[Federal Register Volume 63, Number 159 (Tuesday, August 18, 1998)]
[Proposed Rules]
[Pages 44220-44224]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-22162]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 43
[CC Docket 98-117; FCC 98-147]
1998 Biennial Regulatory Review--Review of ARMIS Reporting
Requirements
AGENCY: Federal Communications Commission.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Commission is required, in every even-numbered year
beginning in 1998, to review its regulations applicable to providers of
telecommunications service 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be repealed or modified. In this Notice of Proposed Rulemaking
(``NPRM''), we propose as part of the biennial review to reduce the
reporting requirements of our Automated Reporting Management
Information System (``ARMIS''). These modifications are designed to
minimize the reporting burden on carriers, improve the quality and use
of the reported information and reduce the cost to the Commission of
collection, verification, and distribution of the data. This Notice
invites interested parties to comment on several modifications to the
ARMIS ten reports.
DATES: Comments are to be filed on or before August 20, 1998 and reply
comments are due on or before September 4, 1998. Written comments
[[Page 44221]]
and reply comments by the public on the information collections are due
October 19, 1998.
ADDRESSES: Federal Communications Commission, Secretary, Room 222, 1919
M Street NW., Washington, D.C. 20554. In addition to filing comments
with the Commission's Secretary, a copy of any comments on the proposed
information collections contained herein should be submitted to Judy
Boley, Federal Communications Commission, Room 234, 1919 M Street, NW.,
Washington, DC 20554, or via the Internet to jboley@fcc.gov, and to
Timothy Fain, OMB Desk Officer, 10236 NEOB, 725 17th Street, N.W.,
Washington, D.C. 20503, or via the Internet to fain__t@al.eop.gov.
FOR FURTHER INFORMATION CONTACT: Anthony Dale, Common Carrier Bureau,
Accounting Safeguards Division, (202) 418-2260, or via E-mail to
adale@fcc.g''. For additional information concerning information
collections, contact Judy Boley at (202) 418-0214, or via the Internet
at jboley@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Proposed Rulemaking in the matter of 1998 Biennial Regulatory
Review--Review of ARMIS Reporting Requirements, CC Docket 98-117,
adopted July 6, 1998, and released July 17, 1998. The complete text of
this Notice of Proposed Rulemaking is available for inspection and
copying during normal business hours in the Commission's Reference
Center, Room 239, 1919 M Street, NW, Washington, DC. The NPRM is
available through the Internet at http://www.fcc.gov/Bureaus/
Common__Carrier/Notices/1998/fcc98147.wp. The complete text may be
purchased from the Commission's duplicating contractor, International
Transcription Service, Inc. (ITS, Inc.), at 1231 20th Street NW.,
Washington, DC 20036 (202-857-3800).
Paperwork Reduction Act
This NPRM contains proposed information collections. 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 notice, 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 notice; OMB notification of action is due
October 19, 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 Annual Biennial Review of ARMIS Reporting Requirements.
Form No.: FCC Reports 43-01 through 43-08 and FCC Reports 495A and
495B.
Type of Review: New collections.
Respondents: Business or other for profit.
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No. of Estimated time Total annual
Title respondents per response burden
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ARMIS Annual Summary Report..................................... 150 135 20,250
ARMIS USOA Report............................................... 50 190 9,500
ARMIS Joint Cost Report......................................... 150 110 12,450
ARMIS Access Charge Report...................................... 150 621 93,150
ARMIS Service Quality Report.................................... 12 625 7,500
ARMIS Customer Satisfaction Report.............................. 8 675 5,400
ARMIS Infrastructure Report..................................... 8 412 3,296
ARMIS Operating Data Report..................................... 50 120 6,000
ARMIS Forecast of Investment Usage & Actual Usage Reports....... 300 21 6,300
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Total Annual Burden: 163,846.
Estimated costs per respondent: $0.
Needs and Uses: As part of the biennial regulatory review, we are
required to review our regulation applicable to providers of
telecommunications service 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. In this NPRM we propose as part of the
biennial review to reduce the reporting requirements of our ARMIS.
ARMIS is needed to administer our accounting, jurisdictional
separations, access charges and joint cost rules and rules to analyze
revenue requirements and rates of reform, service quality and
infrastructure development. It collects financial and operating data
from certain local exchange carriers. The information contained in the
reports provide the necessary detail to enable this Commission to
fulfill its regulatory responsibilities. These proposed modifications
will reduce the reporting burdens on carriers, improve the quality and
use of the reported information. If adopted the proposed modifications
will reduce public burden by approximately 50% for the ARMIS reports.
