FCC Record, Volume 26, No. 7, Pages 4843 to 5761, March 28 - April 08, 2011 Page: 5,222
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Federal Communications Commission
U.S. carriers who may wish to establish direct communications between the United States and Cuba.34
15. The Commission may waive its rules and policies where particular facts make strict
compliance inconsistent with the public interest.35 In doing so, the Commission may take into account
more effective implementation of overall policy on an individual basis, and whether a deviation from the
general rule will better serve the public interest.36 In considering the TeleCuba waiver requests, we
balance the policy goals of reestablishing direct telecommunications links with Cuba by U.S. carriers with
promoting competition and lower international calling rates for services to Cuba, as well as other
international routes. We believe that re-establishing direct links should be done in a way that benefits
consumers and should not create a problematic precedent for settlement rates for other international
routes. For the reasons discussed below, we dismiss, without prejudice, TeleCuba's request for a waiver
of the ISP. At the same time, we grant, with conditions, TeleCuba's request for a three-year waiver of the
Commission's applicable benchmark rate to Cuba. Taken together, these actions will allow TeleCuba to
agree to a $0.84 per minute settlement rate with ETECSA, subject to the ISP, in order to reestablish direct
links with Cuba. This decision is based upon the unique circumstances of the U.S.-Cuba international
route and should not be viewed as precedent for similar actions on other routes.
A. ISP Waiver Request
16. The Commission established the ISP to govern how U.S. carriers negotiate with foreign
incumbent carriers for the exchange of international traffic. It is the policy the Commission has used to
respond to concerns that foreign carriers with market power are able to take advantage of the presence of
multiple U.S. carriers serving a particular market." The policy prevents foreign carriers with market
power from discriminating or using threats of discrimination or other anticompetitive actions against
competing U.S. carriers as a strategy to obtain pricing concessions regarding the exchange of international
traffic, such as "whipsawing."38 Specifically, the ISP requires that: (1) foreign carriers must offer all
34 Verizon Reply Comments at 1.
35 Northeast Cellular Telephone Co. v. FCC, 897 F.2d 1164, 1166 (Northeast Cellular).
36 WAIT Radio v. FCC, 418 F.2d 1153 (D.C. Cir. 1969) (WAIT Radio).
37 See 2004 ISP Reform Order, 19 FCC Rcd at 5715, 12. The ISP, formerly known as the Uniform Settlements
Policy, or USP, initially applied to telegraph and telex services and evolved through Commission decisions and
practices. The intent of the USP was to ensure that U.S. carriers were treated fairly and that U.S. customers received
the benefits that result from the provision of international services on a competitive basis. Among other things, the
policy required uniform accounting rates and uniform terms for sharing of tolls. See, e.g., Mackay Radio and
Telegraph Co., 2 FCC 592 (Telegraph Committee 1936), denying an application for Section 214 authority to serve
Norway because the settlement terms would have permitted the Norwegian carrier to engage in anticompetitive
behavior against U.S. carriers by manipulating traffic flows and retaining a greater percentage of the accounting rate,
aff'd sub nomr. Mackay Radio v. FCC, 97 F.2d 641 (D.C. Cir. 1938); Modifications of Licenses in the Fixed Public
and Fixed Public Press Services, 11 FCC 1445 (1946); Mackay Radio and Telegraph Company, 25 FCC 690
(1951), rev 'd on other grounds sub nom. RCA Communications, Inc. v. FCC, 210 F.2d 694 (D.C. Cir. 1952),
vacated and remanded, 346 U.S. 86 (1953); TRT Telecommunications Corp., 46 FCC 2d 1042 (1974). In 1986, the
Commission renamed the USP the "ISP" and extended its application to International Message Telephone Service
(IMTS) in response to significantly greater reported instances of anticompetitive behavior. The Commission also
streamlined the filing of accounting rate modifications and chose not to apply the ISP to enhanced services. See ISP
Order, 51 Fed. Reg. 4736; modified in part on recon., Order on Reconsideration, 2 FCC Red 1118 (1987) (ISP
Recon Order); Further Reconsideration, 3 FCC Red 1614 (1988) (ISP Further Recon).
38 The term "whipsawing" generally refers to a broad range of anticompetitive behavior by foreign carriers that
possess market power, in which the foreign carrier or a group of foreign carriers exploit that market power in
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United States. Federal Communications Commission. FCC Record, Volume 26, No. 7, Pages 4843 to 5761, March 28 - April 08, 2011, book, April 2011; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc52169/m1/394/: accessed June 23, 2017), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.