Trade in Services

MEXICO

Schedule of Specific Commitments

Supplement 2

(This is authentic in Spanish only)

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This text supplements the Telecommunication services section contained on pages 20 to 22 of document GATS/SC/56.

MEXICO - SCHEDULE OF SPECIFIC COMMITMENTS

Modes of supply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence (4) Presence of natural persons

REFERENCE PAPER

Scope

The following are principles and definitions on the regulatory framework for the basic telecommunications services.

Definitions

Users mean service consumers and service suppliers.

Essential facilities mean facilities of a public telecommunications network of service that:

(a) Are exclusively or predominantly provided by a single or limited number of suppliers; and

(b) cannot feasibly be economically or technically substituted in order to provide a service.

A major supplier is a supplier which has the ability to materially affect the terms of participation (having regard to price and supply) in the relevant market for basic telecommunications services as a result of:

(a) Control over essential facilities; or

(b) use of its position in the market.

1. Competitive safeguards

1.1 Prevention of anti-competitive practices in telecommunications

Appropriate measures shall be maintained for the purpose of preventing suppliers who, alone or together, are a major supplier from engaging in or continuing anti-competitive practices.

1.2 Safeguards

The anti-competitive practices referred to in the above paragraph shall include in particular:

(a) Engaging in anti-competitive cross-subsidization;

(b) using information obtained from competitors with anti-competitive results; and

(c) not making available to other services suppliers on a timely basis technical information about essential facilities and commercially relevant information which are necessary for them to provide services.

2. Interconnection

2.1 This section applies, on the basis of the specific commitments undertaken, to linking with suppliers providing public telecommunications transport networks or services in order to allow the users of one supplier to communicate with users of another supplier and to access services provided by another supplier.

2.2 Interconnection to be ensured

Interconnection with a major supplier will be ensured at any technically feasible point in the network. Such interconnection is provided:

(a) Under non-discriminatory terms, conditions (including technical standards and specifications) and rates and of a quality no less favourable than that provided for its own like services or for like services of non-affiliated service suppliers or for its subsidiaries or other affiliates;

(b) in a timely fashion, on terms, conditions (including technical standards and specifications) and cost-oriented rates that are transparent, reasonable, having regard to economic feasibility, and sufficiently unbundled so that the supplier need not pay for network components or facilities that it does not require for the service to be provided; and

(c) upon request, at points in addition to the network termination points offered to the majority of users, subject to charges that reflect the cost of construction of necessary additional facilities.

2.3 Public availability of the procedures for interconnection negotiations

The procedures applicable for interconnection to a major supplier will be made publicly available.

2.4 Transparency of interconnection arrangements

It is ensured that a major supplier will make publicly available either its interconnection agreements or a reference interconnection offer.

2.5 Interconnection: dispute settlement

A service supplier requesting interconnection with a major supplier will have recourse, either:

(a) At any time; or

(b) after a reasonable period of time which has been made publicly known

to an independent domestic body, which may be a regulatory body as referred to in paragraph 5, to resolve disputes regarding appropriate terms, conditions and rates for interconnection within a reasonable period of time, to the extent that these have not been established previously.

3. Universal service

Any Member has the right to define the kind of universal service obligation it wishes to maintain. Such obligations will not be regarded as anti-competitive per se, provided they are administered in a transparent, non‑discriminatory and competitively neutral manner and are not more burdensome than necessary for the kind of universal service defined by the Member.

4. Public availability of licensing criteria

Where a licence is required, the following will be made publicly available:

(a) All the licensing criteria and the period of time normally required to reach a decision concerning an application for a licence; and

(b) the terms and conditions of individual licences.

The reasons for the denial of a licence will be made known to the applicant upon request.

5. Independent regulators

The regulatory body is separate from, and not accountable to, any supplier of basic telecommunications services. The decisions of and the procedures used by regulators shall be impartial with respect to all market participants.

