**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the matter of                 | *  | WC Docket No. 02-319         |
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| Ameritech Operating Companies    | ** |                              |
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| Tariff FCC No. 2                 | *  |                              |
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| Transmittal No. 1312             | ** |                              |
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| Nevada Bell Telephone Companies  | *  |                              |
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| Tariff FCC No. 1                 | ** |                              |
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| Transmittal No. 20               | *  |                              |
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| Pacific Bell Telephone Company   | ** |                              |
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| FCC Tariff No. 1                 | *  |                              |
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| Transmittal No. 77               | ** |                              |
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| Southern New England Telephone   | *  |                              |
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| Tariff FCC No. 39                |    |                              |
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| Transmittal No. 772              | *) |                              |
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| Southwestern Bell Telephone      |    |                              |
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| FCC Tariff No. 73                | ** |                              |
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| Transmittal No. 2906             | *  |                              |
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+----------------------------------+----+------------------------------+

**ORDER**

**Adopted: October 10, 2002 Released: October 10, 2002**

**Direct Case Due by:** October 31, 2002

**Oppositions to Direct Case Due by:** November 14, 2002

**Rebuttal Due by:** November 21, 2002

By the Chief, Pricing Policy Division:

# Introduction

1.  In this order, we designate for investigation, pursuant to sections
    204 and 205 of the Communications Act of 1934, as amended (the
    Act),[^1] certain issues regarding the rates, terms, and conditions
    in tariff Transmittal Nos. 1312, 20, 77, 772, and 2906 that the
    Ameritech Operating Companies (Ameritech), the Nevada Bell Telephone
    Companies (Nevada Bell), the Pacific Bell Telephone Company (Pacific
    Bell), the Southern New England Telephone Companies (SNET), and the
    Southwestern Bell Telephone Company (SWBT) filed, respectively, to
    become effective August 17, 2002.[^2] We suspended Transmittal Nos.
    1312, 20, 77, 772, and 2906 for five months on August 16, 2002, and
    initiated this investigation.[^3] As discussed below, we designate
    issues relating to deposit provisions of Ameritech, Nevada Bell,
    Pacific Bell, SNET, and SWBT[^4] contained in tariff Transmittal
    Nos. 1312, 20, 77, 772, and 2906 for investigation to ensure that
    the proposed tariff provisions are not unjust, unreasonable, or
    unreasonably discriminatory in violation of sections 201 and 202 of
    the Act.[^5]

# Background 

2.  A brief overview of the Commission's policies concerning security
    deposits and treatment of uncollectibles would be useful to the
    discussion of the issues presented by the present tariff revisions.
    Existing incumbent local exchange carrier (LEC) interstate access
    tariffs contain protections for uncollectibles. In 1984, the
    Commission rejected incumbent LECs' proposed security deposit tariff
    language and instead permitted dominant LECs to require security
    deposits from: (1) those carriers that have a proven history of late
    payments to the LEC; and (2) those carriers that have no established
    credit.[^6] These provisions since have become a standard term in
    interstate access tariffs.[^7] In 1987, the Commission addressed a
    BellSouth proposal to reduce the notice it must give to terminate
    service for nonpayment to 15 days from 30 days. The Commission
    allowed a 15-day notice period only if the customer received its
    bill within three days after the billing date.[^8]

3.  The Commission's ratemaking policies for incumbent LECs also account
    for interstate uncollectibles and provide for their recovery through
    interstate access charges. As a price cap carrier, SBC's rates at
    the time it entered price caps included a factor reflecting
    wholesale uncollectibles.[^9] Under price caps, the permitted price
    indexes are annually adjusted for changes in general economic
    conditions as reflected in the GDP-PI inflation index.[^10] Price
    cap carriers experiencing a rise in uncollectibles resulting in
    interstate rates of return below 10.25% may, if eligible, seek a
    low-end adjustment, permitting the carrier to target a 10.25% rate
    of return.[^11] Price cap carriers that are not eligible for a
    low-end adjustment because they have exercised pricing flexibility
    retain the right to demonstrate that earnings are low enough to
    warrant an above cap filing, or to seek an exogenous cost change,
    either of which would allow them to charge rates that exceed the
    current price caps.[^12]

4.  SBC's existing interstate access tariffs vary from one another with
    respect to deposit provisions and remedies for non-payment,[^13]
    but, by way of example, the existing Ameritech tariff requires a
    deposit from a customer who "has a proven history of late payments"
    or who "does not have established credit."[^14] The existing
    Ameritech tariff further states that "\[s\]uch a deposit will be
    refunded or credited . . . when the customer has established credit
    or after the customer has established a one-year prompt payment
    record at any time prior to the termination of the provision of
    service to the customer."[^15] This tariff also states that if a
    customer fails to pay its bills on time, Ameritech may refuse to
    process new orders or complete any pending orders 30 days after the
    customer receives a written notice.[^16]

