2011 International Telecommunications Data (Filed as of October 31, 2012) April 2013 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 at www.bcpiweb.com. The report can also be downloaded [file name: CREPOR11.ZIP or CREPOR11.PDF] at www.fcc.gov/international-bureau. 2011 International Telecommunications Data April 2013 Introduction This is the Federal Communications Commission’s (FCC’s) annual report on telecommunications service between the United States and international points. The data are for the year 2011. The data are compiled from reports submitted to the FCC by U.S. carriers pursuant to Section 43.61 of the Commission’s rules. 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) (Filing Manual). 1 Statistical Findings • U.S.-billed minutes increased 18.1%, from 62.4 billion in 2010 to 73.7 billion in 2011. • In 2011, 67 U.S. facilities-based and “facilities-resale” carriers (providers of facilities- based services that lease their circuits rather than own them, see definitions on page 3) together reported that they billed $3.9 billion for international telephone service, and $531 million for international private line and other miscellaneous services, compared to $4.0 billion and $534 million, respectively, in 2010. • U.S. carriers’ net settlement payments – the amount paid to foreign carriers to compensate those carriers for completing calls less settlement amounts received from foreign carriers – increased 3.5%, from $2.1 billion in 2010 to $2.2 billion in 2011. • 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 – decreased 7.3%, from $2.5 billion in 2010 to $2.3 billion in 2011. • Pure resale providers resell the services of underlying U.S. facilities-based and facilities- resale carriers. The number of reporting pure resale carriers increased 1.6% from 1,211 in 2010 to 1,230 in 2011. Pure resale minutes decreased from 80.8 billion in 2010 to 74.5 billion in 2011. Billed revenues decreased 3.4%, from $5.8 billion in 2010 to $5.6 billion in 2011. Table 1 summarizes the traffic and revenue data reported by all U.S. facilities-based and facilities-resale carriers for 2011, but does not include pure resale service. Inclusion of pure resale would result in double-counting, since all minutes and revenue are reported by facilities-based and 1 In 2011, the Commission made changes to the Part 43 reporting requirements. Specifically, carriers are (1) no longer required to report traffic and revenue from off-shore U.S. points separately, and (2) no longer required to report traffic and circuits between the United States and off-shore U.S. points. See Reporting Requirements for U.S. Providers of International Telecommunications Services, Amendment of Part 43 of the Commission’s Rules, IB Docket No. 04-112, First Report and Order and Further Notice of Proposed Rulemaking, 26 FCC Rcd 7274, 7295, ¶ 55 (2011). See also Manual for Filing Section 43.61 Data (June 1995) (Filing Manual) at http://www.fcc.gov/wcb/iatd/intl.html. 1 facilities-resale carriers. Table 1. International Telecommunications Traffic Measures and Revenues, 2011* Traffic Revenues Billed Net Settlements Net Measures** by U.S. Carriers with Foreign Retained (millions) Carriers Revenues*** (millions) (millions) Message Telephone 98,315 $3,934 ($2,161) $1,773 (millions of minutes) Private Line 146,412 $518 not applicable $518 (number of circuits) International Other Miscellaneous**** $13 $(0) $13 Total $4,465 ($2,161) $2,304 * Traffic measures and revenues include information for all carriers, including those requesting confidential treatment for their individual data. ** Traffic measures for international message telephone 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 2011, carriers reported frame relay/ATM, switched ethernet, TDM/TDMA, virtual private network, and virtual private line services as international other miscellaneous services. Aggregated totals for international other miscellaneous services can be found in Section C (International Miscellaneous Services, page 1) of this report. 2 Definitions International services are provided either on a facilities-based, facilities-resale or pure resale basis. 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 communications 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). 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 the different reporting requirements for different categories of services. 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 2011, 1,230 carriers reported that they provided international message telephone service on a pure resale basis. These pure resale providers billed customers $5.6 billion for 74.5 billion minutes. Twenty-four 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 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 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, ¶¶ 26-31 (2004) (“2004 International Settlements Policy Reform Order”). 3 terminating that traffic. Carriers now classify switched service traffic as traditional settlement with proportionate return or as non-traditional settlement, including traffic hubbed through an intermediate foreign country (see definitions on page 5).3 Carriers continue to report facilities- based and facilities-resale private line services