[Federal Register Volume 63, Number 164 (Tuesday, August 25, 1998)]
[Proposed Rules]
[Pages 45208-45213]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-22601]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 32 and 64

[CC Docket No. 98-81; FCC 98-108]


1998 Biennial Regulatory Review--Review of Accounting and Cost 
Allocation Requirements; United States Telephone Association Petition 
for Rulemaking

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: In this Notice of Proposed Rulemaking, (NPRM), the Commission 
proposes as part of the biennial review to modify its accounting and 
cost allocation rules. The Commission proposes to raise the threshold 
significantly for required Class A accounting thus allowing mid-sized 
carriers currently required to use Class A accounts to use the more 
streamlined Class B accounts. In addition, the Commission proposes to 
establish less burdensome cost allocation manual (``CAM'') procedures 
for the mid-sized incumbent local exchange carriers (``LECs'') and to 
reduce the frequency with which independent audits of the cost 
allocations based upon the CAMs are required. Finally, the Commission 
propose several changes to the Uniform System of Accounts (``USOA'') to 
reduce accounting requirements and to eliminate or consolidate 
accounts.

DATES: Written comments by the public on the proposed information 
collections

[[Page 45209]]

are due July 17, 1998 and reply comments on or before September 4, 
1998.

ADDRESSES: Office of the Secretary, Room 222, Federal Communications 
Commission, 1919 M Street, NW, Washington, DC 20554. In addition to 
filing comments with the Secretary, a copy of any comments on the 
information collections contained herein should be submitted to Judy 
Boley, Federal Communications Commission, Room 234, 1919 M Street, 
N.W., Washington, DC 20554, or via the Internet to [email protected], and 
to Timothy Fain, OMB Desk Officer, 10236 NEOB, 725--17th Street, N.W., 
Washington, DC 20503 or via the Internet to [email protected].

FOR FURTHER INFORMATION CONTACT: Warren Firschein, Accounting 
Safeguards Division, Common Carrier Bureau, (202) 418-1844. For 
additional information concerning the information collections contained 
in this NPRM contact Judy Boley at 202-418-0214, or via the Internet at 
[email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking (NPRM), CC Docket No. 98-81, adopted on June 2, 
1998, and released on June 17, 1998. The full text of the NPRM is 
available for inspection and copying during normal business hours in 
the FCC Reference Center (Room 239), 1919 M Street NW, Washington, DC. 
The complete text may also be purchased from the Commission's copy 
contractor, International Transcription Service, Inc., 1231 20th 
Street, Washington, DC 20036, telephone (202) 857-3800.

Paperwork Reduction Act

    This NPRM contains either a proposed information collection. The 
Commission, as part of its continuing effort to reduce paperwork 
burdens, invites the general public and the Office of Management and 
Budget (OMB) to comment on the information collections contained in 
this NPRM, as required by the Paperwork Reduction Act of 1995, Public 
Law 104-13. Public and agency comments are due at the same time as 
other comments on this NPRM; OMB notification of action is due October 
26, 1998. Comments should address: (a) Whether the proposed collection 
of information is necessary for the proper performance of the functions 
of the Commission, including whether the information shall have 
practical utility; (b) the accuracy of the Commission's burden 
estimates; (c) ways to enhance the quality, utility, and clarity of the 
information collected; and (d) ways to minimize the burden of the 
collection of information on the respondents, including the use of 
automated collection techniques or other forms of information 
technology.
    OMB Approval Number: None.
    Title: 1998 Biennial Regulatory Review--Review of Accounting and 
Cost Allocation Requirements, CC Docket No. 98-81.
    Form No.: N/A.
    Type of Review: New collection.
    Respondents: Business or other for profit.

