Before the

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | * | SCL-LIC-20000629-00025       |
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| Australia-Japan Cable (Guam)     | ) |                              |
| Limited                          | * |                              |
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| Application for License to Land  |   |                              |
| and Operate in the United States | * |                              |
| a Private Submarine Fiber Optic  | * |                              |
| Cable Extending Between          | ) |                              |
| Australia, Guam, and Japan       | * |                              |
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**CABLE LANDING LICENSE**

**Adopted:** December 7, 2000 **Released:** December 8, 2000

By the Associate Chief, Telecommunications Division:

# Introduction

1\. In this Order, we grant the application of Australia-Japan Cable
(Guam) Limited ("AJC Guam"), pursuant to the Cable Landing License
Act[^1] and Executive Order No. 10530,[^2] for authority to land and
operate a private fiber optic submarine cable system to be called the
"Australia-Japan Cable," or "AJC," extending between Australia, Guam and
Japan.[^3] AJC Guam proposes to operate AJC on a non-common carrier
basis. We find that AJC Guam has provided sufficient information under
our rules to comply with the Cable Landing License Act, and that it
would serve the public interest to grant the cable landing license
subject to the conditions set out below.

# Application

2\. According to the AJC Application, AJC Guam, which will own and
control the portion of AJC located in U.S. territorial waters, is a
company organized and existing under the laws of Bermuda. AJC Guam is
wholly owned by Australia-Japan Cable Limited ("AJC Ltd."), which in
turn is wholly owned by Australia-Japan Cable Holding ("AJCH"), both
Bermuda companies.[^4] AJCH, AJC Ltd., and AJC Guam are 39.9 percent
indirectly owned by Telstra Corporation Limited ("Telstra"), the
Australian incumbent telecommunications carrier providing local and long
distance, including international, services in Australia.[^5] Telstra,
in turn, is 50.01 percent owned by the Australian Government. Additional
owners of AJCH, AJC Ltd., and AJC Guam are: Concert Global Networks
Services Limited, a Bermuda corporation ultimately owned 50 percent by
AT&T Corporation and 50 percent by British Telecom PLC, both publicly
traded communications companies (10.1 percent); Japan Telecom Co., Ltd.,
a publicly traded Japanese corporation engaged in communications (10
percent); MCI WorldCom Global Network Services Limited, a Bermuda
corporation ultimately owned by MCI Worldcom Inc., a publicly traded
communications company (15 percent); NTT Communications Corporation, a
Japanese corporation and wholly owned subsidiary of Nippon Telegraph and
Telephone Corporation, a Japanese corporation engaged in communications
that is 46.7 percent owned by the Japanese Government (10 percent)[^6];
and Teleglobe Inc., a publicly traded Canadian corporation engaged in
communications (15 percent).[^7]

3\. AJC Guam's immediate parent, AJC Ltd., also wholly owns: (1)
Australia-Japan Cable (Australia) Limited ("AJC Australia"), the entity
that will own and control the portion of the cable located in Australian
territorial waters; (2) Australia-Japan Cable (Japan) Limited ("AJC
Japan"), the entity that will own and control the portion of the cable
located in Japanese territorial waters; and (3) Australia-Japan Cable
(Management) Limited ("AJC Management"), a Bermuda corporation that will
manage the cable pursuant to a contractual arrangement between the
owners of the cable and AJC Management. AJC Ltd. itself will own and
control the portions of the cable located in international waters.[^8]

4\. AJC will connect Australia, Guam, and Japan, with two separate
landing points in each location. AJC will be configured as a two-fiber
pair "collapsed ring" network, with a single backbone in deep water
between Australia and Japan and double branch landings to terminals in
Australia, Guam, and Japan. The total distance of the cable will be
approximately 12,000 kilometers. In addition, AJC will use terrestrial
transmission links between the in-country terminals (and optionally a
submarine link for Japan) to close the collapsed ring.[^9] A map of AJC
is attached as Exhibit A. AJC will provide synchronous digital hierarchy
(SDH) transmission facilities over optical fiber pairs operated at a
nominal wavelength of about 1.5 micrometers and using optical
amplification. Each fiber pair will be capable of carrying 32 separate
wavelengths in each direction, each modulated to STM-64 level, although
the initial equipment provisioning will be linked to that required to
support four such separate wavelengths in each direction per fiber pair.
Thus, the total design capacity, based on current technology, will be
320 Gbps per fiber pair, initially equipped to 40 Gbps per fiber
pair.[^10]

5\. According to the AJC Application, AJC capacity will be available on
three paths: Australia-Japan; Australia-Guam; and Guam-Japan. Applicants
state that capacity purchasers will be able to interconnect with several
other planned and existing cables in Australia, Guam, and Japan, that
future use of AJC may comprise other than SDH traffic, such as Internet
Protocol traffic through high speed routers, and that AJC will be
capable of supporting such alternative use of each wavelength through
the provision of suitable transmission equipment. Applicants also state
that it will be possible to expand the capacity of AJC, either to carry
Internet Protocol traffic or to provide transport of additional SDH
traffic. AJC's owners plan to place the cable into commercial service by
June 30, 2001.[^11]

