat any Global Venture Board proposition that is contrary 
to Sprint's interest. 
28. Similarly, AT&T states that Spr int is transferring 
operational control to FT and DT because it must subm it 
its business plans (for partnership services to the Global 
Venture Board.)41 We do not believe that this requirement 
constitutes a transfer of control. Sprint and FT and OT are 
required to prepare and submit to the Global Venture 
Board only business plans relating to Joint Venture activi­
ties. The business plans for Sprint's many other activities 
will not be submitted.42 We find no reason to disagree with 
Spr int's a rgument that this provision is commercially nec­
essary to ensure that each party meets uniform service 
standards and does not take action inconsistent with the 
parties' agreements.43 We thus conclude that this require­
ment, which extends to each party and permits monitor ing 
of the performance of a contractual partner, does not 
amount to a transfer of control, particularly given Sprint's 
negative consent rights on the G lobal Venture Board. 
29. AT&T also asserts that Sprint has given up oper­
ational control of its international facilities. AT&T argues 
that, because FT and OT own 50 percent of the Global 
Backbone Network, and Sprint is granting the Global 
Backbone Network use of its international facilities for the 
37 The Global Venture Board will con trol all services specified 
in the Joint Venture Agreement. Joint Venture Agreement at 
33-39. 
38 Sprint Petition at 19. 
39 See Sprint Reply at IS (filed Dec. 5, 1994). 
40 Joint Venture Agreement at 54. 
41 AT&T Opposition at 18-19. 
42 See Sprint Reply at 17-18. 
43 se·e id. at 17 (noting that each party has the sole responsibil­
ity to provide partnership services in its home country). 
11 FCC Red No. 4 Federal Communications Commission Record FCC 95-498 
provision of Sprint's international Joint Venture services, 
Sprint has conveyed SO percent of the control of its facili­
ties to FT and OT.44 We disagree. The use of facilities does 
not necessarily equate to control of those facilities. Sprint 
can maintain control of its international facilities while 
allowing the Global Backbone Network or the Regional 
Operating Groups to use those facilities. Allowing joint 
control over the provision of Joint Venture services does 
not grant FT and OT the power to "determine the com­
pany's operations" or "dominate its corporate affairs." 
Sprint only has permitted FT and OT a measure of influ­
ence in providing specific services. Based on these facts, 
Sprint's grant of influence to FT and OT does not rise to 
the level of a transfer of control. 
30. We conclude that the agreements between Sprint and 
FT and OT do not grant FT and OT the right to determine 
the corporate policy that Sprint will pursue, or indicate 
that FT and OT will dominate the management of Sprint's 
corporate affairs. Consequently, we find that the transaction 
before us does not constitute a transfer of control and, 
therefore, does not require Commission approval under 
Section 310(d) prior to consummation of the transaction.45 
Commission approval pursuant to the Cable Landing Li­
cense Act also is not required by the specific terms of 
Sprint's cable landing licenses.46 In addition , prior au­
thorization under Section 214 of the Act is not required to 
the extent Sprint alone -- and not the Joint Venture - will 
be providing basic Joint Venture services in the United 
States.47 If the Joint Venture seeks to provide basic services 
to U.S. customers, the Joint Venture must then seek prior 
Section 214 authorization. 
8. Public Interest Analysis 
1. Applicability of the Foreign Carrier Entry Decision 
a. Comments 
31. In their supplemental oppos1t1on and comments, 
AT&T and BTNA urge us to apply the effective market 
access standard proposed in the Notice of Pro posed 
Rulemaking (NPRM) in the Foreign Carrier Entry proceed­
ing to Sprint's petition for purposes of determining wheth­
er the proposed transaction is in the public interest.48 
Sprint opposes this approach. First. Sprint states that the 
NPRM is a tentative proposal that has been widely criti ­
cized as the improper means to achieve the Commission's 
policy goals. Second, Sprint asserts that it would be unfair 
to apply an effective market access approach because 
Sprint's petition was pending before the Commission ini­
tiated the Foreign Carrier Entry proceeding.~Q 
44 AT&T Opposition at 20. As noted above. Global Backbone 
Network £unctions will be performed by the two Regional Op· 
erating Groups. ROE Group and ROW Group. See Joint Ven­
ture Agreement at 39-53. 
45 See MCI/BT, 9 FCC Red at 3%3 n.34. 
46 See An Act Relating to the Landing and Operation of 
Submarine Cables in the United States, 47 U.S.C. §§ 34-39 
( 1994) (Cable Landing License Act): see e.g., Private Transatlan­
tic Telecommunications System, Inc., 4 FCC Red 5077 ( 1989) 
(approving transfer of control of submarine cable licensee to US 
Sprint Communications Co .. Inc.): su also Tel-Optik. Limited, 
Mimeo 4618, at 1 6 (prohibiting the transfer of control of a 
1855 
b. Discussion 
32. On November 28, 1995, after the parties filed their 
supplemental pleadings, we adopted final rules in the For­
eign Carrier Entry proceeding affecting our public interest 
analyses under Sections 214 and 310{b)(4).50 We concluded 
in that proceeding that the public interest in an effectively 
competitive market for U.S. telecommunications services 
requires us to evaluate, as an important part of our overall 
public interest analysis under Section 214, whether effec­
tive competitive opportunities exist for U.S. carriers in the 
destination markets of foreign carriers seeking to enter the 
U.S. international services market through an affiliation 
with a U.S. carrier.s1 We similarly must examine, in con­
sidering whether to permit foreign investment in a U.S. 
radio licensee in excess of the benchmarks contained in 
Section 310(b}(4), whether relevant foreign home markets 
offer effective competitive opportunities to U.S. entities.52 
Consistent with our broad authority to determine the pub­
lic interest. under that section, the goals of these new rules 
are (1) to promote competition in the U.S. telecommunica­
tions market; (2) to prevent anticompetitive conduct in the 
provision of international services; and (3) to encourage 
foreign governments to open their communications mar­
kets to competition. 
33. Sprint has requested a declaratory ruling from this 
Commission that the investments by FT and OT and the 
Joint Venture are consistent with the public interest. Be­
cause Sprint is a carrier authorized to provide telecom­
munications services and facilities under Sections 214 and 
309 of the Act, we are required to assess the public interest 
merits of the investments and the Joint Venture under 
Sections 214 and 310{b)(4). If we were to find that the 
investments and the Joint Venture were inconsistent with 
the public interest, and Sprint were to proceed with the 
transaction , we could designate for hearing the issue wheth­
er the public interest would continue to be served by 
Sprint's holding of Title II authorizations and Title III 
licenses. 
34. It is well established that the Commission may apply 
new rules and policies to pending matters.53 We disagree 
with Sprint that it would be unfair ·to apply our new 
analysis to Sprint's petition. It was not until late July 1995 
that Sprint filed the definitive agreements of the parties 
with the Commission. At that time. our Foreign Carrier 
Entry rulemaking proceeding had been underway for five 
months and extensive comments and reply comments had 
been filed. We see no reason why o ur newly adopted rules 
and policies should not apply here.s4 Accordingly, we will 
apply our Foreign Carrier Entry decision to the Sprint 
submarine cable licensee unless prior Commission approval is 
obtained) ( 1989). 
47 47 u.s.c. § 214 (1994). 
48 AT&T Supplemental Opposition at 8-16: BTNA 
Supplemental Opposition at 8-12. 
4Q Sprint Supplemental Reply at 15-20 (filed Sep. 15, 1995). 
so See footnote 1. supra. 
SI Su Foreign Carrier Entry Order at 11 27-39. 
52 Su id. at 11 179-96. 
53 See, e.g., Storer Broadcasting v. United States, 351 U.S. 192 
( 1956 ); Hispanic Information and Telecommunications Network 
v. FCC, 865 F.2d 1289. 1294-95 (D.C. Cir. 11189). 
54 In its Opposition, which was filed before the Foreign Carrier 
Entry NPRM was adopted, AT&T urged .us to adopt a "com-
-FCC 95-498 Federal Communications Commission Record 11 FCC Red No. 4 
petition and adopt this Order effective the day after all 
rules, regulations and policies adoEted in the Foreign Car­
rier Entry Order become effective. s 
2. Effective Competitive Opportunities Analysis Under 
Section 214 
a. Comments 
35. AT&T, BTNA, CWNIBEW, Esprit, MCI, and MFSI 
argue that France and Germany do not afford market 
access to U .S. carriers because the provision of domestic 
and international public switched voice telephony services 
and telecommunications faci~ities is reserved exclusively for 
FT in France and DT in Germany.56 AT&T and BTNA also 
state that the French and German telecommunications reg­
ulatory regimes lack other important characteristics, in­
cluding com,Petitive safeguards and independent regulatory 
authorities. s 
b. Discussion 
36. Sprint, through its subsidiaries, holds many Section 
214 authorizations for the provision of U.S. international 
facilities-based services between the United States and 
France and the United States and Germany. In analyzing 
whether the proposed transaction is in the public interest, 
the Foreign Carrier Entry Order requires us to determine 
whether effective competitive opportunities exist for U .S. 
carriers to provide internatio nal services in France and 
Germany. 
37. We first must determine whether the proposed for­
eign carrier investments rise to the level of an "affiliation" 
with a U .S. carrier fo~ purposes of determining whether 
the effective competitive opportunities analysis under Sec­
tion 214 applies in this case. The ~ffiliation threshold 
adopted in the Foreign Carrier Entry Order is an equity 
interest greater than 25 percent or a controlling interest at 
any level. In addition, we will aggregate multiple foreign 
carrier interests when a contractual relation. such as a joint 
venture or marketing alliance, between two or more for­
eign carrier investors is involved, which affects the provi­
sion or marketing of basic international 
telecommunications services in the United States.58 Foreign 
carrier investment that does not exceed the 25 percent 
threshold may nonetheless be subject to the effective com-
parable market" approach in this proceeding_ AT&T Opposition 
at 24-46. We declined to adopt this approach in the Foreign 
Carrier Entry proceeding: for the same reasons, we will not 
apply this approach in this proceeding. See Foreign Carrier 
Entry NPRM, 10 FCC Red 4844, 4849 (1995). 
ss OT argues that the Commission's public interest calculus 
''cannot include consideration of effective market access because 
Sections 214 and 310 do not mention this factor .... " OT Reply 
Comments at 5-6 (filed Sep. 15, 1995). OT raised the same 
argument in the Foreign Carrier Entry proceeding. We con ­
cluded in our Order in that proceeding, after full consideration 
or the issues raised by OT and other parties. that market access 
considerations fall within our mandate under Sections 214 and 
310. See Foreign Ca"ier Entry Order at , , 223-38; see also 
AT&T Ex Parte Submission (filed Nov. 21, 1995). We thus do 
not reexamine these issues here. 
S6 AT&T Supplemental Opposition, Appendix: BTNA Sup­
plemental Comments at 8-29; CWNIBEW Comments at 11-15: 
Esprit Opposition at 4-6: MCI Opposition at 8-15 (filed Sep. I, 
1856 
petitive opportunities analysis when the investment 
presents a significant potential impact on competition in 
the U.S. basic international telecommunications services 
market.s9 
38. The proposed interests of FT and DT (10 percent 
each) in Sprint must be aggregated because the carriers also 
have joined forces through the Joint Venture. The invest­
ments represent an important part of a global alliance 
strategy among Sprint, FT, and DT, affecting the provision 
of basic telecommunications services. The proposed invest­
ments by FT and DT in Sprint, even when aggregated to 
equal 20 percent, do not exceed the 25 percent affiliation 
threshold for application of the effective competitive op­
portunities analysis. 
39. Review of this transaction under our effective com­
petitive opportunities analysis is warranted and necessary, 
however, because of the size of the carriers involved and 
the potential impact on competition in the U .S. basic 
international services market. FT and OT are two of the 
largest telecommunications carriers in Europe; traffic vol­
ume between the United States and France and Germany 
together accounts for more volume than to any single 
country other than Canada and Mexico.60 International 
Message Telephone Service ( IMTS) minutes between the 
United States and Germany are fourth highest among U.S. 
correspondent countries; IMTS minutes between the Unit­
ed States and France are the thirteenth highest.61 Few 
countries originate and terminate more calls to and from 
the United States than France and Germany, which are key 
locations for multinational corporations.bl In addit ion .. FT 
and OT propose to invest in the third largest U.S. domestic 
interexchange and international services carrier. with ap­
proximately 10 percent domestic and international services 
market share, not a fledgling start-up.63 Given the size of 
the parties involved and the strategic investment and joint 
venture alliance they have planned, we find ·that the trans­
action , although falling below the threshold for automatic 
application, necessitates an effective competitive opportu­
nities analysis under the newly adopted rules and policies. 
40. We turn next to the question of which foreign mar­
kets we must analyze. Under Section 214, we apply our 
analysis o nly to those destination markets where the for­
eign carrier can exercise market power. As we mentioned 
previously, "market power" is defined in the Foreign Car-
1995); MFSI Comments at 5-7. 
s7 AT&T Supplemental Opposition. Appendix: BTNA Sup­
~lemental Comments at 20-24. 
8 See Foreign Carrier Emry Order at , 92. 
s9 See id. at f 89. 
60 In 1994, France and Germany combined accounted for ap­
proximately 14 percent of total international billed revenues of 
all . U.S. carriers for !MTS. See Feder3l Communications Com­
mission. "Preliminary 1994 Secti~n 43.61 International Tele­
communications Data," (Com. Car. Bur.. Oct. 1995) 
<Preliminary 1994 International Telecommunications Data). 
61 See id. 
bl The United States. Japan, the United Kingdom, Germany, 
and France are the top five countries in terms of locations for 
Fortune 500 companies. The United States accounts for 30 
percent of the world total; Germany. 8 percent: 3nd France, 6 
percent. In 3ddition, the United States, Germany 3nd France 
account for 41 percent of international voice traffic: the United 
States, 25 percent: Germany, 10 percent; 3nd France, 6 percent. 
6J See generally infra at , , 78-83. 
11 FCC Red No. 4 Federal Communications Commission Record FCC 95-498 
rier En.try Order as the ability to act anticompetitively 
against unaffiliated U.S. carriers through the control of 
bottleneck services or facilities on the foreign end.64 FT and 
DT are the incumbent, monopoly telecommunications fa­
cilities providers in France and Germany, respectively. 
Thus, they control bottleneck facilities in those markets 
and have market power. There is no record evidence in 
this proceeding regarding whether FT or DT has market 
power in other foreign markets. Accordingly, the relevant 
destination markets for our analysis in this decision are 
France and Germany. We also require Sprint, within 30 
days of the effective date of this Order, to notify the 
Commission of any foreign carrier that controls, is con­
trolled by, or is under common control with FT or DT. 
We will apply the effective competitive opportunities analy­
sis to these markets unless Sprint demonstrates that these 
foreign carriers do not have market power on these 
routes.65 
41. In applying our effective competitive opportunities 
analysis under Section 214, we first examine the legal, or 
de jure, ability of U.S. carriers to enter the foreign destina­
tion markets and provide international facilities-based ser­
vices. If U.S. carriers are prohibited de jure from 
competing in the provision of any international facilities­
based IMTS service, then there are not effective competi­
tive opportunities on that route. If the foreign carrier's 
destination market has no explicit legal restrictions on 
entry, we then will examine the other factors of the effec­
tive competitive opportunities analysis to determine wheth­
er there are de facto effective competitive opportunities. 