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                                                                No. of         Estimated time     Total annual  
                          Title                               respondents       per response         burden     
----------------------------------------------------------------------------------------------------------------
Uniform Systems of Accounts..............................               239           12,672.6         2,398,268
Cost Allocation Manual...................................                18              600              10,800
Auditor's Attestation....................................                19              342.1             6,500
----------------------------------------------------------------------------------------------------------------

    Total Annual Burden: 2,415,568.
    Estimated costs per respondent: $1,200,000.
    Needs and Uses: This Notice of Proposed Rulemaking proposes to 
modify the Commission's accounting and cost allocation rules as part of 
the biennial review process. Specifically, the Commission proposes (1) 
to raise the threshold significantly for required Class A accounting, 
thus allowing mid-sized carriers currently required to use Class A 
accounts to use the more streamlined Class B accounts; (2) to establish 
less burdensome cost allocation manual (``CAM'') procedures for the 
mid-sized incumbent local exchange carriers (``LECs'') and to reduce 
the frequency with which independent audits of the cost allocations 
based upon the CAMs are required; and (3) to make certain changes to 
our Uniform System of Accounts (``USOA'') to reduce accounting 
requirements and to eliminate or consolidate accounts. If the proposals 
are adopted as proposed, we anticipate a reduction of over 500,000 
burden hours. The proposed information collection requirements will 
provide the necessary information to enable this Commission to fulfill 
its regulatory responsibilities.

Summary of Notice of Proposed Rulemaking

    1. Section 11 of the Communications Act of 1934, as amended, 
requires the Commission, in every even-numbered year beginning in 1998, 
to review its regulations applicable to providers of telecommunications 
services to determine whether the regulations are no longer in the 
public interest due to meaningful economic competition between 
providers of such service and whether such regulations should be 
repealed or modified. Section 11 further instructs the Commission to 
``repeal or modify any regulation it determines to be no longer 
necessary in the public interest.''

Streamlining Accounting Requirements for Mid-Sized Incumbent LECs

    2. Section 32.11 of the Commission's rules establishes two classes 
of incumbent local exchange carriers for accounting purposes: Class A 
and Class B. Carriers with annual operating revenues above a designated 
indexed revenue threshold, currently $112 million, are classified as 
Class A; those with annual operating revenues below the threshold are 
considered Class B. The classification of a carrier is determined by 
its lowest annual operating revenues for the five immediately preceding 
years. Class A carriers must record their transactions in 261 accounts 
while Class B carriers maintain only 109 accounts. Our accounting 
system is designed to enable management and policymakers to assess the 
results of operational and financial events. The financial data 
contained in the accounts, together with the detailed information 
contained in the other subsidiary records required by the Commission, 
provide the information necessary to support jurisdictional 
separations, cost of service, and management reporting requirements. 
The basic account structure has been designed to remain stable as 
reporting requirements change.
    3. We propose to streamline accounting requirements for certain 
mid-sized incumbent LECs based on the aggregate revenues of the 
incumbent LEC and any LEC that it controls, is controlled by, or with 
which it is under common control. If the aggregate revenues of these 
affiliated incumbent LECs are less than $7 billion, then each LEC 
within that group would be eligible

[[Page 45210]]