5.  The proposed tariff revisions in Transmittal Nos. 1312, 20, 77, 772,
    and 2906 would revise the existing deposit provisions and make them
    identical across all the five tariff-filing entities subject to this
    proceeding. The proposed revisions include three separate criteria
    for imposition of a deposit: (1) a history of late payments, (2) no
    demonstration of established credit, and (3) an impairment of credit
    worthiness.[^17] The proposed revisions state that "\[a\] history of
    late payments exists if the customer has failed to pay two monthly
    bills by the bill due date within a 12-month period of time."[^18]
    These revisions further state that "\[e\]stablished credit means the
    customer has a one-year prompt payment record with another
    entity."[^19] Under the proposed revisions, an impairment of credit
    worthiness would be present in any of the following situations: (1)
    if any debt securities of a customer or its parent are below
    investment grade, as defined by the Securities and Exchange
    Commission; (2) if any debt securities of a customer or its parent
    are rated the lowest investment grade by a nationally recognized
    credit rating organization and are put on review by the rating
    organization for a possible downgrade; (3) if the customer does not
    have outstanding securities rated by credit rating agencies, e.g.,
    Standard and Poor's, and the customer is rated (a) "fair" or below
    in a composite credit appraisal published by Dun and Bradstreet,
    or (b) "high risk" in Paydex score as published by Dun and
    Bradstreet; (4) if the customer or its parent informs SBC or
    publicly states that it is unable to pay its debts; or (5) if the
    customer or its parent has commenced a voluntary receivership or
    bankruptcy proceedings or had one initiated against it.[^20] SBC may
    seek a deposit or prepayment from a customer with impaired credit
    worthiness only if the customer's most recent interstate access
    bills from "the SBC Telephone Companies" total (including any
    outstanding balances) \$1 million dollars or more.[^21]

6.  Under the proposed tariff provisions, SBC has discretion to require
    a two-month deposit from a customer with a history of late payments
    or no established credit.[^22] The two-month deposit is based on the
    total charges billed and rendered by SBC for the most recent two
    months of service, and, if the customer has not received two months
    of service, it will be based on charges estimated by SBC for the
    initial two-month period.[^23] SBC has discretion to require a
    one-month deposit based on the total charges billed and rendered by
    it for the most recent month of service from a customer with
    impaired credit worthiness.[^24] If the customer so chooses, the
    customer may, in lieu of the one-month deposit, provide a prepayment
    for one-month's service based on the total charges billed and
    rendered for the most recent month of service.[^25] If a customer
    with impaired credit worthiness also meets one of the other
    criteria, i.e., history of late payments or no established credit,
    the customer must pay SBC a two-month deposit.[^26]

7.  The proposed tariff provisions also shorten the notice period for
    refusal or discontinuance of service. Ameritech, for example, would
    shorten the notice period from 30 days to 15 days or 10days after
    which it would refuse to process new orders, including Primary
    Interexchange Carrier (PIC) change orders from end users, or would
    discontinue service if a customer fails to pay its bills on
    time.[^27] Similarly, if a customer fails to pay a deposit or
    prepayment within 21 days of the date the notice is sent, SBC may
    refuse to process orders or may terminate service 11 days after the
    original deposit or prepayment due date.[^28]

8.  As justification for these revisions, SBC states that it has
    participated in 53 bankruptcies in the past two years.[^29] SBC
    estimates that WorldCom owes it more than \$300 million, "most of
    which . . . could be lost in bankruptcy proceedings."[^30]

9.  On August 9, 2002, AT&T Corp. (AT&T); WorldCom, Inc. (WorldCom); and
    counsel for the Association for Local Telecommunications Services
    (ALTS), the Competitive Telecommunications Association (CompTel),
    Grande Communications Networks, Inc., Ionex Telecommunications,
    Inc., KMC Telecom Holdings, Inc., NuVox, Inc., Sage Telecom, Inc.,
    Talk America, Inc., and XO Communications, Inc.; and counsel for the
    Association of Communications Enterprises (ASCENT), ATX
    Communications, Inc., Focal Communication Corp., Level 3
    Communications, LLC, Pac-West Telecomm, Inc., US LEC Corp., and U.S.
    TelePacific Corp. filed petitions to reject, or, in the alternative,
    to suspend and investigate all the SBC tariffs.[^31] Sprint
    Corporation (Sprint) filed a petition to reject, or, in the
    alternative, to suspend and investigate the Ameritech, Pacific Bell,
    SNET, and SWBT tariffs.[^32] MPower Communications Corp. (MPower)
    filed a petition to reject, or, in the alternative, to suspend and
    investigate the Ameritech, Pacific Bell, and SWBT tariffs.[^33]
    Nextel Communications, Inc. (Nextel) filed a petition to reject, or,
    in the alternative, to suspend and investigate the SWBT tariff.[^34]
    On August 16, 2002, SBC Communications filed its reply on behalf of
    Ameritech, Nevada Bell, Pacific Bell, SNET, and SWBT.[^35]

