2008 International Telecommunications Data (Filed as of October 31, 2009) March 2010 Strategic Analysis and Negotiations Division Multilateral Negotiations and Industry Analysis Branch International Bureau This report is available for reference in the FCC’s Reference Information Center at 445 12th Street, S.W., Courtyard Level. Copies may be purchased by calling the FCC’s duplicating contractor, Best Copy and Printing, Inc., 445 12th Street, S.W., Room CY-B402, Washington, DC 20554, telephone 1-800-378-3160, facsimile 202-488-5563, or via e-mail www.bcpiweb.com. The report can also be downloaded [file name: CREPOR08.ZIP or CREPOR08.PDF] from www.fcc.gov/ib. 2008 International Telecommunications Data March 2010 Introduction This is the Federal Communications Commission’s (FCC’s) annual report compiling data on telecommunications service between the United States and international points. The data compiled in this report are for the year 2008. The data are compiled from reports submitted to the FCC by U.S. carriers pursuant to Section 43.61 of the Commission's rules.1 Section 43.61(a) directs carriers to file reports by July 31 which summarize international telecommunications service provided during the preceding calendar year. Carriers submit corrections of the data by October 31. The specific filing requirements are set forth in the Manual for Filing Section 43.61 Data (June 1995). Statistical Findings • U.S.-billed minutes increased 7.0% from 70.0 billion in 2007 to 74.9 billion in 2008. • In 2008, 77 U.S. facilities-based and facilities-resale carriers (see definitions on page 3) together reported that they billed $6.5 billion for international telephone service, and $816 million for international private line and other miscellaneous services, compared to $6.5 billion and $717 million, respectively, in 2007. • U.S. carriers’ net settlement payments – the amount paid to foreign carriers to compensate those carriers for completing calls – decreased slightly from $3.4 billion in 2007 to $3.3 billion in 2008. • Retained international revenues – revenues billed by U.S. carriers, less settlement amounts owed to foreign carriers for U.S.-billed traffic, plus settlement amounts due to U.S. carriers for foreign-billed traffic – increased 1.4% from $3.9 billion in 2007 to $4.0 billion in 2008. • Pure resale providers resell the services of underlying U.S. facilities-based and facilities- resale carriers. The number of reporting pure resale carriers grew 10% from 1,068 in 2007 to 1,175 in 2008. Pure resale minutes grew from 75.8 billion in 2007 to 86.7 billion in 2008. Billed revenues increased from $7.0 billion in 2007 to $8.5 billion in 2008. Table 1 summarizes the traffic and revenue data reported by all U.S. facilities-based and facilities-resale carriers for 2008, but does not include pure resale service. These categories are explained below. 1 The Commission’s data collection rules under 47 C.F.R. § 43.61 are the subject of a pending Notice of Proposed Rulemaking. See Reporting Requirements for U.S. Providers of International Telecommunications Services; Amendment of Part 43 of the Commission’s Rules, IB Docket 04-112, Notice of Proposed Rulemaking, 19 FCC Rcd 6460 (2004) (International Reporting Requirements Reform NPRM)(proposing modifications to the Section 43.61 and 43.82 international data collection rules). 1 Table 1. International Telecommunications Traffic Measures and Revenues, 2008 Traffic Revenues Billed Net Settlements Net Measures* by U.S. Carriers with Foreign Retained (millions) Carriers Revenues** (millions) (millions) Message Telephone (millions 101,334 $6,459 ($3,329) $3,130 of minutes) Private Line (number of 149,529 $363 None $363 circuits) International Other Miscellaneous*** $4 $(0) $4 Total**** $7,275 ($3,329) $3,946 * Traffic measures for international message telephone and other miscellaneous service include both U.S.-billed traffic and foreign-billed traffic that terminates in the United States, but excludes most traffic that transits the United States. ** Net U.S. carrier retained revenues equal billed revenues plus settlement amounts receivable from foreign carriers less amounts due to foreign carriers. See Table 3, below. Details may not match totals due to necessary rounding. *** In 2008, carriers reported frame relay/ATM, virtual private line, TDM/TDMA, virtual private network, and packet switching services as other miscellaneous international services. That information can be found in Section C (International Miscellaneous Services, Page 1) of this report. Carriers use several different traffic measures when reporting the different types of international other miscellaneous services. Therefore, because they are not uniform, no overall totals are calculated for international other miscellaneous traffic measures or total traffic measures. **** Total above includes $5.2 billion billed revenues, $2.1 billion net settlements, and $3.1 billion net revenues for 30 facilities-based and facilities-resale carriers together requesting confidential treatment in the above categories. 