for Class B accounting, even if the annual operating revenue of any 
individual LEC exceeds $112 million. Among incumbent LECs, this 
revision would limit Class A accounting to the Bell Operating Companies 
and the GTE Operating Companies. All other incumbent LECs could use the 
Class B system of accounts. The $7 billion threshold will provide the 
Commission with Class A accounting data for nearly 90% of the industry 
for local exchange telecommunications, as measured by annual operating 
revenues.
    4. We have maintained Class A and Class B accounting requirements 
since we revised the USOA more than ten years ago. Through our auditing 
functions and ongoing review of company financial information, we have 
had sufficient experience with carriers of different size to conclude 
tentatively that we can maintain the necessary degree of oversight and 
monitoring while imposing less administratively burdensome accounting 
requirements on the mid-sized carriers. We have reached this conclusion 
because we have generally found that mid-sized carriers typically 
conduct a lower volume of transactions involving competitive products 
and services than the large incumbent LECs, thus providing easier 
monitoring and oversight because there are fewer opportunities for 
these mid-sized carriers to subsidize competitive services with the 
revenues earned from the provision of noncompetitive services. We 
therefore tentatively conclude that mid-sized carriers may opt to use 
Class B accounting. We seek comment on these tentative conclusions and 
also specifically ask commenters to address any possible effects on 
jurisdictional separations that could result from adopting these 
tentative conclusions.
    5. For the largest incumbent LECs, however, our review of these 
rules indicates that we should maintain the level of detail required by 
Class A accounting. We believe that the more detailed Class A 
accounting is required to monitor the large incumbent LECs as 
competition begins to develop in local telephony markets. The more 
detailed accounting requirements are also necessary for the Commission 
to uphold our statutory obligations under sections 254(k), 260, 271, 
272, 273, 274, 275, and 276 of the Act. Class A accounting is necessary 
to ensure that the largest incumbent LECs are in compliance with these 
provisions, such as section 254(k)'s mandate that ``a 
telecommunications carrier may not use services that are not 
competitive to subsidize services that are subject to competition.'' 
The level of detail of the Class A accounting rules allows us to 
identify potential cost misallocations beyond those revealed by the 
Class B system of accounts. Although we are cognizant of the necessity 
of balancing our continuing need for information against our desire not 
to impose unreasonable or unnecessary reporting requirements, we have 
found that Class A accounting provides the level of detail needed to 
ensure that a carriers' emerging competitive activities are not 
subsidized by its noncompetitive activities. In allocating costs 
between regulated and nonregulated activities, use of Class A accounts 
also provides more refined cost allocations without imposing an undue 
burden on the largest incumbent LECs. Moreover, we have long recognized 
that, for managerial decision-making and other purposes, incumbent LECs 
maintain their financial records in significantly more detail than that 
required for Class A carriers in our Part 32 rules. Because incumbent 
LECs disaggregate their financial records into much greater detail than 
our Class A requirements, we tentatively conclude that the burden on 
the largest incumbent LECs resulting from Class A accounting and 
reporting requirements does not outweigh our needs for collecting 
financial information. We therefore intend to maintain the Class A 
accounting requirements for the largest incumbent LECs. We seek comment 
on this tentative conclusion and ask for comment whether, instead, we 
should relax Class A requirements for the largest incumbent LECs.
    6. We note that our pole attachment formulas are based on Class A 
accounting detail. If the Commission adopts Class B accounts for mid-
sized incumbent LECs as proposed herein, the ARMIS reports of the mid-
sized incumbent LECs would no longer provide the details needed to 
calculate pole attachment fees using the pole attachment formulas. The 
details provided in eight Class A accounts are needed to provide data 
for the pole attachment formulas: six accounts associated with cable 
and wire facilities investment and expenses, and two accounts 
associated with network operations expenses. We seek comment on whether 
mid-sized incumbent LECs should be required to maintain subsidiary 
record categories to provide the data now provided in the eight Class A 
accounts and to report in ARMIS the information in the noted accounts 
as well as other information required by the pole attachment formulas.
    7. We note that, while the same indexed revenue threshold is 
applied for Part 32 carrier classification purposes and Part 64 cost 
allocation purposes, the threshold is applied differently. For part 32 
purposes, the accounting classification for a carrier is determined by 
its lowest annual operating revenues for the five immediately preceding 
years. For part 64 cost allocation purposes, carriers must file CAMs 
and obtain independent audits of their cost allocations based upon 
those CAMs after carriers exceed the indexed revenue threshold. This 
dichotomy provides unnecessary complexity to our rules. Accordingly, in 
light of our tentative conclusions to relax accounting requirements for 
certain mid-sized incumbent LECs, we see no reason to maintain the 
difference between the application of the indexed revenue threshold for 
part 32 and part 64 purposes. We have tentatively concluded that mid-
sized LECs should continue to follow our Class B accounting rules until 
their annual revenues exceed $7 billion, thus, crossing the $112 
million threshold will no longer have an effect on a carrier's cost 
allocation process. Because we see no reason to maintain the difference 
between exceeding the indexed revenue threshold for part 32 accounting 
or part 64 cost allocation purposes, we tentatively conclude that 
carriers should be classified as Class A at the start of the calendar 
year following the first time their annual operating revenues exceed 
the indexed revenue threshold. We seek comment on this tentative 
conclusion.
    8. Section 64.903 of the Commission's rules requires incumbent LECs 
with $112 million or more in annual operating revenues to file CAMs 
setting forth the cost allocation procedures that they use to separate 
costs between regulated and nonregulated services. These CAMs include 
the following: (a) A description of each of the company's nonregulated 
activities; (b) a list of the activities that the company accords 
incidental accounting treatment; (c) a chart showing all of its 
corporate affiliates; (d) a statement identifying affiliates that 
engage in or will engage in transactions with the carrier entity and 
describing the nature, terms, and frequency of such transactions; (e) 
for each USOA account and subaccount, detailed specifications of the 
cost categories to which amounts in the account or subaccount will be 
assigned and of the basis on which each cost category will be 
apportioned; and (f) a description of the carrier's time reporting 
procedures. We tentatively conclude that we should reduce the 
administrative burden on mid-sized incumbent LECs by eliminating or