# issues designated for investigation 

## Basis for Requiring a Deposit from a Customer 

### Background

10. Under the proposed tariff provisions, SBC would have discretion to
    require a two-month deposit from a customer with a history of late
    payments or no established credit.[^36] The two-month deposit is
    based on the total charges billed and rendered by SBC for the most
    recent two months of service, and if the customer has not received
    two months of service, it will be based on charges estimated by SBC
    for the initial two-month period.[^37] SBC has discretion to require
    a one-month deposit based on the total charges billed and rendered
    by it for the most recent month of service from a customer with
    impaired credit worthiness.[^38] If the customer so chooses, the
    customer may, in lieu of the one-month deposit, provide a prepayment
    for one-month's service based on the total charges billed and
    rendered for the most recent month of service.[^39] If a customer
    with impaired credit worthiness also meets one of the other
    criteria, i.e., history of late payments or no established credit,
    the customer must pay SBC a two-month deposit.[^40]

11. "Impaired credit worthiness" is defined as meeting any one of the
    following criteria: (1) if any debt securities of a customer or its
    parent are below investment grade, as defined by the Securities and
    Exchange Commission; (2) if any debt securities of a customer or its
    parent are rated the lowest investment grade by a nationally
    recognized credit rating organization and are put on review by the
    rating organization for a possible downgrade; (3) if the customer
    does not have outstanding securities rated by credit rating
    agencies, e.g., Standard and Poor's, and the customer is rated (a)
    "fair" or below in a composite credit appraisal published by Dun and
    Bradstreet, or (b) "high risk" in Paydex score as published by Dun
    and Bradstreet; (4) if the customer or its parent informs SBC or
    publicly states that it is unable to pay its debts; or (5) if the
    customer or its parent has commenced a voluntary receivership or
    bankruptcy proceedings or had one initiated against it.[^41] SBC may
    require a deposit or prepayment from a customer with impaired credit
    worthiness "only if the customer's most recent interstate access
    bills from the SBC Telephone Companies total (including any
    outstanding balances) \$1 million dollars or more."[^42] A "history
    of late payment exists if the customer has failed to pay two monthly
    bills by the bill due date within a 12-month period of time."[^43]
    Further, SBC's revisions change the method used to determine the
    interest rate on deposits to the rate of the most current one-year
    Treasury Bill.[^44] SBC will pay interest only on deposits, not
    prepayments.[^45]

12. Several carriers petitioned against the SBC Transmittal Nos. 1312,
    20, 77, 772, and 2906.[^46] These parties allege that the tariff
    revisions: (1) are unjust, unreasonable, and discriminatory in
    violation of sections 201(b) and 202(a) of the Act,[^47] and (2) are
    vague and ambiguous in violation of sections 61.2 and 61.54 of the
    Commission's rules.[^48] In addition, ALTS, ASCENT, and WorldCom
    argue that the \$1 million dollar threshold is unjust and
    unreasonably discriminatory.[^49] ALTS, ASCENT, Nextel, Sprint, and
    WorldCom assert that an entity's credit standing in the investment
    community has no direct bearing on its ability to pay its bills on a
    timely basis.[^50] ALTS also asserts that the interest paid on
    deposits is insufficient.[^51] AT&T argues that the tariff
    revisions, which trigger a deposit or advance payment from any
    customer that has any debt securities that are either rated "below
    investment grade" or are rated "at the lowest investment grade by a
    nationally recognized statistical rating organization and are put on
    review by the rating organization for a possible downgrade," are
    overbroad.[^52] AT&T also argues that the SBC definition of "history
    of late payment," which is a failure "to pay any two monthly bills
    by the due date within a 12 month period of time," is overbroad, and
    fails to comply with the existing prescription that limits deposits
    to carriers with a "proven history" of non-payment.[^53]

13. In addition, several petitioners assert that requiring a deposit or
    prepayment from a customer that has "commenced a voluntary
    receivership or bankruptcy proceeding (or had a receivership or
    bankruptcy proceeding initiated against it)"[^54] conflicts with the
    U.S. Bankruptcy Code provisions[^55] and bankruptcy court
    precedent.[^56] WorldCom asserts that the bankruptcy court has
    exclusive responsibility to determine the "adequate assurance" of
    payment to utilities to preclude termination of service for
    non-payment of certain utility bills.[^57]

