[Federal Register Volume 62, Number 142 (Thursday, July 24, 1997)]
[Rules and Regulations]
[Pages 39776-39779]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-19534]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 32, 43, and 64

[CC Docket No. 96-193; FCC 97-145]


Reform of Filing Requirements and Carrier Classifications; 
Anchorage Telephone Utility, Petition for Withdrawal of Cost Allocation 
Manual

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this Report and Order (Order), the Commission revised the 
rules governing filing requirements for cost allocation manuals (CAMs) 
and Automated Reporting Management Information System (ARMIS) reports 
so that these rules are in accord with the 1996 Act. Specifically, the 
Order: provides for a uniform filing date of April 1 for all ARMIS 
reports; reduces the 60-day notice period for a carrier to make changes 
to its CAM to 15 days; makes permanent our interim rules for measuring 
inflation, used to adjust the threshold revenue values in our rules; 
permits carriers to file the interstate carrier quarterly report on an 
annual basis; and eliminates the supplemental reporting requirement.
    This Order also addresses a Motion for Reconsideration filed by 
Anchorage Telephone Utility (ATU). On June 22, 1995, ATU filed a 
petition seeking a declaratory ruling that it is not required to file 
ARMIS reports or, in the alternative, a waiver of these filing 
requirements or rulemaking to amend the Commission's filing 
requirements. In its Petition for Reconsideration, ATU argues that the 
Commission should require only incumbent local exchange carriers with 
more than 2% of the nation's access lines to comply with the CAM and 
ARMIS filing requirements. In this Order, the Commission denies ATU's 
Petition for Reconsideration and retains the $107 million annual 
revenue threshold (adjusted annually for inflation, and since raised to 
$109 million) indicating which incumbent local exchange carriers must 
comply with the Commission's CAM and ARMIS reporting and filing 
requirements. However, because ATU sufficiently demonstrated that its 
annual revenues may soon decrease to a level

[[Page 39777]]

below the filing and reporting threshold, the Commission granted ATU a 
limited two-year waiver of the ARMIS reporting requirements.

EFFECTIVE DATE: August 25, 1997.

FOR FURTHER INFORMATION CONTACT: Warren Firschein, Accounting and 
Audits Division, Common Carrier Bureau, (202) 418-0844.

SUPPLEMENTARY INFORMATION: On September 12, 1996, the Commission 
released an Order and Notice of Proposed Rulemaking (the Order and 
NPRM) (61 FR 50266, September 25, 1996) modifying the rules as directed 
by the 1996 Act to require only annual ARMIS reports and annual cost 
allocation manual revisions. Furthermore, because the 1996 Act did not 
specify how the Commission should measure inflation in adjusting annual 
revenue thresholds used to define (or identify) those incumbent local 
exchange carriers that must file these annual reports, the Commission 
adopted interim rules that adjust those thresholds for inflation using 
a generally-available inflation index. The Order and NPRM sought 
comment on additional modifications to the rules, such as whether the 
Commission should modify or eliminate the 60-day advance notice 
requirement for cost allocation manual revisions as well as which 
permanent inflation measure the Commission should incorporate into the 
rules pertaining to carrier classification and reporting requirements.

Paperwork Reduction Analysis

    OMB Control No.: 3060-0470.
    Expiration Date: 08/31/98.
    Title: Computer III Remand Proceeding: Bell Operating Company 
Safeguards and Tier 1 Local Exchange Company Safeguards and 
Implementation of further Cost Allocation Uniformity.
    Form No.: N/A.
    Estimated Annual Burden: 18 respondents; 300 hours per response 
(avg.) x 2 responses annually; 10,800 total annual burden hours.
    Estimated Annual Reporting and Recordkeeping Cost Burden: $0.
    Frequency of Response: On occasion.
    Needs and Uses: In the Report and Order, the Commission revised 
these rules to: (1) Provide for a uniform filing date of April 1 for 
all ARMIS reports; (2) reduce the 60-day notice period for a carrier to 
make changes to its CAM to 15 days; (3) make permanent the Commission's 
interim rules for measuring inflation, used to adjust the threshold 
revenue values in part 43 and Secs. 32.11 and 64.904 of the rules; (4) 
permit carriers to file Sec. 43.22 interstate carrier quarterly report 
on an annual basis; and (5) eliminate the Sec. 43.21(b) supplemental 
reporting requirement. The cost allocation manual is reviewed by the 
Commission to ensure that all costs are properly classified between 
regulated and nonregulated activities. The 15-day notice requirement 
provides the Commission with sufficient time to determine whether 
further information is required to facilitate its review process and, 
if necessary, to issue a temporary stay until the carrier submits 
additional information concerning proposed changes.
    Public reporting burden for the collection of information is as 
noted above. Send comments regarding the burden estimate or any other 
aspect of the collection of information, including suggestions for 
reducing the burden to Performance Evaluation and Records Management, 
Washington, DC 20554. An agency may not conduct or sponsor and a person 
is not required to respond to a collection of information unless it 
displays a currently valid control number.
    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 rules because they will not have a significant 
economic impact on the carriers that must comply with our filing and 
reporting requirements. This Order adjusts our filing and reporting 
threshold for inflation and allows carriers to file ARMIS reports on an 
annual basis. As such, it prevents additional carriers from becoming 
subject to these filing and reporting requirements solely due to the 
cumulative effect of inflationary pressure. It also reduces the 
regulatory burden on those carriers that must comply with our ARMIS 
filing requirements by allowing these reports to be filed only once per 
year. Accordingly, we certify that the rules adopted or modified in 
this Order will not have a significant economic impact on a significant 
number of small entities.

