[Federal Register Volume 62, Number 62 (Tuesday, April 1, 1997)]
[Rules and Regulations]
[Pages 15412-15416]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-8113]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 36
[CC Docket No. 80-286; FCC 97-30]
Establishment of a Joint Board
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: On February 3, 1997, the Commission adopted a Report and Order
(``Order'') adopting a recommended decision by the Federal-State Joint
Board regarding permanent rules to govern the procedures that incumbent
local exchange carriers (ILECs) use for allocating Other Billing and
Collecting (OB&C) expenses between the intrastate and interstate
jurisdictions. Specifically, the Joint Board recommended that OB&C
expenses be divided equally among three services: Interstate toll;
intrastate toll; and local exchange, with two thirds of the OB&C
expenses thus allocated to the state jurisdiction, and one third
allocated to the interstate jurisdiction. In cases in which an ILEC
provides no interstate billing and collecting for an interexchange
carrier (IXC), the Joint Board recommended an automatic reduction of
the interstate assignment to five percent to cover the cost of billing
the federal Subscriber Line Charge (SLC). The intended effect is to
adopt the Joint Board's recommendations and implement new rules
regarding the separations procedures applicable to OB&C expenses.
DATES: May 1, 1997.
FOR FURTHER INFORMATION CONTACT: Lynn Vermillera, Attorney/Advisor,
Accounting and Audits Division, Common Carrier Bureau, (202) 418-0852.
SUPPLEMENTARY INFORMATION: In this proceeding, we establish permanent
rules that satisfy our stated goals that the permanent rules (1)
reflect principles of cost causation, (2) not be unnecessarily
burdensome to implement and administer, (3) be simple to audit, and (4)
be certain and predictable in their effect.
Regulatory Flexibility Analysis
In the NPRM (60 FR 30059, June 7, 1995) Amendment of Part 36 of the
Commission's Rules and Establishment of a Joint Board, Notice of
Proposed Rulemaking, 10 FCC Rcd 7013 (1995)), the Commission certified
that the Regulatory Flexibility Act (RFA) of 1980 did not apply to this
rulemaking because the rules it proposed to adopt in this proceeding
would not have a significant impact on a substantial number of small
businesses. The Commission's RFA in this Report and Order (Amendment of
Part 36 of the Commission's Rules and Establishment of a Joint Board,
Report and Order, CC Docket No. 80-286, FCC 97-30 (1997)) conforms to
the RFA, as amended by the Contract With America Advancement Act of
1996 (CWAAA), Public Law 104-121, 110 Stat. 847 (1996).
Need for and Objectives of the Proposed Rules
To reflect the fact that their facilities are used for both
intrastate and interstate communication, ILECs must allocate their
costs and expenses between the state and interstate jurisdictions.
Prior to 1987, the rules for jurisdictional separation of OB&C expenses
required ILECs to determine the amount of time spent billing for
interstate services and for intrastate services. In 1987, the
Commission adopted, at the recommendation of the Federal-State Joint
Board, a new apportionment formula based on the number of users billed
by each ILEC for specific interstate and intrastate services. Because
the new system led to unpredictable results, and because carriers had
difficulty administering the new formula (as evidenced by waiver
requests), in 1988 the Commission reinstated, on an interim basis, a
portion of the allocation rules that were in effect prior to 1987. In
this proceeding, we are establishing permanent rules that satisfy our
stated goals that the permanent rules (1) reflect principles of cost
causation, (2) not be unnecessarily burdensome to implement and
administer, (3) be simple to audit, and (4) be certain and predictable
in their effect.