### Discussion

14. The initial issue designated for investigation is whether the
    revised deposit provisions applicable to interstate access customers
    are reasonable and not so vague as to permit SBC to discriminate
    unreasonably among its interstate access customers, whether they be
    interexchange carriers, competitive LECs, or business end-user
    subscribers. The interstate access market has two distinct
    characteristics \-- SBC must provide access services to IXCs and
    competitive LECs requesting such service, and those carriers must
    use SBC's access services to originate or terminate many of their
    interstate calls. The proposed revisions to the deposit terms
    significantly alter the balance between SBC and its interstate
    access customers with respect to the risks of nonpayment of
    interstate access bills that was struck in the early 1980s when
    access charges were instituted. The revisions raise the question
    whether circumstances have changed so as to warrant the imposition
    of additional deposits. The tariffs also raise concerns about
    whether the tariff language clearly and unambiguously sets forth a
    standard that can be objectively administered in a nondiscriminatory
    manner. We therefore direct SBC to respond to the matters discussed
    below and provide the requested information in its direct case.
    Nonetheless, SBC may, as part of its direct case, seek to justify
    its expansion of the instances in which deposits may be required of
    interstate access customers.

15. As part of its direct case, SBC[^58] shall explain why it believes
    its rates under price caps do not adequately compensate it for the
    risk of uncollectibles. SBC's rates include a revenue requirement
    component for uncollectible debts that is based on the amount of
    uncollectibles permitted as an interstate revenue requirement at the
    time SBC became subject to price cap regulation. SBC is directed to
    submit the level of uncollectible debts from interstate access
    services for the years 1990 to the present and indicate the level of
    uncollectibles that was included in its initial price cap rates. It
    shall then address whether the variation in uncollectible levels for
    2000 and 2001 is merely a normal fluctuation in uncollectibles,
    which would be covered by the business risks anticipated to be
    endogenous to price caps, or whether it reflects some long term
    trend that warrants expanded deposits from customers meeting SBC's
    proposed standards. SBC shall provide the Commission with the total
    amount uncollected by year from January 2000 to July 31, 2002. SBC
    shall also provide the totals of each of the individual defaults
    grouped into the following ranges: less than \$250,000;
    \$250,001-\$500,000; \$500,001-\$1,000,000; \$1,000,000-\$5,000,000;
    and more than \$5,000,000. For each range, SBC shall indicate the
    number of defaulting entities. SBC shall also indicate the total
    dollar amount of deposits it holds that are attributable to
    interstate access services and the percentage relationship of that
    amount to average monthly interstate access billings. The changes in
    the deposit provisions of SBC's interstate access tariffs would
    increase customer-supplied funding as well as reduce SBC's exposure
    to defaults. SBC should accordingly address what modifications
    should be made to its price cap indexes and service band indexes to
    account for these changes to the capital and risk parameters of
    price caps.

16. To assist the Commission in understanding the increase in the level
    of uncollectibles, SBC should describe its billing and collection
    procedures and explain any changes in its billing and collection
    procedures or the accounting treatment of disputed amounts on bills
    within the past two years that could have affected the levels of
    uncollectibles. SBC shall indicate the average length of time from
    the bill date until the bill is sent to the carrier customer and
    what percentage of those bills, by number of entities and by billed
    amount, is sent electronically. In addition, SBC shall provide the
    Commission with the number of customers that have been sent
    non-payment, discontinuance of service, or refusal of new orders
    letters in the past year and the average length of time from a
    bill's being delinquent until the letter was sent. To provide
    information on possible changes in customer behavior, SBC shall
    provide the Commission with the percent of carrier bills disputed,
    the percent of carrier-billed revenues disputed, and the percentage
    of the disputed amounts that were successfully disputed by the
    carrier for billing periods beginning with January 2000 to the
    present. SBC should also indicate if it deducts disputed amounts
    from amounts billed for purposes of determining whether a carrier
    has complied with a deadline.

17. SBC shall indicate which services in its interstate access tariff,
    including the subscriber line charge and other common line services,
    are billed in advance and those that are billed in arrears. It shall
    indicate the percentage of interstate billings that are billed in
    advance, how this level has changed over the past five years, and
    how this change has affected the risk SBC faces. In this connection,
    SBC should discuss whether different deposit provisions should apply
    depending upon whether the service is billed in advance or billed in
    arrears. SBC shall also discuss the extent to which it has a debtor
    relationship with its customers and how that may affect SBC's credit
    risk. SBC has multiple business relationships with many of its
    access customers. For example, an IXC could also be a CLEC and bill
    SBC for reciprocal compensation. By year for the period January 2000
    to July 31, 2002, SBC should indicate the total amount as well as
    the net amount owed it by customers it identified as defaulting on
    access charge payments.