Ordering Clause

    Accordingly, it is ordered that, pursuant to sections 402(b)(2)(B) 
and 402(c) of the Telecommunications Act of 1996, Pub. L. 104-104, and 
sections 1, 4, 201-205, 215, 218, 220 of the Communications Act of 
1934, as amended, 47 U.S.C. 151(a), 154, 201-205, 215, 218 and 220, and 
section 553(b)(B) of the Administrative Procedure Act, 5 U.S.C. 
553(b)(B), parts 32, 43, and 64 of the Commission's rules, 47 CFR parts 
32, 43, and 64 are amended.
    It is further ordered that, pursuant to sections 402(b)(2)(B) of 
the Telecommunications Act of 1996, Public Law 104-104, and sections 1, 
4, 201-205, 215, 218, 220 of the Communications Act of 1934, as 
amended, 47 U.S.C. 151(a), 154, 201-205, 215, 218 and 220, the Petition 
for Reconsideration by Anchorage Telephone Utility is denied.

List of Subjects

47 CFR Part 32

    Communications common carriers, Reporting and recordkeeping 
requirements, Telephone, Uniform System of Accounts.

47 CFR Part 43

    Communications common carriers, Radio, Reporting and recordkeeping 
requirements, Telegraph, Telephone.

47 CFR Part 64

    Civil defense, Claims, Communications common carriers, Computer 
technology, Credit, Foreign relations, Individuals with disabilities, 
Political candidates, Radio, Reporting and recordkeeping requirements, 
Telegraph, Telephone.

Federal Communications Commission.
William F. Caton,
Acting Secretary.

Rules Changes

    Parts 32, 43 and 64 of title 47 of the Code of Federal Regulations 
are amended to read as follows:

PART 32--UNIFORM SYSTEM OF ACCOUNTS FOR TELECOMMUNICATIONS 
COMPANIES

    1. The authority citation for part 32 is revised to read as 
follows:

    Authority: 47 U.S.C. 154(i), 154(j) and 220; Telecommunications 
Act of 1996, Pub. L. 104-104, sec. 402(c), 110 Stat. 56 (1996) as 
amended unless otherwise noted.

    2. Section 32.11 is amended by revising paragraphs (a)(1) and 
(a)(2) to read as follows:


Sec. 32.11  Classification of companies.

    (a) * * *
    (1) Class A. Companies having annual revenues from regulated 
telecommunications operations that are equal to or above the indexed 
revenue threshold.
    (2) Class B. Companies having annual revenues from regulated 
telecommunications operations that are less than the indexed revenue 
threshold.
* * * * *
    3. Section 32.9000 is amended by adding the definition of ``indexed

[[Page 39778]]

revenue threshold for a given year'' in alphabetical order to read as 
follows:


Sec. 32.9000  Glossary of terms.

* * * * *
    Indexed revenue threshold for a given year means $100 million, 
adjusted for inflation, as measured by the Department of Commerce Gross 
Domestic Product Chain-type Price Index (``GDP-CPI''), for the period 
from October 19, 1992 to the given year. The indexed revenue threshold 
for a given year shall be determined by multiplying $100 million by the 
ratio of the annual value of the GDP-CPI for the given year to the 
estimated seasonally adjusted GDP-CPI on October 19, 1992. The indexed 
revenue threshold shall be rounded to the nearest $1 million. The 
seasonally adjusted GDP-CPI on October 19, 1992 is determined to be 
100.69.
* * * * *

PART 43--REPORTS OF COMMUNICATION COMMON CARRIERS AND CERTAIN 
AFFILIATES

    1. The authority citation for part 43 is revised to read as 
follows:

    Authority: 47 U.S.C. 154; Telecommunications Act of 1996, Pub. 
L. 104-104, secs. 402 (b)(2)(B), (c), 110 Stat. 56 (1996) as amended 
unless otherwise noted. 47 U.S.C. 211, 219, 220 as amended.