Summary of Significant Issues Raised by the Public Regarding Regulatory
Flexibility
There is some concern over what might be perceived by some as a
likely shift of OB&C expenses to the interstate jurisdiction, with the
possible result that ILECs could either lose money on billing and
collection, or lose their IXC billing and collecting contracts
[[Page 15413]]
altogether. The argument suggested that a shift of OB&C expenses to the
interstate jurisdiction might keep small ILECs from providing billing
and collection services to IXCs, and convenient single-source billing
to end users. In particular the Commission was urged to consider how
this might affect small ILECs, and was suggested further that non-price
cap companies should have the option of either using whatever fixed
allocator is adopted, or user counts, or relative use among service
categories. The Joint Board, however, thought and we concur, the
likelihood of ILECs being unable to recover a large amount of their
billing and collection expenses, or of their losing the IXCs' billing
and collection business altogether, had been greatly exaggerated. The
Joint Board therefore recommended that we not adopt the suggestion that
non-price cap companies be allowed to choose among several
methodologies in allocating their OB&C expenses. The Joint Board also
stated that, under its recommended procedures, ILECs that lose their
IXC OB&C customers (or that never handled billing and collecting for
IXCs) need only allocate five percent of OB&C expenses to the
interstate jurisdiction to cover the cost of billing the federal SLC.
The Joint Board's recommendation included the preference for
waivers of the fixed allocation for OB&C expenses over an automatic
adjustment mechanism expressed by some of the state Commissioners. It
was argued that waivers were preferable to a specific alternative
procedure, because the waiver process would be flexible and sensitive
to individual circumstances. If, contrary to the Joint Board's
expectation, a pattern of waiver requests developed indicating that
non-price cap ILECs might need other separations rules for allocation
of OB&C expenses, the Joint Board suggested the Commission refer that
issue, and the record accumulated through the waiver process, to it for
consideration.
We concur with the Joint Board's reasoning. As we have said, if
IXCs discontinue employing ILECs as their billing agents, other
developments, such as the IXCs competing with ILECs in local service
markets, will probably influence their decision much more than this
change to our allocation rules. If market forces or these rules do in
fact cause an ILEC to lose all IXC billing and collecting business,
that carrier will allocate only five percent of its OB&C expenses to
the interstate jurisdiction to cover the cost of billing the SLC.
PaPUC's suggestion that small ILECs choose among three different
procedures could be burdensome to administer, difficult to audit, and
have uncertain and unpredictable effects, and would therefore be a
disproportionate response to a speculative concern. If a pattern of
waiver requests indicates that non-price cap ILECs need other rules for
the allocation of OB&C expenses, the record accumulated through the
waiver process could form a record for the Joint Board's consideration.
We believe, however, that the new rules will not cause significant IXC
abandonment of their billing relationship with ILECs, but rather will
simplify the needlessly complex procedures currently in use, and thus
reduce the burden on carriers.
Description and Estimates of the Number of Small Entities to Which
Rules Will Apply
For the purposes of this Order, the RFA defines a ``small
business'' to be the same as a ``small business concern'' under the
Small Business Act, 15 U.S.C. Sec. 632, 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). SBA
has defined a small business for Standard Industrial Classification
(SIC) categories 4812 (Radiotelephone Communications) and 4813
(Telephone Communications, Except Radiotelephone) to be small entities
when they have fewer than 1,500 employees. We first discuss generally
the total number of small telephone companies falling within both of
those SIC categories. Then, we discuss the number of small businesses
within the two subcategories, and attempt to refine further those
estimates to correspond with the categories of telephone companies that
are commonly used under our rules.
We have found incumbent LECs to be ``dominant in their field of
operation'' since the early 1980's, and we consistently have certified
under the RFA that incumbent LECs are not subject to regulatory
flexibility analyses because they are not small businesses. We have
made similar determinations in other areas. We recognize SBA's special
role and expertise with regard to the RFA, and intend to continue to
consult with SBA outside the context of this proceeding to ensure that
the Commission is fully implementing the RFA. Although we are not
persuaded on the basis of this record that our prior practice has been
incorrect, we will, nevertheless, include small incumbent LECs in this
FRFA to remove any possible issue of RFA compliance.
