Dr. Axel Spies

FCC: Neues Lizenzverfahren für Anlandung von Unterseekabeln

On December 14, 2001, the FCC released a Report and Order ("R&O") streamlining its submarine cable landing license procedures to resemble those applicable to international Section 214 authorizations. Streamlined procedures will apply to initial applications as well as assignments and transfers of control.

Applications eligible for streamlining typically will first be listed on an FCC Public Notice as "Accepted for Filing," and then granted by a subsequent FCC Public Notice within 45 days of the initial Public Notice.

To qualify for streamlining, an application must contain a certification by each applicant stating whether it is, or has an affiliation with, a foreign carrier in any of the cable's destination markets, and if so, identifying each such market. If no applicant is a foreign carrier, and no applicant is affiliated with a foreign carrier, in any of the cable's destination markets, the application will be eligible for streamlined processing. The FCC's International Bureau retains the discretion to subject applications appearing to pose "competitive risks" to non-streamlined treatment. Non-streamlined applications will be acted upon within 90 days of an FCC Public Notice accepting such applications for filing, unless such period is extended by the FCC.

Streamlining will be available to applications for all submarine cables to WTO Member destination countries, including those cables whose applicants or licensees have affiliations with foreign carriers that possess market power in a destination market ("Affiliated Cables"). To protect against the risk of anti-competitive behavior associated with such market power, the FCC has adopted competitive safeguards for carriers with such foreign affiliations, including a "no special concessions" rule and specific reporting obligations.

Under the "no special concessions" rule, carriers are prohibited from directly or indirectly accepting from a foreign carrier with market power in one or more of the cable's destination markets any exclusive arrangements involving services, facilities or functions on the foreign end of the route necessary to land, connect or operate cables where the agreement is not offered to similarly situated parties. Existing submarine cable licensees may apply to the FCC to avail themselves of this more narrow restriction. In addition, Affiliated Cables must file (1) quarterly provisioning and maintenance reports of all network facilities and services related to the cable procured from each licensee foreign carrier affiliate; and (2) quarterly circuit status reports.

Similar to its treatment of international Section 214 licensees, the FCC will require all cable landing licensees, present and future, to report foreign carrier affiliations acquired after the issuance of a cable landing license where the affiliation is with a carrier in a market at the foreign end of the cable. If the FCC deems it necessary, it may impose the above competitive safeguards. In addition, a foreign carrier notification requirement will apply in the case of cables that may land in non-WTO destination markets. The R&O replaces the requirement for prior approval of pro forma assignments and transfers of interests in cable landing licenses with post-transaction notifications. The R&O is to be effective 60 days after publication in the Federal Register. The FCC asks that any requests to modify existing cable licenses to include these new procedures be made within 30 days of the rules going into effect.

Dr. Axel Spies, Swidler, Berlin, Shereff, Friedman, LLP, Washington DC.

MMR 2/2002