01-5489. 1998 Biennial Regulatory Review-Review of Depreciation Requirements for Incumbent Local Exchange Carriers

AGENCY:

Federal Communications Commission.

ACTION:

Proposed rule; denial.

SUMMARY:

In this document the Commission denied US West, Inc. (now Qwest) petition for reconsideration of our December 30, 1999 Depreciation Order. The US West, Inc. petition sought reconsideration of: our denial of United States Telephone Association petition for forbearance; the methodology for certain equipment life ranges, and the accounting treatment in waiver situation. The Commission concluded that US West, Inc had not provided any new information or arguments that required us to alter our prior rulings.

ADDRESSES:

Office of the Secretary, Federal Communications Commission, 445-12th Street, SW, TW-A325, Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT:

JoAnn Lucanik, Accounting Safeguards Division, Common Carrier Bureau, at [phone].

SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's Order on Reconsideration adopted February 21, 2001, and released February 26, 2001. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC Reference Center (Room CY-A257), 445 12th Street, SW, Washington, DC 20554. The complete text may also be purchased from the Commission's copy contractor, International Transcription Service, Inc., 1231 20th Street, Washington, DC 20036, telephone [phone].

Summary of Order on Reconsideration

In this order, we deny a petition for reconsideration filed on May 10, 2000, by US West, Inc. (now Qwest) of our December 30, 1999 Order (Depreciation Order) (which was not published in the Federal Register). In the Depreciation Order, which was part of our 1998 Biennial Regulatory Review proceeding, we undertook an extensive review of our depreciation requirements for price cap incumbent local exchange carriers (ILECs). Although we denied a petition filed by the United States Telecom Association (USTA) to forbear from imposing depreciation requirements on price cap ILECs, we significantly streamlined our depreciation requirements, and set out specific conditions under which ILECs could seek waiver of these requirements.

In a subsequent order, released on November 7, 2000, 66 FR 9681 (February 9, 2001), we reviewed an alternative proposal for relieving carriers of our depreciation requirements. We concluded that the alternative proposal to permit an above-the-line accounting treatment of the financial-to-regulatory book differential in lieu of a below-the-line accounting treatment lacked the inherent protections provided for in the waiver process adopted in the Depreciation Order. Thus, we declined to relieve carriers of our depreciation requirements in circumstances where they elected above-the-line treatment.

In its petition for reconsideration, Qwest requests (1) that we reconsider our denial of USTA's petition for forbearance of our depreciation requirements; (2) that if USTA's petition is not granted, we reconsider our methodology for establishing service life ranges for telecommunications plant equipment; and (3) that for purposes of seeking a waiver of the depreciation requirements, we permit an above-the-line accounting treatment of the differential between regulatory and financial book reserve levels.

After review of the arguments presented on reconsideration, we conclude that Qwest has not provided any new information or arguments that require us to alter our prior rulings. The precise issues and arguments that Qwest raises on reconsideration were thoroughly considered and examined in the previous proceeding. Our analysis and reasons for our rulings are fully stated in the Depreciation Order, and the November 2000 Order further underscores the appropriateness of the decision to deny reconsideration.

Accordingly, pursuant to sections 4, 201-205, 218-220, 303(r), and 405 of the Communications Act of 1934, as amended, 47 U.S.C. 154, 201-205, 218-220, 303(r), and 405 of the Communications Act of 1934, as amended, and §§ 1.106 and 1.429 of the Commission's rules, 47 CFR 1.106, 1.429, that the petition for reconsideration filed May 10, 2000, by US West, Inc. (now Qwest) is denied.

Federal Communications Commission.

Magalie Roman Salas,

Secretary.