Total Number of Telephone Companies Affected
Many of the decisions and rules adopted herein may have a
significant effect on a substantial number of the small telephone
companies identified by SBA. The United States Bureau of the Census
(``the Census Bureau'') reports that, at the end of 1992, there were
3,497 firms engaged in providing telephone services, as defined
therein, for at least one year. This number contains a variety of
different categories of carriers, including local exchange carriers,
interexchange carriers, competitive access providers, cellular
carriers, mobile service carriers, operator service providers, pay
telephone operators, PCS providers, covered SMR providers, and
resellers. It seems certain that some of those 3,497 telephone service
firms may not qualify as small entities or small incumbent LECs because
they are not ``independently owned and operated.'' For example, a PCS
provider that is affiliated with an interexchange carrier having more
than 1,500 employees would not meet the definition of a small business.
It seems reasonable to conclude, therefore, that fewer than 3,497
telephone service firms are small entity telephone service firms or
small incumbent LECs that may be affected by this Order.
Local Exchange Carriers
Neither the Commission nor SBA has developed a definition of small
providers of local exchange services (LECs). The closest applicable
definition under SBA rules is for telephone communications companies
other than radiotelephone (wireless) companies (SIC 4813). The most
reliable source of information regarding the number of LECs nationwide
of which we are aware appears to be the data that we collect annually
in connection with the Telecommunications Relay Service (TRS).
According to our most recent data, 1,347 companies reported that they
were engaged in the provision of local exchange services. Although it
seems certain that some of these carriers are not independently owned
and operated, or have more than 1,500 employees, we are unable at this
time to estimate with greater precision the number of LECs that would
qualify as small business concerns under SBA's definition.
Consequently, we estimate that there are fewer than 1,347 small
incumbent LECs that may be affected by the decisions and rules adopted
in this Order.
[[Page 15414]]
Interexchange Carriers
Neither the Commission nor SBA has developed a definition of small
entities specifically applicable to IXCs (SIC 4813). The closest
applicable definition is for telephone carriers other than
radiotelephone (wireless) companies. The most reliable source of
information regarding the number of IXCs nationwide of which we are
aware appears to be the data that we collect annually in connection
with TRS. According to our most recent data, 97 companies reported that
they were engaged in the provision of interexchange service. Although
it seems certain that some of these carriers are not independently
owned and operated, or have fewer than 1500 employees, we are unable at
this time to estimate with greater precision the number of IXCs that
would qualify as small business concerns under SBA's definition.
Tentatively, we conclude that there are fewer than 97 small IXCs that
may be affected by the permanent OB&C separations rules.
Description of Projected Reporting, Record Keeping and Other Compliance
Requirements of the Rules
The Commission's Part 36 rules apply to all incumbent local
exchange carriers. This order reduces current reporting, record keeping
or other compliance requirements, because carriers, including small
ILECs, will no longer be required to segregate expenses assigned to the
OB&C classification on the basis of the number of users of various
services. We anticipate that carriers, including small ILECs, will need
to devote less staff time to comply with these permanent rules than was
needed to comply with the interim rules. No new skills are required to
comply with these rules.
Steps Taken to Minimize Impact on Small Entities Consistent With Stated
Objectives
The Joint Board recommended a fixed-factor plan that was consistent
with our stated objectives that the permanent rules be easy to
implement and administer, simple to audit, and certain and predictable
in their effect. As we explain in paragraph 22 above, the Joint Board
recommended that we not adopt the PaPUC's suggestion that non-price cap
companies be allowed to choose among several methodologies for
allocating their OB&C expenses, because the Joint Board thought the
likelihood of ILECs being unable to recover a large amount of their
OB&C expenses, or of their losing their IXC OB&C customers, had been
greatly exaggerated. We agree that having small ILECs choose among
three different procedures would be needlessly complex to administer,
difficult to audit, and unpredictable in result, and we consider such a
complicated approach to be an excessive precaution against a
speculative concern. We do, however, entertain waiver petitions for
good cause shown,and if a pattern of waiver petitions develops that
indicates, contrary to our expectation, that these rules are not
satisfactory in regard to small ILECs, the waiver requests could form a
basis for the Joint Board to recommend a solution tailored to any
problem that is revealed. We also note that the Joint Board found
greater support among commenters for waivers than for the alternative
procedures we suggested in the NPRM.