6. Allocation and use of scarce resources

Any procedures for the allocation and use of scarce resources, including frequencies, numbers and rights of way, will be carried out in an objective, timely, transparent and non-discriminatory manner. The current state of allocated frequency bands will be made publicly available, but detailed identification of frequencies allocated for specific government uses is not required.

C. ILD RULES

RULES FOR THE SUPPLY OF INTERNATIONAL LONG-DISTANCE SERVICES

To be Applied by the Licensees of Public Telecommunications Networks
Authorized to Provide Such Services

11 December 1996

In the margin, a stamp displaying the Mexican Coat-of-Arms and the words "United Mexican States � Ministry of Communications and Transport, Federal Telecommunications Commission".

On the basis of Article 36 of the Basic Law on the Federal Public Administration; Articles 1 and 3 and other relevant articles of the Federal Law on Administrative Procedure; Articles 7 and 47, Transitional Article Ten, and other relevant articles of the Federal Telecommunications Law; Articles 2 and 37 bis of the Rules of Procedure of the Ministry of Communications and Transport; Articles 1, 2, 3, and 5 of the Decree establishing the Federal Telecommunications Commission, and other applicable provisions; and

WHEREAS:

Pursuant to Article 7 of the Federal Telecommunications Law, the Ministry of Communications and Transport shall promote the efficient development of telecommunications, and foster fair competition among the various telecommunications service providers so that users may be offered a better price, range, and quality of services;

Transitional Article Ten of the Federal Telecommunications Law establishes that licensees of public telecommunications networks that have concluded interconnection agreements, under the terms of said Law, with licensees of public networks wishing to provide national and international basic public long-distance telephone services, may begin to operate their respective interconnections as of 1 January 1997;

In the Regulations on Long-Distance Services, published in the Diario Oficial de la Federaci�n [Official Journal] of 21 June 1996, the Ministry of Communications and Transport has determined the procedures that must be followed by licensees of public telecommunications networks authorized to provide basic public long-distance telephone services for their operations with other licensees or permit-holders, as well as for the supply of services to end users;

It is therefore necessary to establish the procedure applicable to those licensees of long‑distance services wishing to establish and operate international gateways in order to interconnect with foreign telecommunications networks for the purpose of carrying international traffic, as well as promoting the efficient interconnection of public telecommunications networks within Mexican territory;

By means of a decree published in the Diario Oficial de la Federaci�n of 9 August 1996, the Federal Executive established the Federal Telecommunications Commission as a decentralized agency of the Ministry of Communications and Transport, with technical and operational autonomy, for the purpose of regulating and promoting the efficient development of telecommunications;

As established in Articles 7(II) and 47 of the Federal Telecommunications Law, as well as Article 37 bis (XIII) and (XIV) of the Rules of Procedures of the Ministry of Communications and Transport, it is within the authority of the Federal Telecommunications Commission to promote and oversee the efficient interconnection of public telecommunications networks and equipment, including interconnection with foreign networks, as well as to approve the corresponding interconnection agreements and authorize the installation of telecommunications equipment and means of transmission that cross the country's borders;

Under the terms of the aforementioned provisions, the Federal Telecommunications Commission may establish the terms to be included in agreements for the interconnection of public telecommunications networks with foreign networks whenever it is deemed that such agreements prejudice the interests of Mexico in general, of users, or of other licensees of public telecommunications networks;

As established in Article 7(III) of the Federal Telecommunications Law, Article 2(1) of the Decree establishing the Federal Telecommunications Commission, and other applicable provisions of the said Decree, as well as in Article 37 bis (I) of the Rules of Procedure of the Ministry of Communications and Transport, it is within the authority of the Federal Telecommunications Commission to issue administrative provisions in the area of telecommunications; and

In view of the imminent opening up of the market for international long-distance telephone services, in a plenary session on 4 December 1996, and by means of Decision No. RES PC 961207, the Commission unanimously approved the following:

Rules for the Supply of International Long-Distance Services to be Applied by the Licensees of Public Telecommunications Networks Authorized to Provide Such Services

General Provisions

Rule 1. The purpose of these Rules is to regulate the supply of international long-distance services and to establish the terms to be included in agreements for the interconnection of public telecommunications networks with foreign networks.