    2. Section 43.01 is amended by revising paragraph (b) and adding 
new paragraph (c) to read as follows:


Sec. 43.01  Applicability.

* * * * *
    (b) Except as provided in paragraph (c) of this section, carriers 
becoming subject to the provisions of the several sections of this part 
for the first time, shall, within thirty (30) days of becoming subject, 
file the required data as set forth in the various sections of the 
part.
    (c) Carriers becoming subject to the provisions of Secs. 43.21 and 
43.43 for the first time, because their annual operating revenues equal 
or exceed the indexed revenue threshold for a given year, shall begin 
collecting data pursuant to such provisions in the calendar year 
following the publication of that indexed revenue threshold in the 
Federal Register. With respect to such initial filing of reports by any 
carrier, pursuant to the provisions of Sec. 43.21 (d), (e), (f), (g), 
(h), (i), (j), and (k), the carrier is to begin filing data for the 
calendar year following the publication of that indexed revenue 
threshold in the Federal Register by April 1 of the second calendar 
year following publication of that indexed revenue threshold in the 
Federal Register.
    3. Section 43.21 is amended by revising the first two sentences of 
paragraph (a), removing paragraph (b), redesignating paragraphs (c) 
through (g) as paragraphs (b) through (f), revising the newly 
redesignated paragraphs (b), and (c), the introductory text of (e), and 
paragraph (f), and adding new paragraphs (g), (h), (i), (j), and (k) to 
read as follows:


Sec. 43.21  Annual reports of carriers and certain affiliates.

    (a) Communication common carriers having annual operating revenues 
in excess of the indexed revenue threshold, as defined in Sec. 32.9000, 
and certain companies (as indicated in paragraph (b) of this section) 
directly or indirectly controlling such carriers shall file with the 
Commission annual reports or an annual letter as provided in this 
section. Except as provided in paragraph (b) of this section, each 
annual report required by this section shall be filed no later than 
April 1 of each year, covering the preceding calendar year. * * *
    (b) Each company, not itself a communication common carrier, that 
directly or indirectly controls any communication common carrier that 
has annual operating revenues equal to or above the indexed revenue 
threshold, as defined in Sec. 32.9000, shall file annually with the 
Commission, not later than the date prescribed by the Securities and 
Exchange Commission for its purposes, two complete copies of any annual 
report Forms 10-K (or any superseding form) filed with that Commission.
    (c) Each miscellaneous common carrier (as defined by Sec. 21.2 of 
this chapter) with operating revenues for a calendar year in excess of 
the indexed revenue threshold, as defined in Sec. 32.9000, shall file 
with the Common Carrier Bureau Chief a letter showing its operating 
revenues for that year and the value of its total communications plant 
at the end of that year. This letter must be filed no later than April 
1 of the following year. Those miscellaneous common carriers with 
annual operating revenues that equal or surpass the indexed revenue 
threshold for the first time may file the letter up to one month after 
publication of the adjusted revenue threshold in the Federal Register, 
but in no event shall such carriers be required to file the letter 
prior to April 1.
* * * * *
    (e) Each local exchange carrier with annual operating revenues 
equal to or above the indexed revenue threshold shall file, no later 
than April 1 of each year, reports showing:
* * * * *
    (f) Each local exchange carrier with operating revenues for the 
preceding year that equal or exceed the indexed revenue threshold shall 
file, no later than April 1 of each year, a report showing for the 
previous calendar year its revenues, expenses, taxes, plant in service, 
other investment and depreciation reserves, and such other data as are 
required by the Commission, on computer media prescribed by the 
Commission. The total operating results shall be allocated between 
regulated and nonregulated operations, and the regulated data shall be 
further divided into the following categories: State and interstate, 
and the interstate will be further divided into common line, traffic 
sensitive access, special access and nonaccess.
    (g) Each local exchange carrier for whom price cap regulation is 
mandatory and every local exchange carrier that elects to be covered by 
the price cap rules shall file, by April 1 of each year, a report 
designed to capture trends in service quality under price cap 
regulation. The report shall contain data relative to network measures 
of service quality, as defined by the Common Carrier Bureau, from the 
previous calendar year on a study area basis.
    (h) Each local exchange carrier for whom price cap regulation is 
mandatory shall file, by April 1 of each year, a report designed to 
capture trends in service quality under price cap regulation. The 
report shall contain data relative to customer measures of service 
quality, as defined by the Common Carrier Bureau, from the previous 
calendar year on a study area basis.
    (i) Each local exchange carrier for whom price cap regulation is 
mandatory shall file, by April 1 of each year, a report containing data 
from the previous calendar year on a study area basis that are designed 
to capture trends in telephone industry infrastructure development 
under price cap regulation.
    (j) Each local exchange carrier with annual operating revenues that 
equal or exceed the indexed revenue threshold shall file, no later than 
April 1 of each year, a report containing data from the previous 
calendar year on an operating company basis. Such report shall contain 
statistical data designed to monitor network growth, usage, and 
reliability.
    (k) Each designated interstate carrier with operating revenues for 
the preceding year that equal or exceed the indexed revenue threshold 
shall file, no