6\. According to Applicants, the AJC Ltd. subsidiaries that will own and
control the portions of AJC located in territorial waters will obtain
Indefeasible Rights of Use ("IRUs") in cable landing stations owned by
landing parties other than AJC subsidiaries. AJC Guam will receive an
IRU from Concert Global Network USA LLC, a Delaware corporation that
owns 100 percent of the existing Tanguisson, Guam and Tumon Bay, Guam
landing stations.[^12] In Japan, AJC Japan will receive an IRU from NTT
Communications Corporation, the 100 percent owner of the Shima, Japan
cable landing station and an IRU from Japan Telecom Co., Ltd., the 100
percent owner of the Maruyama, Japan cable landing station.[^13] In
Australia, AJC Australia will receive an IRU from Telstra Corporation
Limited, the 100 percent owner of the Oxford Falls, Australia and
Paddington, Australia cable landing stations.[^14] Pursuant to the
landing party agreements entered into by the AJC Ltd. subsidiaries with
the four landing parties, the landing parties are required to provide
space and connection with the network at the cable stations to
alternative carriers on a nondiscriminatory basis for the provision of
backhaul services between the cable station and a central office or
international gateway, either for the carriers' own purposes or for
purposes of resale to third parties.[^15] Applicants state that in Guam,
all backhaul services will be provided by carriers unaffiliated with the
owners of AJC and that in Australia and Japan, where cable users also
have the right to receive backhaul services from the landing parties,
these services must be provided on a nondiscriminatory basis to cable
users.[^16]

# Comments

7\. We placed the AJC Application on public notice on July 12,
2000.[^17] We received no comments on the application. Pursuant to
Section 1.767(b) of the Commission's rules,[^18] the Cable Landing
License Act, and Executive Order No. 10530, we informed the Department
of State of the AJC Application and the AJC Oct. 23 Letter.[^19] 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 the issuance of the cable
landing license.[^20]

# Discussion

8\. Section 35 of the Cable Landing License Act provides that licenses
may be granted upon "such terms as shall be necessary to assure just and
reasonable rates and service in the operation and use of cables so
licensed."[^21] In the *Foreign Participation Order*,[^22] the
Commission adopted a presumption in favor of granting applications by
applicants that are affiliated with carriers in destination markets that
are World Trade Organization (WTO) members. The Commission observed that
if a particular application presents unusual risks to competition, the
Commission can address most potential problems by imposing conditions on
the license.[^23] Each of the countries in which the proposed cable
would land where AJC Guam has foreign carrier affiliations as described
below is a WTO member.

9\. AJC Guam certifies that it is affiliated with foreign carriers,
within the meaning of 47 C.F.R. Section 63.09(d) of the Commission's
rules, in the destination countries of Australia and Japan.
Specifically, AJC Guam states that it is affiliated with: Telstra, the
incumbent provider of local and long distance services in Australia;
Telstra Japan KK, which holds a Type I telecommunications license in
Japan but has not yet obtained approval to offer services; and Telstra
Singapore Pte Ltd. (Japan Branch), which holds a Type II
telecommunications license in Japan, allowing it to resell voice data
and fax services in Japan and to offer international telecommunications
services.[^24] In addition, AJC Guam advises that AJC Australia, a
wholly owned subsidiary of AJC Guam's parent AJC Ltd., will apply for a
Carrier License in Australia.[^25] AJC Guam asserts that, although the
Commission previously has found that Telstra possesses market power in
Australia, the Commission also has found that carriers have effective
competitive opportunities to provide international facilities-based
services.[^26]

10\. Because the proposed cable's foreign affiliates are in countries
that are WTO members, there is a presumption in favor of granting AJC
Guam's application to land and operate AJC in the United States.[^27] We
find no reason, based on the record before us, to rebut this
presumption. However, as we have discussed previously,[^28] where there
is a risk of competitive harm to U.S. consumers and to competitive
providers, including telecommunications service providers and
information service providers, due to an applicant's affiliation with
dominant foreign carriers and foreign cable landing stations in foreign
destinations, we have imposed certain conditions designed to address
possible harms to competition.[^29]

11\. The Commission licenses submarine cables to be operated on either a
common carrier or non-common carrier basis,[^30] and requires a cable
landing license applicant to indicate under which of these two
regulatory categories it seeks to operate.[^31] AJC Guam proposes to
operate AJC as a non-common carrier submarine cable system in which
capacity will not be offered indifferently to the user public.

12\. The Commission's private submarine cable policy is intended to
promote competition in the provision of international transmission
facilities.[^32] In determining whether a cable system qualifies to be
operated on a non-common carrier basis, the Commission uses the two-part
test set forth by the United States Court of Appeals for the District of
Columbia Circuit in *NARUC I.*[^33] Pursuant to this policy, the
Commission has authorized non-common carrier cables where: 1) there is
no legal compulsion to serve the public indifferently; and 2) there are
no reasons implicit in the nature of the operations of the submarine
cable system to expect an indifferent holding-out to the eligible user
public.[^34]

13\. In applying the first prong of *NARUC I* to submarine cable
authorizations, the Commission has stated that there will be no legal
compulsion to serve the public indifferently where there is no public
interest reason to require facilities to be offered on a common carrier
basis. This public interest analysis generally has focused on whether an
applicant will be able to exercise market power because of the lack of
alternative facilities, although the Commission has not limited itself
to that reasoning.[^35] Where there are sufficient alternatives, the
Commission has found that the licensee will lack market power and will
not be able to charge monopoly rates for cable capacity. The Commission
has found that, in those circumstances, the public interest would be
served by allowing a submarine cable to be offered on a non-common
carrier basis.[^36]

14\. If the Commission finds that there is no public interest reason to
require the submarine cable facilities to be offered on a common carrier
basis, then, under the second prong of the *NARUC I* test, the
Commission considers whether there is reason to expect an indifferent
holding-out by the applicant to the eligible user public. If the
Commission finds that an applicant has shown that it will make
individualized decisions whether and on what terms to provide service
and will not undertake to serve all customers indifferently, the
Commission has held that the second prong of the test has been met.[^37]

15\. Notwithstanding a Commission decision not to require a submarine
cable system to be operated on a common carrier basis, the Commission
retains the authority to impose common carrier or common-carrier-like
obligations on the operations of that cable system, if the public
interest so requires.[^38] Furthermore, the Commission has always
maintained the authority subsequently to classify facilities as common
carrier facilities subject to Title II of the Communications Act if the
public interest requires that the facilities be offered to the public
indifferently.[^39]

16\. In this case, with respect to the second prong of the test, AJC
Guam proposes to operate AJC on a non-common carrier basis, offering
bulk capacity to a specific class of eligible users, including common
carriers, on an original ownership, IRU, or lease of capacity basis. AJC
Guam will not hold out to the public indifferently, but will make
individualized decisions in particular cases whether and on what terms
to deal with prospective customers.[^40] Based on these representations,
we conclude that there is no reason to expect an indifferent holding-out
to the eligible user public.

