Before the

**Federal Communications Commission**

**Washington, D.C. 20554**

+----------------------------------+---+------------------------------+
| In the Matter of                 | * | SCL-MOD-20001025-00036       |
|                                  | * |                              |
| GST Telecom Hawaii, Inc. and     | ) |                              |
|                                  | * |                              |
| Time Warner Telecom of Hawaii,   | * |                              |
| L.P.                             |   |                              |
|                                  | * |                              |
| Application for Modification of  | * |                              |
| License to                       | ) |                              |
|                                  | * |                              |
| Land and Operate the GST         | * |                              |
| Interisland                      |   |                              |
|                                  | * |                              |
| Cable System                     | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
+----------------------------------+---+------------------------------+
|                                  |   |                              |
+----------------------------------+---+------------------------------+

**MODIFICATION OF CABLE LANDING LICENSE**

**Adopted:** January 16, 2001 **Released:** January 17, 2001

By the Chief, Telecommunications Division, International Bureau:

# Introduction

### In this Order, we modify the cable landing license for the GST Interisland Cable System held by GST Telecom Hawaii, Inc. (GST Hawaii) to add Time Warner Telecom of Hawaii, L.P. (Time Warner Hawaii) (collectively Applicants) as an additional party to the license.[^1] The original license authorized GST Pacwest Telecom Hawaii, Inc., pursuant to the Cable Landing License Act,[^2] and Executive Order No. 10530,[^3] to land and operate the GST Interisland Cable System, a common carrier[^4] fiber optic submarine cable system extending between the Hawaiian Islands of Kauai, Oahu, Molokai, Lanai, Maui, and Hawaii. The Commission subsequently granted the application of GST Pacwest Hawaii, Inc. for a *pro forma* transfer and assignment of the license to GST Hawaii as part of a corporate reorganization.[^5]

2.  The Application requests authority to add Time Warner Hawaii as an
    additional party to the license.[^6] Time Warner Telecom, Inc. has
    designated its subsidiary, Time Warner Hawaii, as the purchaser of
    GST's assets in Hawaii.[^7] Time Warner Hawaii proposes to acquire
    12 of the 24 fibers that are part of the GST Interisland Cable
    System connecting the islands of Kauai, Oahu, Maui, and Hawaii.[^8]
    Applicants assert that there is a difference between the description
    of the cable in the original license and the way the system was
    actually constructed, and have requested that the Commission's
    records be updated to reflect this difference. Specifically, the two
    branching units of the system that connect the islands of Lanai and
    Molokai consist of eight fibers (four fiber pairs), not 12 fibers
    (six fiber pairs) as described in the original license.[^9] The rest
    of the system, identified in the license as the "backbone" of the
    system, consists of 24 fibers (12 fiber pairs) which is consistent
    with the original license.[^10] The landing points are described in
    the license and remain unchanged.[^11]

3.  GST Hawaii and Time Warner Hawaii propose to each own and operate 12
    fibers on the GST Interisland Cable System. Specifically, Time
    Warner Hawaii will own 12 fibers, extending from Kauai (Wailua Golf
    Course) to Oahu (Makaha) to Oahu (Keawaula) to Oahu (Sandy Beach),
    to Maui (Mokapu), and from Maui to Hawaii (Spencer Beach), including
    ownership of the associated cable sheath; and rights to access the
    GTE manholes and splice boxes[^12] at Wailua, Sandy Beach, Mokapu
    and Spencer Beach.[^13] GST Hawaii will maintain ownership in the
    remaining fiber pairs along the routes mentioned above and will
    maintain complete ownership of the eight fibers on the branches
    connecting the islands of Lanai and Molokai to the GST Interisland
    Cable System.[^14] The system, including the 12 fiber pairs operated
    by Time Warner Hawaii, will continue to be operated on a common
    carrier basis.[^15]