Significant Alternatives Considered and Rejected
The Joint Board considered and rejected an allocation procedure
based on relative-use measurements. The Joint Board reasoned that
measuring use produced results no more indicative of cost causation
than applying a fixed factor, and that our other goals--ease of
administration, auditability, and predictable results--were best met by
adopting a fixed allocation factor. The Joint Board considered the
contention of some parties that a measured-use method would be more
convenient because it was self-adjusting, and that changing separations
procedures was itself burdensome, but was persuaded by other
commenters, including all the participating state public utility
commissions, that the convenience of allocating OB&C expenses by a
fixed factor outweighed these considerations and best met our goals.
After determining to recommend allocation by fixed factor, the
Joint Board considered all the possible factors set forth for its
consideration by this Commission and by parties. The Joint Board took
the approach that any plan that called for it to revise its 1987 view
that there are three essential services (local exchange service,
intrastate toll service, and interstate toll service) bore the burden
of convincing the Joint Board of its superiority, and no plan overcame
that challenge. We consider the Joint Board's approach reasonable. The
Joint Board considered the argument that it should choose a factor that
would result in an allocation to the interstate jurisdiction similar to
that arrived at by using the interim rules, but rejected that approach
because the results produced by the interim rules bear no special
relation to cost causation that would justify their use as a benchmark.
Report to Congress
The Secretary shall send a copy of this Final Regulatory
Flexibility Analysis, along with this Report and Order, in a report to
Congress pursuant to the Small Business Regulatory Enforcement Fairness
Act of 1996, 5 U.S.C. 801(a)(1)(A). A copy of this Final Regulatory
Flexibility Analysis shall also be published in the Federal Register.
Summary of Report and Order
The expenses ILECs incur in preparing and rendering end user
customer bills, and in accounting for revenues generated by those
bills, are categorized as OB&C expenses. Most of the OB&C expenses are
allocated to nonregulated activities, and, except for the cost of
billing and collecting the SLC, ILECs recover them through untariffed
charges.
Prior to 1987, the rules for jurisdictional separation of OB&C
expenses required ILECs to measure the amount of time they spent
billing for interstate services and for intrastate services. In 1987,
the Federal-State Joint Board in CC Docket No. 80-286 recommended, and
we adopted, an interstate apportionment formula that replaced this
method with one based on counting the number of users billed by each
ILEC for specific interstate and intrastate services. This formula
established an upper bound of thirty-three percent and a lower bound of
five percent for the interstate assessment of OB&C expenses.
Although we had expected that the new procedures would result in
reduced interstate assignments, it became apparent that the new
procedures would have the opposite effect, at least in some cases. In
1988, this unanticipated result, combined with the difficulty carriers
had administering the new formula (as evidenced by waiver requests),
led us, on reconsideration, to reinstate on an interim basis a portion
of the allocation rules that were in effect prior to 1987. On May 4,
1995 we adopted a Notice of Proposed Rulemaking (NPRM) (60 FR 30059,
June 7, 1995) in which we proposed replacing those interim rules with
permanent rules for allocating OB&C expenses between the jurisdictions.
The Order adopts the Joint Board's finding that nearly all OB&C
expenses are joint or common with respect to the individual services
appearing on customer bills, and that there is no method of allocating
these joint and common expenses that reflects cost
[[Page 15415]]
causation better than a fixed allocator does. The Joint Board explained
that a carrier's ability to attribute costs to individual services
largely depends on the nature of the costs, i.e., on whether the costs
are incremental, joint, or common. If a cost is incurred solely for a
particular service, that cost is ``incremental'' with respect to the
service. The Joint Board observed, however, that the costs of some
shared facilities and operations are not incremental with respect to
the individual services they support, and referred to such non-
incremental costs as joint or common.