This analysis focuses on the actual conditions of entry, i.e., 
terms and conditions of interconnection, competitive safe­
guards, and the regulatory framework.66 
42. An effective competitive opportunities finding can be 
made if such opportunities are present now or if it is 
reasonably certain that they will be available in the near 
future. Where effective competitive opportunities do not 
now exist, there will need to be clear and concrete commit­
ments that effective competitive opportunities will be avail­
able in the near future in order for us to reach a favorable 
determination. Finally, we note that effective competitive 
opportunities are only a part of a larger public interest 
analysis; we must also consider whether other public inter­
est factors mandate grant or denial of an application. 
43. To meet the standard of de jure market entry. France 
and Germany would be required to permit a U.S. carrier 
to obtain a controlling interest in a French- or German­
based facilities carrier able to originate and terminate IMTS 
traffic to and from the United States. In France. the provi-
64 See supra footnote 14; Foreign Carrier Entry Order at , 116; 
see also Eastman Kodak Co. v. Image Technical Services, Inc., 
504 U.S. 451. ~64 (1992) ("Market power is the power to force a 
purchaser to do something that he would not do in a competi­
tive market .... It has been defined as the ability of a single 
seller to raise price and restrict ou!put.") (quotation marks and 
citations omitted). 
65 We reserve the right to impose any conditions enumerated 
in this decision, or other conditions, on Sprint's provision of 
service on those routes. 
66 See Foreign Carrier Entry Order at , , 42-55. 
67 See infra , , -76. 
68 Section 3 lO(b)(4) states, in pertinent part, that no "common 
carrier ... license shall be granted to or held by ... any 
corporation directly or indirectly controlled by any other cor­
poration of which any officer or more than one-fourth of the 
Ul~7 
sion of IMTS facilities-based service is a legal monopoly of 
France Telecom. The same is true in Germany, where DT 
holds the legal monopoly over the provision of interna­
tional facilities-based service. U.S. carriers currently are 
prohibited as a matter of law from entering this market in 
both France and Germany. 
44. We note that both countries have publicly committed 
to implementing international facilities and services com­
petition by January 1, 1998.67 The French and German 
Governments both have proposed plans for enacting na­
tional legislation in this regard. We are very encouraged by 
these developments, as we discuss more fully below. We 
view their public statements to be important indications of 
these countries' intent to liberalize their markets. Nonethe­
less, we believe that implementation of international facili­
ties competition in 1998, over two years away, is too distant 
in time to be considered competition in the near future 
under our effective competitive opportunities analysis. 
Moreover, the specific legal and regulatory framework for 
the competitive markets is not yet fully determined, leaving 
us · unable to evaluate whether de facto competitive op­
portunities will exist after the legal barriers are removed. 
45. Given that de jure international facilities competition 
for IMTS is absent in France and Germany, we find that 
effective competitive opportunities for U.S. carriers to op­
erate as international facilities-based carriers currently do 
not exist in those countries. 
46. Although Sprint holds resale authorizations to serve 
France and Germany which may be subject to an effective 
competitive opportunities analysis, we see no need to con­
duct that analysis here given our finding that France and 
Germany do not offer effective competitive opportunities 
to provide international facilities-based services, and our 
ultimate conclusion in Section V below that the public 
interest weighs in favor of granting Sprint's petition, sub­
ject to certain conditions. 
3. Effective Competitive Opportunities Analysis Under 
Section 310(b)(4) 
47. The presence of aggregated alien ownership in excess 
of 25 percent in Sprint, the parent corporation of Title Ill 
common carrier radio licensees. triggers the applicability of 
Section 310(b)(4)'s statutory benchmark, which requires 
that we determine whether the "public interest will be 
served by the refusal or revocation of such license."68 FT 
and OT will each acquire a 10 percent ownership interest 
in srrint, a U.S. corporation thatcontrols Title Ill licens­
ees.6 Based upon a Sprint ownership survey, Sprint main-
directors are aliens, or of which more than one-fourth of the 
capital stock is owned of record or voted by aliens, their repre­
sentatives, or by a foreign government or representative thereof, 
or by any corporation organized under the laws of a foreign 
country, if 1he Commission finds 1hat the public in1erest will be 
served by 1he refusal or revocation of such license." 47 U.S.C. § 
3 IO(b)(4) (emphasis added). 
69 This investment percentage may not increase for 15 years 
from the date of FT's and DT's initial investment in Sprint. 
These restrictions cease to apply, however, in the event that 
another party or parties acquires more than a 20 percent inter­
est in Sprint. In that case, FT and OT. subject to Section 
3 IO(b)(4), may acquire sufficient shares to maintain their inter­
ests equal to the interest of the other party or parties. See 
Standstill Agreement at 9-10. 
. FCC 95-498 Federal Communications Commission Record 11 FCC Red No. 4 
tains that Fr's and DT's proposed acquisition of 10 percent 
of the shares each in Sprint will result in 25.17 percent 
alien ownership of Sprint's capital stock (plus or minus 
1. 74 percent at the 97 .5 percent confidence level). 70 Due to 
likely fluctuations in alien ownership from the publicly· 
traded nature of the company, Sprint believes the alien 
ownership may exceed the 25 percent statutory benchmark 
at any one time by up to three percent. Therefore, Sprint 
requests the Commission to find that up to 28 percent 
alien ownership in Sprint is not inconsistent with the 
public interest. 
48. Through a public interest analysis, the Commission 
decides whether to authorize or revoke alien ownership or 
participation in excess of the Section 31 O(b )( 4) statutory 
benchmark on a case-by-case basis.71 We will first consider 
the impact·of our newly adopted effective competitive op­
portunities analysis.72 We will then consider the extent of 
alien participation in Sprint's parent corporation in assess­
ing the additional public interest factors relevant to Section 
310(b)(4) determinations. 
49. In Section IV.B.2, we determined that effective com­
petitive opportunities do not exist in France or Germany 
under our Section 214 analysis. Because we reach the 
ultimate conclusion (described in Section V below) that, 
on balance, the public interest weighs in favor of granting 
Sprint's petition subject to certain conditions, we see no 
reason to conduct an effective competitive opportunities 
analysis under Section 310(b)(4).73 
50. We note, however, that France and Germany have 
introduced a degree of competition in their wireless mar­
kets, unlike in theirp wireline facilities markets we exam­
ined above. This is true with respect to the types of Title 
III licenses in which FT and DT seek to invest through 
Sprint. Through subsidiaries and affiliates, Sprint holds 
cellular,74 paging, satellite, and common carrier microwave 
radio licenses. In addition, Sprint owns interests in PCS 
70 Sprint Petition at 24-25. 
71 See PrimeMedia Broadcasting, Inc., 3 FCC Red ~293. ~295 
~1988). 
2 See Foreign Carrier Entry Order at 1 1 179-219. 
73 The commenters in this proceeding do not specifically ad· 
dress whether competitive opportunities exist in the French and 
German wireless markets. One commenter. AirTouch, men­
tions its experiences in these markets. and these comments are 
included below. 
74 As we noted earlier. Sprint currently owns cellular assets, 
but has announced its intention to divest these holdings. See 
s~ra footnote 5. 
7s There is limited competition in the French paging market. 
In September 1993, lnfomobile. a consortium in which 
AirTouch holds an 18.5 percent interest, won one of three 
nationwide paging network licenses in France. In Germany, 
there are three providers of nationwide paging services. The 
BMPT. however, has issued several dozen licenses for trunked 
radio networks. 
76 The French satellite services market generally is open to 
competition, with the notable exception of the transmission of 
public switched voice telephony. More than 50 satellite commu· 
nications networks have been authorized. U.S. entities, includ­
ing Scientific Atlanta, MCI and IBM, are among the licensees. 
Like France, Germany permits the provision of satellite services 
except for the transmission of public switched voice services. 
According to DT, nearly 50 satellite communications licenses 
have been awarded, 12 to U.S. entities. See DT Reply Com· 
ments at 8 n.3. 
77 In France, two entities are licensed to provide cellular 
services: a France Telecom affiliate. France Telecom Mobiles 
1858 
licensees through its affiliate, STV. STV owns 40 percent of 
WirelessCo, a major PCS licensee, and is the largest 
shareholder. It would appear that the French and German 
paging7s and satellite76 markets generally are open at least 
to the level of ownership collectively sought by FT and DT 
in Sprint: 20 percent. By contrast, there appears to be less 
comfietition in the French and German cellular" and 
PCS 8 markets: the number of licenses is limited to one or 
two in each market. Finally, we note that the provision of 
common carrier microwave radio links is not open to U.S. 
investment.79 We address in Section IV.B.5.c, infra, whether 
the proposed alien ownership poses concerns under the 
other public interest factors we consider in our Section 
310{b){4) public interest analysis. 
4. Competitive Concerns 
51. We concluded that effective competitive opportu­
nities are not currently available to U.S. carriers under 
Section 214 for the provision of international telecom­
munications facilities or services in France and Germany 
because of de jure monopolies in both countries. Before 
our effective competitive opportunities analysis was adopt· 
ed, the majority of commenters in this proceeding ex­
pressed concerns about the market power conferred by 
these monopolies in France and Germany. These parties 
are troubled by the effect that the SprintJFT/DT alliance 
may have on competition in several telecommunications 
markets as a result of the potential for discrimination or 
other anticompetitive conduct. The same kinds of concerns 
also were raised in the MCI/BT proceeding, anc.I we agree 
that these concerns are important public interest consider­
ations under Sections 4(i), 214, 310(b)(4) and 31680 of the 
Radiotelephone (FTMR). and Societe Francaise de 
Radiotelephone (SFR). As a subsidiary of FT. FTMR is 100 
percent government-owned. Investment by non-E.U. entities in 
holders of French wireless telecommunications radio services 
licenses. including cellular licenses. is limited to 20 percent. 
This limit may be waived. particularly when the foreign en· 
tities' home market offers reciprocal treatment of French en­
tities. AirTouch asserts that it has experienced discriminatory 
ownership policies in France. AirTouch Comments at 6. In 
Germany, cellular services are subject to limited competition. 
Two cellular providers are licensed by the !3MPT to provide 
cellular services. These providers are a DT affiliate, DeTeMobil, 
and Mannesmann Mobilfunk GmbH (Mannesmann Mobilfunk). 
DeTeMobil is 100 percent government-owned; Mannesmann 
Mobilfunk is 34.5 percent owned by AirTouch. a U.S. entity. 
AirTouch states its belief that the German mobile services 
market is open to U.S. opportunity and ownership. Id. There 
are no restrictions on foreign ownership of wireless licenses in 
Germany. 
78 The French government has licensed one provider, a con­
sortium led by Bouygues Telecom and including U S West. to 
provide PCS-type services. Similarly. the German Government 
has licensed the E-plus consortium. which is 21 percent owned 
by BellSouth, to provide similar ~rvices. E-Plus is considered a 
direct competitor of the German cellular service providers. 
79 In France, the provision of common carrier microwave 
radio links is reserved to FT. Similarly, in Germany. the provi· 
sion of common carrier microw01ve radio links is reserved to 
DT. 
80 See 47 U.S.C. § 316 (1994) (Commission authority to modify 
construction permits or licenses). 
--... .......... _________________ ~ 
11 FCC Red No. 4 Federal Communications Commission Record FCC 95-498 
Act, and other relevant statutory provisions,81 and possibly 
implicate our enforcement responsibilities under the Clay­
ton Act.82 We thus address these concerns in this proceed­
ing, independent of our effective competitive opportunities 
analysis. 
a. Comments 
52. A number of parties raise specific competitive con­
cerns about FT's and DT's prop<;>sed investment in Sprint 
and the formation of the Joint Venture. They argue that 
FT's and DT's substantial equity investment in Sprint, and 
their interests in the Joint Venture, create financial incen­
tives for FT and DT to use their monopoly positions in the 
French and German telecommunications markets to dis­
criminate in favor of Sprint over competing U.S. interna­
tional carriers on the U.S.-France and U.S.-Germany 
routes, and in providing transiting services to Eastern and 
Central Europe.83 ACC, AT&T, BTNA, and MCI argue that 
FT, DT, and Sprint will be able to use FT's and DT's 
absolute bottleneck of access facilities in their home coun­
tries to the unfair advantage of Sprint and the Joint Ven­
ture. Furthermore, they argue, FT, DT and Sprint have the 
incentive and ability to enter into exclus.ive arrangements 
directing all international switched and private line traffic 
to each other. AT&T states that Sprint will have 50 percent 
control over FT's and DT's correspondent relationships 
with U.S. carriers (through its ownership in Joint Venture 
operations), and thus will have the opportunity to discrimi­
nate against other U.S. carriers.84 OFTEL expresses concern 
that France and Germany do not have independent regula· 
tory authorities that can ensure that effective competition 
is in fact implemented.8s 
53. In response to the assertions that FT, DT and Sprint 
will engage in unlawful discrimination and enter into ex­
clusive arrangements for the provision of international ba­
sic telecommunications services, Sprint reaffirms its intent 
- and states that FT and DT have reaffirmed their intent •• 
to continue their correspondent relations with other inter­
national carriers.86 Moreover, Sprint. FT and DT state they 
will not impermissibly exclude competitors from the mar­
ket for regulated basic services or unlawfully discriminate 
in favor of the o ther in accounting rates and settlements. fn 
addition , Sprint emphasizes that it will not be involved in 
carrying the bilateral correspondent traffic of other U.S. 
carriers.87 They also assert that FT and DT are legally 
required, by national and E.U. regulation. to offer 
nondiscriminatory access to their netwo rks.88 FT and DT 
8 1 Set, e.g., FCC v. RCA CommunicatiollS, Inc., 346 U.S. 86 
( 1953) (there can be no doubt that competition is a relevant 
factor in weighing the public interest): United States v. FCC, 652 
F.2d at 81-82 (competitive considerations are an important ele­
ment of the public interest standard). 
82 Under Section 11 of 1he Clayton Act, we are charged with 
enforcing. inter alia, Section 7 of the Clayton Act. See IS U.S.C. 
H 18. 21. These provisions empower this Commission to dis­
approve anticompetitive acquisitions of stock "of common car­
riers eng<1ged in wire or radio communications or radio 
transmissions of energy." Sec1ion 7 also proscribes the acquisi­
tion of the stock of a company by another company "where in 
any line of commerce in any section of the country" the effect 
of such acquisition may be "substantially to lessen competition, 
or to tend to create a monopoly." We have discretion whether 
to enforce Section 7 of the Clayton Act. United States v. FCC, 
652 F.2d at 83. Because we find our jurisdiction under the 
Communications Act to be sufficient to address all the competi· 
state that the DGPT and the BMPT have demonstrated 
their independence from FT and DT in the past and will 
continue to do so.89 In addition, Sprint claims that the 
potential for discrimination is less in this case than in the 
MCI/BT proceeding because Sprint carries approximately a 
third as much international traffic as MCI, and the equity 
investments by FT and DT are only 10 percent each, thus 
proportionately reducing their incentives to discriminate in 
favor of Sprint. · 
54. Finally, in response to AT&T's claims that FT and 
DT have agreed to impermissibly "steer" customers to the 
Joint Venture, Sprint claims that it is commercially reason­
able and expected that parties to a joint venture will at­
tempt to sell the joint venture's services to unsolicited 
customers. Sprint also emphasizes that customers are not 
steered by the Joint Venture to Sprint, but only to the 
Joint Venture itself.90 . 
b. Discussion 
SS. We share the parties' fundamental concerns about 
the potential for anticompetitive behavior by FT and DT 
on the U.S.-France and U.S.-Germany routes. FT and DT 
are monopoly providers of French and German interna­
tional facilities-based services, control the local termination 
points in those countries, and control the national long 
distance networks to which interconnection is essential for 
the distribution of international traffic. 