18. SBC should indicate the amount of unpaid bills of defaulting
    customers that have gone into bankruptcy since January 2000 and the
    percentage of that amount that it has recovered through bankruptcy
    proceedings. SBC should address whether its proposed tariff
    revisions requiring a deposit or prepayment are consistent with the
    U.S. Bankruptcy Code and precedents, given that bankruptcy law
    contains provisions addressing payment to utilities by debtors.[^59]

19. If SBC believes that the risk of uncollectible debts has increased
    permanently, it should explain what accounts for this change,
    *e.g.*, the general economic climate or some structural change in
    the market. If the change is a structural one, are there methods
    other than the SBC proposal that would adequately address this
    additional risk, *e.g.*, is there a subset of carriers that can be
    identified that is the major cause of the increased risk? SBC's
    tariff revisions expanding the applicability of deposits would
    impose additional costs on carriers that are also SBC's competitors
    at a time when access to capital markets is extremely limited. This
    could adversely affect the competitiveness of telecommunications
    markets. Thus, if some measures are necessary, an approach that has
    the fewest adverse effects on the competitive market while
    protecting SBC's interests would be preferred. One alternative would
    be to phase in deposit requirements over several months after a
    trigger had been reached. SBC should comment on the efficacy of this
    alternative and how it might reduce SBC's risk.

20. SBC's proposed tariff revisions define "impaired credit worthiness"
    as meeting one of the five criteria mentioned above.[^60] SBC would
    require deposits or prepayments from customers with impaired credit
    worthiness only if their most recent interstate access bills from
    "the SBC Telephone Companies" total \$1 million or more.[^61] SBC
    has not shown that these criteria are valid predictors of the
    likelihood of a customer paying its access bill, or that they are
    better predictors of whether a customer will pay its bills in the
    future than the customer's past payment history. As part of its
    direct case, SBC shall explain how each of these criteria is a valid
    predictor of whether the customer will pay its interstate access
    bill. SBC shall also explain how such data can be applied in a
    manner that will not produce arbitrary and/or discriminatory
    results. This is especially important because in most cases the
    entity upon which SBC would impose the deposit would also be a
    competitor of SBC, or of its long-distance and advance services
    affiliates. In this connection, SBC shall provide the Commission
    with information concerning the deposits that it has required of its
    affiliates. SBC shall also indicate whether any of its affiliates
    has "impaired credit worthiness" according to the five criteria,
    and, if so, what actions SBC would take in response to that
    classification. We note that most of these criteria relate to
    ratings for businesses. SBC should discuss its intentions, if any,
    with respect to residential end user customers. In addition, SBC
    should indicate, for each month from January 2001 to present, what
    percentage of its interstate access customers had bills from "the
    SBC Telephone Companies" totaling \$1 million or more and what
    percentage of SBC's interstate revenues are attributable to these
    customers. SBC should also explain how the \$1 million threshold is
    consistent with section 202(a) of the Act.[^62]

21. The proposed tariff revisions would define a history of late
    payments as a failure to pay two monthly bills by the bill due date
    within a 12-month period of time. SBC should explain how this
    requirement is indicative of a "proven history of late payments."
    SBC should explain how it will implement this provision. How are
    disputed amounts treated for this purpose? SBC should explain why it
    removed from its tariffs the provision that stated that no deposit
    will be required of a customer which is a successor of a company
    which has established credit and has no history of late payments.

22. The proposed tariff revisions state that deposits and prepayments
    will be based on "total charges billed and rendered" by SBC.[^63]
    SBC shall explain what it means by "total charges" and whether this
    term includes charges for disputed amounts or services not purchased
    out its interstate access tariffs (e.g., intrastate services). SBC
    shall also explain what it means by the term "the SBC Telephone
    Companies."[^64]

23. The proposed tariffs would revise the methodology used to calculate
    the interest on customer deposits.[^65] The tariffs currently apply
    the same methodology to calculating interest on deposits as that
    applied to calculating interest for late payment penalties. In
    reviewing the initial access tariffs, and, in particular, the
    interest paid on deposits, the Commission questioned the difference
    in interest paid on deposits and the interest penalty collected by a
    telephone company on late payments.[^66] The Commission stated that
    it could find no justification for the difference and concluded that
    fairness dictated an evenhanded approach to interest paid and
    collected.[^67] Finally, the Commission stated that any differences
    must be justified or eliminated.[^68] SBC should provide
    justification for the different interest amount proposed here.

