#  July 9, 2004

TO: RUS Telecommunications Borrowers

RUS Broadband Borrowers

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height="0.4548611111111111in"}

FROM: KENNETH M. ACKERMAN

Assistant Administrator

Program Accounting and Regulatory Analysis

# 

#  SUBJECT: Supplemental Information for Broadband Providers

Attached is a draft of RUS Bulletin 1770B-1, Appendix A, Supplemental
Information for Use by Broadband Providers. This appendix provides an
overview of the Uniform System of Accounts required for all RUS
Telecommunications and Broadband borrowers along with items lists for
pertinent plant, revenue and expense accounts. This appendix will be
included in Bulletin 1770B-1 when it is reissued later this year.

If you have any questions, you may contact the Technical Accounting and
Auditing Staff at (202) 720-5227.

\###

**APPENDIX A**

**Supplemental Information for Use by Broadband Providers**

Accounting requirements for RUS Broadband Borrowers parallel the
accounting requirements for traditional telecommunications borrowers.
This Uniform System of Accounts, based on the Federal Communications
Commission's 47 CFR Part 32, Uniform System of Accounts, contains all of
the accounts needed to account for Broadband Operations. The general
instructions found in Subpart B are applicable to borrowers under the
RUS Broadband Program, regardless of whether they are traditional
telecommunications borrowers or borrowers for the purpose of providing
broadband services only. Broadband borrowers must understand that while
not every account shown in Bulletin 1770B-1 is necessary based on the
size and complexity of the company, the underlying account structure is
the same. Asset accounts, other than fixed assets, are numbered from
1130 to 1500. These accounts include both current and noncurrent assets.
Fixed assets, both tangible and intangible, which ordinarily have a
service life of more than one year, are found in Accounts 2001 through
2007, with the detailed Telecommunications Plant in Service balances
found in Accounts 2100 through 2690. Accounts 3100 through 3600 contain
Accumulated Depreciation and Amortization related to the fixed assets
found in Accounts 2100 through 2690 along with the Retirement work in
progress (RWIP). Accounts 4000 through 4199 contain Current Liability
balances while Accounts 4200 through 4299 include Long-Term Debt.
Accounts 4300 through 4399 are used to account for Other Long-Term
Liabilities and Deferred Credits. Stockholders' Equity balances are
found in Accounts 4500 through 4599. Operating revenue accounts are
found in Accounts 5000 through 5302. These accounts are intended to
record the results of the company's major or central operations during
the accounting period. These accounts contain both regulated and
non-regulated revenues. Accounts 6000 through 6790 shall be used to
record the expenses associated with the company's major or central
operations. Again, these accounts contain both regulated and
non-regulated expenses. Accounts 7000 through 7990 are designed to
reflect both operating and nonoperating income items include taxes,
extraordinary items and other income and expense items not associated
with the major or central operations.

Expenses within this system of accounts are accounted for on a
functional basis, that is, expenses are recorded based on the function
they support regardless of the type of expense. See Subpart E,
Instructions for Expense Accounts, for the detailed instructions for
classifying expenses. The expense accounts shall be maintained by
subsidiary record categories, as appropriate to each account. The
expense matrix is provided to allow a company to capture this
information for management purposes.

In addition to those items described in Bulletin 1770B-1, this Appendix
outlines those additional items to be included in these same accounts
for other telecom companies such as Internet Service Providers, Cable TV
companies, wireless companies, and any other type of entity providing
broadband services. This appendix is to be used in conjunction with 47
CFR Part 32, as supplemented by 7 CFR Part 1770, in setting up and
maintaining accounts of RUS telecom program borrowers.