[[Page 45211]]

modifying some of the information required in their CAMs, because our 
experience has taught us that we can maintain the necessary degree of 
oversight and monitoring while imposing less administratively 
burdensome requirements on mid-sized incumbent LECs, which tend to have 
lower transactional volumes than the largest incumbent LECs.
    9. We tentatively conclude that mid-sized incumbent LECs may 
maintain their accounts at the Class B level. Consistent with our 
proposed change in the level of accounting detail required, we 
tentatively conclude that mid-sized incumbent LECs should be permitted 
to submit their CAMs based upon the Class B system of accounts. We seek 
comment on these tentative conclusions. In the CAM section that 
describes nonregulated activities, carriers must include a matrix that 
shows each nonregulated product or service and the accounts associated 
with each product or service. In the CAM section describing cost 
allocation procedures, carriers are required to provide detail cost 
pools and allocation methods by account. By allowing mid-sized 
incumbent LECs to submit their CAMs based upon the Class B system of 
accounts, we intend to reduce the reporting burden of the nonregulated 
activity matrix and the cost apportionment section of the CAM. We seek 
comment on this approach.
    10. Section 64.904 of the Commission's rules requires that an 
independent audit of reported cost allocation data must be performed 
annually for all carriers that are required to file cost allocation 
manuals. This rule requires that the audit shall provide a positive 
opinion that the reported data is presented fairly in all material 
respects and the audit shall be conducted in accordance with generally 
accepted auditing standards, except as otherwise directed by the Chief, 
Common Carrier Bureau. We propose to reduce the audit requirements for 
the mid-sized incumbent LECs. We tentatively conclude that mid-sized 
incumbent LECs be required to obtain an audit every two years instead 
of annually. We also propose that the required audit be an attest 
audit, which has significantly less stringent standards of testing, 
reporting and expression of opinion than the audits currently required. 
As stated before, our experience with carriers of different size leads 
us to conclude tentatively that we can maintain the necessary degree of 
oversight and monitoring while imposing less administratively 
burdensome requirements on mid-sized incumbent LECs. We tentatively 
conclude that the relaxation of the audit requirements as proposed 
above should significantly reduce the cost of the audit requirement for 
mid-sized incumbent LECs. We seek comment on these tentative 
conclusions.
    11. For the largest incumbent LECs, however, our review of these 
rules indicates that we should maintain the annual audit requirements 
as presently provided for in Sec. 64.904 of our rules. Because the 
largest incumbent LECs tend to conduct a much greater transactional 
volume of competitive services than the smaller and mid-sized carriers, 
there is a greater risk of harm to consumers and competitors from 
cross-subsidization among these carriers. As stated above, Class A 
accounting is necessary to properly monitor the largest incumbent LECs 
because these carriers tend to offer a large volume of competitive 
products and services, thereby creating numerous opportunities for 
these largest carriers to subsidize competitive services with the 
revenues earned from the provision of noncompetitive services. 
Accordingly, we believe that these audits are required to monitor the 
large incumbent LECs as competition begins to develop in local 
telephony markets and are necessary for the Commission to uphold our 
statutory obligations under sections 254(k), 260, 271, 272, 273, 274, 
275, and 276 of the Act. We therefore intend to maintain the 
independent CAM audit requirements for the largest incumbent LECs.