Rule 2. For the purposes of these Rules, the following definitions shall apply:

I. Auditor: firm retained by the Commission to audit the uniform settlement rate and proportionate return systems, as well as to perform other functions authorized under these Rules.

II. Commission: Federal Telecommunications Commission.

III. Committee: the Long-Distance Operators Committee to which Chapter VI of the Long-Distance Rules published in the Diario Oficial de la Federaci�n of 21 June 1996 refers.

IV. Long-distance service licensee: natural or legal person having a licence to instal, operate, or exploit a public telecommunications network authorized to provide long-distance services.

V Call attempt: any call origination provided by a foreign operator to an international gateway operator, regardless of whether or not the call is terminated.

VI. Law: Federal Telecommunications Law.

VII. International gateway operator: long-distance service licensee authorized by the Commission to operate a switching exchange as an international gateway;

VIII. International gateway: switching exchange interconnected to incoming and outgoing circuits, authorized by the Commission to carry international traffic.

IX. Network terminal connection point: the site at which end-user facilities and equipment are connected to a public telecommunications network, or, as applicable, the site at which other telecommunications networks are connected to that network.

X. Ministry: Ministry of Communications and Transport.

XI. International long-distance service: service whereby all international switched traffic is carried through long-distance exchanges authorized as international gateways.

XII. Uniform settlement rate system: the system whereby:

(a) The same settlement rates are applied by international gateway operators to all long‑distance calls from a given country, regardless of which operator originates the call abroad and which licensee terminates the call within Mexican territory; and

(b) The same settlement rates are applied by the operators of a given country to long‑distance calls originating within Mexican territory and delivered to such operators, regardless of which long-distance service licensee originates the call within Mexican territory or which operator terminates the call abroad.

XIII. Proportionate return system: the system under which international gateway operators distribute call attempts entering Mexican territory in accordance with the following procedure:

(c) The total settlements paid over a one-month period by all international gateway operators to all operators of a given country shall be determined;

(d) The percentage of the total amount of the above-mentioned settlements generated by each of the international gateway operators during the said period shall also be determined;

(e) Regardless of the type of call, international gateway operators shall have the right to receive incoming call attempts from a given country during any one-month period, on the basis of the percentages established for the previous monthly period, in accordance with subparagraphs (a) and (b), above; and

(f) For this purpose, any international gateway operator that receives incoming traffic in an amount exceeding its percentage pursuant to the above subparagraph shall, regardless of the type of call, (i) retain its own call attempts; and (ii) distribute the excess call attempts to each of the international gateway operators in order to meet the percentages indicated.

XIV. Settlement rate: the rate which:

(g) An international gateway operator charges a foreign operator for receiving traffic from a given country; and

(h) A foreign operator charges an international gateway operator for receiving traffic originating in Mexican territory.

XV. Switched circuit traffic: traffic which is carried by means of the temporary connection of two or more circuits between two or more users, allowing the said users the full and exclusive use of the connection until it is released.

Rule 3. Only international gateway operators shall be authorized to interconnect directly with the public telecommunications networks of other countries' operators for the purpose of carrying international traffic.

Rule 4. In order to establish a private cross-border network, capacity must be leased form a long-distance service licensee. Cross-border traffic carried through dedicated infrastructure that forms part of a private network shall be originated and terminated within the same private network.

Pursuant to Article 47 of the Law, only international gateway operators or persons expressly authorized by the Commission may instal telecommunications equipment and means of transmission that cross the country's borders.

International gateway operators or persons expressly authorized by the Commission to instal telecommunications equipment and means of transmission that cross the country's borders shall apply for prior authorization from the Commission before making any modifications to the said equipment or means of transmission.

Rule 5. In order to provide international long-distance services in Mexico, a licence granted by the Ministry under the terms of the Law shall be required. No foreign operator may make use of means of transmission or switching for the direct supply of international long-distance services in Mexico without the participation of a duly authorized Mexican licensee.