56. Before the proposed transaction, FT and DT had no 
incentive to discriminate in favor of Sprint, the Joint Ven­
ture or any of their competitors over others. The proposed 
transaction, however, will give FT and DT each a substan­
tial financial stake in the success of Sprint and the Joint 
Venture and will, therefore, give each an incentive to 
. engage in anticompetitive strategies to maximize the return 
on their investment. This discrimination could take a num· 
ber of forms , such as: (1) routing calls to Sprint and the 
Joint Venture in proportions greater than those justified 
under our proportionate return policy; (2) otherwise 
manipulating the calculations and settlements payments to 
wrongfully favor Sprint and the Joint Venture; (3) routing 
high-profit calls to Sprint and the Joint Venture, and leav­
ing the rest to their competitors; (4) undercharging Sprint 
and the Joint Venture and/or overcharging their competi· 
tors for use of the same essential facilities in France or 
Germany; (5) leaking to Sprint and the Joint Venture the 
confidential information that FT or DT receives from 
Sprint's and the Joint Venture's competitors; (6) giving 
1859 
tive effects of the proposed transaction, we exercise our discre­
tion not to invoke our Clayton Act jurisdict ion in this 
rroceeding. 
3 See, e.g., AT&T Opposition at 24-42: Letter from C. Fred 
Bergsten to Reed E. Hundt, Chairman, Federal Communica· 
tions Commission (filed Jan.18, 199S): CWA/IBEW Comments at 
2; MCI Comments at 7-13. 
84 AT&T Opposition at 21. 
SS OFTEL Letter at 2-3. 
86 Sprint Petition at 30. 
87 Sprint Reply at 46-49. 
88 Sprint Petition at 31-35: FT Reply Comments at 28-29: OT 
Reply Comments at 18-23. · 
89 FT Reply Comments at 22-25: OT Reply Comments at 9-13. 
QO Sprint Supplemental Reply at 12-13. 
FCC 95-498 Federal Communications Commission Record 11 FCC Red No. 4 
Sprint and the Joint Venture advance notice of network 
changes and other information that Sprint, the Joint Ven­
ture and their competitors will need to know; or (7) either 
as an agent or through an affiliated third party,91 selling the 
services of Sprint or the Joint Venture in ways that use 
FT's and DT's home market power. 
57. Absent effective conditions, such strategic behavior 
could yield Sprint more customers, calls and revenues, and 
ultimately higher returns, than would otherwise be the 
case. Sprint would receive these returns simply because of 
its affiliation with FT and DT and not because of the 
superior quality, lower prices, or innovativeness of its ser­
vices. At the same time, the costs of Sprint's rivals would 
be raised above competitive levels, which would tend to 
reduce competition in the market as a whole. Less com­
petition would ultimately result in impaired market perfor­
mance: higher prices, lower quality, and slower innovation 
compared to what would exist in the absence of such 
conduct. 
58. We reject Sprint's claims that FT and DT have no 
more leveraging power than BT did in our MCI/BT pro­
ceeding. Sprint argues that BT retains substantial market 
power in the United Kingdom and the ability to use this 
power to favor MCI at the expense of other carriers. Sprint 
overlooks the fact that, in the United Kingdom, there is de 
jure competition in nearly every market segment. BT faces 
competition to some extent at all levels. The effect is that, 
unlike in France and Germany, in the United Kingdom 
U.S. carriers have a choice of carriers to haul their traffic. 
There also is an effective regulatory authority that is in­
dependent of BT, which employs fair and transparent pro­
cedures. U.S. carriers may resort to this authority in the 
event of anticompetitive conduct by BT. There currently 
are no such independent regulatory authorities with fair 
and transparent procedures in France or Germany. Not­
withstanding FT's and DT's statements that the OGPT and 
the BMPT do not favor FT or DT. we share OFTEL's 
concerns about the current lack of legally independent 
regulatory authorities in France and Germany to ensure 
that fair, effective competition emerges in both countries. 
59. We also are not persuaded by Sprint's claim that the 
individual incentives on the part of FT and OT to discrimi­
nate in favor of Sprint or the Joint Venture are less than in 
the MCI/BT case because FT and OT are each purchasing 
only 10 percent of Sprint's equity. The Joint Venture ar­
rangement provides for FT and DT to act in concert, and 
creates additional incentives beyond their investments in 
Sprint for FT and DT to favor unfairly Sprint and the 
Joint Venture. Thus, FT and DT generally have com­
plementary interests regarding their involvement with 
Sprint. · · 
60. We also do not agree with the arguments of Sprint, 
FT and DT that national and E.U. regulatory prohibitions 
on discriminatory conduct by FT and DT are sufficient to 
protect competition . Such provisions are likely to be inad­
equate when , as in this case, there is de jure 100 percent 
monopoly market power and an incentive to discriminate, 
and the carriers .remain co mpletely government-owned. 
Such provisions also cannot address the unfair competitive 
91 This third party could be Atlas, the entity created by FT 
and OT to provide Joint Venture services in Europe (except for 
in France and Germany) or Transpac and Datex-P, the public 
1860 
advantage that may accrue to Sprint, particularly in the 
U.S. market for global, seamless services, by virtue of its 
strategic alliance with FT and DT.92 
5. Countervailing Factors 
61. While France and Germany do not currently offer 
effective competitive opportunities to U.S. carriers under 
Section 214, and FT and OT have both the incentive and 
ability to favor Sprint over competing carriers, there are 
strong countervailing reasons to grant the Sprint petition. 
First, the recent liberalization efforts in France and Ger­
many have resulted in commitments to open various seg­
ments of their national monopolies to competition before 
1998. Second, the FT and DT investment of $3.5-4.2 billion 
in Sprint will have a procompetitive impact on the U.S. 
telecommunications market, subject to conditions. Given 
these factors, we find, as the Justice Department has, that 
the competitive concerns arising from this transaction can 
be addressed through conditions and safeguards, in antici­
pation of the French and German markets opening to U.S. 
carriers in 1998. 
a. Liberalization Developments In France and Germany 
i. Comments 
62. AT&T and BTNA state that numerous liberalization 
proposals before the E.U. Commission and French and 
German Governments are still pending and the final re­
sults are uncertain. They state that there are no assurances 
that the proposed reforms will become law, or that im­
plementing regulations and licenses will be issued. They 
also assert that 'there is no certainty that the current liber­
alization proposals will extend to facilities or services pro­
vided between E.U. member states and third countries. 
Finally, BTNA states that neither the French nor German 
Governments plan to relinquish majoritl ownership and 
control over FT or OT in the near future. 3 
ii. Discussion 
63. A critical factor in our approval of the proposed 
transaction is the policy shift in France and Germany 
towards competitive telecommunications markets. We rec­
ognize that this trend likely will be opposed. We also 
realize that, as AT&T and BTNA point out, timely, effec­
tive implementation of planned liberalization steps remains 
to be accomplished. Current developments, however, can­
not be ignored in considering the proposed transaction. 
64. As we mentioned above. Sprint filed its petition in 
October l 994. In February 1995, we adopted the NPRM in 
our foreign carrier entry proceeding which proposed that, 
when foreign carriers seek to enter the U.S. telecommuni­
cations market or become affiliated with a U.S. carrier, the 
Commission examine whether the relevant foreign tele­
communications markets afford effective market access to 
U.S. carriers. Since the NPRM was released, the French 
and German Governments each have made specific com­
mitments for further telecommunications liberalization. 
data networks owned by FT and OT, respectively. 
9z See Foreign Carrier Entry Order at , , 15 & 33. 
93 BTNA Supplemental Comments at 25-29. 
-11 FCC Red No. 4 Federal Communications Co~ion Record FCC 95-498 
65. We have already noted the specific liberalization 
commitments made by the French and German Govern­
ments.94 On October 20, 1995, in a letter to Commission 
Chairman Hundt, the French Government stated that it 
soon will allow entities other than FT to build and operate 
facilities (known as "alternative infrastructure") to offer 
already liberalized services.95 These services include data 
communications and closed user groups,96 but exclude 
public switched voice telephony. The French Government 
states that legislation to enact this measure will be intro­
duced in the French Parliament in the Spring of 1996, and 
will take effect by July 1, 1996.97 The French Government 
has made the same commitment regarding the liberaliza­
tion of alternative infrastructure to the European Commis­
sion in the context of DG IV's review of the Atlas and 
Phoenix transactions.98 
66. Earlier this year, the DGPT issued an experimental 
license to MFSI, a U.S.-owned company, to construct and 
operate a metropolitan network designed to serve the needs 
of closed user groups for data and voice communications. 
According to the French Government, other experimental 
alternative infrastructure licenses that will permit provision 
of public voice telephony services will be issued in early 
1996.99 
67. Similarly, on October 17, 1995, the German Govern­
ment submitted a letter to Commission Chairman Hundt 
in which it stated its commitment to allowing alternative 
facilities providers to commence operations as of July 1, 
1996.100 Like the French Government, the German Gov­
ernment also has made this commitment to the European 
Commission. 101 In addition, the German Government states 
that further liberalization steps are possible before 1998 
provided that they do not infringe on the exclusive right.s 
held by OT. We note that ACC indicates that it received 
approval in June 1995 from the German Ministry to op­
erate as a switchless reseller of DT's monopoly public 
switched voice services.101 
68. The liberalization of alternative infrastructure in the 
French and German telecommunications markets is an 
important first step towards the introduction of full and 
effective facilities and services competition. Alternative in­
frastructure providers will be perm itted to compete with 
FT and DT to carry most non-public switched voice ser­
vices, including data communications and intracorporate 
network services. Thus, potential competitors of FT, DT 
94 See mpra , -14. 
95 Letter from Bruno Lasserre, Director General. DGPT. to 
Reed E. Hundt, Chairman, Federal Communications Commis­
sion, at 2 (Oct. 20, 1995) (Lasserre Letter). 
96 The precise definition of "closed user group" differs from 
country to country within the European Union. The term 
typically is used to mean a stable and identifiable groups of 
users, and not the general public. The European Union has 
defined closed user group to include members of an integrated 
business community encompassing a corporation. partially­
owned subsidiaries, employees working outside company prem­
i~s, major suppliers and customers or dealers. 
9 Lasserre Letter at 2. 
98 See supra , 12. 
99 Lasserre Letter at 2. 100 Letter Crom Dr. Wolfgang Boetsch, Federal Minister for 
Posts and Telecommunications, to Reed E. Hundt, Chairman. 
Federal Communications Commission (Oct. 17, 11)95) (Boetsch 
Letter). 
101 See supra t 12. 
1861 
and the Joint Venture will have the legal ability to choose 
between underlying carriers for liberalized services, a use­
ful hedge against certain types of anticompetitive conduct 
by FT or DT. 
69. In their letters submitted in this proceeding, the 
French and German Governments also have firmly com­
mitted to implementing full facilities and services competi­
tion by January 1, 1998. The French Government filed 
with the Commission a copy of its recently announced 
proposal for wide-ranging liberalization of the French tele­
communications regulatory regime. The French Ministry 
of Information Technology and Postal Services issued this 
document in October 1995. A "public consultation docu­
ment" entitled "New Ground Rules for Telecommunica­
tions in France," the document outlines the key features of 
the French Government's planned regulatory regime. It 
states that licenses of general applicability will be issued for 
most telecommunications services. Individual licenses will 
be issued for three categories: (1) operators of networks 
providing service to the general public; (2) providers of 
telephone services to the public; and (3) operators of radio­
based networks.103 In addition, the French Government 
states that there will be no limitations on the number of 
licenses unless justified by frequency scarcity.104 
70. Regarding interconnection, the public consultation 
document states that any authorized service provider will 
have the right to access networks open to the public. FT 
will have more extensive obligations, including publishing 
an interconnection "reference offer ," which will contain 
basic terms and conditions, rates, and interconnection 
points, by July 1997. This offer must be approved by a 
national regulatory authority. In addition, the "Select Com­
mittee," a group of independent experts. will review possi­
ble cost accounting methods. Mandatory and independent 
audited cost-accounting measures will be developed. ac­
cording to the public consultation document, to ensure 
cost-oriented foricing and to prevent anticompetitive cross­
subsidization. os The public consultation document further 
provides that operators will be able to appeal to the na­
tional re~ulatory authority for interconnection dispute res­
olution. ro6 
7 1. The responsibility for. supporting universal service 
will be shared among public operators; costs will be as­
sessed and independently audited through transparent pro­
cedures by the Select Committee. Finally, the French 
102 Under this arrangement, ACC would provide service under 
contract with OT. ACC would buy switched capacity from OT 
at wholesale rates. and would provide services to ACC's German 
customers under contract at retail rates. See Letter from Helen 
E. Disenhaus, Counsel for ACC. to William F. Caton, Acting 
Secretary. Federal Communications Commission (citing ·at­
tached Letter from Francis D.R. Coleman, Secretary and Cor­
porate Counsel, ACC. to Dr. .Wolfgang Boetsch. Federal 
Minister for Posts and Telecommunications (October 27, 19Q5)) 
~filed Nov. 20. 19Q5). See also infra t 112. 
OJ French Ministry of Information Technology and Postal 
Services, "New Ground Rules for Telecommunications in 
France," at 8-10 (Oct. 19Q5) (Public Consultation Document). 104 L:lsserre Letter at 2. 
ios Public Consultation Document at 22-23: L:lsserre Letter at 
2. 
10
" Public Consultation Document at 23-26.G 
FCC 95-498 Federal Communications Commi~ion Record 11 FCC Red No. 4 
Government states that a national regulatory authority will 
be established to ensure effective regulation. The public 
consultation document proposes two possible approaches to 
this authority. Under the first approach, the authority 
would handle arbitration and enforcement; regulation 
would be handled within the Ministry. Under the second 
approach, the national regulatory authority would handle 
regulatory functions as well, and would be independent of 
the Ministry. 101 
72. The German Government also has taken steps to 
achieve full facilities and services liberalization by January 
l, 1998. A Ministry draft Telecommunications Act, which 
the German Government expects to introduced in the Ger­
man Parliament in early 1996, details the regulatory princi­
ples for the new regime.108 The German Government's 
letter further explains these provisions. Licenses will be 
required for all service providers seeking to provide facili­
ties or services currently within DT's monopoly, including 
public v<;>ice telephony. The number of licenses will not be 
restricted, except for radio licenses when warranted because 
of scarce resources. In addition, there will be no foreign 
investment restrictions on licensing.109 
73. Many of the details of the German interconnection 
regime have 'yet to be established. The Ministry states that 
dominant carriers (such as DT} will have the obligation to 
interconnect other carriers to their networks, and intercon­
nection will be subject to regulatory review. 110 In addition, 
universal service will include public voice telephony and 
certain types of leased lines. The Ministry states that only 
in exceptional cases will universal service obligations be 
imposed, and then only the dominant carrier or a service 
provider chosen through bidding procedures will be subject 
to such obligations. Should this provider incur deficits 
because of this obligation, service providers with more than 
five percent market share will be required to contribute in 
proportion to their market share .1 11 Finally. the Ministry 
states that an independent federal regulatory authority, 
equipped with enforcement powers, will be established to 
implement the regulatory objectives of the new federal 
legislation. 
