DA 97-2670
Before the
FEDERAL COMMUNICATIONS COMMISSION
Washington, D.C. 20554
In Re Petition of
Communication TeleSystems International, Inc.
File No. ISP-97-PDR-513
For Declaratory Ruling Regarding an
Alternative Accounting Rate arrangement for
Services between the United States and Australia
Declaratory Ruling and Order
Adopted: December 19, 1997
	
Released: December 22, 1997
By the Chief, Telecommunications Division:
1.
	
On August 12, 1997, Communication TeleSystems International, Inc., ("CTS") filed a
petition for Declaratory Ruling pursuant to §64.1002 of the Commission's Rules seeking a ruling that
its alternative settlements arrangement concluded with WorldxChange Pty, Ltd. ("WorldxChange"), for
services to and from Australia, is consistent with the Commission's Accounting Rates Flexibility
Order' and the public interest. CTS seeks authorization to provide facilities-based service to Australia
in correspondence with its affiliate, WorldxChange, and to settle its traffic at an accounting rate of 1O^
per minute, divided 50/50 between the carriers. On September 10, 1997, Telstra, Inc., the dominant
Australian international carrier, filed a petition to deny CTS' alternative settlement arrangement, or
delay approval until the Commission grants all pending applications to provide interconnected private
line services to Australia. On December 17, 1997, the Commission found that equivalent resale
opportunities exist in Australia for U.S.-based carriers, and therefore granted all of the pending
applications to resell private lines for the provision of switched services between the United States and
Australia.2 Therefore, we find that Telstra's concerns have been addressed.
2.
	
We also find that CTS' proposal will "promote market-oriented pricing and
competition, while precluding abuse of market power by the foreign correspondent."3 The proposed
accounting rate of 10 per minute, divided equally between carriers, is well below the prevailing
accounting rates of facilities-based carriers on this mute, and it matches the rate of Telegroup
See Fourth Report and Order on Regulation of International Accounting Rates. 11 FCC Rcd
20063 (1997) (Flexibility Order).
Cable & Wireless. Inc. etgL, Memorandum Opinion, Order and Certificate, File Nos. ITC-93-
328, ITC-94-435, ITC-95-015, 016, and 185, ITC-96-182 and 319, DA 97-2554 (rd. Dec. 17,
1997).
Flexibility Order at 2.
I.
2
3
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Australia.4 Moreover, the proposed rate is lower than the average net settlement payment per minute
paid by U.S. to Australian facilities-based carriers. As a result, CTS will be in a position to engage in
price competition to attract customers and this conduct should benefit U.S. consumers and expand
service between the United States and Australia. Finally, WorldxChange is a small, emerging carrier
in Australia and, therefore, has no market power. Therefore, we find that CTS' alternative settlements
arrangement described in its petition is in the public interest.
3.
	
Accordingly, it is ORDERED that CTS' alternative settlements arrangement concluded
with WorldxChange Pty, Ltd. for service to and from Australia, File No. ISP-97-PDR-513, is
consistent with the Commission's Accounting Rates Flexibility Order and the public interest. The
petition is therefore GRANTED.
4.
	
This Order is issued under Section 0.261 of the Commission's rules and is effective
immediately. Petitions for reconsideration under Section 1.106 or applications for review under
Section 1.115 of the Commission's rules may be filed within 30 days of the date of the public notice
of this order (see Section 1 .4(bX2) of the Commission's rules).
FEDERAL COMMUNICATIONS COMMISSION
v -----
Diane J. Cornell
Chief, Telecommunication Division
International Bureau
See Declaratory Ruling and Order In Re petition of Telegroup, Inc., DA 97.1341 (rd. June 26,
1997).
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