Synopsis of Notice of Proposed Rulemaking
A. Eliminating Paper Filing Requirement
1. The Common Carrier Bureau (``the Bureau'') currently requires
carriers to submit both paper and electronic copies of the ARMIS
reports. The Commission has, in recent years, relied increasingly on
the data filed electronically to maintain internal databases and
generate meaningful reports for policy making. We tentatively conclude
that paper versions of the ARMIS reports do not significantly
contribute to the Commission's current efforts or future goals in
administering its accounting, joint cost, jurisdictional separations,
access charge rules, or in monitoring the quality of service and
infrastructure development in the public network. Therefore, we
tentatively conclude that we should eliminate the paper filing
requirement. We anticipate that the transition to an electronic-only
reporting program will represent a substantial cost savings for all
carriers that file ARMIS reports. We seek comment on this tentative
conclusion and request suggestions for improving the electronic filing
system for ARMIS reports.
2. The paper versions of the ARMIS reports, however, are our
primary means for distributing ARMIS data to the public. To satisfy the
frequent requests
[[Page 44222]]
from the public for ARMIS data, we plan to meet the demand by making it
available through the Internet. This will require Commission staff to
develop software that will allow interested parties to obtain ARMIS
reports over the Internet, which we anticipate to be a costly process.
We seek comment on this proposal and request parties to provide
information on the costs of filing paper copies of ARMIS data so that
we can assess the utility of eliminating the paper filing requirement.
In considering whether to make ARMIS data available on the Internet, we
plan to balance the benefits of such availability, in particular the
frequency of requests from the public and the reduced administrative
burden on Commission staff, against the costs of this course of action.
B. Equal Access, Payphone, and Inside Wire Data
3. The ARMIS 43-04 Access Report provides jurisdictional
separations and access charge data by part 36 category at the study
area level. The data collected in this report are used by Commission
staff to verify cost information filed in tariffs. We propose to modify
the ARMIS 43-04 Access Report by eliminating 114 rows and three columns
in which carriers report data pertaining to equal access, inside wire,
and payphone investment. We tentatively conclude that the equal access
information is no longer necessary because the nearly complete
transition to equal access has reduced our need to monitor its
deployment. We tentatively conclude that we can eliminate the inside
wire and payphone investment columns because these two categories are
no longer regulated. In the NPRM, Appendix A presents the specific row
and column deletions and our reasons for their removal. We solicit
comment on these tentative conclusions and seek additional suggestions
from interested parties on streamlining the ARMIS 43-04 Access Report.
4. The ARMIS 43-01 Annual Summary Report summarizes the carriers'
accounting, rate base, and cost allocation data prescribed in parts 32,
36, 64, 65, and 69 of the Commission's rules (See 47 CFR 32, 36, 64,
65, and 69). The Annual Summary Report consists of two tables: (1)
Table I, the ``Cost and Revenue Table;'' and (2) Table II, the ``Demand
Analysis Table.'' In order to make the ARMIS 43-01 Annual Summary
Report consistent with the streamlined version of the ARMIS 43-04
Access Report, we tentatively conclude that we should eliminate the
corresponding rows and columns pertaining to equal access, inside wire,
and payphone investment. Appendix B presents the specific row and
column deletions and our reasons for their removal. We seek comment on
this proposal and ask whether any additional streamlining or
consolidation of these reports should be made.
C. Reduced Reporting Requirements for Mid-Sized Incumbent LECs
5. Incumbent LECs whose annual operating revenues exceed an indexed
revenue threshold are required to file ARMIS reports (See Reform of
Filing Requirements and Carrier Classifications; Anchorage Telephone
Utility, Petition for Withdrawal of Cost Allocation Manual, Report and
Order, (FR cite 62 FR 39776 (July 24,1997) 12 FCC Rcd 8071)). The
indexed revenue threshold, which has recently been increased to $112
million, is based on annual operating revenues for both regulated and
nonregulated activities and is adjusted for inflation. (See 47 CFR
32.9000). Based on our experience with administering the ARMIS
reporting system, it appears that the carriers' costs of implementing
that system are largely fixed with respect to the number of access
lines served. This implies that, on a per-access-line basis, the cost
of complying with the full ARMIS reporting requirements is
substantially higher for mid-size incumbent LECs than for large
incumbent LECs, because the large incumbent LECs are able to average
their fixed reporting costs over a larger number of access lines.