17\. With respect to the first prong of the test, AJC Guam asserts that
there are sufficient existing and planned facilities on the route to
constrain the ability of AJC Guam to exercise market power.[^41] AJC
asserts that existing and planned common carrier and private cable
systems offer connectivity between Australia, Guam, and Japan, and that
AJC is designed not only to provide capacity between these points, but
to be a link between cables providing transpacific capacity.[^42] AJC
Guam states that these systems include the following cables extending to
one or more of the countries other than the United States in which AJC
would land: (1) NPC (authorized on a non-common carrier basis to serve
the U.S. Mainland, Alaska, and Japan);[^43] (2) TPC-4 (authorized on a
common carrier basis to serve the U.S. Mainland, Canada, and
Japan);[^44] (3) PacRimWest (authorized on a common carrier basis to
serve Australia and Guam);[^45] (4) PacRimEast (authorized on a common
carrier basis to serve Hawaii and New Zealand);[^46] (5) HAW-5
(authorized on a common carrier basis to serve the U.S. Mainland and
Hawaii);[^47] (6) TPC-5 (authorized on a common carrier basis to serve
the U.S. Mainland, Hawaii, Guam, and Japan);[^48] (7) Southern Cross
(authorized on a common carrier basis to serve the U.S. Mainland,
Hawaii, Fiji, New Zealand, and Australia);[^49] (8) China-US (authorized
on a non-common carrier basis to serve the U.S. Mainland, China, Taiwan,
Japan, South Korea, and Guam);[^50] (9) Guam-Philippines (authorized on
a non-common carrier basis to serve Guam and the Philippines);[^51] (10)
Oxygen USA (authorized on a non-common carrier basis to serve the U.S.
Mainland and various oversea points, including Australia, Guam, and
Japan);[^52] and (11) Japan-US ( authorized on a non-common carrier
basis to serve the U.S. Mainland, Japan, and Hawaii).[^53]

18\. We find that the public interest would be served by the provision
of additional capacity on the routes proposed to be served by AJC,
particularly on the Guam-Australia route. Currently, two U.S. cables
directly serve Australia: PacRimWest and Southern Cross. Moreover,
PacRimEast, a common carrier cable that serves the U.S. Mainland,
Hawaii, and New Zealand, indirectly serves Australia via the Tasman-2
cable linking Australia and New Zealand.

19\. In its recent Notice of Proposed Rulemaking addressing competition
in the submarine cable market, the Commission noted the importance of
promoting the expansion of capacity and facilities-based competition,
which will result in innovation and lower prices for U.S. consumers of
international communications services.[^54] At the same time, we are
concerned about a possible risk of competitive harm to U.S. consumers
and competitive providers on the U.S.-Australia route due to AJC Guam's
affiliation with a dominant foreign carrier and foreign cable landing
stations in the cable's destination market of Australia.[^55]

20\. With respect to Australia, the International Bureau has found AJC
Guam's foreign affiliate in Australia, Telstra, to have market power in
the local exchange market in Australia,[^56] and thus treats Telstra's
wholly owned U.S. subsidiary, Telstra, Inc. (TI) as dominant on the
U.S.-Australia route.[^57] In 1998, the International Bureau found that
U.S. carriers have effective competitive opportunities to provide
international facilities-based service in Australia.[^58] At the same
time, however, Telstra is the landing party for almost all submarine
cables in Australia. The Commission, in its *Foreign Participation
Order,* determined that the relevant markets on the foreign end of a
U.S. international route generally include: international transport
facilities or services, including cable landing station access and
backhaul facilities; inter-city facilities or services; and local access
facilities or services on the foreign end.[^59] Telstra, therefore, has
market power in at least two of the three relevant markets \-- cable
landing station access and local access facilities or services \-- on
the Australian end of the U.S.-Australia route.[^60] We are concerned
that AJC's foreign affiliate, Telstra, might favor AJC or affiliated
telecommunications or information service providers. We recently
addressed similar concerns about potential competitive harm to U.S.
consumers and service providers by attaching a limited set of conditions
to a submarine cable license for a network serving the United States and
destination countries in South America.[^61]

21\. In this instance, given that the AJC owners do not plan to commence
commercial service until sometime just prior to June 30, 2001 and given
that Southern Cross, a new common carrier cable, recently began service,
we find that market forces and a limited number of additional conditions
will constrain the ability of AJC Guam and its foreign affiliates in
Australia to engage in anticompetitive practices.[^62] Moreover, we note
that the AJC landing party agreements between the landing parties
(including Telstra) and the IRU holders (including AJC Australia and AJC
Guam) require the landing parties to provide space and connection with
the network at the cable stations to alternative carriers on a
nondiscriminatory basis for the provision of backhaul services between
the cable station and a central office or international gateway, either
for the carriers' own purposes or for purposes of resale to third
parties.[^63] Further, where the landing parties, such as Telstra, will
provide backhaul services or interconnection, they must provide them on
a nondiscriminatory basis to cable users.[^64] Finally, the availability
of regional submarine cable links (SEA-ME-WE-3, APCN and JASURAUS[^65]),
that together connect Australia, via Indonesia, to the Philippines, and
the availability of Guam-Philippines,[^66] connecting the Philippines to
Guam, will help to create competition on the U.S.-Australia route.