Moreover, the Order adopts the Joint Board's determination that
most OB&C expenses are not incremental but rather are joint and common
expenses, and as such are ill-suited to a measured-use method of
allocation, because such measurements are not based on cost causation.
As the Joint Board recommended, the Order adopts of a fixed allocation
factor for OB&C expenses, because a fixed allocator would be easier to
administer, easier to audit, and more certain and predictable in its
effect than allocators based on usage measurements. Furthermore, as the
Joint Board reasoned, a simple fixed allocator should be less expensive
for ILECs to implement than procedures requiring time-consuming
separations studies.
The Joint Board recommended that ``assignment of these [OB&C] costs
should reflect the three basic services for which the ILECs render
bills: local, state toll and interstate toll.'' The Joint Board also
stated that it saw no justification for departing from the established
industry benchmark of allocating five percent of OB&C expenses to cover
the cost of billing the SLC, and explained that allocating the larger
share called for in some of the plans would consume an unreasonably
high percentage of the total SLC revenue. The Joint Board anticipated,
however, that the five percent assignment will be used only by those
ILECs that do not perform billing functions for one or more IXC.
The Joint Board acknowledged that dividing the allocation of OB&C
expenses equally among interstate toll, intrastate toll, and local
service may in at least some cases increase the allocation to the
interstate jurisdiction, and that some commenters from the ILEC
industry viewed this increased allocation to interstate as a drawback.
The Joint Board did not, however, view this possible increase in the
allocation to the interstate jurisdiction as a defect in its
recommendation. In response to comments that the advent of competition
may disrupt the traditional billing relationship between ILECs and
IXCs, the Joint Board noted that the circumstances of individual ILECs
are likely to vary significantly, and declined to speculate on the
effect of local competition on the billing activities of ILECs. The
Joint Board stated that, under its recommended procedures, ILECs that
lose their IXC OB&C customers (or that never handled billing and
collecting for IXCs) should allocate five percent of OB&C expenses to
the interstate jurisdiction to cover the cost of billing the federal
SLC.
The Joint Board expressed skepticism in regard to the concern of
some ILECs that, rather than pay ILECs for any increased interstate
allocation, the IXCs would stop using the ILECs as billing agents
altogether. The Joint Board noted that the IXCs must bill their
customers in some manner, and asserted that sharing the OB&C expense
with the ILECs, rather than bearing the entire billing expense
themselves, would continue to be an attractive option for cost-
conscious and highly competitive IXCs. The Joint Board also discounted
the concern of some ILECs that, because ILECs provide billing and
collecting services to IXCs under fixed contractual arrangements, they
would not be able to recover the increased allocation of OB&C expenses
to interstate unless they could successfully renegotiate contracts with
their IXC customers. The Joint Board observed that the ILECs are free
to renegotiate their contracts with IXCs, and foresaw a one-third
allocation to the interstate jurisdiction causing, at worst, a
temporary decline in the profitability of some ILECs' billing
operations. The Joint Board found that the likelihood of ILECs being
unable to recover a large amount of their billing and collection
expenses, or of their losing the IXCs' billing and collection business
altogether, had been greatly exaggerated. Therefore the Joint Board
recommended that we not adopt the suggestion of the Pennsylvania Public
Utility Commission (PaPUC) that non-price cap companies be allowed to
choose among a fixed-factor, a user-count, or a relative-use
methodology in allocating their OB&C expenses. The Joint Board noted,
however, that if cases occur where the effect of the allocation rules
on an ILEC would be unduly harsh, the ILEC could file a petition for
waiver.