Reducing the reporting requirements on mid-sized carriers would
eliminate a costly reporting burden on those carriers that must recover
the cost from a smaller number of customers.
6. We propose to streamline the ARMIS reporting 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 (See 47 CFR 32.9000). If the aggregate
revenues of these affiliated incumbent LECs are less than $7 billion,
then each LEC within that group would be eligible for the streamlined
reporting requirements described below. Incumbent LECs with individual
annual operating revenues below the indexed revenue threshold would
continue to be exempt from all ARMIS reporting requirements. The $7
billion threshold will still provide the Commission with data for
nearly 90% of the industry for local exchange telecommunications, as
measured by annual operating revenues. We seek comment on our proposal
to streamline the reporting requirements for mid-sized LECs and on
utility of this threshold mechanism. In addition to the reporting
requirements detailed below, we seek comment on other suggestions for
reducing the reporting burden on mid-sized incumbent LECs while still
collecting the information needed to perform our oversight functions
and protect ratepayers from the effects of improper cost allocations.
7. The ARMIS 43-02 USOA Report provides the annual operating
results of carriers' activities for every account in the Uniform System
of Accounts (``USOA''), which we use to review the operations of
communications common carriers subject to our jurisdiction. The USOA
encompasses both balance sheet and income statement accounts that we
use to review overall investment and expense levels, affiliate
transactions, property valuation, and depreciation rates. The ARMIS 43-
02 USOA Report collects accounting and financial data in 27 tables. We
tentatively conclude that we should reduce the filing burden of
eligible reporting carriers by eliminating the requirement to file 21
tables in the ARMIS 43-02 USOA Report. Our experience administering the
ARMIS reporting system and our accounting rules suggests that routine
reporting of the balance sheet information contained in tables B-3 and
B-5 through B-15 may not be crucial for eligible reporting carriers to
report on a regular basis. Because we will continue to have access to
the underlying data and source documents, we tentatively conclude that
eliminating these reporting requirements will not impair our ability to
perform necessary oversight functions.
8. This tentative conclusion, if adopted, would result in eligible
reporting carriers filing only six tables in the USOA Report: (1) Table
B-1, ``Balance Sheet Accounts;'' (2) Table B-2, ``Statement of Cash
Flows;'' (3) Table B-4, ``Analysis of Assets Purchased from or Sold to
an Affiliate;'' (4) Table C-3, ``Board of Directors and General
Officers;'' (5) Table I-1, ``Income Statement Accounts;'' and (6) Table
I-2, ``Analysis of Services Provided from or Sold to an Affiliate.''
Together, these tables provide the information, such as the complete
financial statements, needed to perform our audit and other oversight
functions. In addition, we tentatively conclude that we should allow
eligible reporting carriers to file the Class B level of detail for
applicable schedules. (See 47 CFR 32.11) This proposed modification
would not relieve eligible reporting carriers of their responsibility
to maintain their books of accounts in accordance with part 32 of the
Commission's rules, but would reduce the filing burden imposed on
[[Page 44223]]
eligible reporting carriers that file ARMIS reports. We seek comment on
this tentative conclusion.
9. We note that our pole attachment formulas are based on the Class
A level of accounting detail. If the Commission adopts Class B accounts
for mid-sized LECs as proposed herein, the ARMIS reports of the mid-
sized 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 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.
10. The ARMIS 43-03 Joint Cost Report details the regulated and
nonregulated cost and revenue allocations by study area in accordance
with the Commission's rules (See 47 CFR 64.901-904). In order to be
consistent with the modifications to the USOA Report, we tentatively
conclude that we should allow eligible reporting carriers to file only
the Class B level of detail. This proposal, if adopted, would eliminate
roughly two-thirds of the entries for eligible reporting carriers. We
seek comment on this proposal.
11. The ARMIS 495A Forecast Report and the ARMIS 495B Actual Usage
Report provide the information needed to monitor our requirement that
incumbent LECs allocate the costs of certain telephone plant investment
used for both regulated and nonregulated activities on the basis of
forecasted regulated and nonregulated usage. Carriers file these
reports at the same time as their annual access tariff filing. The
ARMIS 495A Forecast Report displays forecasts of expected regulated and
nonregulated investment usage at the study area level. The ARMIS 495B
Actual Usage Report displays the actual usage of regulated and
nonregulated investment at the study area level. We tentatively
conclude to allow eligible reporting carriers to report the data in the
ARMIS 495A Forecast Report and the ARMIS 495B Actual Usage Report at
the Class B level of detail. This tentative conclusion, if adopted,
will provide flexibility for eligible reporting carriers to aggregate
types of equipment and to forecast the regulated and nonregulated usage
of such equipment. We seek comment on this tentative conclusion.