22\. The AJC Nov. 6 Letter indicates that AJC Guam and its affiliates in
AJC are willing to accept certain conditions to the authorization to
land and operate AJC.[^67] AJC and its affiliates have accepted the
following three conditions:

(1) AJC Guam states that it is willing to commit that it will neither
    (directly or indirectly) accept from nor offer to an affiliated
    dominant carrier or foreign landing station owned by an affiliated
    dominant carrier in Australia a "special concession" as that term is
    defined in Section 63.14(b) of the Commission's rules, 47 C.F.R. §
    63.14(b).

(2) AJC Guam agrees to provide the Commission with quarterly reports
    (within 90 days from the end of each calendar quarter) summarizing
    the provisioning and maintenance of all network facilities and
    services procured from AJC Guam's dominant affiliates and foreign
    cable landing stations owned by AJC Guam's dominant affiliates in
    Australia, including, but not limited to those services procured on
    behalf of customers or any joint venture in which AJC Guam or any
    dominant affiliates participate. This report will contain the
    information required in Section 63.10(c)(4) of the Commission's
    rules, 47 C.F.R. § 63.10(c)(4).

(3) AJC states that it is the intent of AJC Guam and its affiliates to
    provide capacity users direct interface access to the cable network
    interface as well as the ability to collocate their own equipment on
    commercially reasonable and non-discriminatory terms at the cable
    stations in order to access the AJC network. In order to clarify
    that intention, AJC Guam states that it is willing to agree to a
    condition that capacity users will (if requested by the user) be
    provided direct interface access to the cable network interface as
    well as the ability to collocate their own equipment on commercially
    reasonable and non-discriminatory terms at the cable stations in
    order to access the AJC network.

The conditions agreed to by AJC Guam and its affiliates, along with the
conditions regularly attached to the grant of non-common carrier cables,
should serve to address our concerns that AJC's foreign affiliate,
Telstra, might favor AJC or affiliated telecommunications and
information service providers.

23\. Based on the analysis above, we conclude that AJC Guam will not
offer capacity in AJC to the public on a common carrier basis, and that
the public interest does not require that it do so. Accordingly, we
conclude that it is appropriate to license AJC on a non-common carrier
basis, but with certain common-carrier-like conditions designed to
detect and deter anticompetitive activity detrimental to U.S. consumers.
We emphasize that our decision to grant this cable landing license to
AJC Guam on a non-common carrier basis is predicated in part upon the
current and planned facility alternatives in the region. Because of
these alternatives, carriers and users alike will have viable choices
other than AJC when seeking capacity. If the public interest should
require, we retain the authority to modify these conditions and to
classify these facilities as common carrier facilities subject to Title
II of the Communications Act. We also find that AJC Guam will not
provide a telecommunications service for a fee to such class of users as
to be "effectively available directly to the public" and thus will not
be a "telecommunications carrier" under the 1996 Act.[^68]

# Ownership And Landing Points

24\. AJC Guam has provided the ownership information required by
Sections 1.767(a)(6) and 63.18 of the Commission's rules. According to
the AJC Application, AJC Guam is 39.99 percent indirectly owned by
Telstra, itself 50.01 percent owned by the Australian Government; 15
percent indirectly owned by MCI Worldcom; 15 percent indirectly owned by
Teleglobe Inc.; 10.01 percent owned by Concert Global Network Services,
a 50/50 joint venture of AT&T Corporation and British Telecom PLC; 10
percent indirectly owned by Japan Telecom Co., Ltd.; and 10 percent
indirectly owned by NTT, itself 53 percent owned by the Japanese
Government. AJC Guam will hold an IRU in the Tanguisson, Guam and Tumon
Bay, Guam landing stations and will own and control the portion of AJC
located in U.S. territorial waters. Wholly-owned subsidiaries of AJC
Guam's direct parent, AJC Ltd., will hold IRUs in the Japan and
Australia cable stations. These subsidiaries will own the portions of
AJC located, respectivly, in Japanese and Australian territorial waters,
while AJC Ltd. itself will own and control the portions of the cable
located in international waters. AJC Guam states that it is affiliated,
in AJC's destination markets, with Telstra, Telstra Japan KK, and
Telstra Singapore Pte Ltd.[^69]

25\. AJC Guam states that AJC will land at: Shima, Japan; Maruyama,
Japan; Tanguisson, Guam, U.S.A.; Tumon Bay, Guam, U.S.A.; Oxford Falls,
Australia; and Paddington, Australia. AJC Guam has complied with Section
1.767(a) of the Commission's rules, which requires applicants to file a
specific description of any landing point, including a map.[^70] AJC
Guam has filed, with the AJC Application, the specific description of
each landing point, maps showing specific coordinates of each landing
station, and the identity, citizenship, and specific ownership share of
each owner of each U.S. landing station. These are attached as Exhibits
B-E. The license therefore is not subject to any further public notice
or Commission approval of the cable system's landing points pursuant to
the procedure in Section 1.767(a).

# Environmental Impact

26\. Based on the information provided by AJC Guam and pursuant to the
Commission's procedures implementing the National Environmental Policy
Act of 1969,[^71] we find that acting on the AJC Application would not
significantly affect the environment according to Section 1.1307(a) or
(b) of the Commission's rules. Therefore, pursuant to Section 1.1306 of
the Commission's rules, we conclude that grant of the requested license
would not significantly affect the environment. Consequently, AJC Guam
is not required to submit an environmental assessment, and the AJC
Application is categorically excluded from environmental processing.