In the NPRM, we suggested that the proposed fixed allocation
methods might require an adjustment mechanism that would be triggered
if IXCs substantially reduced their use of ILEC billing and collecting
services. The NPRM suggested two possible adjustment triggers. The
first would permit an adjustment, or recourse to an alternative
procedure, if an ILEC lost 50 percent of its existing interstate toll
billing and collecting operations. The second would use the ILEC's loss
of its largest IXC customer for billing services to activate the
alternative allocation procedure. Under either procedure, the
Commission could adjust the fixed allocator to take into account the
decrease in the ILEC's interstate toll billing and collecting
operations. The Joint Board, however, found little support from
commenters for the proposed automatic adjustment mechanism to a fixed-
factor allocation system, and therefore recommended that we not adopt a
specific automatic adjustment mechanism at this time. The Joint Board
explained that if, contrary to its expectation, a pattern of waiver
requests developed indicating that non-price cap ILECs appear to need
other separations rules for allocation of OB&C expenses, we could refer
that issue, and the record accumulated through the waiver process, to
the Joint Board for consideration.
We believe that adoption of these rules will further our goal of
simplifying the separations process. In its Recommended Decision, the
Joint Board carefully considered the nature of OB&C expenses, explained
why a fixed factor is the most sensible approach to allocating these
expenses among services and between the jurisdictions, and explained
its recommendation that OB&C expenses be allocated equally among local
exchange service, intrastate toll service, and interstate toll service.
We also adopt as our own the Joint Board's reasoning in support of its
recommendations.
We agree with the Joint Board's characterization of OB&C expenses
as joint and common expenses. In the NPRM, we suggested that postage
costs constitute a substantial portion of OB&C costs, and that such
costs are not directly attributable to any individual service, because
several pages containing many itemized charges can be included in a
customer's bill without increasing the postage charge. In addition,
because the same group of employees perform the billing and collecting
function for various services, segregation of their work by services is
difficult and of doubtful usefulness. We agree, therefore, with the
Joint Board that there is no method of allocating these joint and
common expenses that reflects cost causation better than a fixed
allocator does, and other considerations such as predictability and
ease of administration strongly militate in favor of using a fixed
factor. The Joint Board's recommended
[[Page 15416]]
methodology is clear and straightforward, and will be predictable in
its effect, and will also be easier to administer and to audit than the
current rules. Thus the Joint Board's recommendations fully satisfy the
criteria for permanent rules for allocating OB&C expenses that we set
forth in the NPRM.
In the 1988 Reconsideration Order (53 FR 33010) (August 29, 1988),
we said that ``[a]lthough these [OB&C] costs are fixed, only a specific
and decreasing portion of the expenses in this category are related to
interstate services [and] the reduction in the amount of billing and
collecting the LECs perform on behalf of the [IXCs] should be reflected
in reduced interstate assignments.'' We now believe that statement
rested on faulty analysis. The Joint Board has correctly stated that
nearly all the costs associated with OB&C are joint and common with
respect to the services billed. In contrast to incrementally incurred
costs, which are by nature specific, the interstate portion of these
joint and common costs cannot meaningfully be described as ``specific
and decreasing.'' Because the causation of joint and common costs is
not attributable to individual services, no economic reason exists for
concluding that a ``reduction in the amount of billing and collecting
the LECs perform on behalf of IXCs should be reflected in reduced
interstate assignments'' unless, of course, the service is no longer
billed at all. We are further persuaded that noneconomic considerations
of fairness and convenience do not, in the case of allocating OB&C
expenses, call for adoption of a usage-based surrogate for measurable
cost causation. The nature of OB&C expenses, which are unrelated to
such possible surrogates for measurable cost causation as facilities
investment or subscriber use, makes the option of allocating the costs
equally among the billed services particularly attractive in this case.
Thus we also find the factor chosen by the Joint Board--one third
each to local exchange service, intrastate toll service, and interstate
toll service--to be reasonable. The Joint Board saw no reason to depart
from the tripartite division of services into local exchange,
intrastate toll, and interstate toll that it recommended in 1987,
stating that, ``Neither the three alternatives proposed in the Notice
nor the fixed-factor proposals made by * * * [various commenters],
surpass the simplicity or clarity of the three-way division we
recommended in 1987 or otherwise offer benefits that induce us to
depart from that position.'' We agree that the other possible factors
that we and the commenters suggested do not improve on the three-way
division recommended by the Joint Board. We also agree with the Joint
Board that, for ILECs that do no billing or collecting for IXCs, there
is no justification for departing at this time from the established
industry benchmark of five percent as an appropriate allocation to
cover the costs of billing the federal SLC.