74. We also note that European Union has established 
January l, 1998, as the date by which most Member States. 
including France and Germany. must fully open their 
telecommunications markets by liberalizing existing 
monopolies for public voice telephony services and trans­
mission facilities. The European Council of Ministers 
agreed in June 1995 that such liberalization should occur. 
Carrying out this agreement. the European Commission 
adopted, on July 19, 1995, a draft directive mandating full 
facilities and services liberalization as of January 1, 1998.1 12 
The same draft directive would require E.U. Member 
States, including France and Germany, to permit the use of 
alternative infrastructure for the provision of already liber-
107 Public Consultation Document at 26-28; Lasserre Letter at 
s. 
t08 German Ministry of Posts and Telecommunications. "Draft 
Telecommunications Act." (Jul. 27, !INS) (Ministry Draft Act); 
Boetsch Letter at 2. 
ioci Id. at 3. . 
110 Id.; Ministry Draft Act at 22-23. 
Ill Id. 
112 See European Council Resolution of July 22, IQQ3 on the 
review of the situation in the telecommunications sector and 
the need for further development in the market, 93/C 213/01, 
OJ C213; Draft Commission Directive amending Commission 
1862 
alized services in 1996. When this directive is made final, 
whi~h is expected to occur in early 1996, the European 
Commission will have the authority to initiate enforcement 
action should liberalization not occur in France and Ger­
many as required. 
75. We believe these commitments indicate that the 
French and German Governments are serious about tele­
communications liberalization. We note that when the 
Sprint petition was filed last year, there were few, if any, 
liberalization p lans in either country. Since that time, both 
Governments have announced concrete plans for increased 
competition leading to full facilities and services competi­
tion in 1998. Liberalization of alternative infrastructure 
will require FT and DT to relinquish their monopoly over 
the provision of telecommunications facilities to all cus­
tomers, including their own competitors. Thus, they will 
no longer necessarily control significant cost components 
of their competitors' service offerings. 
76. Of course, timely implementation and the develop­
ment of effective regulatory rules remain to be accom­
plished. For example, in each country, not only must final 
legislation be enacted to formally remove the legal 
monopoly status, but an interconnection regime must be 
established, competitive safeguards must be implemented, 
and an independent regulatory body must be put in place 
to ensure effective competition. Nonetheless, we realize 
that the implementation of effective competition takes 
time. and the French and German Governments have com­
mitted themselves to this process and have established firm 
timetables for introducing full competition. We believe 
these commitments weigh in favor of granting Sprint's 
petition. 
b. Effects on Competition in U.S. Markets 
i. Comments 
77. Sprint states in its pet1t1on that FT's and DT's 
$3.5-4.2 billion investment would be used for a number of 
procompetitive purposes. both domestically and globally. 
Domestically, Sprint asserts. these funds will enable it to 
"expand and upgrade its existing network, to undertake 
additional research and to develop new applications and 
services." 113 In addition, Sprint states that the capital in­
vested by FT and DT will enable it to participate fully in 
its broadband PCS venture, Wireless Co.1 u Finally, Sprint 
asserts that the investment will enable Sprint to participate 
fully in its global seamless services joint venture with FT 
and DT. Sprint states that the investment also would enable 
it to retire debt and thus improve its credit rating. Only 
AT&T responds to Sprint's assertions, stating thai Sprint 
has not demonstrated that it could not raise the capital in 
the worldwide financial markets.••S AT&T also argues that 
Directive 90/388/EEC. regarding the implementation of full 
competition in telecommunications markets (July IQ, IQQS). In 
addition, both the French and German Governments have un­
dertaken to fully liberalize their telecommunications facilities 
and services by January I, 1998 in order to obtain E.U. approval 
of the Atlas and Phoenix transactions. 
• 13 Sprint Petition at iv; Sprint Reply at 7. ~S-38. 
114 Sprint Petition at iv, 20. 
I IS AT&T Opposition at 45-46. 
---. ........... ______________ _ 
11 FCC Red No. 4 Federal Communications Commission Record FCC 95-498 
in any event the public interest benefits of the proposed 
transaction do not outweigh the potential for competitive 
harm. 
ii. Discussion 
78. A second critical factor in our approval of the pro­
posed transaction is the procompetitive effects in U.S. mar­
kets of the Ff and OT investment in Sprint. In addition to 
the effective competitive opportunities analysis, our For­
eign Carrier Entry Order cites other factors that will be 
co·nsidered important in our overall public interest analysis 
for foreign carrier entry, including the general significance 
of the proposed entry to the promotion of competition in 
the U.S. communications market. 116 We are persuaded by 
Sprint's arguments regarding the value of the transaction to 
Sprint as a competitor in the U.S. telecommunications 
market and find that the procompetitive benefits of the 
proposed transaction to U.S. telecommunications markets 
are significant and justify approving the transaction. More­
over, we do not agree' with AT&T that Sprint should 
demonstrate it cannot raise the capital elsewhere in order 
for the investments by FT and OT to be considered a 
positive public interest factor. There likely are many rea­
sons behind Sprint's choice to raise capital through equity 
partners rather than through the world's financial markets. 
Taking on more debt, for example, could involve greater 
transaction costs than would otherwise be the case. In any 
event, we find no reason to question Sprint's representa­
tions that it needs these investments to participate fully in 
various sectors of the U.S. communications market, as 
discussed below.117 
79. To begin our analysis of these claims, we examine the 
markets in which the proposed transaction will have com­
petitive effects. These relevant markets include: domestic 
interexchange services; terrestrial commercial m<;>bile radio 
services (CMRS); U.S. international services; and global 
seamless services. 118 
(a) Domestic lnterexchange Services 
80. In the domestic interexchange services market, the 
major competitors and market shares in 1994 were AT&T, 
55 percent; MCI, 17 percent; Sprint, 10 percent; LOOS 
(now WorldCom), 3 percent; and the remaining 15 percent 
shared by more than 400 other carriers. 11 ~ FT and OT 
currently are not involved in this" wmarket. Although 
capital investment is not, by itself. necessarily 
procompetitive or efficient,'20 the competitive forces in the 
116 Foreign Carrier Entry Order at,, 61-72. 
'17 See Sprint Reply Comments at iii . 
118 We note that Sprint affiliates control local exchange facili­
ties, and thus are involved in the local exchange market. Be­
cau:;e these local exchange affiliates presently are subject to 
little, if any, competition in most cases, we bel ieve the transac­
tion will have minimal competitive effects in the local exchange 
market. Thus, we do not include this market. 
119 Federal Communications Co mmission, Common Carrier 
Bureau, Industry Analysis Division, Long Distance Market Share 
First Quarter 1995, Table 5 (Total Toll Service Revenues) (July 
1995). These records consist of reports filed by carriers operat­
in§ in the interexchange market. 
12 Set AT&T Opposition at 45-46. 
121 See MCI/BT, 9 FCC Red at 3972. 
122 Cf. IDB, Memorandum Opinion & Order, IO FCC Red at 
1863 
domestic interexchange market will likely drive Sprint to 
devote the investment to making itself a stronger competi­
tor in the ways it describes. 121 Sprint's strengthening of 
itself as a competitor. against its larger rivals, AT&T and 
MCI, should yield procompetitive benefits for 
consumers.122 In addition, by permitting Sprint to expand 
and upgrade its existing network, undertake additional re­
search and develop new applications and services, the 
capital should ultimately benefit consumers through lower 
prices and more service choices. Moreover, we find there 
are no apparent anticompetitive effects occurring in this 
market as a result of FT's and OT's investment. Accord­
ingly, we find that the proposed transaction will have a 
procompetitive effect in the domestic interexchange ser­
vices market. 
(b) Terrestrial CMRS 
81. CMRS consists of certain mobile radio telecommuni­
cations services that are interconnected to the public 
switched telecommunications network and are offered to 
the general public (or a substantial portion of it) for 
profit. 123 Terrestrial CMRS includes cellular, paging, spe­
cialized mobile radio, interconnected business radio, and 
broadband and narrowband PCS. 12' There are numerous 
existing competitors in this market, including AT&T, the 
Regional Bell Holding Companies and GTE. Sprint owns a 
40 percent partnership interest, through its affiliate STY, in 
WirelessCo. which holds more broadband PCS licenses 
than any other entity. 12s The other partners in WirelessCo 
are three cable television multiple system operators.126 
WirelessCo is expected to provide broadband PCS in com­
petition with other CMRS providers and, perhaps, with 
providers of wireline local exchange services. 
82. We agree with Sprint that this capital infusion to its 
wireless activities is an important procompetitive effect of 
the proposed transaction. To the extent Sprint plans to use 
the proposed investment to fund its PCS ventures to com­
pete with current CMRS and wireline local exchange pro­
viders, the proposed transaction will be procompetitive. In 
the local exchange wireline market in particular. competi­
tion is nascent. There do not appear to be, and no party 
alleges, any anticompetitive effects in this market resulting 
from FT's and OT's proposed investment. Accordingly, we 
find that the proposed transaction will have important 
procompetitive effects in the terrestrial CMRS market. 
1116 ("the propose$! transaction will create procompetitive bene­
fits by producing . .. improved capability of serving customers 
in several markets"). 
llJ Set Implementation of Section 6002(B) of the Omnibus 
Budget Reconciliation Act of 1993, First Report, 10 FCC Red 
8844 ( 1995) (First Annual CMRS Report). 
12~ This group of services has been called "terrestrial CMRS" 
and has been used in competitive analysis of acquisitions and 
joint ventures by the Commission"s Wireless Telecommunica­
tions Bureau. Motorola. Inc .. 10 FCC Red 7710. 7785-86 (1995), 
petition for reconsideration pending, cited with approval in Nextel 
CommU1tications, Inc., DA95-1677, , 32 & n.101 (released July 
28 1995). 
tz:S First Annual CMRS Report, 10 FCC Red at 8875-78 (Table 
2). At present, Sprint is a provider of cellular service on a 
significant scale. but it is divesting its cellular licenses and other 
assets. 
126 Id. at 8879 (Table 2). 
FCC 95-498 Federal Communications Commission Record 11 FCC Red No. 4 
(c) US. International Services 
83. In 1993, AT&T's IMTS market share in terms of U.S. 
originated and terminated minutes was approximately 63 
per~e~t; MCI's share was approximately 24 percent; 
Sprmt s share was approximately 10 percent; and the re­
maining 3 percent were scattered. 127 As in the domestic 
interexchange market, the FT/OT capital contribution 
would enable Sprint to upgrade its international facilities 
and provide new applications beneficial to U.S. customers. 
Neither FT nor DT has a market share of its own. Thus the 
proposed transaction would not increase Sprint's market 
share in the sense that FT's nor OT's market shares would 
be combined with Sprint's market share. More vigorous 
competition by Sprint, the third largest international ser­
vices carrier, would result in tangible benefits to customers 
and is proc-0mpetitive. Specifically, Sprint's investment i~ 
its infrastructure and in the development of new applica­
tions should lead to a broadened range of customer 
choices, more price competition, and better quality service 
offerings in this market. These procompetitive effects are 
essentially the same type as we expect in the domestic 
interexchange market and noted as attendant benefits in 
the MCI/BT decision. In summary, we conclude that, on 
balance, the proposed transaction will have procompetitive 
effects in the U.S. international services market, assuming 
the Sprint complies with the conditions described below. 
(d) Global Seamless Services 
84. In addition, we expect the transaction to have a 
procompetitive effect in the global seamless services mar­
ket. Global seamless services is an emerging product mar­
ket of worldwide geographic scope, which we discussed 
briefly in the MC!IBT decision. 128 At present, the product 
dimension of this market consists of a combination of 
voice, data. video and other telecommunications services 
that are offered by a single source over an integrated 
international network of owned or leased facilities, and that 
have the same quality, characteristics, features and capabil­
ities wherever they are provided. This end-to-end service 
offers the advantage to customers of "one-stop shopping" 
and single-source billing. The principal customers are high­
end users such as multinational corporations, but 
individuals and carriers may also be customers.12'1 
85. The Joint Venture plans to offer mid-size and large 
multinational business customers a variety of seamless 
voice, data, private line and videoconferencing options. 
These include global virtual private networks, international 
private lines and private networks, high-speed data 
127 Federal Communications Commission. Common Carrier 
Bureau, 1993 International Telecommunications Data (Interna­
tional Message Telephone Service. U.S. and Foreign Billed Traf­
fic Originating or Terminating in the United States) (Nov. 
IW4). 
128 M('[/ BT, 9 FCC Red at 3971. 
iiq See Competitive Impact Statement, 60 Fed. Reg. at 44060-61 
(describing "seamless international telecommunications ser­
vices"). 
tJO Set Sprint Petition at 17-19. 
131 Worldpartners is a non-exclusive, co-marketing alliance of 
major telecommunication providers. See MCI/BT. 9 FCC Red at 
3971 n.98. It also has been de>Cribed as being made up of equity 
and non-equity members. Equity members are AT&T. KOO of 
Japan and the national or principal telecommunications provid­
ers of Singapore, Sweden, Switzerland, Spain, and the Nether­
lands. Non-equity members are the national or principal 
1864 
offerings, packet-switched networks, bandwidth manage­
ment products, store-and forward fax, and electronic mail. 
The services may employ advanced technologies such as 
frame relay, asynchronous transfer mode (ATM) and syn­
chronous digital hierarchy (SDH) technologies, and may be 
basic or enhanced, depending on the needs of users. Lower 
volume users and travelers will be offered a number of 
global card and travel products. According to Sprint, these 
products will permit easy and cost-efficient access by in­
dividual users to international calling services worldwide 
on a pre-paid and post-paid card basis. For users outside of 
their home markets, Sprint states, third-country caJling will 
provide an easy and efficient way to reach other interna­
tional points worldwide. These customers will be tradi­
tional facilities-based carriers, as well as emerging carriers, 
resellers and niche service providers. In addition, the Joint 
Venture will offer transit. and global termination services. 
Computer-based platforms for advanced carrier services 
also will be marketed to other carriers. 130 
86. At the time of our decision in MCI/BT, there were 
no established global seamless service providers. Today, 
there are several such providers in this market. As the 
Justice Department noted in its Competitive Impact State­
ment, global seamless service providers consist mainly of 
various carrier alliances, including AT&T's partnersh ips 
(through Worldpartners131 and Uniworld),112 and the 
MCUBT alliance (Concert).133 The Joint Venture between 
Sprint, FT and DT would add another significant competi­
tor to this market. Each of these alliances is targeting 
essentially the same potential global market for the world's 
large business customers. 
