DA 02-1736

July 29, 2002

Petition for Waiver of the International Settlements Policy for a Change
in Accounting Rate for International Message Telephone Services with
TeleFonos de Mexico S.A. de C.V.

**Pleading Cycle Established**

**ISP-WAV-20020705-00022**

**Comments/Petitions Due: August 28, 2002**

**Responses/Oppositions Due: September 12, 2002**

Williams Communications, LLC ("Williams") has filed a petition to waive
the Commission's International Settlements Policy ("ISP") to lower the
accounting rate for International Message Telephone Services ("IMTS")
between Williams and its correspondent in Mexico, Telefonos de Mexico
S.A. de C.V. ("Telmex").[^1] Williams has requested a waiver of the ISP
in order to implement a proposed settlement rate reduction between
Williams and Telmex for traffic exchanged between the United States and
Mexico.

The average settlement rate currently in effect with Telmex is US \$0.19
per minute. Williams has submitted to the Commission a proposed
agreement with Telmex reflecting reductions in the settlement rate for
certain traffic between Williams and Telmex. Williams states that the
proposed agreements would reduce settlement rates with Telmex as
follows: For the period January 1, 2001 through December 31, 2001 each
party will pay the proposed average total settlement rate of \$0.155 per
minute. For the period January 1, 2002 through February 28, 2002, each
party will pay the proposed average total settlement rate of \$0.135 per
minute. For the period March 1, 2002 through December 31, 2003, the
proposed rates to be paid by Williams to Telmex ("southbound") would be
divided into three different rates for different locations in
Mexico,[^2] and all traffic sent by Telmex to Williams ("northbound")
would be settled at \$0.055 per minute.[^3] Williams' proposed
settlement rate reductions is detailed in the Supplementary Data
Statement of their petitions (see Attachment below).

Williams argues that the Commission may find good cause to waive the ISP
to allow implementation of the proposed rates.[^4] Williams states that
the rates proposed are lower than the existing \$0.19 settlement
rate.[^5] As such, Williams argues that waiving the ISP to permit the
proposed settlement rate agreement with Telmex to go into effect would
promote the public interest.[^6] Williams notes that WorldCom, SBCS,
Sprint and AT&T have filed petitions with the Commission to implement
similar rates with Telmex and that Telmex has offered similar rates to
other U.S. carriers.[^7]

Pursuant to Sections 1.415 and 1.419 of the Commission\'s rules, 47
C.F.R. §§ 1.415, 1.419, interested parties may file comments on or
before **August 28, 2002**, and reply comments on or before **September
12, 2002**. Any filings should reference the file number of the
proceeding. **An original and four copies** of all pleadings must be
filed in accordance with Section 1.51(c) of the Commission's rules, 47
C.F.R. § 1.51(c).

**If filed by hand delivery,** the Commission\'s contractor, Vistronix,
Inc., will receive hand-delivered or messenger-delivered paper filings
for the Commission\'s Secretary at 236 Massachusetts Avenue, N.E., Suite
110, Washington, D.C. 20002. The filing hours at this location are 8:00
a.m. to 7:00 p.m. All hand deliveries must be held together with rubber
bands or fasteners. Any envelopes must be disposed of before entering
the building.

**If filed by mail, the following procedures should be followed:
Commercial Overnight Mail** (other than U.S. Postal Service Express Mail
and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol
Heights, MD 20743. **U.S. Postal Service first-class mail, Express Mail,
and Priority Mail** should be addressed to 445 12th Street, SW,
Washington, D.C. 20554. All filings must be addressed to the
Commission's Secretary, Office of the Secretary, Federal Communications
Commission.

**In addition, one copy of each pleading must be sent to each of the
following:**

(1) The Commission's duplicating contractor, Qualex International, 445
    12^th^ Street, S.W., Room CY-B402, Washington, D.C. 20554; e-mail:
    qualexint@aol.com; facsimile: (202) 863-2898; phone: 202 863-2893.