[[Page 39779]]

later than April 1 of each year, a report showing for the previous 
calendar year its revenues, expenses, taxes, plant in service, other 
investment and depreciation reserves, and such other data as are 
required by the Commission, on computer media prescribed by the 
Commission. The total operating results shall be allocated between 
regulated and nonregulated operations, and the regulated data shall be 
further divided into the following categories: State and interstate, 
and the interstate will be further divided into common line, traffic 
sensitive access, special access, and nonaccess.


Sec. 43.22  [Removed]

    4. Section 43.22 is removed.
    5. Paragraph (a) of Sec. 43.43 is revised to read as follows:


Sec. 43.43  Reports of proposed changes in depreciation rates.

    (a) Each communication common carrier with annual operating 
revenues that equal or exceed the indexed revenue threshold, as defined 
in Sec. 32.9000, and that has been found by this Commission to be a 
dominant carrier with respect to any communications service shall, 
before making any change in the depreciation rates applicable to its 
operated plant, file with the Commission a report furnishing the data 
described in the subsequent paragraphs of this section, and also comply 
with the other requirements thereof.
* * * * *

PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS

    1. The authority citation for part 64 is revised to read as 
follows:

    Authority: 47 U.S.C. 154; Telecommunications Act of 1996, Pub. 
L. 104-104, secs. 402 (b)(2)(B), (c), 110 Stat. 56 (1996), as 
amended unless otherwise noted. 47 U.S.C. 201, 218, 226, 228, as 
amended unless otherwise noted.

    2. Section 64.903 is amended by revising the introductory text of 
paragraph (a) and paragraph (b) to read as follows:


Sec. 64.903  Cost allocation manuals.

    (a) Each local exchange carrier with annual operating revenues that 
equal or exceed the indexed revenue threshold, as defined in 
Sec. 32.9000 of this chapter, shall file with the Commission within 90 
days after the publication of that threshold in the Federal Register, a 
manual containing the following information regarding its allocation of 
costs between regulated and nonregulated activities:
* * * * *
    (b) Each carrier shall ensure that the information contained in its 
cost allocation manual is accurate. Carriers must update their cost 
allocation manuals at least annually, except that changes to the cost 
apportionment table and to the description of time reporting procedures 
must be filed at least 15 days before the carrier plans to implement 
the changes. Annual cost allocation manual updates shall be filed on or 
before the last working day of each calendar year. Proposed changes in 
the description of time reporting procedures, the statement concerning 
affiliate transactions, and the cost apportionment table must be 
accompanied by a statement quantifying the impact of each change on 
regulated operations. Changes in the description of time reporting 
procedures and the statement concerning affiliate transactions must be 
quantified in $100,000 increments at the account level. Changes in cost 
apportionment tables must be quantified in $100,000 increments at the 
cost pool level. The Chief, Common Carrier Bureau may suspend any such 
changes for a period not to exceed 180 days, and may thereafter allow 
the change to become effective or prescribe a different procedure.
* * * * *
    3. Paragraph (a) of Sec. 64.904 is revised to read as follows:


Sec. 64.904  Independent Audits.

    (a) Each local exchange carrier required to file a cost allocation 
manual, by virtue of having annual operating revenues that equal or 
exceed the indexed revenue threshold for a given year or by order of 
the Commission, shall have an audit performed by an independent auditor 
on an annual basis, with the initial audit performed in the calendar 
year after the carrier is first required to file a cost allocation 
manual. The audit shall provide a positive opinion on whether the 
applicable data shown in the carrier's annual report required by 
Sec. 43.21(e)(2) of this chapter present fairly, in all material 
respects, the information of the carrier required to be set forth 
therein in accordance with the carrier's cost allocation manual, the 
Commission's Joint Cost Orders issued in conjunction with CC Docket No. 
86-111 and the Commission's rules and regulations including Secs. 32.23 
and 32.27 of this chapter, 64.901, and 64.903 in force as of the date 
of the auditor's report. The audit shall be conducted in accordance 
with generally accepted auditing standards, except as otherwise 
directed by the Chief, Common Carrier Bureau.
* * * * *
[FR Doc. 97-19534 Filed 7-23-97; 8:45 am]
BILLING CODE 6712-01-P