87. We believe Sprint's entry, through the Joint Venture, 
into the global seamless services market will yield signifi­
cant competitive benefits for U.S. customers. The establish­
ment of a new, viable competitor in this area should result 
in more competitive options for U.S. customers, particu­
larly in terms of pricing and variety of services available 
for large scale. high-end customers such as multinational 
corporations. In addition, the Joint Venture should offer a 
number of efficiencies for Sprint, such as greater econo­
mies of scale, easier entry into new markets and the shar­
ing of risks. Given that several strong competitors already 
exist in this market, the procompetitive effects of the 
Sprint/FT/OT transaction outweigh any possible 
anticompetitive results in this market. 
telecommunications providers of Australia, Korea, New Zealand, 
Hong Kong. and Canada. Members do not hold equity in one 
another. and the alliance has not been subject to prior U.S. or 
E.U. regulatory approval. See Competitive Impact Statement, 60 
Fed. Reg. at 44061. Several parties raise concerns in this pro­
ceeding related to AT&T's Worldpartners alliance. See BTNA 
Reply Comments at 5; ACC Reply Comments at 3. General 
issues regarding such marketing alliances were addressed in our 
Foreign Carrier Entry Order. See Foreign Carrier £n1ry Order at 
, , 93-95. 
132 In July 1995, AT&T and the European-based consortium 
Unisource, comprised of dominant or monopoly carriers from 
Sweden. Switzerland, Spain, ana the Netherlands. finalized the 
terms of their joint venture Uniworld. Unisource holds a 20 
percent equity stake in Worldpartners, but the alliances remain 
serarate entities. 
13 See Competitive Impact Statement, 60 Fed. Reg. at 44061. 
11 FCC Red No. 4 Federal Communications Commission Record FCC 95-498 
Ill. Summary 
88. We thus find that the transaction offers the additional 
public interest benefits of significant procompetitive effects 
m the U.S. market and, in particular, in the domestic 
interexchange, terrestrial CMRS, international, and global 
seamless services markets. The infusion of capital by Ff 
and DT will assist Sprint's further development in markets 
in which it is already competing, and will facilitate Sprint's 
entry into new, undeveloped markets, to the ultimate bene­
fit of U.S. customers. We disagree with AT&T that the 
public interest benefits of the proposed transaction dis­
cussed above do not outweigh the potential competitive 
harm, particularly given the conditions we impose. Thus, 
we find that these public interest factors weigh strongly in 
favor of granting Sprint's petition, subject to the conditions 
discussed below. 
c. Other Public Interest Factors 
89. Other factors cited in our Foreign Carrier Entry Order 
that may be considered as part of the overall public interest 
analysis for foreign carrier entry include cost-based ac­
counting rates, and any national security or law enforce­
ment issues, foreign policy or trade concerns raised by the 
Executive Branch. In addition, the extent of alien partici­
pation in Sprint's parent corporation is a public interest 
, factor under Section 310(b)(4). 
90. AT&T argues that the implementation of cost-based 
accounting rates by Ff and DT should be a precondition of 
approval of the petition. 134 We decline to adopt the specific 
approach advocated by AT&T. We decided in the Foreign 
Carrier Entry Order that we would not take AT&T's ap­
proach, but instead would consider cost-based accounting 
rates as an additional public interest factor. The accounting 
rates between the United States and Germany have signifi­
cantly decreased in the last 10 years, following a general 
global trend. In 1985, the accounting rate between the 
United States and Germany was l.2 Special Drawing Rights 
(SDR) (approximately $1.32); in 1995. the rate was 0.26 
SOR (approximately $0.39). 135 Although there remains 
room for further progress, Germany has taken significant 
str ides towards a cost-based accounting rate. 
91. The accounting rates between the United States and 
France also have decreased in the last 10 years, but much 
less than the U.S.-Germany rates. They remain significantly 
above cost. In 1985, the accounting rate between the Unit­
~d States and France was 1.6 (SOR) (approximately $1.76); 
m 1995, the rate was 0.36 SOR (approximately $0.54). d6 
Today, the U.S.-France accounting rate is nearly 28 percent 
above the U.S.-Germany and U.S.-U.K. accounting rates.1.17 
There is no possible justification for this difference. Given 
134 AT&T Supplemental Opposition at 33-3-t 
135 Federal Communications Commission, International Bu­
reau, "Accounting Rates for International Message Telephone 
Service of the United States." at 3 (Nov. I. 1995). 
136 See id. at 2. 
137 See id. at 6 (listing the U.S.-U.K. accounting rate as 0.25 
SOR (S0.37)). 
138 AT&T has estimated that a cost-based accounting rate for 
the United Kingdom is 0.08 SOR. See AT&T Comments. BTNA 
Application for Authority Under Section 214 of the Commu· 
nications Act to Provide International Resale Services as a 
Nondominant Common Carrier, File No. l-T-C-93-126 (filed 
1865 
the si~i lar levels of infrastructure and economic develop­
~ent m France, Germany and the United Kingdom, the 
htgh volume of calls originated and terminated in each 
country, and the geographic proximity of the these coun­
tries, the costs of originating and terminating U.S. traffic in 
France should be similar to the costs for Germany and the 
United Kingdom.'38 But while the U.S.-Germany and 
U.S.-U.K. rates are in the same range, the U.S.-France 
accounting rate is significantly higher. 
92. Thus, although the accounting rates with France and 
Germany are moving downward, they remain well above 
cost, particularly in the case of France. Accordingly, we 
find this to be a negative factor in our public interest 
analysis, especially for France. We thus find that this trans­
action is in the public interest only if Sprint obtains a 
written commitment from Ff to lower the accounting rate 
between the United States and France to the same range as 
the U.S.-U.K. and U.S.-Germany accounting rates, as de­
scribed more fully below in paragraph 131. 
93. With respect to the other public interest factors laid 
out in the Foreign Carrier Entry Order, we note that the 
Executive Branch has not advised us of any national secu­
rity, law enforcement, foreign policy. or trade concerns 
that support grant or denial of the petition. 
94. We next analyze the extent of alien participation in 
Sprint's parent corporation as a public interest factor iden­
tified in the Foreign Carrier EntIT. Order as relevant to our 
analysis under Section 310{b){4).1 9 Upon consummation of 
the transaction , Spr int could at any time have up to 28 
percent alien ownership ( 10 percent Ff, 10 percent DT 
and approximately 6.2 percent non-Ff or -OT, with a 3 
percent margin for fluctuation), with 80 percent U.S. direc­
tors and 100 percent U.S. officers. Both prior to and after 
consummation of the transaction, however, 100 percent of 
the officers and directors of Sprint's .wholly-owned Title III 
common carrier licensee subsidiaries will be U.S. 
citizens. 140 Sprint maintains that the aggregated 28 percent 
alien ownership is consistent with the public interest and 
the Commission's decision in MCI/BT and falls within 
Commission precedent permitting alien ownership in ex-
cess of the statutory benchmark. · 
95. In the common carrier context.141 the Commission's 
decision whether to permit a level of alien ownership or 
participation that exceeds the statutory benchmark tradi· 
tionally has taken into account the overall level of alien 
involvement in the ownership and management of the 
parent company.'~z Recently, the Commission approved 92 
percent alien ownership in the alien parent of a U.S. 
subsidiary which would control a licensee where. more 
than 50 percent of the directors and 85 percent of the 
Mar. 22, l<N5). 
IJ9 See Foreign Carrier Entry Order at , 216. 
IJO See Sprint Petition at 25. 
IJI Common carrier licensees traditionally have been treated 
differently from broadcast licensees because common carriers do 
not control the content of their transmissions. See Fox Tele vi­
sion Stations, Inc., FCC 95-313, at, 21 (released Jul. 28, 1995). 
IJl See MCI/BT, 9 FCC Red at 3973 (citing GRC Cablevision, 
Inc., 47 F.C.C.2d 467 (1974); LC/ Communications, Inc., Mimeo 
No. 3491 (Mar. 31, 1986); Millicom, 4 FCC Red 4846 (Com. Car. 
Bur. 1989); IDB Communications Group. Inc .. 6 FCC Red 4652 
(Com. Car. Bur. 1991); and Teleport Transmission Holdings, 8 
FCC Red 3063 (Com. Car. Bur. IW3)). 
FCC 95-498 Federal Communications Commission ·Record 11 FCC Red No. 4 
officers of the subsidiary would be U.S. citizens.143 As in 
the MCI/BT proceeding, it is only the potential for a three 
percent fluctuation in alien ownership beyond the 25 
percent statutory benchmark that causes the petitioners to 
seek a favorable Section 310(b)(4) declaratory ruling. In 
addition, this transaction involves a dominant U.S. pres­
ence among Sprint's officers, directors and shareholders. 
Approval of the percentage of alien ownership in Sprint 
resulting from the transaction with FT and OT is consistent 
with the previous cases in which we have determined it 
would not be in the public interest to prohibit levels of 
indirect alien ownership of common carrier licensees in 
excess of that proposed by Sprint. 144 Thus, our analysis of 
the extent of alien participation in Sprint's parent corpora­
tion under Section 310(b)(4) weighs in favor of approval. 
6. Conditions and Safeguards 
a. Comments 
96. As noted above, a number of parties urge us to deny 
Sprint's petition until France and Germany open their 
telecommunications markets and offer effective market ac­
cess. 145 In addition to FT's and DT's monopoly status, 
these parties cite the lack of competitive safeguards and 
independent regulators as major deficiencies of the current 
French and German regulatory regimes. In addition to the 
competitive concerns mentioned in Section IV.B.4, AT&T, 
BTNA, CWNIBEW, and ITI state that approval of Sprint's 
petition will remove incentives for faster liberalization in 
France and Germany.146 These parties also assert that ap­
proval of the transaction would undercut the U.S. Govern­
ment's bargaining position in the Negotiating Group on 
Basic Telecommunications (NGBT). Several parties also 
propose that, in the event we approve the transaction, we 
should impose certain conditions. For example, AT&T 
states that the Commission should withhold approval of the 
equity investment and permit the parties' Joint Venture to 
proceed with conditions.147 · 
97. ACC and MFSI urge the Commission to treat Sprint 
as a dominant carrier on the U.S.-France and 
U.S.-Germany routes. They also believe that the conditions 
imposed by the Justice Department on MCI/BT, including 
•
43 See Cable & Wireless, File No. 60-SAT-MISC-Q5 (released 
Oct. 17, 1995). 144 See GRC Cablevision, Inc., 47 F.C.C.2d at 467; GC/ 
Liquidating Trust, 7 FCC Red 7641 ( IW2); Teleport Transmission 
Holdings. 8 FCC Red at 3063. 145 See, e.g., Letter from Gerd Eickers, ADPO. to Reed Hundt, 
Chairman. Federal Communications Commission (filed Dec. 20, 
1994); BTNA Supplemental Comments at 5-8; Esprit Opposition 
at 7-8; and MCI Opposition at 16-20. 
146 See AT&T Supplemental Opposition at iv; BTNA Sup­
plemental Comments at 6-7; CWNIBEW Comments at 2-3; !Tl 
Letter at 2. 
147 These conditions include: (I) prohibit Sprint from offering 
a new correspondent service with FT or OT unless FT and OT 
offer to provide the service on the same terms and conditions 
with any U.S. carrier with whom it has an operating agreement; 
(2) require that FT and OT implement cost-based accounting 
rates with all U.S. carriers; (3) prohibit the "steering" of cus­
tomers by OT and FT to Sprint or the Joint Venture; and (4) 
impose the conditions required in the MCI/BT Ordtr, including 
the prohibition against accepting any "special concession." See 
AT&T Supplemental Opposition at 31-37. AT&T also recom­
mended specific conditions in a recently filed ex parte submis­
sion. These conditions reflect concerns raised by AT&T 
1866 
transparency, confidentiality and international simple re­
sale requirements, should be imposed in this proceeding. 148 
Worldcom requests that the Commission condition any 
approval of Sprint's petition upon requirements that FT 
and OT implement co>t-based local switched rates, and not 
discriminate in their provisioning and maintenance of fa­
cilities.149 Finally, Senator Dole urges the Commission not 
to artificially "freeze" Sprint's communications capacity 
because an arbitrary limit on communications capacity will 
not alleviate concerns about foreign market leveraging.150 
b. Discussion 
98. We have concluded that, in the overall public inter­
est under Sections 214 and 310(b)(4), we should not with­
hold a positive public interest finding regarding · the 
transaction until France and Germany offer effective com­
petitive opportunities or the market access requirements 
suggested by a number of the parties. is• We are not dis­
counting the importance of these factors; indeed, we expect 
these factors, including a fair and transparent interconnec­
tion regime, competitive safeguards, and an independent 
regulator, to be implemented in France and Germany by 
1998. But we believe the significant public interest benefits 
of the transaction weigh in favor of a finding that this 
transaction is in the public interest, subject to conditions, 
notwithstanding the current lack of effective competitive 
opportunities in France and Germany. 
99. We also believe that delay or denial of Sprint's 
petition until effective competitive opportunities exist in 
France and Germany would undermine the parties' pro­
posed transaction and, accordingly, possibly result in the 
loss of the important public interest benefits of the transac­
tion. Moreover, in view of these public interest benefits 
arising from the capital investment, we decline to permit 
only the parties' Joint Venture to proceed and withhold a 
finding that this transaction is in the public interest until 
effective competitive opportunities exist. as proposed by 
AT&T. Given our public interest findings, we also decline 
to require Sprint to divest its operations on the France and 
Germany routes.152 
previously in this proceeding, and we respond to those concerns 
below. See Letter from R. Gerald Salemme. AT&T. to Jane 
Mago, Federal Communications Commission (filed Dec. 8. 
IQQ5). 
tJS See ACC Opposition at 6-16; MFSI Opposition at 7-15. 149 WorldCom Letter at 3-7. 
iso Letter from Senator Bob Dole to Reed E. Hundt, Chair­
man, Federal Communications Commission. (filed Dec. 12. 
19Q5). 
•St See e.g., ACC Opposition at 16-17; AT&T Supplemental 
Opposition at 17-30; BTNA Supplemental Opposition at 8-12; 
MCI Opposition at 16-20. We also·decline to agree with Esprit 
that, if we grant Sprint's request, we should permit U.S. car­
riers to (I) engage in "one-way" resale and (2) route traffic over 
private lines between the United States and third countries 
through private lines between the United States and countries 
designated as equivalent. See Esprit Reply Comments at 4-6 
(filed Sep. 15, 1995). Esprit's recommended changes to our 
international private line policies were ra ised by other parties in 
the Foreign Carrier Emry proceeding and addressed extensively 
in our final Order in that proceeding. See Foreign Carrier Entry 
Order at,, 165-70. We see no need to revisit these conclusions 
here. 
ISZ See id. at,, 117-18. 
11 FCC Red No. 4 Federal Communications Commission Record FCC 95-498 
100. We do believe, however, that Sprint must agree to 
adhere to the strict conditions described below until full 
facilities and services competition emerge in both countries 
in o rder to ensure that the parties do not engage in 
anticompetitive activities. We continue to believe, as we 
stated in the Foreign Carrier Entry Order, that full facilities­
based competition, rather than regulatory conditions, are 
the most potent safeguard against the abuse of market 
power.1s3 Nonetheless, because of the public interest bene­
fits of the proposed transaction and the commitments to 
foreign liberalization, we are willing to rely on strict con­
ditions in this proceeding to protect competition. Because 
of the conditions we are requir ing Sprint to accept as part 
of our public interest finding, we disagree with the AT&T, 
BTNA and CWA/IBEW that approval of Sprint's petition 
will remove incentives for the French and German Gov­
ernments to undertake further liberalization. These con­
ditions provide important incentives for earlier 
liberalization than might otherwise be the case. We thus do 
not believe that approval of this transaction will adversely 
affect NGBT negotiations. In any event, we do not believe 
it would be appropriate to delay our decision until after 
April 1996, the deadline for an agreement in that forum, 
given Sprint's legitimate business needs for a timely de­
cision. 
