[Federal Register Volume 67, Number 79 (Wednesday, April 24, 2002)]
[Rules and Regulations]
[Pages 20052-20054]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-9880]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 32, 51 and 54

[CC Docket No. 00-199; FCC 02-68]


2000 Biennial Regulatory Review -- Comprehensive Review of the 
Accounting Requirements and Reporting Requirements for Incumbent Local 
Exchange Carriers

AGENCY: Federal Communications Commission.

ACTION: Final rule; withdrawal of amendment and partial delay of 
effective date.

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SUMMARY: In this document the Commission reinstates Account 3400, 
Accumulated amortization--tangible, a Class B Account. Reinstating 
Account 3400 is less burdensome for the Class B carriers. We also 
clarify that mid-sized carriers are not required to file ARMIS 43-02 
(USOA Report), 43-03 (Joint Cost Report), and 43-04 (Separations and 
Access Report). The Commission delays the effective date of the changes 
to the part 32 chart of accounts, and derivative changes to parts 51 
and 54 of the Commission rules. This delay would allow the accounting 
changes to be implemented at the beginning of the year.

DATES: The amendment removing Sec. 32.3400, published at 67 FR 5688, 
(February 6, 2002), which was to become effective August 6, 2002 
(however, carriers were permitted to implement part 32 accounting 
changes as of January 1, 2002) is withdrawn as of April 24, 2002. All 
other amendments to part 32 and parts 51 and 54 published at 67 FR 
5679-5702, which were to become effective August 6, 2002 (however, 
carriers were permitted to implement part 32 accounting changes as of 
January 1, 2002) are delayed until January 1, 2003.

FOR FURTHER INFORMATION CONTACT: Clifford Rand, Deputy Chief, PPD, 
Wireline Competition Bureau.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order 
on Reconsideration adopted March 7, 2002 and released March 8, 2002. 
The full text of the document is available for public inspection and 
copying during regulator business hours at the FCC Reference 
Information Center, Portals II, 445 12th Street, SW., Room CY-A257, 
Washington DC, 20554. This document may also be purchased from the 
Commission's duplicating contractor, Qualex International, Portal II 
445 12th Street, SW., Room CY-B402, Washington, DC, 20554, telephone 
202-863-2893, facsimile 202-863-2898, or via e-mail [email protected].

Synopsis of Order

I. Background

    The Commission undertook a comprehensive review of the accounting 
rules and Automated Reporting Management Information System (ARMIS) 
reporting requirements in the Phase 2 Report and Order, 67 FR 5669 
(February 6, 2002). Among other things, the Commission eliminated many 
part 32 accounts and reduced ARMIS reporting requirements for mid-sized 
local exchange carriers (LECs). On the Commission's motion, pursuant to 
Sec. 1.108 of the Commission's rules, the Commission issues this 
limited reconsideration of the rules adopted in the Phase 2 Report and 
Order. In this Order, the Commission reinstates Account 3400, 
Accumulated amortization--tangible, a Class B account, at the request 
of United States Telecom Association (USTA). At Sprint's request, the 
Commission clarifies that mid-sized carriers are not required to file 
ARMIS 43-02 (USOA Report), 43-03 (Joint Cost Report), and 43-04 
(Separations and Access Report). Finally, at the request of the Bell 
Operating Companies (BOCs), the Commission extends the effective date 
of the changes to the Part 32 chart of accounts, and derivative changes 
to parts 51 and 54, adopted in the Phase 2 Report and Order, to January 
1, 2003.