International Gateways

Rule 6. Long-distance service licensees may only carry international switched circuit traffic through international gateways, and solely in accordance with the provisions of these Rules.

Rule 7. Only long-distance service licensees may apply to the Commission for authorization to operate international gateways. For this purpose, applicants shall submit to the Commission an application for each of the switching exchanges they wish to establish as an international gateway and shall indicate which other exchanges, either belonging to the applicant or to other licensees, will be interconnected with each of said international gateways.

Applicants for international gateway authorization and a record of the exchanges that are to be interconnected with each such gateway shall be submitted at least ten calendar days prior to the date on which the applicant wishes to begin operations at the international gateway in question. The Commission shall issue its decision on an application within ten calendar days of the date of receipt of the application.

The Commission shall authorize the installation and operation of international gateways to those long-distance service licensees that have complied with the obligations stipulated in their respective licences; that show that they have interconnected, via their own infrastructure, cities in at least three States of Mexico; and that have at least one interconnection agreement, previously approved by the Commission, with a foreign operator.

Where the Commission decides to grant an international gateway application submitted by a long-distance service licensee, the licensee shall register the international gateway in question with the Public Telecommunications Register.

Rule 8. The Commission shall authorize exclusively the installation of international gateways having the capacity to identify the technical and commercial parameters necessary to effect the required invoicing and to exchange accounts with their correspondents.

For this purpose, international gateways shall be equipped with the systems necessary to keep daily accounts comprising at least the following information:

I. Incoming and outgoing traffic volume in minutes for each type of call;

II. Total revenue from incoming and outgoing calls;

III. Duration of each call;

IV. Type of traffic, broken down into the following categories:

(i) Telephone-to-telephone;

(j) person-to-person;

(k) country-direct;

(l) collect-call traffic;

(m) calls to 800 numbers;

(n) transit traffic; and

(o) other categories to be established by the Commission.

V. Time at which call was carried;

VI. Operators involved in traffic interexchange;

VII. Countries of call origination and termination;

VIII. Geographical area of destination within Mexican territory, where applicable, when traffic from a given country is subject to separate settlement rates; and

IX. Geographical area in the destination country, where applicable, when outgoing traffic from Mexican territory is subject to separate settlement rates for different geographical areas.

After consulting with the Committee, the Commission may at any time eliminate the requirement stated under this Rule that one or more systems for the identification of technical and commercial parameters be available at international gateways.

Rule 9. Once an international gateway is authorized, its operator shall apply for prior authorization from the Commission before making any modification in the assignment of exchanges interconnected with that international gateway. The Commission shall issue its decision on an application within ten calendar days of the date of receipt of the application.

Rule 10. International gateway operators shall carry international incoming and outgoing traffic, using the uniform settlement rate system and the proportionate return system.

Rule 11. The Commission may at any time require international gateway operators to show that the international gateways they own are equipped with each and every technical facility and capability needed to distribute traffic in accordance with the proportionate return system, without prejudice to the terms of Rule 17.

Rule 12. International gateway operators may supply, on a non-discriminatory basis, traffic switching, routing, and accounting services to any long-distance service licensees that request them.

Settlement Rate

Rule 13. The long-distance service licensee having the highest percentage of the outgoing long-distance market for the six months prior to negotiations with a given country shall be the licensee that is authorized to negotiate settlement rates with the operators of the said country. These rates shall be submitted to the Commission for approval.

Rule 14. Long-distance service licensees may register any rates or services, supplementary to those already filed, that they wish to offer within Mexican territory in coordination with one or more foreign operators. Their proposals shall be recorded in the Telecommunications Register to allow the Commission and the Committee to make comments. The Commission shall approve the proposal or request further information within 30 calendar days of the date of its receipt. Where the Commission requests further information from the long-distance service licensee, the Commission shall issue its decision within 15 calendar days of the date of receipt of the additional information.

Rule 15. The weighted average rates long-distance service licensees charge the public for the supply of international long-distance services may not be lower than the weighted average settlement rate for the specific service provided.