32.2112, Motor Vehicles

Examples of items to be recorded in this account include:

Automobiles

Tractor Trailers

Trucks

Vans

Buses

32.2113, Special Purpose Vehicles

Examples of items to be recorded in this account include:

Boats and barges

Motor scooters

Snowmobiles

32.2114, Tools and other work equipment

Examples of items to be recorded in this account include:

Air compressors

Backhoes

Bulldozers

Cable lashers

Cable plows

Car hoists

Carts-cable splicers

Concrete mixers

Derricks

Duct rodders

Earth moving machines

Fork lifts

Garage jacks

Gasoline pumps

Heaters

Hydraulic lubricated equipment

Ladders

Lubricating racks

Machine tools

Metal bins

Oil pumps

Paint spraying equipment

Pole-treating apparatus - chemical

Portable motors

Portable test equipment

Power blowers, hammers, drills, loaders and winches

Power take-offs

Power tools

Pumps (except fuel and oil)

Storage tanks (e.g., fuel oil)

Tamping and back-filling machines

Tents -- cable splicers

Tire changers

Tire racks

Tool boxes

Torches

Tractors

Trailers, special purpose

Trenching machines

Welding equipment

Wheel alignment equipment

Work benches

32.2122, Furniture

Examples of items to be recorded in this account include:

Antiques

Artwork (Paintings, prints, photographs, sculptures, wall hangings,
tapestry, etc.)

Beds, cots & couches

Bookcases

Cabinets and filing cases

Chairs

Credenzas

Desks

Drapes, blinds, and shades

Lamps

Lockers and wardrobes -- movable

Modular furniture units

Partitions -- movable

Refrigerators

Rugs

Sofas

Tables

32.2123.1, Office Support Equipment

Examples of items to be recorded in this account include:

Addressing machines

Air conditioners -- portable

Audio/visual equipment

Billing/posting machines

# CAD systems

Calculators

Cameras

Check registers

Cash registers

Copy machines

Humidifiers/Dehumidifiers -- portable

Display and lecture demonstrating kits

Electric fans -- portable

Fire extinguishing equipment -- portable

Floor scrubbing and polishing machines

Medical equipment

Microfilm equipment

Postage meter machines

Radios and television sets

Typewriters

Vacuum cleaners

Vending machines

Water coolers -- portable

32.2123.2, Company Communications Equipment

Examples of items that can be recorded in this account are:

Data communications terminal equipment

Distributing frames

Fax Machines

Fiber optic distribution systems

Operators' headset and transmitters

Telephone sets

# Mobile phones

Private Branch exchange

Switching equipment at switching or relay centers of teletypewriter
systems

Teletypewriter systems

> \*Includes common equipment (power equipment, switching equipment,
> etc.), station equipment (usually telephones or key telephone
> systems), and wires connecting the common equipment and the station
> equipment plus the terminal boxes or cross connector points, and the
> cable or wires that connect that connect the private branch exchange
> with the network interface.

32.2124, General Purpose Computers

Examples of items that can be recorded in this account are:

Desktop and Laptop computers

Tape drives

Uninterrupted power supply

Printers

Optical scanners

Memory units

External drives

Modems

Monitors

Keyboards

Mouse

Microphones

Speakers

## RUS 2210.21, Central office switching -- digital

Examples of items to be recorded in this account are:

Digital central office switches

Remote switches

Next-generation switches including soft switches and IP switches

Mobile switching offices

Base station controllers

Asynchronous Transfer Mode switches

Automatic message recording equipment

Call store equipment

Central control and processing equipment including initial operating
system software for computers classified to this account

Controllers

Direct memory access units

Main distribution frames, arrestors, and protectors

Furniture designed specifically for equipment included in this account

Input/output devices including disk and tape drives, display and alarm
units

Plug-in units (line cards, circuit pack, line cards, etc.)

Trunks

Permits, privileges, and rights-of-way for installation of
externally-mounted central office equipment

Test equipment, hardwired or specifically designed and dedicated for use
with a particular major switching system or component

Power equipment (chargers, batteries, generators, etc)

Timing equipment

Automated Line Assignment equipment

RUS 2230.11, Central office transmission -- radio systems-satellite and
earth station facilities

Examples of equipment that can be recorded in this account are:

Antenna systems

Base band equipment

Converters

High power amplifiers

Low power amplifiers

Satellite receivers

Satellites

Satellite launch insurance premiums

Special cost incurred in procuring launch insurance

Transceivers

Transmitters

# Digital or analog video headend equipment

Test equipment hardwired or specifically designed and dedicated to be
used with a particular major operator system or component

## RUS 2230.12, Central office transmission -- radio systems -- other

Examples of equipment that can be recorded in this account are:

