[Federal Register Volume 60, Number 109 (Wednesday, June 7, 1995)]
[Proposed Rules]
[Pages 30059-30060]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-13849]



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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 36

[CC Docket No. 80-286; FCC 95-189]


Establishment of a Joint Board

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Communications Commission proposes to change the 
separations rules applicable to local exchange carriers (``LECs'') for 
allocating the Other Billing and Collecting (``OB&C'') expenses\1\ 
portion of Account 32.6623, Customer services,\2\ between state and 
interstate jurisdictions. These permanent separations rules would 
replace the interim procedures that LECs currently use to allocate OB&C 
costs. The FCC proposes a fixed allocation method which would allocate 
a specified percentage of costs to the interstate jurisdiction. The FCC 
invited comment on four fixed allocation methodologies and it asked 
parties to suggest alternative approaches. The FCC also invited comment 
on the need for a contingency provision that would be triggered by one 
or more of the interexchange carriers substantially reducing their use 
of LEC billing and collection services. The FCC referred the issues 
involving the OB&C separations rules to the Federal State Joint Board 
established in the CC Docket 80-286 Joint Board proceeding for a 
recommendation.

    \1\The phrase ``OB&C expenses'' refers to the Other Billing and 
Collecting Expenses described in 47 CFR 36.380 (1994).
    \2\See 47 CFR 32.6623.

DATES: Comments are due July 14, 1995; Reply Comments are due August 
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14, 1995.

ADDRESSES: FCC, 1919 M St., N.W., Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT:Deborah Dupont, telephone number 202-
418-0850.

SUPPLEMENTARY INFORMATION: This is a summary of the FCC's Notice of 
Proposed Rulemaking in Amendment of Part 36 of the Commission Rules and 
Establishment of a Joint Board, FCC 95-189, CC Docket No. 80-286, 
adopted May 4, 1995 and released May 15, 1995. The Commission has made 
the full text of the Notice of Proposed Rulemaking available for 
inspection and copying during normal business hours in the Commission's 
Reference Center, Room 239, 1919 M Street, N.W., Washington, DC 20554, 
and will publish it in the FCC Record. The full text of the Notice of 
Proposed Rulemaking may also be purchased from the commission's 
duplicating contractor, International Transcription Service, 2100 M 
Street, N.W., Suite 140, Washington, DC 20037, telephone number 202-
857-3800.

Synopsis of Notice of Proposed Rulemaking

    OB&C expenses are the costs incurred by LECs in preparing and 
rendering customer bills (other than carrier access charge bills), and 
in accounting for revenues generated by those billings. LECs allocate 
most of the interstate OB&C costs to nonregulated activities and 
recover these costs through untariffed charges for non-regulated 
services. The sole exception is the billing and collecting cost for the 
federal end user common line charge which LECs recover through the 
common line access rate element.
    Prior to 1987, the FCC rules had complex and administratively-
burdensome rules in place. In 1987 the FCC replaced those rules with a 
new approach which it expected to simplify the separation of OB&C 
expenses.\3\ The new rules, however, applied a formula that 
inadvertently set the intestate share of OB&C expenses at thirty-three 
percent for LECs that continued to provide billing and collecting 
functions for AT&T. The interstate allocations had typically amounted 
to approximately twenty percent. This unanticipated result led the 
Commission, in 1988, on reconsideration to reinstate on an interim 
basis a portion of the allocation rules that were in effect prior to 
1987.\4\

    \3\MTS and WATS Market Structure, Amendment of Part 67 of the 
Commission's Rules and Establishment of a Joint Board, CC Docket 
Nos. 78-72 and 80-286, 2 FCC Rcd 2078, 2083 (1987), 52 FR 18408, May 
15, 1987; Amendment of Part 67 (New Part 36) of the Commission's 
Rules and Establishment of a Federal-State Joint Board, 2 FCC Rcd 
2639 (1987), 52 FR 17228, May 6, 1987.
    \4\Amendment of Part 67 (New Part 36) of the Commission's Rules 
and Establishment of a Federal-State Joint Board, 3 FCC Rcd 5518 
(1988), 53 FR 33010, August 29, 1988.
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    The FCC believes that LECs generally cannot attribute OB&C services 
to any specific service and, therefore, it proposes a fixed allocation 
factor to replace the interim OB&C allocation procedures. The FCC also 
believes that a fixed allocation factor would provide greater 
administrative simplicity, certainty and auditability than the interim 
rules. The FCC proposed four alternative fixed allocation methods and 
invited parties to propose other possible methods as well. The FCC 
requests that parties comment on (1) whether the allocation procedures 
should be based upon a fixed allocation factor, rather than on a direct 
measurement of actual interstate usage, and (2) whether the 
[[Page 30060]] allocation factor should be adjusted to reflect 
substantial changes in the interexchange carriers usage of LEC billing 
services.
    The FCC also seeks comments on whether its permanent OB&C 
allocation rules should include a contingency provision that would 
alter separations procedures if interexchange carriers substantially 
reduce their use of LEC billing and collecting services, and if so, 
what form this ``trigger'' provision should take. The FCC proposes two 
possible adjustment triggers and invites comments on its proposals and 
related issues as well as suggestions for alternative approaches.
    Finally, the FCC invites comments on the separations procedures 
applicable to OB&C expenses and refers this issue to the Docket 80-286 
Joint Board for a recommendation for a permanent solution. It requests 
that interested parties address the extent to which the proposed 
procedures: (1) Would reflect cost-causation principles; (2) would 
affect the division of costs between the jurisdictions; and (3) would 
prove burdensome to implement and administer.
    Accordingly, it is ordered that, pursuant to sections 1, 4(i), 
4(j), 403, and 410(c) of the Communications Act of 1934, as amended, 47 
U.S.C. 151, 154(i), 154(j), 403, and 410(c), NOTICE IS HEREBY GIVEN of 
proposed permanent amendments to Part 36, Subpart D of the Commission's 
Rules, 47 CFR part 36, subpart D, as described in the Notice of 
Proposed Rulemaking.
    It is further ordered, pursuant to Section 410(c) of the 
Communications Act of 1934, as amended, 47 U.S.C. 410(c), that the 
issues relating to permanent changes in the Commission's Part 36 
Revenue Accounting Expense rules, 47 CFR 36.380, shall be and hereby 
are referred to the Federal State Joint Board established in the CC 
Docket No. 80-286 proceeding for a recommended decision regarding the 
issues raised herein.

List of Subjects in 47 CFR Part 36

    Uniform System of Accounts.

Federal Communications Commission.
LaVera F. Marshall,
Acting Secretary.
[FR Doc. 95-13849 Filed 6-6-95; 8:45 am]
BILLING CODE 6712-01-M