The Federal Communications Commission gave the green light to international telecommunications competition at the end of 1991 when it ruled that US carriers must permit the resale of capacity on international private lines – so long as it is to a country with liberalised telecommunications policies. That last proviso is important: when the FCC put forward its original proposal last May, without the clause, it was rejected. And why? Because, without a reciprocal arrangement, the US industry realised that unscrupulous foreign administrations might facilitate resale in one direction only – damaging the US’s already iffy net settlements deficit for international telecommunications, which reached nearly $3,000m last year. For this reason, the onus is now on resale applicants to prove that their home countries permit such competition themselves, although the UK, Sweden, Canada, New Zealand and Australia are being considered pretty safe bets. The rest of Europe is unlikely to qualify, however, which may prove good news for UK resellers: once competition takes hold, the tariff for a call from mainland Europe to the US routed through the UK may well be cheaper than direct from the user’s home country. It may also encourage Europe to move faster down the road to liberalisation to avoid losing transatlantic business, although judging by the time it has taken the US to adopt these regulations there is still a long way to go: the FCC first mooted the idea back in 1980, but a proposal to bring in similar regulations was dropped because of lobbying from US carriers frightened of the competition it might lead to. The FCC is also considering a more lenient attitude to foreign carriers operating in the US. A document issued last month proposes that restrictions applied to all companies with foreign parentage should be used only where there is discrimination against US carriers in the company’s home country. At the moment all carriers that are more than 15% owned by foreign companies face tight controls, but if the proposal is accepted, these will only be applied in situations where the parent company has a monopoly in its home country, or could prevent US carriers from gaining access to its network through control of switching equipment or gateways. There is a long way to go before any decision will be made on whether to adopt the new measures, however, and the FCC will have to take on board comments from interested parties – which includes US carriers, which are certain to be against it. The idea was put forward by Cable & Wireless Plc, although if it is adopted then it will have wide implications for British Telecommunications Plc and other companies.
Broadband Brokers
Despite the new liberal regulations, one company remains the victim of a grey area of US telecommunications law. Bandwidth Brokers International Ltd was set up to act as go-between for companies to sell excess bandwidth capacity on private international lines, but has run into difficulties because of the woolly definition of the word resale. According to a Federal Communications Commission spokeswoman, the term applies only when bandwidth is bought for the purpose of reselling it, but Bandwidth Brokers is targetting companies that buy it for their own use, and find themselves with capacity left over. Since the company is UK-registered, the new regulations get over one stumbling block that Bandwidth Brokers faced, by permitting foreign companies to resell capacity, but ultimately the result will come down to whether the FCC agrees to interpret resale in the way that Bandwidth Brokers wants it to. Paul Kirvan, the organisation’s director for North America, generally welcomed news of the regulatory change when our sister publication Network Week informed him of it, stating that based on the way this latest FCC statement will probably be interpreted, it appears that Bandwidth Brokers will probably be able to conduct business. He still expressed reservations about the lengthiness of the approvals process, however, saying that even if Bandwidth won the interpretation b
attle, the time frame for the whole process would still cause the company problems.