Notwithstanding the foregoing, the Commission reserves the right to issue any administrative provisions it deems appropriate in the event that rates established in accordance with this Rule are inconsistent with the objectives and conditions established by the Law for the supply of services.

Rule 16. International gateway operators that receive international incoming traffic shall charge their foreign correspondence the applicable settlement rate and shall pay the local operator that terminates the call the applicable interconnection rate.

Where an international gateway operator receives a greater share of incoming traffic than that to which it is entitled under the terms of subparagraph XIII of Rule 2, the said operator shall distribute the surplus to another international gateway operator so as to remain within the limits of its own percentage. In such cases, the operator concerned shall deduct any offsetting adjustments due to it for the supply of switching, routing, and accounting services at the international gateway and shall pay the remaining balance of the settlement rate to the international gateway operators to which it transfers the traffic in question. The latter operators shall, in turn, pay the applicable interconnection rate to the local operator that terminates the call.

Rule 17. International gateway operators may negotiate financial compensation agreements among themselves, according to the rights applicable to each of them, under the terms of the proportionate return system established in these Rules. Such agreements shall be duly notified to the Commission and shall meet the requirements of fair competition and non-discrimination.

Rule 18. International gateway operators shall pay the local operator having registered the destination number a percentage of the settlement rate in effect for incoming traffic, as determined in accordance with the applicable provisions.

Rule 19. After consulting with the parties and taking into consideration the average long-term incremental costs, as well as the trends in international references for interconnection rates and settlement rates for Mexico's traffic with its principal trading partners and the growth and development of the telecommunications market in Mexico, inter alia, the Commission may establish the offsetting adjustments to which international gateway operators are entitled for the supply of switching, routing, and accounting services for any excess international traffic they distribute pursuant to Rule 16. International gateway operators shall require payment of the above-mentioned offsetting adjustments, on a uniform and non-discriminatory basis, from all long-distance service licensees that request the said operators to supply the above-mentioned services.

Rule 20. International gateway operators that receive international incoming traffic or send outgoing collect-call traffic and that receive the corresponding settlement rate from their foreign correspondents shall have a period not exceeding ten working days as of the date of receipt of the said rate in which to make payment to the local operator pursuant to Rule 16. Such payment shall be made at the exchange rate in effect on the day the local operator is paid, in the currency in which the settlement rate is to be paid pursuant to the interconnection agreement concluded with the foreign correspondent and in accordance with applicable provisions. The local access rate shall be paid within the time-period agreed in the relevant contract.

If after 180 calendar days the international gateway operator has not received payment of the settlement rate from his foreign correspondent, the said international gateway operator shall be liable for immediate payment of the rate to the local operator in question.

Rule 21. Under the terms of Article 71 of the Law, the Ministry may penalize long-distance service licensees that commit acts intended to avoid paying the local operator for international interconnections, without prejudice to any civil and criminal liability incurred.

Interconnection Agreements.

Rule 22. Pursuant to Article 47 of the Law, the interconnection of public telecommunications networks with foreign networks shall be carried out by means of an agreement to be concluded by the parties concerned.

Rule 23. Long-distance service licensees wishing to establish interconnection agreements with foreign operators must submit the said agreements to the Commission for approval before they are formally concluded.

Such agreements shall comply with the following requirements. They shall:

I. Expressly knowledge the authority of the Commission to approve all the terms of the said agreements;

II. Recognize the principles of the uniform settlement rate and proportionate return systems established in these Rules;

III. Stipulate that incoming and outgoing traffic may be carried only through international gateways previously authorized by the Commission;

IV. Establish the last day of the calendar year as the date of expiry of the agreement;

V. Establish the first five working days of each month as the period for making settlement payments;

VI. Set the first day of each calendar month as the deadline for making adjustments in the percentages determined under the proportionate return system;

VII. Provide mechanisms for automatic renewal and for the compulsory settlement of disputes that, in the Commission's view, avoid the potential interruption of traffic among interconnected operators;

VIII. Incorporate the settlement rates approved by the Commission; and

IX. Stipulate, where applicable, the geographical areas previously approved by the Commission in which the same settlement rate shall be applied.