(2) George Li, Policy Division, International Bureau, 445 12^th^ Street,
    S.W., Room 6-A761, Washington, D.C. 20554; e-mail: gli@fcc.gov;

(3) Claudia Fox, Policy Division, International Bureau, 445 12^th^
    Street, S.W., Room 6-A848, Washington, D.C. 20554; e-mail:
    cfox@fcc.gov;

(4) Susan O'Connell, Policy Division, International Bureau, 445 12^th^
    Street, S.W., Room 6-A847, Washington, D.C. 20554; e-mail:
    soconnel@fcc.gov;

(5) David Strickland, Policy Division, International Bureau, 445 12^th^
    Street, S.W., Room 5-C848, Washington, D.C. 20554; e-mail:
    dstrickland@fcc.gov.

(6) Gardner Foster, Policy Division, International Bureau, 445 12^th^
    Street, S.W., Room 3-A625, Washington, D.C. 20554; e-mail:
    gfoster@fcc.gov.

Copies of the application and any subsequently-filed documents in this
matter may be obtained from Qualex International, in person at 445
12^th^ Street, S.W., Room CY-B402, Washington, D.C. 20554, via telephone
at (202) 863-2893, via facsimile at (202) 863-2898, or via e-mail at
qualexint@aol.com. The application and any associated documents are also
available for public inspection and copying during normal reference room
hours at the following Commission office: FCC Reference Information
Center, 445 12^th^ Street, S.W., Room CY-A257, Washington, D.C. 20554.

For further information, contact Gardner Foster, International Bureau,
at (202) 418-1460.

**ATTACHMENT**

[^1]: *Petition for Waiver of the International Settlement Policy for a
    Change in Accounting Rate for International Message Telephone
    Services with Telefonos de Mexico S.A. de C.V.* (filed June 24,
    2002) (*Williams Petition*).

[^2]: Williams states that the proposed agreement calls for: (1) a
    settlement rate of \$0.055 per minute for IMTS traffic terminating
    in the three largest cities in Mexico (Mexico City, Guadalajara and
    Monterrey); (2) a settlement rate of \$0.085 for IMTS traffic
    terminating in roughly 150 large and medium sized cities in Mexico;
    and (3) a settlement rate of \$0.1175 for IMTS traffic terminating
    in all other locations in Mexico. *Williams Petition* at 2.

[^3]: Williams also states that the proposed agreement calls for a
    \$0.11 settlement rate for Home Country Direct, Inbound 800
    (International Freephone) and Received Collect traffic for both the
    northbound and southbound routes. *Williams Petition* at 2.

[^4]: *Williams Petition* at 2.

[^5]: *Williams Petition* at 2 (citing *1998 Biennial Regulatory Review,
    Reform of the International Settlements Policy and Associated Filing
    Requirements*, Report and Order and Order on Reconsideration, 14 FCC
    Rcd 7963, 7993, ¶ 80 (1999)). Williams also notes WorldCom's
    estimate that these lower rates will generate cost savings of over
    \$550 million for the years 2001 through 2003. *Williams Petition*
    at 2 (citing *Petition for Waiver of the International Settlements
    Policy for a Change in Accounting Rate for International Message
    Telephone Services with Telefonos de Mexico S.A. de C.V* at 2 (Mar.
    21, 2002)).

[^6]: *Williams Petition* at 2. Williams further argues that the
    proposed arrangement is tailored to reflect varying levels of
    competition for terminating traffic at different locations in Mexico
    which "comports with the Commission's long-standing policy of
    encouraging settlement rates that reflect market dynamics."
    *Williams Petition* at 2-3 (citing *International Settlement Rates*,
    Report and Order, 12 FCC Rcd. 19806 (1997), *aff'd sub. nom, Cable &
    Wireless et al. v. FCC,* 166 F.3d 1224 (D.C. Cir. 1999) (*ISR
    Order*)). Williams also argues that the proposed agreement "moves
    closer to achieving the Commission's goal of having cost-based
    settlement rates so that consumers have more choices, receive better
    quality service, and pay lower rates for international
    telecommunications services." *Williams Petition* at 3 (citing *ISR
    Order*, 12 FCC Rcd at 19810, ¶ 7).

[^7]: *Williams Petition* at 3. Williams notes that, because Telmex has
    offered the same terms and conditions to other U.S. carriers, "the
    proposed agreement is non-discriminatory... \[and\] Telmex has not
    'whipsawed any U.S. carriers." Williams also notes that, as a part
    of the proposed agreement, Telmex has promised to request the
    elimination of certain Mexican regulations to ensure fully
    competitive negotiations of international termination rates on the
    U.S.-Mexico route by January 1, 2004. *Williams Petition* at 3.