4.  GST Hawaii is a Hawaii corporation and is an indirect, wholly-owned
    subsidiary of GST Telecommunications, Inc., a Canadian corporation,
    which is a publicly held holding company.[^16] According to the
    Application, GST is a facilities-based integrated communications
    service provider, currently offering voice, data, and Internet
    service throughout the Western United States. Applicants assert GST
    holds authority to provide intrastate interexchange service in 49
    states and intrastate local exchange service in 11 states. GST also
    holds authority to provide interstate and international
    telecommunications services as a non-dominant common carrier
    pursuant to the authority of the Commission.[^17]

5.  Time Warner Hawaii is a Delaware limited partnership. Time Warner
    Telecom Inc., holds a 99 percent limited partnership interest in
    Time Warner Hawaii; the remaining one percent general partnership
    interest in Time Warner Hawaii is held by Time Warner Telecom
    General Partnership.[^18] Applicants assert that Time Warner Hawaii
    and its affiliates currently provide local exchange and exchange
    access services as well as interexchange service. Specifically, Time
    Warner Hawaii and its affiliates are authorized to provide
    intrastate telecommunications services in 13 states and have
    requests for authority pending in 10 other states.[^19]

6.  Under Section 1.767(a)(8) of the Commission's rules, applicants are
    required to disclose their affiliations with foreign carriers.[^20]
    Time Warner Hawaii has certified that it is neither a foreign
    carrier nor affiliated with a foreign carrier, as defined in Section
    63.09 of the Commission's Rules.[^21]

# Comments

7.  We placed the Application on public notice on November 1, 2000.[^22]
    No comments were received. Pursuant to Section 1.767(b) of the
    Commission's rules,[^23] the Cable Landing License Act, and
    Executive Order No. 10530, we informed the Department of State of
    the Modification request.[^24] The Department of State, after
    coordinating with the National Telecommunications and Information
    Administration and the Department of Defense, stated that it has no
    objection to approving the Applicants' request to add Time Warner
    Hawaii as an additional licensee to the cable landing license.[^25]

# Discussion

8.  We grant the Applicants' request to modify the GST Interisland Cable
    System cable landing license to add Time Warner Hawaii as a
    licensee. Applicants have asserted that the application is in the
    public interest because the proposed transaction will enable
    customers to continue to receive high-quality, competitively priced
    telecommunications services without interruption on the GST
    Interisland Cable System.[^26] Applicants further assert that they
    are both nondominant Competitive Local Exchange Carriers in Hawaii,
    competing against the dominant local exchange provider, Verizon;
    that Verizon also owns a competing cable system; and that Time
    Warner Hawaii's proposed acquisition of GST Hawaii's assets will
    help to ensure competition in the region.[^27]

9.  We conclude that adding Time Warner Hawaii to the cable landing
    license for the GST Interisland Cable System raises no competitive
    concerns, and does not provide a basis for altering the common
    carrier status of the cable.[^28] Specifically, we conclude that
    Time Warner Hawaii's ownership of 12 fiber pairs on the GST
    Interisland Cable System will not cause competitive concerns.
    Accordingly, we find that grant of the Application is in the public
    interest.

# Ordering Clauses

10. Consistent with the foregoing and pursuant to the Cable Landing
    License Act and Executive Order 10530, IT IS ORDERED that the
    Application, File No. SCL-MOD-20001025-00036, IS GRANTED and the GST
    Interisland cable landing license is MODIFIED to: (1) add Time
    Warner Hawaii as an additional licensee on the cable landing license
    (File No. SCL-95-003); and (2) correct the description of the cable
    to reflect the way in which the cable was actually constructed.
    Specifically, the two branching units of the system that connect the
    islands of Lanai and Molokai consist of eight fibers (four fiber
    pairs), not 12 fibers (six fiber pairs) as described in the original
    license.