Where a long-distance service licensee submits an interconnection agreement to the Commission, the latter shall have 15 calendar days from the receipt of the respective agreement to issue its decision, it is being understood that the international gateway operator that submits the interconnection agreement for the Commission's approval shall first sign a contract with the Auditor for the supply of professional services.

Rule 24. Any international interconnection agreement between a long-distance service licensee and a foreign operator shall be recorded in the Public Telecommunications Register. Long-distance service licensees that conclude international interconnection agreements with foreign operators shall have 15 calendar days from the date the agreement in question is concluded to submit it to the Commission, which shall record it in the Public Telecommunications Register.

Contracts for the Supply of International Gateway Services

Rule 25. In order to carry international switched-circuit traffic, long-distance service licensees shall either have an international gateway or shall enter into a contract with international gateway operators so that the latter may provide the long-distance licensees with international traffic switching, routing, and accounting services.

Rule 26. Long-distance service licensees that do not have an international gateway shall be responsible for interconnecting with one or more international gateway operators to handle their traffic, and for having owned or leased capacity in order to terminate the call at its final destination.

Rule 27. Long-distance service licensees that do not have an international gateway may negotiate financial compensation agreements with international gateway operators to carry the international traffic such licensees originate.

Rule 28. The contracts to which Rule 25 refers shall be approved in advance by the Commission.

If, at the conclusion of 30 calendar days from the submission of the request for approval of the contract, the Commission has not issued its decision, the contract shall be deemed to be approved.

Where the Commission determines that the terms established in the above-mentioned contracts do not comply with the principles established in the Law and in these Rules, it may request that the contracts be modified in any way it deems necessary.

Rule 29. Any contract for the supply of international traffic switching, routing, and accounting services between a long-distance service licensee and an international gateway operator shall be recorded in the Public Telecommunications Register. International gateway operators that enter into contracts with long-distance service licensees shall have a period of five working days from the date the contract is concluded to file it with the Commission, which shall record it in the Public Telecommunications Register.

Rule 30. Any international gateway operator involved in a long-distance call shall be responsible for the quality of the service on its own network until the call reaches the network terminal connection point at which interconnection with the next licensee participating in the call is made. For this purpose, the international gateway operators and licensees participating in the call shall establish the necessary mechanisms and procedures to maintain the levels of quality agreed upon by the parties and provided for in their licences or permits.

International Long-Distance Responsibilities of the Long-Distance Operators Committee

Rule 31. The Committee shall have the following responsibilities, inter alia:

I. To coordinate and oversee the implementation and operation of the uniform rate settlement and proportionate return systems;

II. To inform the Commission of any irregularities detected in the implementation of the said systems that may affect the supply of international long-distance services;

III. To hire the Auditor, subject to prior authorization by the Commission;

IV. To propose to the Commission the adoption of measures for the efficient operation of international long-distance services and of the uniform settlement rate and proportionate return systems;

Rule 32. The Committee shall adopt by consensus the percentages for call attempts to which each international gateway operator is entitled under the procedure established in subparagraph XIII of Rule 2; if no consensus is reached, the Commission shall have the authority to request that the Auditor make a recommendation concerning the establishment of such percentages.

Rule 33. In the Committee, each long-distance service licensee shall have the right to express its opinion and may propose measures related to international long-distance services and to the uniform settlement rate and proportionate return systems.

Proposals meeting with the consensus of the long-distance service licensees shall be submitted to the Commission for its consideration. Where any proposal formulated fails to obtain the consensus of all long-distance service licensees, the procedure described in the Long-Distance Rules published in the Diario Oficial de la Federaci�n of 21 June 1996 shall be followed.

Where, in the opinion of the Commission, a dispute needs to be settled within a time-period shorter than that provided for under the procedure described above, the Commission itself may settle the said dispute.