We do not find troubling the possibility that the new rules for
allocating OB&C expenses may increase some ILECs' allocation to the
interstate jurisdiction. We recognize that ILECs may wish to
renegotiate IXC contracts that were based on the interim rules. Like
the Joint Board, however, we find exaggerated the concern of some ILECs
that, rather than pay a minor increase in OB&C expenses, IXCs will
prefer to take on the entire cost of running a billing operation
themselves. If IXCs discontinue employing ILECs as their billing
agents, we think that other developments, such as the IXCs competing
with ILECs in local service markets, will influence the IXCs' decisions
in this regard much more than will this change to our OB&C expense
allocation rules. If market forces or these rules do in fact cause an
ILEC to lose all IXC billing and collecting business, that ILEC will no
longer be required to allocate a third of its OB&C expenses to the
interstate jurisdiction, but instead will allocate only five percent of
its OB&C expenses to the interstate jurisdiction to cover the cost of
billing the SLC.
We also agree with the Joint Board's rejection of PaPUC's
suggestion that small ILECs choose among three different allocation
procedures. We conclude that PaPUC's proposal would be burdensome to
administer, difficult to audit, and could have uncertain and
unpredictable effects, and would therefore be a disproportionate
response to a speculative concern.
If unforeseen circumstances cause these or any of our rules to
place an undue burden on specific carriers, those carriers may seek a
waiver. We believe, however, for the reasons state above, that the new
rules will not cause significant IXC abandonment of their billing
relationship with ILECs, but rather will simplify the needlessly
complex separations procedures currently in use, and will therefore
reduce the administrative burden on carriers.
Ordering Clauses
Accordingly, pursuant to Sections 1, 4(i), 220, 221(c) and 410(c)
of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i),
220, 221(c), and 410(c).
It is ordered That the recommendations of the Federal-State Joint
Board in CC Docket No. 80-286 ARE ADOPTED.
It is further ordered That, pursuant to Sections 1, 4(i), 220, and
221(c) and 410(c) of the Communications Act of 1934, as amended, 47
U.S.C. 151, 154(i), 220, and 221(c), Part 36 of the Commission's Rules
and Regulations, is amended as shown below.
List of Subjects in 47 CFR Part 36
Communications common carriers, Reporting and recordkeeping
requirements, Telephone, Uniform System of Accounts.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
Rule Changes
Part 36 of Title 47 of the Code of Federal Regulations is amended
as follows:
PART 36--JURISDICTIONAL SEPARATIONS PROCEDURES; STANDARD PROCEDURES
FOR SEPARATING TELECOMMUNICATIONS PROPERTY COSTS, REVENUES,
EXPENSES, TAXES AND RESERVES FOR TELECOMMUNICATIONS COMPANIES
1. The authority citation for part 36 continues to read as follows:
Authority: 47 U.S.C. Secs. 151, 154 (i) and (j), 205, 221(c),
403 and 410.
2. Section 36.380 is amended by revising paragraphs (b) and (c) to
read as follows:
Sec. 36.380 Other billing and collecting expense.
* * * * *
(b) Local exchange carriers that bill or collect from end users on
behalf of interexchange carriers shall allocate one third of the
expenses assigned this classification to the interstate jurisdiction,
and two thirds of the expenses assigned this classification to the
state jurisdiction.
(c) Local exchange carriers that do not bill or collect from end
users on behalf of interexchange carriers shall allocate five percent
of the expenses assigned this classification to the interstate
jurisdiction, and ninety-five percent of the expenses assigned this
classification to the state jurisdiction.
[FR Doc. 97-8113 Filed 3-31-97; 8:45 am]
BILLING CODE 6712-01-P