24. The SBC tariff revisions propose to allow prepayment for services
    under certain circumstances. The tariffs define prepayment as an
    advance payment for future services payable in cash only, and state
    that SBC may seek a deposit or prepayment from a customer with
    impaired credit worthiness.[^69] The customer may choose to provide
    a prepayment for one month's services in lieu of a one month
    deposit.[^70] When the customer demonstrates that its credit
    worthiness is no longer impaired, SBC will apply the prepayment
    amount to the next month's billing or, if the customer has
    terminated service, to the bill for the last month of service.[^71]
    There is no true-up procedure and prepayments will not accrue
    interest.[^72] SBC should explain why prepayments should not be
    based on a rolling average of the previous month's billing. SBC
    shall also explain how it intends to apply the prepayment provisions
    in a nondiscriminatory manner.

25. SBC shall provide, for the period January 2000 to present, the
    Commission with data on the payment characteristics of defaulting
    interstate access customers during the year prior to the time the
    account was 90 days overdue. SBC shall present the data in terms
    that will permit the Commission to identify patterns that may exist
    in a customer's payment practices prior to default that may permit
    alternatives to deposits to be identified and evaluated.

26. We ask SBC to provide data, to the extent available, on the level of
    uncollectibles of other regulated utilities, or in the broader
    marketplace. It should also discuss the means those businesses use
    to address the risks of default, especially how they manage bad
    credit risks while continuing to provide goods or services to the
    customer.

## Shortened Notice Period and Bill Payment Interval

### Background

27. SBC's tariff revisions provide that, if a customer fails to pay its
    bills on time, SBC may refuse to process new orders, including
    Primary Interexchange Carrier (PIC) change orders from end users, or
    may discontinue service on 15 days' or 10 days' notice.[^73]
    Similarly, if a customer fails to pay a required deposit within 21
    days, SBC may refuse to process orders or may terminate service
    beginning 11 days after the original deposit or prepayment due
    date.[^74] The proposed tariff revisions also shorten the bill
    payment interval from 30 days to 21 days for customers with impaired
    credit worthiness.[^75] Several petitioners argue that SBC's
    proposals to reduce the interval from 30 days from the bill date to
    21 days from the day the bill is sent or posted electronically, and
    to reduce the notice period to terminate service are unjust and
    unreasonable.[^76] ASCENT and Sprint argue that 21 days is
    inadequate because it is insufficient time to evaluate the accuracy
    of the charges.[^77]

### Discussion

28. The second issue designated for investigation is whether SBC's
    proposals to reduce from 30 days to 10-15 days the notice required
    before termination of service may occur and to require a 21-day bill
    payment interval for certain customers are just and reasonable. We
    direct SBC to respond to the matters discussed below and provide the
    requested information in its direct case. Nonetheless, SBC may, as
    part of its direct case, seek to justify the reduced notice
    provisions in its proposed tariff revision.

29. As part of its direct case, SBC shall explain why it believes that
    the deposit and prepayment provisions it proposes are inadequate and
    why it needs shortened notice periods as well. SBC shall explain why
    a 21-day deadline for payment of bills is (1) necessary to protect
    its interests and (2) adequate to allow a customer to evaluate, and
    dispute if necessary, the accuracy of the charges. SBC shall explain
    why a 21-day deadline for payment of deposits (or prepayment) is (1)
    necessary to protect its interests and (2) adequate to allow a
    customer to assess SBC's determination that a deposit is required,
    dispute that determination, and raise the necessary funds. SBC shall
    also submit information for the most recent twelve months as to the
    timeliness of its billings. In this connection, it shall state the
    billing date, the delivery date (indicating whether it was by mail
    or electronically), and the due date for each billing cycle. It
    shall also discuss the appropriateness of prescribing the time
    within which a bill must be presented to the customer if a shortened
    notice period were to be allowed, in order to permit the customer
    sufficient time to review the bill and pursue its dispute rights
    under the tariff. In particular, SBC should address whether it could
    meet the three-day requirement the Commission adopted in 1987.[^78]

## Refund of Deposits 

### Background

30. The revisions also state that, in the event a customer with a
    history of late payments and impaired credit worthiness establishes
    a prompt payment record but continues to have impaired credit
    worthiness, SBC will, within 21 days after the customer establishes
    a prompt payment history, return an amount equal to one-month of the
    two-month deposit, plus half of any uncredited interest on the
    two-month deposit.[^79] If the deposit is triggered by one of the
    five criteria for impaired credit worthiness, the cash deposit, plus
    any uncredited interest, will be returned within 21 days after the
    customer demonstrates to SBC that its credit worthiness is no longer
    impaired.[^80] Similarly, a customer who elects prepayments in lieu
    of one-month deposit will continue its prepayments until it
    demonstrates that its credit worthiness is no longer impaired.[^81]