101. In its proposed Final Judgment and Competitive 
Impact Statement, the Justice Department reaches many of 
the same conclusions that we do about the potential for 
anticompetitive conduct as a result of the proposed transac­
tion. m It finds that, because of the absence of privatization 
and the continued existence of de jure monopolies in 
France and Germany, additional relief is needed beyond 
that imposed in the MCI/BT Final Judgment. The Justice 
Department concludes that a series of conditions and re­
quirements, imposed in two phases, is sufficient to address 
its concerns over potential anticompetitive conduct. par­
ticu larly given the progress made in France and Germany 
towards a competitive telecommunications environment 
and the plans for the implementation of full facilities and 
services competition in 1998. As we note below, a number 
of the conditions we require Sprint to accept address con­
cerns similar to those addressed by the Justice Department. 
We have taken into account the provisions of the proposed 
Final Judgment in designing our conditions in this Order, 
and we rely on the effectiveness of those provisions. The 
conditions described below, together with the provisions of 
the proposed Final Judgment, fully address our public 
interest concerns. 
102. Upon careful consideration of th·e record in this 
proceeding, we impose, in general. five conditions to pre­
vent potential anticompetitive conduct and minimize the 
unfair competitive advantages accruing to Sprint from its 
affiliation with FT and OT. First. we find that Sprint is a 
dominant carrier for the provision of U.S. international 
services on the U.S.-France and U.S.-Germany routes. Sec­
ond, we will not allow Sprint to operate additional circuits 
on the U.S.-France and U.S.-Germany routes until France 
and Germany have liberalized two important markets: al­
ternative infrastructure for already I iberalized services 
ISJ See id. at,, 15-16 & 29. 
tS4 See Competitive Impact Statement, 60 Fed. Reg. at 
44063-65. 
IR67 
(which include most non-public voice services) and basic 
switched voice resale. Third, we require Sprint to comply 
with nondiscrimination and reporting requirements. 
Fourth, we find this transaction serves the public interest 
only if Sprint obtains a written commitment from FT to 
lower the accounting rate between the United States and 
France to the same range as the U.S.-U.K. and 
U.S.-Germany accounting rates. Fifth, if the anticipated 
liberalization measures and implementation of effective 
competitive opportunities do not occur as planned, we will 
take further action no later than the Spring of 1998. Pro­
vided that Sprint complies with the conditions of this 
ruling, we conclude that we need not designate for hearing 
the issue whether the public interest would continue to be 
served by Sprint's holding of Title II authorizations and 
Title III licenses if these investments and the Joint Venture 
are consummated. 
I. Regulating Sprint as a Dominant Carrier 
103. The first condition includes the regulation of Sprint 
as a dominant carrier for the provision of U.S. interna­
tional services on the U.S.-France and U.S.-Germany 
routes until Sprint can demonstrate that there is no sub­
stantial risk of anticompetitive effects in the U.S. interna­
tional services market from its affiliation with FT and 
OT. us We recently modified our dominant carrier safe­
guards to require tariff filing on 14-days notice, prior Sec­
tion 214 authorization for circuit additions o r changes; the 
filing of quarterly traffic and revenue reports; and the 
maintaining of provisioning and maintenance records that 
cover the network facilities and services a dominant, for­
eign-affiliated carrier procures from its foreign carrier af­
filiate. This requirement includes services that a dominant 
carrier procures on behalf of joint ventures for the provi­
sion of U.S. basic or enhanced services.'s6 
104. The Foreign Carrier Entry Order adopts a change in 
our policy regarding when we will consider a foreign car­
rier investment in a U.S. carrier to constitute an "affili­
ation" for purposes of determining regulatory treatment of 
the U.S. carrier. First, we have lowered the affiliation 
threshold control to a greater than 25 percent interest or a 
controlling interest at any level. In addition, we have in­
dicated we may regulate a carrier as dominant even if an 
investment is less than 25 percent if there are other 
contractual arrangement$ between the parties which could 
have a significant impact on competition.'s7 · 
105. In this case. although the combined equity interests 
of FT and OT are less than 25 percent. we nonetheless find 
an affiliation in this case for the same reasons we found an 
affiliation under our effective competitive opportunities 
analysis. us In particular, this transaction involves two of 
the largest foreign carriers in the world, which ·control 
bottleneck facilities in two of the biggest destination mar­
kets for U.S. traffic.'s9 These carriers propose to invest in 
the third largest U.S. domestic interexchange and interna­
tional telecommunications services carrier as part of their 
Joint Venture. The monopoly positions of FT and OT in 
their own countries. combined with their 10 percent each 
equity interest in. and Joint Venture with, Sprint, provide 
ISS See Foreign Carrier Emry Order at , 253 & n.358. 
IS6 See id. at,, 262-73. 
1s7 See id. at,, 118-92. 
iss See supra at , 39. 
u 9 See 47 C.F.R. § 63.0l(r)(7). 
FCC 95-498 Federal Communications Commission Record 11 FCC Red No. 4 
the incentive and ability for FT and/or OT to engage in 
anticompetitive conduct favoring Sprint on these routes. 
For example, to the extent FT and OT can take actions to 
enhance Sprint's position and Spr int's stock value increases 
as a result , FT and OT would themselves profit by the rise 
in value of their equity investment in Sprint. 
106. Moreover, the potential impact on competition in 
the U.S. basic international services market warrants domi­
nant carrier treatment to enable us to closely monitor 
Sprint's circuits additions, traffic and tariffs for service to 
these countries, as well as the treatment afforded FT and 
OT in the provisioning and maintenance of their basic 
network services and facilities. Accordingly, we find under 
our new policy regarding affiliation that Sprint cannot be 
treated as non-dominant on the France and Germany 
routes because Sprint's affiliated carriers, FT and OT, con­
trol bottleneck facilities in those countries.160 We also find 
that, under our current definition of affiliation, Sprint 
must be regulated as dominant on the France and Ger­
many routes. We thus require Sprint to comply with the 
specific dominant carrier regulation requirements set forth 
in paragraph 140 of this Order. 
107. The longer tariff filing period for dominant carriers 
will give us a better opportunity to detect potential preda­
tory pricing before it occurs. 16 1 Similarly, the requirement 
that Sprint file quarterly traffic reports and seek prior 
approval for circuit additions or changes on the France 
and Germany routes will better enable us to monitor traffic 
flows between Sprint and FT in France and OT in Ger­
many and to remedy promptly any abuses of foreign mar ­
ket power. Prior approval for circuit additions or changes 
is required of all dominant carriers and, in this case, would 
enable competitors of Sprint and the Joint Venture to 
determine if discrimination is occurring. We thus agree 
with ACC and MFSI that these requirements are necessary 
to aid detection of, and help deter. anticompetitive con­
duct. By doing so, dominant carrier regulation will protect 
competition until France and Germany offer effective com­
petitive opportunities. 
108. Because FT and OT continue to hold monopolies 
over key infrastructure, we believe there is a stronger po­
tential for the anticompetitive use of foreign market power 
than in MCI/BT. Thus, regulation of Sprint as a dominant 
carrier is necessary on the routes where it is receiving 
traffic from FT and OT at least until full infrastructure and 
services liberalization and procompetitive regulation 
emerges in France and Germany}6l If effective competition 
and effective regulation actually emerge in each country, 
the potential anticompetitive effects would be diminished 
and the types of conditions we imposed on that transaction 
may .then be adequate to protect competition. We reserve 
the right to extend dominant carrier regulation to addi­
tional U.S.-international routes in the event FT, OT and 
Sprint enter into a similar alliance with any other "foreign 
carrier." We also reserve the right to extend to additional 
U.S. international routes dominant carrier regulation and 
reporting requirements contained in this Order in the 
event Sprint has or acquires an "affiliation" with any "for-
160 Stt 47 C.F.R. § 63. IO(a)(2) & (3). 
l6I Currently. nondominant carriers are subject to the same 
14-day tariff filing notice requirement. We have proposed in 
another proceeding, however. to reduce this waiting period to 
1868 
eign carrier" as those terms are defined in our Foreign 
Carrier Entry Order and Section 63.0l(r)(l)(i) and (ii) of 
the Commission's Rules. 
ii. Circuit Restrictions 
109. Under the second condition, we will not allow 
Sprint to operate additional circuits on the U.S.-France and 
U.S.-Germany routes until two milestones have been met. 
These milestones are described in detail below. This con­
dition is necessary to mitigate Sprint's unfair competitive 
advantage over other U.S. carriers on the routes where FT 
and OT have monopoly market power on the foreign end 
for the interim period until further competition emerges in 
those markets. Thus, while we will permit Sprint to acquire 
additional circuit capacity, we will not allow Sprint to 
operate any newly-acquired circuits until Sprint demon­
strates that these competitive milestones have been met. To 
implement this condition, we require Sprint to file with 
the Commission, within 15 days of the effective date of this 
Order, a circuit status report on the U.S.-France and 
U.S.-Germany routes, specifying the number of circuits in 
which Sprint has an ownership, indefeasible right of use or 
leasehold interest, and the number of circuits it is operat­
ing on these routes. 
110. By virtue of its Joint Venture with FT and OT, we 
find that Sprint has an advantage over other U.S. carriers 
that have no possibility of forming a similar alliance with 
another French or G~rman carrier. As we concluded in 
the Foreign Carrier Entry Order, if there is no opportunity 
for participation by other U.S. carriers, then the benefits of 
providing international service on an end-to-end basis will 
flow solely to the monopoly foreign carrier and its U.S. 
affiliate. Our approach to future Section 214 authorization 
requests by Sprint is designed to mitigate the unfair com­
petitive advantage accruing to Sprint. FT and OT until 
further liberalization occurs. We also believe such action 
will provide further incentives for the French and German 
Governments and FT and OT to continue to liberalize 
their telecommunications markets before 1998. 
111. The first milestone is implementation of alternative 
infrastructure competition in France and Ger many. To 
meet this milestone, France and Germany must permit 
infrastructure to be offered by entities other than FT or 
OT, or their affiliates. Such alternative infrastructure must 
be permitted to carry all currently liberalized services in 
France and Germany, including data communications and 
closed user groups traffic (but not public switched voice 
services). This development opens the way for new facili­
ties-based carriers for most telecommunications services. 
Thus, at least with respect to already liberalized services, 
U.S.-affiliated entities may begin to have competitive alter­
natives to FT and OT to carry their non-public switched 
voice traffic in France and Germany. 
112. The second milestone is the existence of opportu­
nities to provide basic switched voice resale. including for 
the provision of traffic originated or terminated in the 
United States. For purposes of this proceeding, we define 
liberalized basic switched voice resale to include public 
switched voice services which may be offered to the public 
using facilities provided by a separate underlying carrier, 
one day. Set Streamlining tht International Section 214 Au· 
1horiza1ion Process and Tariff Rtqu.irtmtnts. FCC Q5-286, at , 52 
~released Jul. 17, 1995). 
62 47 C.F.R. § 63.0l(r)(l)(i) & (ii). 
----------------------
11 FCC Red No. 4 Federal Communications Commission Record FCC 95-498 
and may be provided to and from the United States. Such 
resale opportunities must be available to all similarly situ­
ated U.S.-affiliated entities on the same terms and con­
ditions. To meet this milestone, it is sufficient that the 
reseller simply provide its own billing functions, and no 
switching or other functions for itself. In countries such as 
Chile, Canada, Sweden, and the United Kingdom, allowing 
such resale has served to aid the entry of competitors in 
the marketplace and to exert competitive pressure on rates, 
resulting in lower rates to the bentfit of customers. The 
French and German Governments each have indicated that 
FT and OT may enter into switchless resale arrangements 
with third parties, as subcontractors, within the current 
French and German legislative frameworks. 163 Thus, it is 
entirely within the authority of FT and OT to determine 
this condition will be satisfied. Although there is no legal 
compulsion in either country for FT or OT to do so, FT 
and OT can voluntarily enter into such arrangements, and 
thus have it within their power to satisfy the basic switched 
voice resale milestone. 
113. Although the opportunity to provide basic switched 
voice resale is not as desirable as full competitive provision 
of infrastructure, and would still require use of FT's or 
OT's underlying facilities, it is nonetheless an important 
interim step. The ~vailability of basic switched voice resale 
in France and Germany will put U.S. competitors of FT, 
OT and the Joint Venture on more equal footing with 
these entities. In particular, basic switched voice resale 
competition essentially would allow competitors to com­
pete for customers at every level with FT and OT, includ­
ing for public switched voice customers. Compet.itors· of 
FT, OT and the Joint Venture would then have the op­
portunity to market themselves, as only FT and OT now 
can, as "full service" providers. Until basic switched voice 
resale opportunities are available, such marketing and ser­
vice offerings are not possible. The competitive availability 
of alternative infrastructure and basic switched resale also 
will limit FT's and OT's ability "to leverage their monopoly 
power unfairly. These two forms of competition will start 
the process o f adapting to competition. which should help 
ease the implementation of full facilities and services com­
petition, to the benefit of potential competitors. This con­
dition also will serve as an important incentive for the 
effective implementation of liberalization steps sooner than 
might otherwise be the case. thus minimizing the competi­
tive harm to other U.S. carriers that wish, but are not 
currently permitted, to participate in the French and Ger­
man markets. 
114. This condition only affects Sprint's operation of 
additional capacity it is authorized to acquire subsequent to 
the consummation of the transaction on the France and 
Germany routes; it will not prevent Sprint from acquiring 
additional capacity as it becomes available or is needed to 
meet its expected long term capacity needs. Business 
realities may mean that Sprint will be required to invest 
l6J Ste Letter from Bruno L.?.sserre, Director General of 
DGPT, to Commissioner Susan Ness. Federal Communications 
Commission (filed Dec. 11, 19115); Letter from BMPT to Francis 
Coleman, ACC (filed June 30. 19115). 
164 Sprint Reply at 12. 
l6S Stt Sections 312(a). 502 and 503 of the Act. -17 U.S.C. H 
312(a}, 502 and 503; Pass Word, 76 F.C.C.2d -lo5 ( IQHO), alfd mb 
11om. Pass Word 11. FCC, 673 F.2d 1363 (D.C. Cir. IQR2) (com­
mon carrier license revoked based on carrier's deliberate mis­
representation to the Commission)). 
1869 
now in capacity on a submarine cable, for example, that is 
not yet operational. As a dominant carrier, Sprint will be 
required to obtain prior Section 214 authority to acquire 
and operate any additional circuits. Because of the particu­
lar circumstances of this transaction, however, we will 
consider granting Sprint Section 214 authority only to 
acquire, not operate, capacity on either the France or 
Germany routes until the two competitive milestones are 
reached. Thus, while we will permit Sprint to acquire 
capacity on these ro utes, we will not allow Sprint to op­
erate any such capacity acquired after the consummation of 
the transaction until Sprint can demonstrate that the com­
petitive milestones have been reached. 