# Conclusion

27\. We grant the AJC Application for authority to land and operate a
non-common carrier fiber optic submarine cable extending between
Tanguisson and Tumon Bay, Guam; Shima and Maruyama, Japan; and Oxford
Falls and Paddington, Australia, subject to the conditions listed below.

# Ordering Clauses

28\. Consistent with the foregoing and pursuant to the Cable Landing
License Act and Executive Order 10530, we hereby GRANT AND ISSUE AJC
Guam a license to land and operate a non-common carrier fiber optic
cable two-fiber pair "collapsed ring" network that uses SDH technology
to provide an initial system capacity of 40 Gbps per fiber pair for
service and protection, upgradable to a total design capacity of 320
Gbps per fiber pair, extending between Guam, U.S.A. and Japan and
Australia. This grant is subject to all rules and regulations of the
Commission; any treaties or conventions relating to communications to
which the United States is or may hereafter become a party; any action
by the Commission or the Congress of the United States rescinding,
changing, modifying, or amending any rights accruing to any person
hereunder; and the following conditions:

(1) The location of the cable system within the territorial waters of
    the United States, its territories and possessions, and upon its
    shore shall be in conformity with plans approved by the Secretary of
    the Army, and the cable shall be moved or shifted by the Licensee at
    its expense upon the request of the Secretary of the Army whenever
    he or she considers such course necessary in the public interest,
    for reasons of national defense, or for the maintenance or
    improvement of harbors for navigational purposes;

(2) The Licensee shall at all times comply with any requirements of U.S.
    government authorities regarding the location and concealment of the
    cable facilities, buildings, and apparatus for the purpose of
    protecting and safeguarding the cable from injury or destruction by
    enemies of the United States;

(3) The Licensee or any persons or companies controlling it, controlled
    by it, or under direct or indirect common control with it do not
    enjoy and shall not acquire any right to handle traffic on a common
    carrier basis to or from the United States, its territories, or its
    possessions unless such service be authorized by the Commission
    pursuant to Section 214 of the Communications Act, as amended;

(4) The Licensee or any persons or companies controlling it, controlled
    by it, or under direct or indirect common control with it shall not
    acquire or enjoy any right to land, connect, or operate submarine
    cables that is denied to any other United States company by reason
    of any concession, contract, understanding, or working arrangement
    to which the Licensee or any persons controlling it, controlled by
    it, or under direct or indirect common control with it are parties;

(5) Neither this license nor the rights granted herein shall be
    transferred, assigned, or in any manner either voluntarily or
    involuntarily disposed of or disposed of indirectly by transfer of
    control of the Licensee to any persons, unless the Commission shall
    give prior consent in writing;

(6) The Commission reserves the right to require the Licensee to file an
    environmental assessment or environmental impact statement should it
    determine that the landing of the cable at those locations and
    construction of necessary cable landing stations would significantly
    affect the environment within the meaning of Section 1.1307 of the
    Commission's procedures implementing the National Environmental
    Policy Act of 1969; this license is subject to modification by the
    Commission upon its review of any environmental assessment or
    environmental impact statement that it may require pursuant to its
    rules;

(7) Pursuant to Section 2 of the Cable Landing License Act, 47 U.S.C. §
    35; Executive Order No. 10530, as amended; and Section 214 of the
    Communications Act of 1934, as amended, 47 U.S.C. § 214, the
    Commission reserves the right to impose common carrier or
    common-carrier-like regulation on the operations of the cable system
    if it finds that the public interest so requires;

(8) The Licensee shall maintain *de jure* and *de facto* control of the
    U.S. portion of the cable system, including the cable landing
    stations in the United States, sufficient to comply with the
    requirements of this license;

(9) This license is revocable by the Commission after due notice and
    opportunity for hearing pursuant to Section 2 of the Cable Landing
    License Act, 47 U.S.C. § 35, or for failure to comply with the terms
    of this license;

(10) The Licensee shall notify the Commission in writing of the date on
     which the cable is placed in service, and this license shall expire
     25 years from such date, unless renewed or extended upon proper
     application, and, upon expiration of this license, all rights
     granted under it shall be terminated;

(11) The terms and conditions upon which this license is given shall be
     accepted by the Licensee by filing a letter with the Secretary,
     Federal Communications Commission, Washington, D.C. 20554, within
     30 days of the release of the cable landing license;

(12) The Licensee shall not either directly or indirectly accept from
     nor offer to an affiliated dominant carrier or foreign landing
     station owned by an affiliated dominant carrier in Australia a
     "special concession," as that term is defined in Section 63.14(b)
     of the Commission's rules, 47 C.F.R. § 63.14(b);

(13) The Licensee shall provide the Commission with quarterly reports
     (within 90 days from the end of each calendar quarter) summarizing
     the provisioning and maintenance of all network facilities and
     services procured from the Licensee's dominant affiliates and
     foreign cable landing stations owned by AJC Guam's dominant
     affiliates in Australia, including, but not limited to those
     services procured on behalf of customers or any joint venture in
     which the Licensee and any dominant affiliates participate; this
     report will contain the information required in Section 63.10(c)(4)
     of the Commission's rules, 47 C.F.R. § 63.14(c)(4); and

(14) The Licensee and its affiliates will provide capacity users direct
     interface access (if requested by the user) to the cable network's
     interface as well as the ability to collocate their own equipment
     on commercially reasonable and non-discriminatory terms at the
     cable stations in order to access the AJC network.