D. ARMIS Reporting Requirements for Large Incumbent LECs
12. For the largest incumbent LECs, we tentatively conclude that we
should maintain the Class A level of detail for their ARMIS reporting
requirements. The more detailed reporting requirements are necessary
for the Commission to uphold our statutory obligations to prevent
cross-subsidization and discrimination under sections 254(k), 260, 271,
272, 273, 274, 275, and 276 of the Act. See 47 USC 254(k), 260, 271-
276. The Class A level of detail specified in the part 32 accounting
rules allows us to identify potential cost misallocations beyond those
revealed by the Class B system of accounts. In addition, the Class A
level of detail is critical for monitoring large incumbent LECs because
such carriers typically conduct a higher volume of transactions
involving competitive services. We need sufficient detail to adequately
perform audit and verification functions of the largest incumbent LECs
that represent nearly 90% of the local exchange industry as measured by
annual revenues. Moreover, the Class A level of detail is required to
monitor the large incumbent LECs as competition begins to develop in
local telephony markets. Therefore, we tentatively conclude that any
further reduction in reporting requirements for ARMIS financial, cost
allocation, and access charge data would impair our ability to guard
against improper cost allocations, to assess the impact of our policies
on incumbent LECs, and to monitor the development of competition in the
telecommunications marketplace. 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 seek comment on these tentative conclusions to maintain
the Class A accounting requirements for the largest incumbent LECs,
and, alternatively, on whether there are certain ARMIS reporting
requirements we could eliminate or streamline for the largest LECs.
Procedural Matters
13. Ex Parte Presentations. This is a permit-but-disclose
proceeding. Ex parte presentations are permitted, except during the
Sunshine Agenda period, provided that they are disclosed as provided in
the Commission's rules (See 47 U.S.C. 1.102, 1.203 and 1.206).
14. Initial Regulatory Flexibility Analysis. The Regulatory
Flexibility Act (``RFA'') (See 5 U.S.C. 601) 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.'' (See 5 U.S.C. 605(b)). The RFA
generally defines ``small entity'' as having the same meaning as the
terms ``small business,'' ``small organization,'' and ``small
governmental jurisdiction'' ( See U.S.C. 601(b)). 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'') (See 15
U.S.C. 632).
15. This NPRM proposes to eliminate the requirement to file paper
versions of ARMIS reports, to reduce the specific reporting
requirements on all incumbent LECs that file ARMIS reports, and to
further reduce the reporting requirements for certain mid-sized
incumbent LECs. 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.
16. 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 and eliminate the
subject paper filing requirement. These changes should be easy and
inexpensive for incumbent LECs to implement and will not require
[[Page 44224]]
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.
17. The Commission's Office of Public Affairs, Reference Operations
Division, will send a copy of this NPRM, including this initial
certification, to the Chief Counsel for Advocacy of the Small Business
Administration. (See 5 USC 605(b)).
Comment Filing Procedures
18. Interested parties may file comments no later than August 20,
1998 and reply comments may be filed no later than September 4, 1998.
All pleadings should reference CC Docket No. 98-117. A copy of each
pleading should be sent to Anthony Dale, Accounting Safeguards
Division, Common Carrier Bureau, FCC, 2000 L Street, Suite 201,
Washington, DC 20554, and another copy should be sent to International
Transcription Services (ITS), the Commission's duplicating contractor,
at its office at 1231 20th Street, NW, Washington, D.C. 20036, (202)
857-3800. All pleadings will be made available for public inspection
and copying in the Accounting Safeguards Division public reference
room, 2000 L Street, NW, Suite 812, Washington, DC 20554.
19. Comments and replies must also comply with Sec. 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 replies. In addition,
one copy of each pleading must be filed with International
Transcription Services (ITS), the Commission's duplicating contractor,
at its office at 1231 20th Street, NW, Washington, DC 20037, (202) 857-
3800. All pleadings are available for public inspection and copying in
the Accounting and Audits public reference room.
List of Subject in 47 CFR Part 43
Communications common carriers, Radio, Reporting and recordkeeping
requirements, Telegraph and Telephone.
Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 98-22162 Filed 8-17-98; 8:45 am]
BILLING CODE 6712-01-P