115. Based on our review of Sprint's confidential circuit 
status reports, published information on Sprint's capacity 
ownership on TAT-12113 and other the transatlantic cables, 
and Sprint's average growth rate, we are confident that this 
remedy will not adversely impact Sprint's short term abil­
ity to respond to marketplace demands. Moreover, this 
restriction does not affect Sprint's ability to provide service 
on these routes on a resale basis. We emphasize that we 
expect this condition to be short-term. Both FT and OT 
have the ability to satisfy the resale milestone by introduc­
ing resale at any time. Moreover, the French and German 
Governments have committed both to the E .U. and U.S. 
authorities to permit alternative infrastructure competition 
by July 1996. There is no reason, then, that this circuit 
restriction should not be able to be lifted in six months 
time. Upon Sprint's demonstration to the Commission that 
these two milestones have been met, the Commission will 
promptly lift this restriction from all previously condi­
tioned Section 214 authorizations. 
iii. Nondiscrimination and Reporting Requirements 
116. The third condition consists of nondiscrimination 
and reporting requirements based on longstanding 
procompetitive rules and policies of this Commission. 
These requirements, similar to those ,imposed in the 
MCI/BT proceeding, are designed to prevent Sprint from 
accepting the benefits of any anticompetitive use of market 
power by FT or OT. Moreover, Sprint has volunteered to 
accept these requirements. 164 These requirements will re­
main in place indefinitely unless expressly removed by 
Commission order. Sprint's failure to comply with these 
requirements may result in the imposition of fines or 
forfeitures or a revocation of one or more of its licenses. 1u 
117. We impose a number of nondiscrimination and 
reporting requirements. First, Sprint is prohibited from 
agreeing to accept, d irectly or indirectly, any special con­
cessions from any foreign carrier or administration with 
respect to traffic or revenue flows between the United 
States and any foreign country. 166 This requirement reflects 
a nondiscrimination safeguard adopted in the Foreign Car­
rier Entry Order. We also note that numerous cable landing 
166 Section 63.14 of the Commission's Rules defines special 
concessions as "any arrangement that affects traffic or revenue 
flows to or from the United States that is offered exclusively by 
a foreign carrier or administration to a particular U.S. interna­
tional carrier and not also to similarly situated U.S. interna­
tional carriers authorized to serve a particular route." -17 C.F.R. 
§ 63.1-1. 
• 
FCC 95-498 Federal Communications Commission Record 11 FCC Red No. 4 
licenses and Section 214 authorizations held by Sprint 
contain similar prohibition's against accepting "exclusive 
arrangements" from any foreign carrier or 
administration. 167 
118. Second, in keeping with the requirement not to 
accept "special concessions" directly or indirectly from FT 
or OT, Sprint shall obtain a written commitment from FT 
and OT not to offer or provide any special concessions to 
Sprint or the Joint Venture in FT's and OT's Erovision of 
basic telecommunications services or faci lities. 1 8 A copy of 
this written commitment must be filed with the Commis· 
sion 15 days prior to consummation of this transaction. 
119. Third, Sprint shall file with the Commission quar· 
terly reports summarizing its records on the provisioning 
and maintenance of facilities and services by FT and OT to 
Sprint, including, but not limited to, correspondent or 
other basic services or facilities procured on behalf of 
customers of Joint Venture offerings, in France and Ger­
many.169 These reports shall include information about any 
distribution or interconnection arrangements, including 
pricing, technical specifications, functional capabilities and 
other quality or operational characteristics, such as provi· 
sioning and maintenance times. Although we do not re· 
quire such reports of other dominant carriers in our 
Foreign Carrier Entry Order,'70 we believe that such reports 
are necessary in this case to enable competitors and users 
to determine if discrimination is occurring because of the 
large traffic flows between the United States and France 
and Germany and the resulting potential significant impact 
of anticompetit ive conduct on the U .S. telecommunications 
market. To provide additional monitoring, we also require 
Sprint to file with the Commission, within 15 days of the 
effective date of this Order, a circuit status report on the 
U.S.-France and U.S.-Germany routes, specifying the num· 
ber of circuits. 
167 See, e.g., US Sprim Communications Company Limited Part­
nership, FCC No. 91-416, at, 20 (released Jan.IO, 1992) (TAT-10 
cable landing license); Sprint Communications Company L.P., 
DA 95-2394, at , 18 (released Dec. I. IW5) (Section 214 au· 
thorization to provide switched services via international pri­
vate lines interconnected to the public switched networks in the 
United States and the United Kingdom); see also US Sprint 
Communications Company Limited Partnership, .t FCC Red 6279. 
6284 ( 1989) ("We will remind US Sprint that exclusive arrange­
ments with correspondents have long been held to be contrary 
to Commission policy."). 
168 If we find in the future that FT and OT have violated these 
written commitments, we will take rurther action, which could 
include fines, additional conditions or. ultimately. revocation of 
Sprint's Section 214 authorizations on the France and Germany 
routes. 169 We note our authority to require Sprint to provide us with 
this information pursuant to Section 218 or the Act. These 
reports will be made publicly available in the record of this 
proceeding. 
70 See Foreign Carrier Entry Order at , , 263-65. 171 We note that the Justice Department shares these concerns. 
and the proposed Final Judgment addresses these concerns by 
requiring Sprint and the Joint Venture to comply with certain 
nondiscrimination and disclosure requirements. See footnote 12 
swra. 17 This merely restates our longstanding policy that U.S. 
international carriers should be afforded nondiscriminatory 
treatment in their traffic relations with a given country and 
therefore receive a proportionate share of return traffic. See 
1870 
120. These requirements a re ·designed to ensure that 
Sprint, the Joint Venture, FT and OT do not use their new 
relationship, in combination with FT's and OT's foreign 
market power, to favor each other at the expense of com­
petitors and competition generally. 171 We have described in 
detail above how FT and OT will have both the ability, 
through their foreign monopolies, and the incentive, as a 
result of their investments in Sprint and the Joint Venture, 
to engage in such conduct. With respect to concerns that 
FT, OT and Sprint could use their relationship to manipu· 
late traffic streams or accounting rates, we reiterate that 
existing Commission policy with respect to these matters 
effectively limits the parties' ability to engage in such 
anticompetitive conduct. As a U .S. carrier, Sprint must: (1) 
not agree to accept more than its proportionate . share of 
return traffic from its foreign correspondent;172 (2) settle its 
accounts in accordance with the nondiscriminatory ac· 
counting rates it is required to file with this 
Commission;173 (3) file copies of all contracts, agreements 
and arrangements that relate to the routing of traffic ( in· 
eluding transiting traffic) and settlement of accounts;174 and 
( 4) not accept any changes in its accounting rates that are 
not made available to all other competing U.S. carriers o n 
a nondiscriminatory basis. Moreover, pursuant to the "no 
special concessions" requirement, Sprint is precluded from 
bargaining for, or accepting, any preferential changes in 
the current method used bfi FT or OT to allocate return 
traffic among U.S. carriers.1 s 
121. Sprint's "no special concessions" obligation a lso 
would preclude Sprint from accepting from FT or OT, or 
from any other foreign carrier or administration, preferen· 
tial or exclusive operating agreements or marketing ar­
rangements for the provision of basic telecommunications 
services, including the introduction and provision of new 
basic services.'76 This obligation would preclude Sprint 
from offering a new correspondent or other basic service, 
Regulation of International Accounting Rates. 6 FCC Red 3552, 
3554-55 (1991), on recon .. 7 FCC Red &).iq (1992); see also 47 
C.F.R. § 64. IOOl(g) (carriers filing notifications or. or waivers 
for, changes in accounting rates shall certify that they have not 
bargained for. nor received any indication that they will be 
fiven. more than their proportionate share or return traffic). 
73 This requirement. ror example, would preclude Sprint 
from taking advantage of any intra-E.U. accounting rate not 
made available to similarly situated U.S. carriers. 174 This would include, for example. agreements ror the pro· 
portionate return of traffic. even where the agreement is not 
written. See Section .t3.Sl(b) of the Commission's Rules . .t7 
C.F.R. § .t3.S l(b). The disclosure of contracts. agreements and 
arrangements relating to the transiting traffic should allow bet· 
ter monitoring of Sprint's transiting arrangements with FT and 
OT, responding to CWA/IBEW's concerns about anticompetitive 
transiting arrangements between Sprint and FT and OT. 175 If we find in the ruture that Sprint has violated its "no 
special concessions" obligation, we will take further action, in­
cluding imposing fines, additional conditions or, ultimately, 
revoking Sprint's Section 21.t authorizations on the France and 
Germany routes. 176 We note the concern, also expressed in the MCVBT pro­
ceeding, that FT or OT may offer, as pan of an incentive to 
purchase their basic telecommunications services in their home 
countries, a discount or preference based on the French or 
German customer's selection of Sprint as its U.S. carrier. Under 
its "no special concessions" obligation, however. Sprint may not 
knowingly participate in the handling of any France-U.S. or 
Germany-U.S. basic telecommunications service for which FT 
---------------------------~ 
11 FCC Red No. 4 Federal Communications Commission Record FCC 95-498 
or concluding an operating agreement for such a new 
service, with either FT or DT unless FT or DT offer to 
provide the service or operating agreement on the same 
terms and conditions to similarly situated U.S. carriers, a 
concern raised by AT&T. 177 Similarly, Sprint would be 
P.recluded from accepting from FT or DT any distribution 
or interconnection arrangements, including pricing, tech­
nical specifications, functional capabilities, or other quality 
and operational characteristics, such as provisioning and 
maintenance times, at rates or on terms and conditions that 
are not available on a nondiscriminatory basis to all com­
peting U.S. carriers. In these examples, the reports to be 
filed by Sprint will enhance the Commission's ability to 
monitor Sprint's compliance with its obligation to accept 
no special concessions from FT or DT. 178 
122. Sprint also would be prohibited from agreeing to 
accept any arrangement with FT or DT for the joint han­
dling of basic traffic o riginating or terminating in third 
countries on terms and conditions not available on a 
nondiscriminatory basis to all competing U.S. carriers. 
123. Our "no special concessions" requirement would 
prohibit Sprint from accepting directly from FT or OT, or 
indirectly, through the Joint Venture, prior to public dis­
closure, any information about FT's or OT's basic network 
services that affects either the provision of basic or en­
hanced services or interconnection to the French or Ger­
man public switched network by U.S. carriers or their U.S. 
customers. 179 In addition, Sprint would be precluded from 
accepting French or German telephone customer informa­
tion (including names and addresses) from FT or DT un­
less such information also is available to other U.S. 
competitors. 
124. As a further example, Sprint would be prohibited 
from accepting, either directly or indirectly, through the 
Joint Venture or from FT o r OT. any proprietary or 
confidential6information obtained by FT or DT from com­
peting U.S. carriers in the course of regular business activi­
ties with such U.S. carriers, unless specific permission has 
been obtained in writing from the U.S. carrier involved. 
Such information might relate to the provision of intercon­
nection or other necessary services, correspondent relation­
ships, o r negotiations of operating agreements, including 
accounting rates. 180 
125. In addition, we agree with AT&T that the "steering" 
of customers by the Joint Venture partners to the Joint 
Venture violates the "no special concessions" requirement 
to the extent a basic service customer is being "steered" to 
a particular U.S. carrier.181 Under the te rms of the Joint 
Venture Agreement, each partner is required to use com­
mercially reasonable efforts to persuade its customers to 
or OT has offered a discount conditioned upon selection of 
Sprint as the U.S. carrier for such service. For example. Sprint 
may not accept traffic from FT or OT pursuant to a plan in 
which FT or OT customers are offered a discounted rate on 
either domestic or international private line service if the other 
half of the international private line is procured from Sprint. 
11.1 Ste supra at footnote IS I. 
178 This reporting requirement should respond to WorldCom·s 
concern that the terms and conditions of FT's and DT's provi· 
sion of facilities to Sprint be transparent in order to identify 
discriminatory treatment. See WorldCom Letter at 5-7. 
179 We note that the proposed Final Judgment requires Sprint 
to disclose, within 30 days of receipt, FT or OT network 
changes. See Proposed Final Judgment, 60 Fed. Reg. at ·HOSl-52. 
1871 
use the Joint Venturc's services. Thus, for example, if an 
FT customer in France requests from FT a basic, private 
line service between France and the United States, FT is 
required to attempt to persuade the customer to use Sprint, 
the Joint Venture partner serving the United States, for the 
U.S. end. Although the customer may ultimately choose 
another U.S. carrier anyway, this arrangement affects traffic 
flows, and requires foreign carriers (FT and DT) to attempt 
to persuade customers to use one particular U.S. carrier 
(Sprint) for the provision of basic services. The same ar­
rangement is not available to other U.S. carriers, and thus, 
by its terms, such "steering" would be an impermissible 
special concession under Section 63.14 of our Rules.182 
126. Our requirement that Sprint maintain complete 
records and provide quarterly reports on the provisioning 
and maintenance of facilities and services provided by FT 
and DT to Sprint specifically includes any services or 
facilities procured on behalf of customers of Joint Venture 
offer ings in France and Germany. This requirement will 
e nhance our ability to monitor Sprint's compliance with 
our "no special concessions" requirement. We may revisit 
the need for these reporting requirements when France 
and Germany are fully liberalized. But until effective com­
petition exists in these countries, we believe that r T':. and 
DT's market power merits this additional measure. 
127. We recognize the concerns in the record raised by 
FT's and DT's participation in the Joint Venture, when 
combined with their 20 percent stake in Sprint. These 
factors may, for example, give FT and DT an incentive to 
provide Sprint preferential access to their basic services 
networks. This potential discrimination could take various 
direct or indirect forms, including preferential pricing or 
treatment in the provision and maintenance of both inter­
national half-circuits and of local exchange services or 
advance disclosure of technical specifications. We find that 
our concerns about the potential leveraging of foreign mar­
ket power in basic service offerings to gain an advantage in 
the global seamless service market are satisfactorily ad­
dressed at this time by the "no special concessions" re­
quirement and recordkeeping and reporting requirements 
we have imposed on Sprint. 
128. We also require Sprint to file progress reports de­
tailing the status of the telecommunications markets and 
regulatory regimes in France and Germany.183 We believe 
these reports will assist us in determining whether progress 
is being made in liberalizing these markets. In the event 
appropriate progress is not being made. we may need to 
consider additional safeguards to protect against 
anticompetitive conduct. 
l!IO We again note that the proposed Final Judgment shares our 
concerns. and imposes confidentiality requirements on both 
Sf.rint and the Joint Venture. · 
1 1 See AT&T Supplemental Opposition at 23, 
182 See Foreign Carrier Entry Order at 1 258. We note, in 
response to Sprint's concern that other U.S. carriers will be 
permitted to engage in such steering, that all U.S. carriers are 
subject to the same special concessions requirement. See id. 
Thus. it is unlawful for any other U.S. carrier to engage in such 
a steering arrangement. 
1113 We impose this condition pursuant to the authority granted 
the Commission by Section 218 of the Communications Act, 47 
u.s.c. § 218. 