11. This Modification of Cable Landing License does not modify any other
    terms or conditions imposed in the license.

12. This Order is issued under Section 0.261 of the Commission's rules,
    47 C.F.R. § 0.261, and is effective upon adoption. Petitions for
    reconsideration under Section 1.106 or applications for review under
    Section 1.115 of the Commission's rules, 47 C.F.R. §§ 1.106, 1.115,
    may be filed within 30 days of the date of public notice of this
    Order (see 47 C.F.R. § 1.4(b)(2)).

    FEDERAL COMMUNICATIONS COMMISSION

    Rebecca Arbogast

    Chief, Telecommunications Division

    International Bureau

[^1]: *See GST Pacwest Telecom Hawaii, Inc. Application for License to
    Land and Operate a High Capacity Digital Submarine Cable System
    Extending Between the Hawaiian Islands of Kauai, Oahu, Molokai,
    Lanai, Maui and Hawaii*, Cable Landing License, 11 FCC Rcd 3024
    (*GST Cable Order*) (IB/1996).

[^2]: An Act Relating to the Landing and Operation of Submarine Cables
    in the United States, 47 U.S.C. §§ 34-39 (Cable Landing License
    Act).

[^3]: Exec. Ord. No. 10530 *reprinted as amended in* 3 U.S.C. § 301.

[^4]: Although this is a common carrier submarine cable, there was no
    international Section 214 authorization issued concurrently with the
    cable landing license because this is a domestic cable, connecting
    one portion of the United States with another portion of the United
    States. Given this, the Order granting the cable landing license
    cautioned that "the service provided on a common carrier basis is
    limited to domestic service. Should GST seek to provide any type of
    international communications services on the GST Interisland Cable,
    it is required to file an application under Section 214 of the
    Communications Act, as amended, requesting such authority." *See GST
    Cable Order*, 11 FCC Rcd at para. 7.

[^5]: On July 14, 1997, the Commission granted GST Pacwest Hawaii,
    Inc.'s request for *pro forma* assignment of the cable landing
    license to GST Hawaii. *See* *Overseas Common Carrier Section 214
    Applications Actions Taken*, Public Notice, Report No. I-8266, File
    No. SCL-95-003-AL, 12 FCC Rcd 16423 (1997).

[^6]: *See* GST Telecom Hawaii, Inc. and Time Warner Telecom of Hawaii,
    L.P., Application for Modification of License to Land and Operate
    the GST Interisland Cable System, filed Oct. 25, 2000 (Application).
    On May 17, 2000, GST Telecommunications, Inc. and its subsidiaries
    (together GST), including GST Hawaii, filed for protection under
    Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court
    for the District of Delaware. GST received Bankruptcy Court approval
    to proceed with an auction of substantially all of its assets. On
    August 25, 2000, at the completion of the auction, GST requested
    Bankruptcy Court approval to proceed toward a sale of its assets to
    Time Warner Telecom Inc. On September 21, 2000, the Bankruptcy Court
    approved the acquisition of GST's assets by Time Warner Telecom Inc.
    *See* Application at 2.

[^7]: *Id.* at 2-3.

[^8]: *Id.* at 3.

[^9]: *Id.* at 7.

[^10]: *Id.*

[^11]: *Id.*

[^12]: According to the Application, except for landings at two AT&T
    cable stations in Oahu, the GST Interisland Cable System does not
    land at traditional cable stations. Instead, the cable is brought
    ashore and connected directly to the terrestrial fiber optic network
    at a "splice box" located close to the shore. *Id.* at 8, n.4.

[^13]: Also included are rights to splice into the fibers at such
    manholes; rights to access the AT&T manhole and splice box and cable
    station at Makaha, including one-half of GST's rack space therein,
    access to at least 150 amps of DC power and access to AC power;
    rights to the AT&T cable station at Keawaula including at least
    one-half of the space in GST's collocation cage with access to at
    least 150 amps of DC power and access to AC power and the right to
    partially partition the cage. Applicants assert that Time Warner
    Hawaii will assume GST's maintenance contract with Tyco (or enter
    into a new contract with Tyco) with respect to the maintenance of
    the wet portion of the system, up to the splice boxes or cable
    stations. GST Hawaii and Time Warner Hawaii will share the cost of
    the maintenance contract on a per-fiber basis. Applicants further
    assert that they will negotiate a transitional services agreement
    pursuant to which Time Warner Hawaii will provide GST with certain
    services and facilities before closing, such as billing, network
    alarm monitoring, CARE account record exchange support, and customer
    service. *Id.* at 8.