### Discussion

31. The third issue designated for investigation is the reasonableness
    of the deposit refund provision. The refund provision requires a
    customer's demonstration that its credit worthiness is no longer
    impaired. Because some of the impaired credit worthiness triggers
    may remain outside of customers' control and persist over an
    uncertain period of time, SBC should explain why it should not
    include provisions that provide it will periodically review the need
    for a deposit or prepayment. SBC should also explain why it should
    not make refunds after timely payments have been received for twelve
    months. Further, SBC should explain why its proposal to retain half
    of the interest accrued on two-months deposit is necessary to
    protect its interest in the event a customer with a history of late
    payments and impaired credit worthiness establishes a prompt payment
    record but continues to have impaired credit worthiness.

## Application of Revised Deposit Requirements to Term Plan Customers

### Background

32. Certain petitioners assert that SBC has not demonstrated substantial
    cause for a material change in a provision of a term plan, citing
    *RCA Communications, Inc.*[^82] For example, WorldCom states that
    the revisions fail the substantial cause test, under which the
    Commission measures the reasonableness of a tariff modification
    during a term plan by weighing two principal considerations: the
    carrier's explanation of the factors necessitating the desired
    changes at that particular time; and the position of the relying
    customer.[^83] WorldCom asserts that SBC has not shown that it has
    experienced any material change in its business circumstances, much
    less a change that would constitute an injury to SBC that would
    outweigh the existing customers' legitimate expectations of
    stability.[^84] Moreover, WorldCom states that the increase in
    uncollectibles is merely the normal effect of the business cycle,
    constituting only 0.5 percent of SBC's interstate revenues, and with
    only a negligible effect on SBC's financial performance, which
    produced an interstate return of 22.4 percent in 2001.[^85]

### Discussion

33. The fourth issue designated for investigation is whether the
    imposition of revised deposit provisions constitutes a material
    change to SBC's term contracts, and, if so, whether it is reasonable
    for SBC to apply the revised deposit provisions to term plans. If a
    carrier would have to provide a new or increased deposit to SBC, its
    operating capital would be significantly reduced. This could affect
    other capital or loan commitments it had, potentially causing the
    carrier to need to restructure or terminate some services that would
    then trigger a termination penalty. This would be a serious
    destabilizing event in the competitive marketplace. We direct SBC to
    respond to the matters discussed below and provide the requested
    information in its direct case. Nonetheless, SBC may, as part of its
    direct case, seek to justify applying the revised deposit provisions
    to term plans.

34. SBC shall explain in its direct case the reasons increased deposits
    should be required of customers with existing term plans and how
    that is consistent with the Commission's decision in *RCA
    Communications, Inc.* This could have significant financial and
    competitive consequences for existing term plan customers that, in
    most cases, would also be competitors of SBC. SBC shall provide the
    Commission with data on the share of interstate access revenues that
    are received from services subject to term plans and, of that
    amount, what portion is attributable to services that are paid in
    advance. If the majority of term plans require prepayment, the risk
    to SBC would appear to be much less than if they were all paid in
    arrears. Moreover, we recognize that when customers' existing term
    plans expire SBC will be able to apply prevailing deposit provisions
    to new plans taken by such carriers.

# PROCEDURAL MATTERS

## Filing Schedules

35. This investigation is designated WC Docket No. 02-319. Ameritech
    Operating Companies, Nevada Bell Telephone Company, Pacific Bell
    Telephone Company, Southern New England Telephone Companies, and
    Southwestern Bell Telephone Company are designated parties to this
    investigation. Ameritech Operating Companies, Nevada Bell Telephone
    Company, Pacific Bell Telephone Company, Southern New England
    Telephone Companies, and Southwestern Bell Telephone Company shall
    file their direct case no later than October 31, 2002. The direct
    case must present their position with respect to the issues
    described in this Order. Pleadings responding to the direct cases
    may be filed no later than November 14, 2002, and must be captioned
    "Oppositions to Direct Case" or "Comments on Direct Case." Ameritech
    Operating Companies, Nevada Bell Telephone Company, Pacific Bell
    Telephone Company, Southern New England Telephone Companies, and
    Southwestern Bell Telephone Company may file a "Rebuttal" to
    oppositions or comments no later than November 21, 2002.