2 Definitions International services are provided either on a facilities-based, facilities-resale or pure resale basis. For categorizing traffic, facilities-based traffic refers to services provided using international transmission facilities owned in whole or in part by the carrier providing the service. Facilities- based carriers use one or more international channels of communication to provide international telecommunications service. An international channel (or circuit) is a wire or radio link that facilitates electronic communications between a U.S. point and a point outside the domestic United States (see Table 4, below). A facilities-based carrier is “a carrier that holds an ownership, indefeasible-right-of-user or leasehold interest in bare capacity in the U.S. end of an international facility, regardless of whether the underlying facility is a common carrier or non-common carrier submarine cable or a satellite system.” See 47 C.F.R. § 63.09(a). For categorizing traffic, facilities- resale traffic refers to services provided by a carrier utilizing international circuits leased from other reporting international carriers. The determination as to whether international private line services are reported as facilities-based or facilities-resale generally is based on the first international link of a circuit. If the carrier has an ownership interest in that link, or leases it from an entity that does not report that link, then service provided over that circuit will be reported as facilities-based. Otherwise, the international private line service should be reported as facilities-resale. Carriers provide pure resale services by switching traffic to (and reselling the switched services of) underlying U.S. carriers. The underlying carriers control the circuit that carries the traffic to the international point, arrange for termination of the traffic, and report the traffic on a country-by-country basis in their own Section 43.61 reports. Table 2 shows that there are reduced reporting requirements for services provided on a pure resale basis. Some carriers report traffic carried over circuits that they own and those that they lease from other carriers, as well as traffic that they handle on a pure resale basis, i.e., by reselling the switched services of underlying carriers. These carriers report detailed data for traffic that they carry over owned and resold circuits and summary data for switched traffic that they route to other U.S. carriers. Section D of this report has information on pure resale services. In 2008, 1,175 carriers reported that they provided international message telephone service on a pure resale basis. These pure resale providers billed customers $8.5 billion for 86.7 billion minutes. Seventeen of these pure resale providers also reported international facilities-based and facilities-resale services. Starting with the 1991 data filings, the Commission required carriers to file facilities-based traffic separately from pure resale traffic. Facilities-resale traffic was not separated from facilities- based traffic. Beginning with the 1995 data filings, the Commission required carriers to provide separate switched service and private line data for facilities-based and facilities resale services. At that time, a few carriers were offering international simple resale (ISR) services2 which at that time consisted of telephone services provided over resold private lines, i.e., on a facilities-resale basis. The Commission subsequently allowed carriers to provide ISR services using owned circuits as well as resold circuits. Beginning with the 1997 data filings, the Commission required carriers to separate switched services data by the settlement arrangements made with carriers in foreign countries for terminating that traffic. Carriers now classify switched service traffic as traditional settlement with proportionate return or as non-traditional settlement, including traffic hubbed 2 The Commission eliminated its ISR policy in the 2004 International Settlements Policy Reform Order. See International Settlements Policy Reform, International Settlement Rates, IB Docket No. 02-234, First Report and Order, 19 FCC Rcd 5709, 5723-25, paras. 26-31 (2004) (“2004 International Settlements Policy Reform Order”). 3 through an intermediate foreign country (see definitions on page 5).3 Carriers continue to report facilities-based and facilities-resale private line services separately. Carriers must report switched traffic