Accounting Changes

    12. We have conducted a review of our USOA accounts and tentatively 
conclude that a number of accounts or filing requirements may be 
reduced or eliminated. A description of these changes and a discussion 
of our rationale for our tentative conclusions are set forth below. 
These modifications will apply to all carriers subject to Part 32 and 
not just the mid-sized incumbent LECs. We invite comment on these 
proposals, and on whether, as an alternative, we could have less 
frequent audits for them as well.
    13. Consolidation of Accounts 2114, 2115, and 2116. The United 
States Telephone Association (``USTA'') has recommended that we 
consolidate Account 2114, Special purpose vehicles, Account 2115, 
Garage work equipment, and Account 2116, Other work equipment, into a 
single new account. We tentatively conclude that the assets recorded in 
these accounts are similar in nature and have similar prescribed 
depreciation rates. In addition, these accounts are treated identically 
under the jurisdictional separations rules set forth in Part 36 of our 
rules. We tentatively conclude that the consolidation of these accounts 
into a single account entitled Account 2114, Tools and other work 
equipment, would reduce the carriers' accounting and reporting burdens 
and would not affect the amounts separated between the interstate and 
intrastate jurisdictions. We seek comment on these tentative 
conclusions.
    14. Consolidation of Accounts 6114, 6115, and 6116. We also propose 
to consolidate Account 6114, Special purpose vehicles expense, Account 
6115, Garage work equipment expense, and Account 6116, Other work 
equipment expense, into a single new account entitled Account 6114, 
Tools and other work equipment expense. The expenses recorded in these 
accounts are related to the assets recorded in Accounts 2114, 2115, and 
2116 and should also be combined into a single account. In addition, 
these accounts are treated identically under the jurisdictional 
separations rules set forth in Part 36 of our rules. We tentatively 
conclude that the consolidation of these accounts into a single account 
would reduce the carriers' accounting and reporting burdens and would 
not affect the amounts separated between the interstate and intrastate 
jurisdictions. We seek comment on these tentative conclusions.
    15. Accounting for Nonregulated Revenues. On September 16, 1997, 
USTA filed a petition for rulemaking requesting that the Commission 
amend sections 32.23(c) and 32.5280 of its rules to allow carriers to 
record revenues from all nonregulated activities in account 5280, 
Nonregulated operating revenues. Such an amendment would modify the 
current rule that instructs carriers to record revenue from 
nonregulated activities in account 5280 only if there is no other 
operating revenue account to which the revenue relates. USTA argues 
that the use of specific regulated accounts for nonregulated activities 
places carriers at a competitive disadvantage because competitors could 
determine product-specific revenue amounts related to incumbent LECs' 
nonregulated products and services. The petition also proposed 
elimination of account 5010, Public telephone revenue. Incumbent LECs 
record message revenue derived from public and semi-public telephone 
services provided within their basic service areas in account 5010. 
USTA argues that account 5010 is no longer needed as a result of the 
deregulation of payphone services as well as the changes it proposed 
with respect to account 5280. We tentatively conclude that the 
Commission's interest in ensuring that such costs and revenues

[[Page 45212]]

