Opinion ID: 1463897
Heading Depth: 3
Heading Rank: 2

Heading: Legality of Resale under Mexican Law

Text: Because we have concluded that LDI/SMS was a reseller of Mexican phone service, we consider Telmex's argument that, even if LDI/SMS is characterized as a reseller rather than phone-service provider, its conduct still violated Mexican law. We analyze this issue while recognizing the United States' policy in favor of resale of international switched service and look to the FCC's pronouncements in the call-back services area for guidance. VIA USA, 10 F.C.C.R. at 9541. Call-back services are similar to LDI/ SMS's servicewith one important difference. Call-back services require the caller to make an incomplete (and thus unbilled) call to a number that captures the caller's number on a caller-identification system. Call-back services are arguably more objectionable than LDI/SMS's services because they result in a call's using a provider's wires without any compensation to the provider. Nevertheless, the FCC has approved call-back services as beneficial to consumers both here and abroad so long as another country's laws do not expressly prohibit the service. See generally VIA USA, 10 F.C.C.R. at 9541, 9557. In VIA USA, AT & T challenged the FCC's approving licenses for international call-back services, arguing that the services were illegal under United States and international laws. Reiterating the United State's policy favoring international resale, the FCC explained: [It] advances the public interest, convenience and necessity by promoting competition in international markets and driving down international phone rates. We believe it is in the best interests of consumersand eventually of economic growtharound the world. 10 F.C.C.R. at 9541. Also stating that we take adherence to international obligations seriously, the FCC entertained an international comity argument. VIA USA, 10 F.C.C.R. at 9550. It discussed information it compiled from twenty-one countries in which three countries identified specific laws prohibiting international call-back services. Other countries expressed no opinion and some, including Mexico, pointed to general telecommunications legislation or concession arrangements favoring one monopolistic provider as support for the practices' alleged illegality. VIA USA, 10 F.C.C.R. at 9554. Ultimately, the FCC concluded that international comity principles compelled its cooperation with other countries to prevent United States telecommunications companies from reselling international phone services in countries where it is expressly prohibited.  VIA USA, 10 F.C.C.R. at 9557 (emphasis added). Towards this end, it invited any foreign government that has expressly found the practice unlawful, to notify the FCC with specific documentation of its legal restrictions. VIA USA, 10 F.C.C.R. at 9558. It further provided that [a]ny foreign government also may convey to the Commission's staff documentation of its specific statutory or regulatory measure in order to put U.S. carriers on notice that international call-back ... is illegal in its territory. VIA USA, 10 F.C.C.R. at 9558. Finally, it explained that, [t]o facilitate such notification, we will maintain and periodically publish a list of countries which have forwarded such information to the Commission. VIA USA, 10 F.C.C.R. at 9558. Significantly, Mexico is not one of the fifty-seven countries that have declared call-back services unlawful. It is also not one of the thirty-six countries that have provided the FCC with specific laws outlawing this practice. See Federal Communications Commission, FCC Public File Country List, at (last modified Aug. 8, 2000). A clause from Telmex's concession confirms that resale is not illegal under Mexican law. It provides that during the amended concession's first six years, Telmex may, but is not required, to allow its users to resell its excess capacity. See Amended Title of Concession, para. 5-7 (December 10, 1990). This clause undermines Telmex's argument that resale is illegal under Mexican law. Logic dictates that if the Mexican government has given Telmex the option of allowing MCI to resell Telmex's services, then reselling its services cannot be illegal. Accordingly, we conclude that LDI/SMS's reselling Mexican telecommunications service did not violate Mexican law. Our holding is narrow and based only upon the record before us. We express no view about whether Telmex's contract with MCI permitted resale; indeed the contract is not in the record. We hold only that Telmex cannot argue the illegality of something the Mexican government has expressly empowered Telmex to do namely, allow MCI to resell service. Whether Telmex actually did so through its contract with MCI is not before us.