29\. 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
>
> Jacquelynn Ruff
>
> Associate Chief, Telecommunications Division
>
> International Bureau

**Exhibit A**

![](media/image1.png){width="6.499305555555556in"
height="8.404166666666667in"}

**Exhibit B**

![](media/image2.png){width="6.499305555555556in"
height="8.404166666666667in"}

**Exhibit C**

![](media/image3.png){width="6.499305555555556in"
height="8.404166666666667in"}

**Exhibit D**

![](media/image4.png){width="6.499305555555556in"
height="8.404166666666667in"}

**Exhibit E**

![](media/image5.png){width="6.499305555555556in"
height="8.404166666666667in"}

[^1]: 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).

[^2]: Exec. Ord. No. 10530 *reprinted as amended in* 3 U.S.C. § 301.

[^3]: *See* Australia-Japan Cable (Guam) Limited Application to Land and
    Operate in the United States a Private Submarine Fiber Optic Cable
    Network, filed June 29, 2000 (AJC Application); *see also* Letter
    from Stephen R. Bell and Sophie J. Keefer, Counsel for AJC Guam, to
    Magalie Roman Salas, Secretary, Federal Communications Commission,
    filed Oct. 23, 2000 (AJC Oct. 23 Letter).

[^4]: AJC Application at 2.

[^5]: *See* AJC Oct. 23 Letter at Enclosure, 1. *See also, e.g.,
    Telstra, Inc., Application for Section 214 Authority to Acquire
    Capacity in International Facilities for the Provision of Switched
    and Private Line Services Between the United States and Australia,*
    File No. ITC-97-320, Memorandum Opinion, Order and Certificate, 13
    FCC Rcd 205, 208 at paras. 7-9 (IB 1998) (*Telstra Facilities
    Order*); *see also* Letter from Stephen R. Bell and Sophie J. Keefer
    to Magalie Roman Salas, Secretary, Federal Communications
    Commission, filed Nov. 6, 2000, at Enclosure, 1 (AJC Nov. 6 Letter).

[^6]: *See* AJC Oct. 23 Letter at 1.

[^7]: AJC Application at 2.

[^8]: *Id.* at 9.

[^9]: *Id.* at 3.

[^10]: *Id.* at 4.

[^11]: *Id.* at 1-2.

[^12]: *See* AJC Application at 5, 8; *see also* Exhibit B of this
    Order.

[^13]: *See* AJC Application at 5, 8-9; *see also* Exhibit C of this
    Order.

[^14]: *See* AJC Application at 5, 8-9; *see also* Exhibits D and E of
    this Order.

[^15]: *See* AJC Application at 5-6; *see also* AJC Nov. 6 Letter, at
    Enclosure, 4-5.

[^16]: *See id.*

[^17]: *See Non Streamlined International Applications Accepted for
    Filing,* Public Notice, Report No. TEL-00257NS (rel. July 12, 2000).

[^18]: 47 C.F.R. § 1.767(b).

[^19]: Letter from George Li, Deputy Chief, Telecommunications Division,
    International Bureau, Federal Communications Commission, to Steven
    W. Lett, Deputy U.S. Coordination, Office of International
    Communications and Information Policy, U.S. Department of State
    (July 12, 2000); Letter from George Li to Steven Lett (Oct. 24,
    2000).

[^20]: Letter from Richard C. Beard, Acting United States Coordinator,
    International Communications and Information Policy, U.S. Department
    of State, to Donald Abelson, Chief, International Bureau, Federal
    Communications Commission (Dec. 6, 2000).

[^21]: 47 U.S.C. § 35.

[^22]: *Rules and Policies on Foreign Participation in the U.S.
    Telecommunications Market,* IB Docket Nos. 97-142 and 95-22, Report
    and Order and Order on Reconsideration, 12 FCC Rcd 23891 (1997)
    (*Foreign Participation Order*), Order on Reconsideration, FCC
    00-339 (rel. Sept. 19, 2000).

[^23]: *Id.*, 12 FCC Rcd at 23934, para. 94.

[^24]: AJC Application at 19-20.

[^25]: *Id.* at 19.

[^26]: *Id.* at 20, *citing Telstra, Inc., Application for Section 214
    Authority to Resell International Message Telephone Service,
    International Private Line Services Interconnected to the PSN, and
    International Private Lines Not Interconnected to the PSN for the
    Provision of Service Between the United States and Australia,* File
    No. ITC-96-319, Memorandum Opinion, Order and Certificate, 12 FCC
    Rcd 21692, 21718 at para. 67 (IB 1997) (*Telstra Resale Order*);
    *Telstra Facilities Order* at 212, para. 23.

[^27]: *See Foreign Participation Order,* 12 FCC Rcd at 23932-35, paras.
    87-96 (concluding that, where an applicant for a submarine cable
    landing license is a foreign carrier, or affiliated with a foreign
    carrier, that has market power in a WTO member country where the
    cable lands, the application is evaluated under a strong presumption
    that it should be granted).

[^28]: *See Telefónica SAM USA, Inc. and Telefónica SAM de Puerto Rico,
    Inc., Application for a License to Land and Operate in the United
    States a Private Submarine Fiber Optic Cable Network Extending
    Between Florida, Puerto Rico, Brazil, Argentina, Chile, Peru, and
    Guatemala,* File No. SCL-LIC-20000204-00003, Cable Landing License,
    DA 00-1826 (IB/TD rel. Aug. 10, 2000) (*Telefónica SAM Order*).

[^29]: *See* *Telefónica SAM Order* at para. 8.

[^30]: *See, e.g., Tel-Optik Limited, Application for a License to Land
    and Operate a Submarine Cable Extending Between the United States
    and the United Kingdom,* Memorandum Opinion and Order, 100 FCC 2d
    1033 (1985) (*Tel-Optik Order*) (setting forth the Commission's
    private submarine cable policy).