are segregated from the carriers' regulated revenues and expenses would 
continue to be served by allowing carriers to combine all nonregulated 
activities into one account. Thus, we tentatively conclude that account 
5010 should be eliminated and that the language in sections 32.23(c) 
and 32.5280 should be revised consistent with USTA's petition. We seek 
comment on these tentative conclusions.
    16. Revision to Section 32.16, Changes in Accounting Standards. 
Section 32.16 of the Commission's rules requires carriers to revise 
their records and accounts to reflect new accounting standards 
prescribed by the Financial Accounting Standards Board (``FASB''). This 
section provides that Commission approval of a change in accounting 
standards shall automatically take effect 90 days after a carrier 
notifies the Commission of its intention to follow a new standard. In 
the notification to the Commission, carriers are required to provide a 
revenue requirement study that analyzes the effects of the accounting 
change for the current year and a projection for three years into the 
future. In recent years, as carriers have adopted new FASB standards, 
we have found that the forecast data is not necessary to determine 
whether to approve the proposed modification. We therefore tentatively 
conclude that carriers should be required to provide only current year 
revenue requirement studies and that the requirement that carriers 
provide projected revenue requirement data should be eliminated. We 
seek comment on these tentative conclusions.
    17. Revision to Section 32.2000(b), Telecommunications Plant 
Acquired. Section 32.2000(b)(4), requires carriers to submit for 
Commission approval the journal entries made to record acquisitions 
from other entities of telecommunications plant that cost more than $1 
million for Class A carriers and $250,000 for Class B carriers. It 
requires that the text for these entries shall include a complete 
description of the property acquired and the basis upon which the 
entries were determined. This requirement was established to ensure 
that plant acquired from other carriers is recorded at original cost as 
required in section 32.2000(b) and so does not inflate the rate base or 
allow recovery of depreciation expense already recovered by the 
previous owner of the plant. The requirement to record plant acquired 
from other entities at original cost is well established, and we 
tentatively conclude that other accounting safeguards such as ARMIS 
reporting and our audit program, together with our ability to obtain 
additional information as necessary, are sufficient to assure that 
carriers will comply with this accounting requirement. We tentatively 
conclude, therefore, that it is no longer necessary to require the 
routine filing of these journal entries to ensure that carriers comply 
with the accounting requirements of section 32.2000(b). Accordingly, we 
propose to eliminate this filing requirement. We seek comment on this 
proposal.
    18. Finally, we seek proposals for other accounts or filing 
requirements that could be reduced or eliminated.

Procedural Matters

    19. Initial Regulatory Flexibility Analysis. The Regulatory 
Flexibility Act (RFA) requires that an initial regulatory flexibility 
analysis be prepared for notice-and-comment rulemaking proceedings, 
unless the agency certifies that ``the rule will not, if promulgated, 
have a significant economic impact on a substantial number of small 
entities.'' The RFA generally defines ``small entity'' as having the 
same meaning as the terms ``small business,'' ``small organization,'' 
and ``small governmental jurisdiction.'' In addition, the term ``small 
business'' has the same meaning as the term ``small business concern'' 
under the Small Business Act. A small business concern is one which: 
(1) Is independently owned and operated; (2) is not dominant in its 
field of operation; and (3) satisfies any additional criteria 
established by the Small Business Administration (SBA).
    20. This NPRM proposes to raise the threshold significantly for 
required Class A accounting thus allowing mid-sized carriers currently 
required to use Class A accounts to use the more streamlined Class B 
accounts, proposes to establish less burdensome CAM procedures for the 
mid-sized incumbent LECs and to reduce the frequency with which 
independent audits of the cost allocations based upon the CAMs are 
required, and proposes several changes to our USOA to reduce accounting 
requirements and to eliminate or consolidate accounts. Neither the 
Commission nor SBA has developed a definition of ``small entity'' 
specifically applicable to LECs. The closest definition under SBA rules 
is that for establishments providing ``Telephone Communications, Except 
Radiotelephone,'' which is Standard Industrial Classification (SIC) 
code 4813. Under this definition, a small entity is one employing no 
more than 1,500 persons.
    21. We certify that the proposals in this NPRM, if adopted, will 
not have a significant economic impact on a substantial number of small 
entities. Pursuant to long-standing rules, incumbent LECs with annual 
operating revenues exceeding the indexed revenue threshold must report 
financial and operating data to the Commission. This NPRM proposes to 
reduce certain of these reporting requirements among mid-sized 
incumbent LECs. These changes should be easy and inexpensive for mid-
sized incumbent LECs to implement and will not require costly or 
burdensome procedures. We therefore expect that the potential impact of 
the proposal rules, if such are adopted, is beneficial and does not 
amount to a possible significant economic impact on affected entities. 
If commenters believe that the proposals discussed in the NPRM require 
additional RFA analysis, they should include a discussion of these 
issues in their comments.
    22. The Commission's Office of Public Affairs, Reference Operations 
Division, will send a copy of this Notice, including this initial 
certification, to the Chief Counsel for Advocacy of the Small Business 
Administration.
    23. Comment Filing Procedures. Pursuant to applicable procedures 
set forth in Sections 1.415 and 1.419 of the Commission's Rules, 47 CFR 
1.415, 1.419, interested parties may file comments no later than July 
17, 1998, and reply comments on or before September 4, 1998. To file 
formally in this proceeding, you must file an original and four copies 
of all comments, reply comments, and supporting comments. If you want 
each Commissioner to receive a personal copy of your comments, you must 
file an original and nine copies. Comments and reply comments should be 
sent to the Office of the Secretary, Federal Communications Commission, 
1919 M Street, N.W. Room 222, Washington, D.C. 20554, with a copy to 
Warren Firschein, Accounting Safeguards Division, Common Carrier 
Bureau, FCC, 2000 L Street, Suite 200, Washington, DC 20554. Parties 
should also file one copy of any documents filed in this docket with 
the Commission's copy contractor, International Transcription Services 
(ITS), at its office at 1231 20th Street, N.W., Washington, D.C. 20036. 
Comments and reply comments will be made available for public 
inspection during regular business hours in the FCC Reference Center, 
1919 M Street, N.W., Room 239, Washington, D.C. 20554.
    24. Comments and reply comments must include a short and concise 
summary of the substantive arguments raised in the pleading. Comments 
and reply comments must also comply with