FCC 95-498 Federal Communications Commission Record 11 FCC Red No. 4 
129. As we noted above, France and Germany have 
committed to taking certain steps to implement effective 
competitive opportunities in their telecommunications 
markets by January 1, 1998. We direct Sprint to provide 
the Commission with the following information regarding 
French and German regulatory developments: the text of 
any laws, resolutions, regulations and court decisions rel­
evant to the implementation of telecommunications ser­
vices and facilities competition, and any descriptive 
information regarding enforcement of and compliance with 
these provisions. This descriptive information should ad­
dress how France and Germany are progressing in !lleeting 
the specific effective competitive opportunities criteria. We 
also require Sprint to report on the status of the ownership 
of FT and DT. 1~ These reports should be filed no later 
than July 31 of each year (beginning in 1996) until this 
Commission determines that there are effective competitive 
opportunities in France and Germany. We will include 
these reports in the public record in this proceeding, 
which will remain open until we find effective competitive 
opportunities exist in both France and Germany. In 1998, 
this report must be filed by March 31 , as described below. 
130. Finally, to ensure if the alien ownership level in 
Sprint does not exceed 28 percent, we require Sprint to 
conduct periodic surveys of their public shareholders. We 
also require Sprint to obtain prior Commission approval 
before increasing FT's or DT's ownership or voting interest 
in Sprint. In 'addition, Sprint must file any substantive 
amendments or modifications to: ( 1) the Investment Agree­
ment; (2) the Stockholders' Agreement; (3) the Joint Ven­
ture Agreement (4) the Certificate of Amendment to 
Sprint's Articles of Incorporation; (5) the Proposed 
Amendments to Sprint's Bylaws; and (6) the Standstill 
Agreement with the Co mmission within 30 days of execu­
tion . We also require Sprint to file with the Secretary of 
this Co mmission. within 30 days of the effective of this 
Order or prior to the consummation of this transaction, 
whichever is sooner, a letter accepting the terms and con­
ditions of this Commission ruling. 
iv. Accounting Rate Condition 
13 1. For the reasons described in paragraph 92 above, we 
find that this transaction serves the public interest only if 
Sprint obtains a written commitment from FT to lower the 
accounting rate between the United States and France to 
the same range as the U.S.-U.K. and U.S.-Germany ac­
counting rates. The written co mmitment should indicate 
that FT will implement these reductions in the near future 
and in no event later than two years from the adoption 
date of th is Order. A co py of the written commitment shall 
be filed with the Commission 15 days prior to consumma­
tio n of the transaction. The filing of this commitment is a 
preco ndition to our finding that this transaction serves the 
public interest. 
v. Possible Additional Conditions or Sanctions 
132. This grant is based in large part upon commitments 
made by the French and German Governments; if full 
liberalization is not implemented as planned, we will be 
184 As we indicated in the Foreign Carrier Entry Order, separa· 
tion between the regulator and the dominant or monopoly 
carrier is most clearly achieved when the dominant or 
monopoly carrier is not government-owned. See Foreign Carrier 
Entry Order at t t 54-55. 
1872 
required to take further action. We thus require Sprint to 
report by March 31 , 1998 on the progress France and 
Germany have made in meeting their liberalization com­
mitments and, specifically, whether France and Germany 
afford effective competitive opportunities at that time. We 
will place Sprint's report on public notice and seek com­
ment. If the record demonstrates there are serious ques­
tions about whether the anticipated measures have been 
taken, and effective competitive opportunities still are not 
available, we will designate for hearing the issue of whether 
the public interest continues to be served by Sprint's hold­
ing of Section 214 facilities authorizations on the 
U.S.-France and U.S.-Germany routes and, if necessary, 
Sprint's holding of Section 214 resale authorizations on 
these routes. 
133. Finally, the terms of this decision are subject to any 
obligations that might arise as a result of the current 
negotiations in the NGBT under the auspices of the World 
Trade Organization. We will adjust the terms of this Order · 
as necessary to comply with any such commitments. 
V. CONCLUSION 
134. After careful consideration of the arguments made 
by all parties, we conclude that, on balance, the public 
interest will be served by the grant of this declaratory 
ruling subject to .our prescribed conditions. We find that 
France and Germany do not currently offer effective com­
petitive opportunities to U.S. carriers and that FT and DT 
have the incentive and ability to favor Sprint over other 
U.S. carriers. Our analysis reveals significant competitive 
concerns arising from FT's and DT's monopoly positions 
in those countries. Our confidence that the conditions we 
have placed on this transaction are sufficient to control 
anticompetitive conduct and mitigate potential 
anticompetitive effects in the U.S. telecommunications 
market in the short term is due in large measure to the 
commitments the French and German Governments have 
made to implementing wide-ranging liberalization schemes. 
135. The procompetitive impact of the equity investment 
on the U.S. telecommunications market is another strong 
public interest factor that weighs in favor of approving the 
transaction. FT's and DT's infusion of $3.5-4.2 billion into 
Sprint will serve the public interest in a number of ways. 
In the United States, the transaction will make Sprint a 
stronger, more competitive participant in the domestic 
interexchange. terrestrial CMRS. and international services 
markets. It also will allow Sprint to expand and improve its 
network services and product offerings and to expand the 
range of communications services it offers to the American 
public. U.S. consumers should have increased access to 
new and existing telecommunications services and lower 
prices, which will help stimulate economic growth. In the 
global seamless services market, the transaction will create 
a significant new competitor. 
136. We encourage further market-opening steps in 
France and Germany before 1998. We also urge the im­
plementation of full facilities and services competition in 
such a way that affords effective competitive opportunities. 
___________________ ....._. ____________ _ 
11 FCC Red No. 4 Federal Communications Commission Record FCC 95-498 
In the interim, we believe the conditions we impose will 
safeguard against anticompetitive behavior and other poten­
tial anticompetitive effects from the strategic investment by 
FT and DT. They also will help mitigate Sprint's unfair 
competitive advantage over other U.S. carriers serving 
France and Germany. 
137. We therefore grant Sprint's request for a ruling that 
10 percent equity investments each, for a total of 20 
percent, by FT and DT do not result in a transfer of 
control of Sprint to FT and DT. Although FT and DT each 
may acquire a certain degree of influence in Sprint's cor­
porate decision-making process, we conclude this influence 
would not rise to a level that constitutes control under 
Section 310(d). We also grant Sprint's requests for a ruling 
that foreign ownership in Sprint of up to 28 percent, as set 
forth in its· submissions, is not inconsistent with Section 
310(b)(4) of the Act, and that the proposed transaction is 
not otherwise inconsistent with the public interest, so long 
as Sprint adheres to the conditions imposed above. 
VI. ORDERING CLAUSES 
138. Accordingly, IT IS ORDERED that the petitioners' 
request for a declaratory ruling, l-S-P-95-002, is GRANT­
ED. Prior approval pursuant to Section 3 lO(d) of the Act 
is not required before the FT and OT investments in Sprint 
can occur because the transaction does not involve a trans­
fer of control. Furthermore, the level of up to 28 percent 
foreign ownership in Sprint, as described, is not inconsis­
tent with the public interest under Section 310(b)(4) of the 
Act if Sprint complies with the conditions and require­
ments set forth in this Order. 
139. IT IS FURTHER ORDERED that, pursuant to 
Section 218 of the Act, 47 U,S.C. § 218. Sprint shall 
report, within 30 days of the effective date of this Order, 
the destination markets other than France and Germany in 
which FT or OT controls, is controlled by. or is under 
common control of a foreign carrier. These reports shall 
also specify whether these foreign carriers have market 
power, as defined in paragraph 40 of this Order. 
140. IT IS FURTHER ORDERED that Sprint shall be 
regulated as a dominant carrier. pursuant to Section 214 of 
the Act, 47 U.S.C. § 214, and Section 63.10 of the Com­
mission's Rules, 47 C.F.R. § 63.10, on the U.S.-France and 
U.S.-Germany routes. Sprint must therefore comply with 
the following requirements until further Order by the 
Commission: 
A. Sprint shall file tariff provisions pursuant to Sec­
tion 203 of the Communications Act. 47 U.S.C. § 
203, and Part 61 of the Commission's rules, 47 
C.F.R. Part 61, for the provision of U.S. basic inter­
national services between the· United States and 
France and the United States and Germany. Absent 
contrary Commission action. the tariffs will become 
effective 14 days after filing; 
B. Sprint shall seek, pursuant to Section 63.01 of the 
Commission's rules. 47 C.F.R. § 63.01. additional 
authorization under Section 214 of the Communica­
tions Act , 47 U.S.C. § 214, before adding or dis­
continuing circuits between the United States and 
France and the United States and Germany; 
C. Sprint shall file, pursuant to Section 218 of the 
Act, 47 U.S.C. § 218, quarterly reports of revenue, 
number of messages and number of minutes of both 
1873 
originating and terminating traffic (each reported sep­
arately and not aggregated) for the U.S.-France and 
U .S.-Germany routes within 90 days from the end of 
each calendar quarter; and; 
0 . Sprint shall, pursuant to Section 218 of the Act, 
47 U.S.C. § 218, maintain complete records on the 
provisioning and maintenance of network facilities 
and services it procures from FT or DT, including, 
but not limited to, those it procures on behalf of 
customers of Joint Venture offerings. 
141. IT IS FURTHER ORDERED that, pursuant to 
Section 214 of the Act, 47 U.S.C. § 214, the Commission 
will not allow Sprint to operate additional circuits on the 
U.S.-France and U.S.-Germany routes to provide facilities­
based services until the Commission finds that France and 
Germany: 
A. Permit the provision of alternative infrastructure 
to be used to provide already liberalized services, in 
which U.S.-affiliated entities are permitted to partici­
pate; and 
B. Permit the provision of basic switched voice re­
sale, including U.S.-originated and -terminated 
international public switched voice services. Such re­
sale opportunities must be available to all similarly 
situated U.S.-affiliated entities on the same terms and 
conditions. This condition may be removed on a 
route-by-route basis as Sprint demonstrates that a 
country has liberalized its telecommunications mar­
kets in the manner specified in (A) and (B) above. 
142. IT IS FURTHER ORDERED that, pursuant to 
Section 218 of the Act, Sprint shall file with the Commis­
sion, within 15 days of the effective date of this Order, a 
circuit status report on the U.S.-France and U.S.-Germany 
routes. specifying the number of circuits in which Sprint 
has an ownership, indefeasible right of use. or leasehold 
interest, and the number of circuits it is operating on these 
routes. 
143. IT IS FURTHER ORDERED that. pursuant to 
Section 63.14 of the Commission's Rules. 47 C.F.R. § 
63.14, Sprint is prohibited from agreeing to accept special 
concession directly o r indirectly from any foreign carrier 
or administration with respect to traffic or revenue flows 
between the United States and any foreign country, or 
agreeing to enter into such arrangements in the future. 
144. IT IS FURTHER ORDERED that Sprint, pursuant 
to our requirement to accept no special concessions di­
rectly or indirectly from FT or OT, shall obtain a written 
commitment from FT and OT not to offer or provide any 
special concessions to Sprint or the Joint Venture, relati~ 
to the provision of basic services or facilities. A copy of 
such written agreement shall be filed with this Commission 
'IS days prior to the consummation of this tranSaction. 
145. IT IS FURTHER ORDERED that, pursuant to 
Section 218 of the Act, Sprint shall file with the Commis­
sion quarterly reports summarizing its records on the pro­
visioning and maintenance of facilities and services by FT 
and OT to Sprint, including, but not limited to, correspon­
dent or other basic services or facilities procured on behalf 
of customers of Joint Venture offerings. in France and 
Germany. These reports shall include information about 
any distribution or interconnection arrangements. includ-
FCC 95-498 Federal Communications Commission Record 11 FCC Red No. 4 
ing pricing, technical specifications, functional capabilities 
and other quality or operational characteristics, such as 
provisioning and maintenance times. 
146. IT IS FURTHER ORDERED that, pursuant to 
Section 218 of the Act, Sprint shall file its circuit status 
reports for U.S.-France and U.S.-Germany circuits on a 
monthly basis and shall make such reports publicly avail· 
able on a quarterly basis. 
147. IT IS FURTHER ORDERED that, pursuant to 
Section 218 of the Act, and Section 43.51 of the Commis­
sion's Rules, 47 C.F.R. § 43.51, Sprint shall file with the 
Commission copies of all contracts, agreements, and ar· 
rangements with FT or OT that relate to the routing of 
traffic (including transiting traffic) and settlement of ac­
counts on the U.S.-France and U.S.-Germany routes. 
148. IT IS FURTHER ORDERED, pursuant to Section 
218 of the Act, 47 U.S.C. § 218, Sprint shall obtain prior 
Commission approval before increasing FT's or DT's own­
ership or voting interest in Sprint. 
149. IT IS FURTHER ORDERED that, pursuant to 
Section 310 of the Act, Sprint shall conduct periodic sur· 
veys of its public shareholders to ensure continuing com­
pliance with the maximum level of foreign ownership in 
Sprint found not to be inconsistent with the public interest 
pursuant to Section 310(b)(4) of the Act. 
150. IT IS FURTHER ORDERED that, pursuant to our 
authority under Section 218 of the Act, 47 U.S.C. § 218, 
Sprint shall file any and all substantive amendments or 
modifications to: (1) the Investment Agreement: (2) the 
Stockholders' Agreement; (3) the Joint Venture Agree­
ment; (4) the Certificate of Amendment to Sprint's Articles 
of Incorporation; (5) the Proposed Amendments to Sprint's 
Bylaws; and (6) the Standstill Agreement with the Commis­
sion within 30 days of execution. 
151. IT IS FURTHER ORDERED that Sprint shall ob· 
tain a written commitment from FT to lower the 
accounting rate between the United States and France to 
the same range as the U.S.·U.K. and U.S.·Germany ac· 
counting rates. The written commitment should indicate 
that FT will implement these reductions in the near future 
and in no event later than two years from the effective date 
of this Order. A copy of the written commitment shall be 
filed with the Commission 15 days prior to the consumma­
tion of the transaction. 
152. IT IS FURTHER O RDERED that, pursuant to 
Section 218 of the Act, 47 U.S.C. § 218. Sprint shall file 
progress reports on liberalization developments in France 
and Germany no later than July 31 of each year, beginni ng 
in 1996. The report provided in 1998 shall be filed no later 
than March 31. These reports shall contain the information 
specified in paragraph 129 of this Order. 
153. IT IS FURTHER ORDERED that all references to 
Sprint, FT. OT and the Joint Venture in this Order sha ll 
also refer to their respective officers, directors and employ­
ees, as well as to any affiliated companies and their officers, 
directors and employees. 
154. IT IS FURTHER ORDERED that Sprint shall file 
with the Secretary of this Commission, within 30 days of 
the effective date of this Order or prior to the consumma­
tion of this transaction, whichever is sooner, a letter ac­
cepting the terms and conditions of this Commission 
ruling. 
155. This Order is effective the day after all rules, regula· 
tions and policies adopted in the Foreign Carrier Entry 
Order become effective. Petitions for reconsideration under 
1874 
Section 1.106 of the Commission's Rules may be filed 
within 30 days of the date of public notice of this Order 
(see Section l.4(b)(2}). 
FEDERAL COMMUNICATIONS COMMISSION 
William F. Caton 
Acting Secretary