II. Discussion

    Account 3400, Accumulated amortization--tangible. In the Phase 2 
Report and Order, the Commission consolidated many of the Class A and 
Class B accounts. The Commission reduced the number of Class A accounts 
by 45 percent while retaining the accounts needed by the Commission or 
the states for regulatory purposes. The Commission also added several 
Class A subaccounts requested by commenters. The Commission concluded 
that the Class B account consolidation should correspond with the Class 
A account consolidation; otherwise, the result would be contrary to the 
intent to adopt a less burdensome accounting system for the Class B 
carriers. The Commission therefore reduced the number of Class B 
accounts by 27 percent. One of the Class B accounts eliminated was 
Account 3400, Accumulated amortization--tangible.
    Account 3400, Accumulated amortization--tangible is used by Class B 
companies to record accumulated amortization of the type and character 
required of Class A companies in

[[Page 20053]]

Accounts 3410 and 3420. The Commission eliminated this account in the 
Phase 2 Report and Order, but required Class B carriers to use Account 
3410, Accumulated amortization--capitalized leases for part of what was 
entered into Account 3400. The remaining portion of what was in Account 
3400 was intended to go into Account 2682, Leasehold improvements.
    USTA argues that it would be easier for the Class B companies to 
use Account 3400, rather than allocate what formerly was in this 
account between two other accounts. USTA therefore proposes that the 
Commission reinstate Account 3400. The streamlining measures adopted in 
the Phase 2 Report and Order were intended to benefit LECs, both large 
and small, by reducing the number of accounts they were required to 
maintain, while maintaining those needed for regulatory purposes. In 
light of USTA's assertion that it is less burdensome for the Class B 
carriers to keep Account 3400, the Commission concludes that it would 
be appropriate to retain this account. Therefore, on reconsideration, 
and at the request of USTA, the Commission retains Account 3400, 
Accumulated amortization--tangible.
    ARMIS Reports. ARMIS is an automated reporting system developed by 
the Commission to collect financial, operating, service quality, and 
network infrastructure information that carriers are required to 
collect under Commission rules. ARMIS Reports 43-01, 43-02, 43-03, and 
43-04 contain financial information of carriers with annual operating 
revenues that are equal to or above the indexed revenue threshold, 
currently $117 million. ARMIS 43-04 (Separations and Access Report) 
collects information on how costs are separated between the federal and 
state jurisdictions.
    At the request of Sprint, the Commission clarifies that mid-sized 
carriers are not required to file the ARMIS 43-02, 43-03, and 43-04 
reports on April 1, 2002. As Sprint observes, one of the goals in this 
proceeding is to reduce reporting requirements for the mid-sized 
carriers. The Commission hereby clarifies that its intention was to 
eliminate the obligation of mid-sized carriers to file ARMIS 43-02, 43-
03, and 43-04 on April 1, 2002, and to require the mid-sized carriers 
to file the revised 43-01 and 43-8 reports on the same schedule as the 
larger companies.
    Extending the effective date of revisions to the Part 32 chart of 
accounts to January 1, 2003. In the Phase 2 Report and Order, the 
Commission adopted changes to the accounting rules. BellSouth, on 
behalf of itself and SBC Communications, Verizon, and Qwest, requests 
that the Commission extend the effective date of the changes to the 
part 32 chart of accounts to January 1, 2003.
    The Commission agrees with these carriers that extending the 
effective date of the new part 32 chart of accounts to January 1, 2003 
would allow the accounting changes to be implemented at the beginning 
of the fiscal year and would avoid the dual data capturing that could 
occur if the part 32 chart of accounts changes were implemented in mid-
year. The Commission also notes that this extension will give carriers 
additional time to revise their accounting systems to incorporate the 
many changes to the part 32 chart of accounts adopted in the Phase 2 
Report and Order. Therefore, on reconsideration, and at the request of 
the Bell Operating Companies, the Commission is extending the effective 
date of the changes to the part 32 chart of accounts to January 1, 
2003.
    As a result of changes in the effective date for the accounting 
rules, carriers will not be able to report revised 2002 data on April 
1, 2003. Consequently, the revisions to the ARMIS Reports 43-01, 43-02, 
and 43-03 shall be effective for filings due April 1, 2004.
    Therefore, on the Commission's own motion, pursuant to Sec. 1.108 
of the Commission's rules, the Commission is extending the effective 
date of the new part 32 chart of accounts and derivative changes to 
parts 51 and 54 adopted in the Phase 2 Report and Order to January 1, 
2003. The Commission is retaining Account 3400, Accumulated 
amortization--tangible, and the Commission is clarifying that mid-sized 
LECs are not required to file the ARMIS 43-02, 43-03, and 43-04 reports 
on April 1, 2002.