[[Page 45213]]

section 1.49 and all other applicable sections of the Commission's 
rules. We also direct all interested parties to include the name of the 
filing party and the date of the filing on each page of their comments 
and reply comments. All parties are encouraged to utilize a table of 
contents, regardless of the length of their submission.
    25. Parties are also strongly encouraged to submit comments and 
reply comments on diskette. Such diskette submissions would be in 
addition to, and not a substitute for, the formal filing requirements 
addressed above. Interested parties submitting diskettes should submit 
them to Warren Firschein, Accounting Safeguards Division, Common 
Carrier Bureau, 2000 L Street, N.W., Suite 200, Washington, D.C. 20554. 
Such a submission should be on a 3.5 inch diskette formatted in an IBM 
compatible format using Wordperfect 5.1 for Windows software. The 
diskette should be submitted in ``read only'' mode. The diskette should 
be clearly labeled with the party's name, proceeding, Docket No., type 
of pleading (comment or reply comments), date of submission, and 
filename with the ``*.wp extension. The diskette should be accompanied 
by a cover letter.
    26. This proceeding will be treated as a ``permit-but-disclose'' 
proceeding subject to the ``permit-but-disclose'' requirements under 
Section 1.1206(b) of the rules, 47 CFR 1.1206(b)(2), as revised. 
Additional rules pertaining to oral and written presentations are set 
forth in Section 1.1206(b).

Ordering Clauses

    27. Accordingly, it is ordered that, pursuant to sections 1, 2, 4, 
and 11 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 
152, 154, and 161 that notice is hereby given of proposed amendments to 
part 32 and 64 of the Commission's rules, 47 CFR parts 32 and 64, as 
described in this Notice of Proposed Rulemaking.
    28. It is further ordered that, pursuant to sections 1, 4, and 220 
of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154, and 
220, and Sec. 1.401 of the Commission's rules, 47 CFR 1.401, the 
Petition for Rulemaking of the United States Telephone Association is 
granted to the extent indicated herein.
    29. It is further ordered that the Commission's Office of Public 
Affairs, Reference Operations Division, shall send a copy of this 
Notice of Proposed Rulemaking, including the Initial Regulatory 
Flexibility Certification, to the Chief Counsel for Advocacy of the 
Small Business Administration.

List of Subjects

Part 32

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

Part 64

    Communications common carriers, Reporting and recordkeeping 
requirements, Telephone.
Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 98-22601 Filed 8-24-98; 8:45 am]
BILLING CODE 6701-12-P