Auditor

Rule 34. Subject to a favorable opinion by the Commission, the Committee shall hire an Auditor. The Auditor shall have a recognized reputation in the area of accounting and auditing in the telecommunications field.

The Auditor may not be a firm that is financially controlled by the long-distance service licensees represented on the Committee or by the partners or shareholders of the said licensees.

Rule 35. The Auditor shall have the following responsibilities, inter alia:

I. To recommend on a monthly basis, subject to consultation with the Committee and to the approval of the Commission, for each registered international gateway, and in accordance with available date on traffic, the percentages for the distribution of international incoming traffic to the various long-distance service licensees and of outgoing traffic to the various foreign operators. The percentage recommendations shall take into account call duration, time of day, type, and destination, as well as optimal routing of traffic;

II. To ensure that each international gateway operator applies its approved percentage;

III. To recommend, subject to consultation with the Committee and to the approval of the Commission, the accounting methodology to be applied to settlements with foreign operators, and to ensure that each international gateway operator applies the approved methodology;

IV. To define, subject to consultation with the Committee and the approval of the Commission, the information systems and formats to be used to transmit the information needed to implement and operate the proportionate return and uniform settlement rate systems;

V. To ensure that revenue from international traffic is distributed among long-distance service licensees and foreign operators in accordance with the uniform settlement rate and proportionate return systems;

VI. To inform the Committee and the Commission of any irregularities detected in the implementation of the said systems that affect the supply of international long-distance services;

VII. To reconcile the monthly information furnished to the Commission for that purpose by the international gateway operators with respect to the rights and duties arising from the calculation of proportionate returns, based on the methodology established in these Rules. This information shall be duly reported and confirmed by the external auditor of each international gateway operator; and

VIII. To fulfil other responsibilities that the Commission deems necessary for the full observance of these Rules.

Rule 36. The cost of hiring the Auditor shall be shared by all long-distance service licensees participating in the Committee, starting on the date each joins the Committee. The costs shall be shared in accordance with a formula specified by the Committee and approved by the Commission that assigns a portion of the total cost of operating the system to each licensee on the basis of the activities that generate the said costs. For this purpose, each licensee's share of the total amount of international traffic and the number of international gateways operated by each licensee shall be taken into account, inter alia.

In the case of special audits of international gateway operators conducted on instructions from the Commission and arising from a dispute between international gateway operators or as the consequence of an irregularity detected by the Auditor, the costs shall be paid by the international gateway operator found liable for the irregularity or else by the operator(s) that requested the action that gave rise to the special audit if the claim of irregularity is found to be without merit.

Percentages

Rule 37. The Committee shall determine the percentages for each international gateway operator applicable to the month following the month during which the traffic was originated and shall make such determination within the first 15 calendar days of the month following the month during which the traffic was originated, on the basis of the information furnished by the international gateway operators in accordance with Rule 42 of these Rules. Where the Committee fails to arrive at a recommendation by consensus within the aforementioned period, the Auditor shall have an additional several calendar days in which to recommend the percentages to be applied.

As of the first calendar day of the calendar month following the recommendation of the Committee or Auditor, as applicable, international gateway operators shall adjust the percentages by which international incoming and outgoing traffic is to be distributed.

Rule 38. In calculating the percentages to which the above Rule refers, all settlements for the types of traffic indicated in Rule 8(IV), except for country-direct services and services provided via international non-geographical reversed-charge (800) numbers, shall be taken into account.

In the case of collect-call traffic, for the calculation of the percentages applicable to international outgoing traffic, settlements for collect-call traffic originated abroad and terminated within Mexican territory shall be excluded. In calculating the percentages for international incoming traffic, settlements for collect-call traffic originated within Mexican territory and terminated abroad shall be excluded.

Rule 39. Traffic sent to a country with which Mexico does not share a border may be routed either directly or through an intermediate country. For the purposes of calculating the percentage arrangement in the latter case, the traffic in question shall be counted as if it were traffic destined for the intermediate country.

Rule 40. The proportionate return system established in these Rules may not be modified prior to the third anniversary of its entry into effect.