Base station equipment

Microwave equipment

Radio equipment that uses licensed or unlicensed frequencies

Antennae

Amplifiers

Combiners

Radio dispatch system with GPS

Radio frequency amplifiers

Receivers

Transmitters

Repeaters

Waveguides

Power equipment

Permits, privileges, and rights-of-way for installation of
externally-mounted radio facilities

Test equipment hardwired or specifically designed and dedicated to be
used with a particular major operator system or component

## RUS 2230.21, Central office transmission -- circuit equipment

Examples of equipment that can be recorded in this category are:

Digital line concentrators

Subscriber loop carrier equipment

Channel banks

Cabinets

Digital access cross-connect system

Channel bank equipment

SS7 signaling equipment

Signal Transfer points

Signal Control points

Signal processors and distributors

Analog to digital converters

Echo cancellers

Echo suppressors

Equalizers

Optical transmission equipment

Optical splitter and couplers

Digital subscriber line (DSL) cards

Line repeaters

Regeneration equipment

Multiplexing equipment including Digital Subscriber Line Access
Multiplexers

Range or loop extenders

T1 transmission equipment

Gigabit Ethernet transmission equipment

Power equipment including chargers, batteries, etc

Voice grade amplifiers

32.2311, Station Apparatus

Examples of equipment that can be recorded in this category are:

DSL, cable and wireless modems

Video set-top boxes

32.2362, Other terminal equipment

Examples of equipment that can be recorded in this category are:

Routers

Optical line terminators

Optical/coaxial network units placed on the subscriber's premises

ADSL and VDSL gateways

Cable modem termination system

Middleware

32.2411, Poles

Examples of equipment that can be recorded in this category are:

A and H fixtures

Anchors

Arms -- cable, extension, guard and crossarms

Auxiliary framework for towers

Bolts, braces, and brackets

Guy clamps, shields, wire or strand

Path surveys

Bridge fixtures

Permits, privileges, and rights-of-way for construction

Pins

Pole and pole steps

Strain insulators

Stubs -- guy or pole

Supports -- radio antennae, such as wood poles or wood pole towers

Treating and marking poles

Towers -- aluminum, wood, or steel; guyed or free standing

# 5000, Local Network Service Revenues

Examples of revenues that can be recorded in this account include:

Dial-Up Internet Service Revenue

Voice-Over-IP Revenue

xDSL Service Revenue \*\*

Cable Modem Service Revenue

Cable TV Service Revenue

Wireless Internet Service Revenue

Customer Premise Equipment (CPE) Leasing Revenue

Any Other Internet/Data/Phone/TV Service Revenue

> \*\*xDSL Revenue will only be included in this category for those
> entities who do not choose to participate in the NECA tariff for this
> service. Those entities who offer xDSL at NECA's tariffed rates will
> account for this revenue under Account 32.5081, End User Revenue,
> under Network Access Service Revenues.

5081, End User Revenue

Examples of revenues that can be recorded in this account include:

xDSL Service Revenue (If company participates in NECA tariff for this
service)

5200, Miscellaneous Revenues

Examples of revenues that can be recorded in this account include:

Fiber Leasing Revenue

Leasing of Local Loops Revenue (CLEC/UNE-P/Resale)

Installation Revenue

Equipment Sales Revenue

Software Sales Revenue

Miscellaneous Sales Revenue

Network Revenue

Mobile Radio Revenue

Educational/Training/Help Desk Revenue

Internet Solutions Revenue (Web Hosting, Email Accounts, Graphic Design,
etc.)

Interactive Television (ITV) Revenue

Consulting Services Revenue

Repair Services Revenue

Other Miscellaneous Revenue

Any Other Revenue Source Not Regulated by Other Accounts or Listed in
the Other Accounts

6121, Land and building expense

Examples of expenses that can be recorded in this account include:

Tower lease payments if included as a part of a building

6231, Radio systems expense

Examples of expenses that can be recorded in this account include:

Expenses related to transmitters and receivers in the provision of
wireless broadband service, both long haul and local transmission.

6411, Poles expense

Examples of expenses that can be recorded in this account include:

Tower lease payments

6540, Access expense

Examples of expenses that can be recorded in this account include:

T-1 access costs

Back haul/transport costs

Video programming expenses