[Federal Register Volume 60, Number 194 (Friday, October 6, 1995)]
[Proposed Rules]
[Pages 52363-52365]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-24883]



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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 61

[CC Docket No. 94-1; FCC 95-394]


Price Cap Performance Review for Local Exchange Carriers; 
Treatment of Video Dialtone Services Under Price Cap Regulation

AGENCY: Federal Communications Commission.

ACTION: Further notice of proposed rulemaking.

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SUMMARY: On October 20, 1994, the Commission adopted a Memorandum 
Opinion and Order concluding that the basic video dialtone offerings of 
local exchange carriers (LECs) would be subject to the existing price 
cap rules. In the order, the Commission stated it would initiate a 
rulemaking proceeding on whether to create a separate price cap basket 
for LEC video dialtone service. On February 7, 1995 the Commission 
issued a notice of proposed rulemaking in this docket seeking comment 
on whether to establish a separate price cap basket for LEC video 
dialtone service. In a companion order adopted today the Commission 
established a separate price cap basket for video dialtone and required 
LECs to segregate video dialtone costs and revenues from those for 
telephony service for purposes of sharing and the low-end adjustment 
once LEC provision of video dialtone exceeds a de minimis threshold. In 
the Order, the Commission also declined to establish sharing and low 
end-adjustments for the video dialtone basket for LECs exceeding the 
threshold. The Order initiated this Further Notice to obtain comment on 
the specific level for the de minimis threshold as well as on the 
procedures for allocating costs to the video dialtone basket for 
purposes of sharing and the low-end adjustment once a LEC has exceeded 
the threshold.

DATES: Comments must be submitted on or before October 27, 1995. Reply 
Comments must be submitted on or before November 17, 1995.

ADDRESSES: Federal Communications Commission, 1919 M Street, NW., 
Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT:
Claudia Pabo, Policy and Program Planning Division, Common Carrier 
Bureau, (202) 418-1595, or Cheryl Lynn Schneider, Tariff Division, 
Common Carrier Bureau, (202) 418-1530.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Third 
Further Notice of Proposed Rulemaking adopted September 14, 1995, and 
released September 21, 1995. The full text of the Commission's decision 
is available for public inspection and copying during normal business 
hours in the FCC Public Reference Room (Room 230), 1919 M St., NW., 
Washington, DC. The complete text of this decision may also be 
purchased from the Commission's copy contractor, International 
Transcription Service, Suite 140, 2100 M Street, NW., Washington, DC 
20037.

 Regulatory Flexibility Analysis

    We have determined that section 605(b) of the Regulatory 
Flexibility Act of 1980, 5 U.S.C. 605(b), does not apply to these 
proposed rules because they do not have a significant economic impact 
on a substantial number of small entities, as defined by section 301(3) 
of the Regulatory Flexibility Act. Carriers subject to price cap 
regulation for local exchange access services affected by the rule 
amendments adopted in this Order generally are large corporations or 
affiliates of such corporations.

Summary of Further Notice of Proposed Rulemaking

    Having concluded that video dialtone costs and revenues should be 
segregated from those for telephony service for purposes of sharing and 
the low-end adjustment once LEC provision of video dialtone exceeds a 
de minimis threshold, we seek comment on the following proposals and 
invite parties to suggest alternate sources for the threshold data, and 
different procedures for setting the threshold. We also invite 
interested parties to suggest alternative methods for allocating costs 
to the video dialtone basket once the LEC exceeded the threshold.
    We propose basing the de minimis threshold on the data carriers are 
currently required to submit under Responsible Accounting Officer (RAO) 
Letter 25. In RAO Letter 25, the Accounting and Audits Division of the 
Common Carrier Bureau required LECs to maintain subsidiary records by 
USOA accounts for all wholly dedicated and shared investments, expense 
and revenue related to providing video dialtone service. Using the RAO 
Letter 25 data, the threshold could be set at the amount of dedicated 
video dialtone investment that would reduce the LEC overall rate of 
return by a specified amount, such 10 or 25 basis points, for example.
    We also need to specify a method or factor to be used in Part 69 
for allocating video dialtone costs to the video dialtone basket for 
purposes of sharing and the low-end adjustment once the threshold has 
been passed in the case of LECs that select an X-Factor with sharing 
and a low end adjustment for telephony. We could allocate costs to the 
video dialtone basket using the approach in the new services test 
applied in the tariff review process for setting video dialtone rates. 
Under this approach, if somewhat different cost allocation 
methodologies are used for a single LEC due, for example, to 
differences in technology for various video dialtone systems, we 
propose to weight the application of the different cost allocation 
methodologies in some manner. For example, use of the different cost 
allocation methodologies could be weighted based on video dialtone 
investment for the relevant systems. As an alternative to use of the 
new services costs allocation methodology, we seek comment on whether 
we should adopt a fixed cost allocation factor, such as a specified 
percentage, and, if so, what level of allocator we should use. Parties 
advocating the use of a fixed allocator should explain the basis for 
their proposal and the public interest goals that would be advanced by 
use of such an allocator. We also ask interested parties to address the 
implications of allocating costs to the video dialtone basket on a 
basis different than that used to set video dialtone rates.

Ordering Clauses

    It is ordered that, pursuant to sections 1, 4, 201-205, 215, and 
218 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154, 
201-205, 215, 218, a third further notice of proposed rulemaking is 
hereby adopted and that comment is sought on the issues contained 
therein. Interested parties may file comments on or before October 27, 
1995, and reply comments on or before November 17, 1995.
    It is further ordered that to file formally in this proceeding, 
parties must file an original and four copies of all comments, reply 
comments, and supporting comments. If parties want each Commissioner to 
receive a personal copy of their comments, parties must file an 
original plus nine copies. Comments and reply comments should be sent 
to the Office of the Secretary, Federal Communications Commission, 
Washington, DC 20554. Parties should also file one copy of any 
documents filed in this docket with the Commission's copy contractor, 
International Transcription Service, Inc., Room 246, 1919 M Street, 
NW., Washington, DC 20037. Parties should also send one copy of any 
documents filed in this proceeding to Ms. Janice Myles, Policy and 
Program Planning Division, Common Carrier Bureau, Room 544, 1919 M 
Street NW., Washington, DC 20554. Comments and 

[[Page 52365]]
reply comments will be available for public inspection during regular 
business hours in the FCC Reference Center, Room 239, 1919 M Street, 
NW., Washington, DC 20554.

List of Subjects in 47 CFR Part 61

    Communications common carriers, Reporting and recordkeeping 
requirements.

    Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 95-24883 Filed 10-5-95; 8:45 am]
BILLING CODE 6712-01-M