Notwithstanding the foregoing, after reviewing the competition and reciprocity conditions in effect for the operation of Mexico's telecommunications services with other countries, as well as the trends in international references for interconnection rates and settlement rates for Mexico's traffic with its principal trading partners and the growth and development of telecommunications markets in Mexico, the Commission may decide to modify the proportionate return system established in these Rules prior to the above-mentioned third anniversary.

Information

Rule 41. Within the 15 calendar days following the end of each calendar month, and for each of the international gateways, the international gateway operators shall make the following information, inter alia, available to the Committee and the Commission:

I. Incoming and outgoing traffic volume in minutes;

II. Total revenue from incoming and outgoing calls; and

III. Any other information that the Commission considers necessary and that Rule 8 indicates must be made available.

Rule 42. Within ten calendar days following the end of each calendar month, and for each of the international gateways, the international gateway operators shall make available to the Committee information on the settlement income and settlement payments for the calendar month in question that have been received from or made to their foreign correspondents.

Rule 43. International gateway operators shall establish the control mechanisms necessary to demonstrate the authenticity of the information they make available to the Committee and Commission, in accordance with criteria to be established by the Auditor.

Rule 44. Under the terms of Article 71 of the Law, the Ministry may penalize international gateway operators that commit any irregularity relating to the implementation or operation of the uniform settlement rate or proportionate return systems or that furnish false information concerning the operation of international gateways.

Transitional Provisions

First. These Rules shall enter into effect on the day following their publication in the Diario Oficial de la Federaci�n.

Second. As of 1 January 1997, long-distance service licensees may carry international switched circuit traffic in accordance with the provisions of these Rules.

Third. International gateway operators that have not carried international traffic prior to the date of the entry into effect of these Rules may begin sharing in the distribution of international incoming traffic as of 1 January 1997.

Fourth. Within 15 days of the enactment of these Rules, the Commission shall make available to long-distance service licensees the settlement rates applicable to international traffic going out to or coming in from the various countries with which any long-distance service licensee has international interconnection agreements.

Fifth. Long-distance service licensees that have, prior to the date of enactment of these Rules, concluded interconnection agreements with foreign operators or entities of an international nature that carry traffic between Mexican territory and foreign countries, must file those agreements, as well as the settlement rates in effect, with the Commission so that they may be recorded in the Public Telecommunications Register. The licensee to which this provision refers shall have 15 calendar days from the entry into effect of these Rules to file these agreements and rates. The terms of the said agreements shall not contravene the provisions of these Rules.

Sixth. The Committee shall hire the Auditor responsible for auditing the uniform settlement rate and proportionate return systems within 15 calendar days of the entry into effect of these Rules. Where the Committee fails to hire the Auditor within that period of time, the Commission shall appoint an Auditor and shall determine the terms under which it shall be hired by the Committee.

Seventh. International gateway operators providing services during the month of January 1997, shall, for the first time, make available to the Committee and Commission the information to which Rules 41 and 42 refer, within the first 15 working days of February 1997. For international gateways that are not in operation during the month of January 1997, the said 15-day period shall begin on the first day of the calendar month immediately following the date on which the said international gateway commences operations.

Eighth. Prior to 14 February 1997, and on the basis of the information which the international gateway operators make available to the Committee under Transitional Provision Seven above, the Auditor shall establish the percentages applicable to the distribution of international incoming and outgoing traffic for the month of March 1997. These percentages shall be determined by the Auditor on the basis of information concerning international outgoing traffic generated during the month of January. For international gateways that are not in operation during the month of January 1997, the percentages shall be determined based on information concerning the calendar month following the commencement of operations of the said international gateway.

Mexico, D.F., 4 December 1996. Carlos Casas�s L�pez Hermosa, Chairman of the Federal Telecommunications Commission. Initialled.

Wednesday, 11 December 1996.

Diario Oficial 37 44

Diario Oficial Wednesday, 11 December 1996.

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3 Agencies which, without owning transmission means, provide third parties with telecommunications services by using capacity leased from a public network concessionaire.