III. Procedural Matters

    Final Regulatory Flexibility Certification. The Regulatory 
Flexibility Act of 1980, as amended, (RFA), requires that a regulatory 
flexibility analysis be prepared for notice and comment 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 term ``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, unless the Commission has developed one 
or more definitions that are appropriate to its activities. Under the 
Small Business Act, a ``small business concern'' is one that: (1) Is 
independently owned and operated; (2) is not dominant in its field of 
operation; and (3) meets any additional criteria established by the 
Small Business Administration (SBA).
    In the Phase 2 Report and Order, the Commission streamlined the 
Class A and Class B accounts and ARMIS reporting requirements for 
incumbent LECs, and further reduced the accounting and reporting 
requirements for mid-sized incumbent LECs. These rule changes generally 
reduced the accounting and reporting requirements for all incumbent 
LECs. In this Order on Reconsideration, the Commission is reinstating 
one Class B account, at the request of USTA. The Commission is also 
clarifying that mid-sized carriers are not required to file the ARMIS 
43-02, 43-03, and 43-04 Reports, also at the request of USTA. Finally, 
the Commission is extending the effective date for the new chart of 
accounts adopted in the Phase 2 Report and Order to January 1, 2003, 
pursuant to the BOCs' request. This will allow carriers, including 
small entities, more time to make the necessary changes to their 
accounting systems. These rule changes and clarification will further 
reduce accounting and reporting burdens for incumbent LECs. Therefore, 
we certify, pursuant to section 605(b) of the RFA, that the rules 
adopted herein will not have a significant economic impact on a 
substantial number of small entities.

IV. Ordering Clauses

    Pursuant to section 220(g) of the Communications Act of 1934, as 
amended, 47 U.S.C. 220(g), changes to the chart of accounts in part 32, 
System of Accounts, adopted in the Report and Order in CC Docket No. 
00-199 shall be effective January 1, 2003. We will, however, permit 
carriers to implement the Sec. 32.3400 rule change as of January 1, 
2002.
    Pursuant to the authority contained in sections 1, 4(i), 4(j), 201-
205, and 218-220 of the Communications Act of 1934, as amended, 47 
U.S.C. sections 151, 154(i), 154(j), 201-205, and 218-220, that mid-
sized incumbent local exchange carriers are not required to file FCC 
Report 43-02, the USOA Report; FCC Report 43-03, the Joint Cost Report; 
and FCC Report 43-04, the Separations and Access Report for filings due 
April 1, 2002.
    Pursuant to the authority contained in sections 1, 4(i), 4(j), 201-
205, and 218-220 of the Communications Act of 1934, as amended, 47 
U.S.C. sections 151,

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154(i), 154(j), 201-205, and 218-220, that revisions to FCC Report 43-
01, the Annual Summary Report; FCC Report 43-02, the USOA Report; and 
FCC Report 43-03, the Joint Cost Report as set forth previously shall 
be effective for filings due April 1, 2004.
    Pursuant to the authority contained in Sec. 0.291 of the 
Commission's rules, 47 CFR 0.291, that the Common Carrier Bureau is 
delegated authority to implement all changes to ARMIS reporting as 
above set forth.

List of Subject in 47 CFR Parts 32, 51 and 54.

    Communications common carriers, Reporting and recordkeeping 
requirements, Telephone.

Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 02-9880 Filed 4-23-02; 8:45 am]
BILLING CODE 6712-01-P