[^31]: 47 C.F.R. § 1.767(a)(6).

[^32]: *See Tel-Optik Order*, 100 FCC 2d at 1040-42, paras. 18-20,
    1046-48, paras. 27-31.

[^33]: *National Association of Regulatory Utility Commissioners v.
    FCC*, 525 F.2d 630, 642 (D.C. Cir.) (*NARUC I*), *cert. denied,* 425
    U.S. 992 (1976). The D.C. Circuit recently affirmed the continuing
    use of the *NARUC I* test in the context of reviewing an undersea
    cable license in light of the addition of the terms
    "telecommunications carrier" and "telecommunications service" in the
    Communications Act as part of the Telecommunications Act of 1996.
    *See Virgin Islands Telephone Corporation v. FCC,* 198 F. 3d 921
    (D.C. Cir. 1999).

[^34]: *See* *NARUC I,* 525 F.2d at 642. *See also AT&T Corp. et. al.,
    Joint Application for a License to Land and Operate a Submarine
    Cable Network Between the United States and Japan*, File No.
    SCL-LIC-19981117-00025, Cable Landing License, 14 FCC Rcd 13066,
    13080, para. 38 (1999) (*Japan-U.S. Order*); *Cable & Wireless PLC,
    Application for a License to Land and Operate in the United States a
    Private Submarine Fiber Optic Cable Extending Between the United
    States and the United Kingdom*, File No. SCL-96-005, Cable Landing
    License, 12 FCC Rcd 8516, 8520-23 paras. 11-17 (1997) (*Cable &
    Wireless UK Cable Order*).

[^35]: *Japan-U.S. Order*, 14 FCC Rcd at 13080, para. 39; *Review of
    Commission Consideration of Applications Under the Cable Landing
    License Act,* IB Docket No. 00-106, Notice of Proposed Rulemaking,
    FCC 00-210 at para. 65 (rel. June 22, 2000) (*Cable Landing License
    NPRM*).

[^36]: *Cable Landing License NPRM* at para. 65. *See also Cable &
    Wireless UK Cable Order,* 12 FCC Rcd at 8522-23, paras. 15-17.

[^37]: *See, e.g., Cable Landing License NPRM* at para. 66.

[^38]: *See, e.g., id.* at para. 67; *Japan-U.S. Order,* 14 FCC Rcd at
    13080-81, para 40*.*

[^39]: *See, e.g., Cable Landing License NPRM* at para. 67; *Foreign
    Participation Order,* 12 FCC Rcd at 23934, para 95; *Cable &
    Wireless UK Cable Order,* 12 FCC Rcd 8530, para. 39.

[^40]: *See* AJC Application at 7.

[^41]: *See id*; *see also* AJC Nov. 6 Letter, at Enclosure, 3-4.

[^42]: *See* AJC Application at 7-8.

[^43]: *See Pacific Telecom Cable, Inc., Application for a License to
    Land and Operate in the United States a Private Submarine Cable
    Between the United States and Japan,* File No. ISCL-86-002-M, Cable
    Landing License, 4 FCC Rcd 8061 (1989); *see also Pacific Telecom
    Cable, Inc.,* Conditional Cable Landing License, 2 FCC Rcd 2686
    (1987). NPC is currently in service.

[^44]: *See AT&T et. al, Joint Application for a License to Land and
    Operate a High Capacity Digital Submarine Cable Systems Extending
    from the United States Mainland to Canada and Japan,* File No.
    SCL-89-004, Cable Landing License, 4 FCC Rcd 8040 (1989). TPC-4 is
    currently in service.

[^45]: *See AT&T et. al, Joint Application for Section 214 Authority to
    Construct, Acquire Capacity in and Operate a High Capacity Digital
    Submarine Cable System Between the United States Territory of Guam
    and Australia,* File No. ITC-90-097, Memorandum Opinion, Order and
    Authorization, 5 FCC Rcd 7362 (1990). PacRimWest is currently in
    service.

[^46]: *See AT&T et. al, Joint Application for Section 214 Authority to
    Construct, Acquire Capacity in and Operate a High Capacity Digital
    Submarine Cable System Between Hawaii and New Zealand,* File No.
    ITC-90-072, Memorandum Opinion, Order and Authorization, 5 FCC Rcd
    7331 (1990). PacRimEast is currently in service.

[^47]: *See AT&T et.al, Joint Application for Section 214 Authority to
    Construct, Acquire Capacity in and Operate a High Capacity Digital
    Submarine Cable System Between the United States Mainland and Oahu,
    Hawaii,* File No. ITC-90-081, Memorandum Opinion, Order and
    Authorization, 5 FCC Rcd 7344 (1990). HAW-5 is currently in service.

[^48]: *See AT&T et. al, Joint Application for Section 214 Authority to
    Construct, Acquire Capacity in and Operate a High Capacity Digital
    Submarine Cable System Between and Among the United States Mainland,
    the State of Hawaii, the Island of Guam and Japan,* File No.
    ITC-92-179, Memorandum Opinion, Order and Authorization, 7 FCC Rcd
    7758 (CCB 1992). TPC-5 is currently in service.