[^14]: *Id.* at 8-9. GST Hawaii states that it is in the process of
    locating a buyer for the remaining fibers that GST Hawaii owns, and
    that it will file a separate application to assign its license to
    the new owner once an Asset Purchase Agreement has been executed.
    *Id.* at 11, n.7.

[^15]: *Id.* at 7. *See GST Cable Order*, 11 FCC Rcd at paras. 1, 7-8.

[^16]: GST Hawaii is a wholly-owned subsidiary of GST Telecom, Inc., a
    Delaware corporation. GST Telecom, Inc. is a wholly-owned subsidiary
    of GST USA, Inc., a Delaware corporation, which in turn is a
    wholly-owned subsidiary of GST Telecommunications, Inc. *Id.* at 3.

[^17]: *Id.* at 3-4.

[^18]: Time Warner Hawaii is owned 99 percent by Time Warner Telecom
    Inc. as limited partner and 1 percent by Time Warner Telecom General
    Partnership as the general partner. Time Warner Telecom General
    Partnership is owned 99 percent by Time Warner Telecom Holdings II
    LLC, which in turn is owned by Time Warner Telecom Holdings Inc.
    (Holdings). Holdings is owned by Time Warner Telecom Inc., whose ten
    percent or greater shareholders are Time Warner Inc. (44.5 percent)
    and Advance/Newhouse Partnership (13.7 percent). No single
    shareholder of Time Warner Inc. holds a ten percent or greater
    indirect interest in Time Warner Hawaii. No single owner of
    Advance/Newhouse Partnership holds a ten percent or great indirect
    interest in Time Warner Telecom Inc. Newhouse Broadcasting Corp. has
    a 61.24 percent interest and Advance Communications Corp. has a
    38.76 percent interest in the Advance/Newhouse Partnership. *Id.* at
    9-10.

[^19]: *Id.* at 4.

[^20]: *See* 47 C.F.R. § 1.767(a)(8).

[^21]: *See* 47 C.F.R. § 63.09.

[^22]: *See Non Streamlined International Applications Accepted for
    Filing*, Public Notice, Report No. TEL-00308NS (rel. Nov. 1, 2000).

[^23]: 47 C.F.R. § 1.767(b).

[^24]: Letter from George Li, Deputy Chief, Telecommunications Division,
    International Bureau, Federal Communications Commission, to Steven
    Lett, Deputy U.S. Coordinator, Office of International
    Communications and Information Policy, U.S. Department of State
    (Oct. 27, 2000). On December 4, 2000, the Commission granted
    Applicants' request for Special Temporary Authority to add Time
    Warner Hawaii as an additional licensee to the cable landing license
    for the GST Interisland Cable System. *See* Request of GST Telecom
    Hawaii, Inc. and Time Warner Telecom of Hawaii, L.P. for Special
    Temporary Authority for a Cable Landing License Modification, File
    No. SCL-STA-20001120-00041 (granted Dec. 4, 2000).

[^25]: Letter from Malcolm R. Lee, United States Coordinator,
    International Communications and Information Policy, U.S. Department
    of State, to Donald Abelson, Chief, International Bureau, Federal
    Communications Commission (Dec. 21, 2000).

[^26]: *See* Application at 12.

[^27]: *Id.*

[^28]: We reiterate, as the *GST Cable Order* granting the initial cable
    landing license made clear, that the service provided on a common
    carrier basis is limited to domestic service, and Applicants, if
    they wish to provide any type of international communications
    services on the GST Interisland Cable, are required to file an
    application for international Section 214 authority specifically for
    this cable. *See* note 4, *infra*.