[^49]: *See MFS International, Inc., Application for a License to Land
    and Operate in the United States A Common Carrier Fiber Optic
    Submarine Cable Extending Between the United States and Australia
    and New Zealand,* File No. SCL-97-005, Cable Landing License, 13 FCC
    Rcd 2932 (TD/IB 1998) (*Southern Cross Cable Order*); *MFS
    International, Inc.,* ITC-97-622, Memorandum Opinion, Order and
    Authorization, 13 FCC Rcd 2939 (TD/IB 1998); *MFS International,
    Inc., MFS Globenet, Inc., Pacific Carriage Limited,* File No.
    SCL-MOD-19990216-00002, Modification of Cable Landing License, 14
    FCC Rcd 13912 (TD/IB 1999); *MFS Globenet. Inc., Pacific Carriage
    Limited,* File No. SCL-MOD-20000201-00002, Modification of Cable
    Landing License, 15 FCC Rcd 10145 (TD/IB 2000). Southern Cross is
    currently in service.

[^50]: *See AT&T et. al, Joint Application for a License to Land and
    Operate in the United States a Digital Submarine Cable System
    Extending Between the United States, China, Taiwan, Japan, South
    Korea, and Guam,* File No. SCL-98-002, Cable Landing License, 13 FCC
    Rcd 16232 (TD/IB 1998). China-US is currently in service.

[^51]: *See AT&T et. al, Application for a License to Land and Operate
    in the United States a Private Fiber Optic Cable System Extending
    Between Guam and the Philippines, the G-P Cable System,* File No.
    SCL-AMD-19980902-0018, Cable Landing License, 14 FCC Rcd 1923 (TD/IB
    1998) (*Guam-Philippines Cable Order*). Guam-Philippines is
    currently in service.

[^52]: *See Project Oxygen (USA) LLC, Application for a License to Land
    and Operate in the United States a Private Fiber Optic Submarine
    Cable System Extending Between the United States and Various
    Overseas Points,* File No. SCL-LIC-19981014-00020, Cable Landing
    License, 14 FCC Rcd 3924 (TD/IB 1999). We note, however, that
    Project Oxygen is reported to be in the process of ceasing
    development efforts because of lack of financing. *See
    Communications Week International Online, Oxygen Collapse Prompts
    New Pacific Network Plan,* July 17, 2000.

[^53]: *See Japan-U.S. Order, supra n.* 34, Cable Landing License, 14
    FCC Rcd 13066 (1999). Japan-US is not currently in service.

[^54]: *See Cable Landing License NPRM*, at para. 95.

[^55]: We note that a different set of factors exist on the U.S.-Japan
    route. AJC Guam's foreign affiliates in Japan are small carriers
    that do not have more than 50 percent of the market share in any of
    the key markets for providing international services in Japan.
    Furthermore, although NTT is the dominant local exchange carrier in
    Japan, NTT's indirect 10 percent interest in AJC Guam does not
    constitute affiliation within the meaning of Section 63.09(e) of the
    Commission's rules. *See* 47 C.F.R. § 63.09(e). Moreover, as noted
    above, there are numerous cable systems serving U.S. customers
    between the United States and Japan.

[^56]: *See Telstra Resale Order,* 12 FCC Rcd at 21711-12, para. 52;
    *Telstra Facilities Order*, 13 FCC Rcd at 208, para. 9.

[^57]: *See Telstra Resale Order,* 12 FCC Rcd at 21695, para. 7;
    *Telstra Facilities Order*, 13 FCC Rcd at 212, para. 22.

[^58]: *See Telstra Facilities Order*, 13 FCC Rcd 205, 212, para. 23.

[^59]: *See Foreign Participation Order,* 12 FCC Rcd 23891, para. 145;
    *see also* 47 C.F.R. § 63.10(a).

[^60]: Telstra also has significant market share in international and
    leased circuits. *See, e.g.,* AJC Nov. 6 Letter, at Enclosure, 6.

[^61]: *See Telefónica SAM Order* at paras. 16-30, 36(13)-(16).

[^62]: The Australian landing party for Southern Cross will be Telstra's
    primary competitor in Australia, C&W Optus. *See Southern Cross
    Cable Order*, 13 FCC Rcd 2932 at para. 7.

[^63]: *See* AJC Application at 5-6. *See also* AJC Nov. 6 Letter at
    Enclosure, 5 ("alternative carrier is defined as "any person, other
    than the Landing Party, which is a telecommunications carrier or
    service provider in the country of the Cable Station provided by the
    Landing Party").

[^64]: *See id.* at 6.

[^65]: SEA-ME-WE-3, a 4 x 2.5 Gbps cable (upgradable to 8 x 2.5 Gbps)
    maintained by non-U.S. entities between foreign destination points,
    including Australia, Indonesia, and the Phillipines, went into
    service in 1999. APCN, the Asia Pacific Cable Network, a 5 Gbps
    cable (upgradable to 2 x 5 Gbps) maintained by non-U.S. entities
    between foreign destination points, including Indonesia and the
    Philippines, went into service in 1997. JASURAUS, a 5 Gbps cable
    between Australia and Indonesia maintained by Telstra and Indosat,
    went into service in 1997. *See, e.g.,* "Submarine Cables of the
    World: Australasian Region," at
    <http://www.iscpc.org/cabledb/aus_cabl_page.htm>, listing cables for
    which Telstra has responsibility in Australian waters, and
    "Submarine Cables of the World: Western Pacific and Far Eastern
    Region," at http://www.iscpc.org/cabledb/wpac_page.htm.

[^66]: *See, supra* n. 51, *Guam-Philippines Cable Order*.

[^67]: *See* AJC Nov. 6 Letter at 1-2.

[^68]: *See* 47 U.S.C. § 153(44) (defining "telecommunications
    carrier"); *Cable & Wireless UK Cable Order,* 12 FCC Rcd at 8523,
    para. 17.

[^69]: *See* AJC Application at 8-20.

[^70]: *See* 47 C.F.R. § 1.767(a).

[^71]: 47 C.F.R. §§ 1.1301-1.1319.