36. An original and four copies of all pleadings shall be filed with the
    Secretary of the Commission. In addition, parties shall serve with
    three copies: Pricing Policy Division, Wireline Competition Bureau,
    445 12th Street, S.W., Room 6-C222, Washington, D.C. 20554, Attn:
    Julie Saulnier. Parties shall also serve with one copy: Qualex
    International, Portals II, 445 12th Street, S.W., Room CY-B402,
    Washington, D.C. 20554, (202) 863-2893. Members of the general
    public who wish to express their views in an informal manner
    regarding the issues in this investigation may do so by submitting
    one copy of their comments to the Office of the Secretary, Federal
    Communications Commission, 445 12th Street, S.W., Room TW-A325,
    Washington, D.C. 20554. Such comments should specify the docket
    number of this investigation, WC Docket No. 02-319. Parties are also
    strongly encouraged to submit their pleadings via the Internet
    through the Electronic Comment Filing System at
    \<http://www.fcc.gov/e-file/ecfs.html\>. Generally, only one copy of
    an electronic submission must be filed. In completing the
    transmittal screen, commenters should include their full name,
    Postal Service mailing address, and the applicable docket number,
    which in this instance is WC Docket No. 02-319. Parties may also
    submit an electronic comment via Internet e-mail. To get filing
    instructions for e-mail comments, commenters should send an e-mail
    to \<ecfs@fcc.gov\>, and should include the following words in the
    body of the message: "get form \<your e-mail address\>." A sample
    form and directions will be sent in reply.

37. Interested parties who wish to file comments via hand-delivery are
    also notified that effective December 18, 2001, the Commission will
    only receive such deliveries weekdays from 8:00 a.m. to 7:00 p.m.,
    via its contractor, Vistronix, Inc., located at 236 Massachusetts
    Avenue, NE, Suite 110, Washington, DC 20002. **The Commission no
    longer accepts these filings at 9300 East Hampton Drive, Capitol
    Heights, MD 20743.** Please note that all hand deliveries must be
    held together with rubber bands or fasteners, and envelopes must be
    disposed of before entering the building. In addition, this is a
    reminder that as of October 18, 2001, the Commission no longer
    accepts hand-delivered or messenger-delivered filings at its
    headquarters at 445 12th Street, SW, Washington, DC 20554.
    Messenger-delivered documents (*e.g.*, FedEx), including documents
    sent by overnight mail (other than United States Postal Service
    (USPS) Express and Priority Mail), must be addressed to 9300 East
    Hampton Drive, Capitol Heights, MD 20743. This location is open
    weekdays from 8:00 a.m. to 5:30 p.m. USPS First-Class, Express, and
    Priority Mail should be addressed to the Commission's headquarters
    at 445 12th Street, SW, Washington, DC 20554. The following chart
    summarizes this information:

+-----------------------------------+----------------------------------+
| **TYPE OF DELIVERY**              | > **PROPER DELIVERY ADDRESS**    |
+-----------------------------------+----------------------------------+
| Hand-delivered paper filings      | > 236 Massachusetts Avenue, NE,  |
|                                   | >                                |
|                                   | > Suite 110, Washington, DC      |
|                                   | > 20002 (Weekdays - 8:00 a.m. to |
|                                   | > 7:00 p.m.)                     |
+-----------------------------------+----------------------------------+
| Messenger-delivered documents     | > 9300 East Hampton Drive,       |
| (*e.g.*, FedEx), including        | >                                |
| documents sent by overnight mail  | > Capitol Heights, MD 20743      |
| (this type excludes USPS Express  | >                                |
| and Priority Mail)                | > (Weekdays - 8:00 a.m. to 5:30  |
|                                   | > p.m.)                          |
+-----------------------------------+----------------------------------+
| USPS First-Class, Express, and    | > 445 12^th^ Street, SW          |
| Priority Mail                     | >                                |
|                                   | > Washington, DC 20554           |
+-----------------------------------+----------------------------------+

38. All relevant and timely pleadings will be considered by the
    Commission. In reaching a decision, the Commission may take into
    account information and ideas not contained in pleadings, provided
    that such information, or a writing containing the nature and source
    of such information, is placed in the public file, and provided that
    the fact of reliance on such information is noted in the order.

## *Ex Parte* Requirements {#ex-parte-requirements .unnumbered}

39. This investigation is a permit-but-disclose proceeding and is
    subject to the requirements of section 1.1206(b) of the Commission's
    rules, 47 C.F.R. § 1.1206(b), as revised. Persons making oral *ex
    parte* presentations are reminded that memoranda summarizing the
    presentations must contain a summary of the substance of the
    presentation and not merely a listing of the subjects discussed.
    More than a one- or two-sentence description of the views and
    arguments presented is generally required.[^86] Other rules
    pertaining to oral and written presentations are also set forth in
    section 1.1206(b).

40. Interested parties are to file any written *ex parte* presentations
    in this proceeding with the Commission's Secretary, Marlene Dortch,
    445 12th Street, S.W., TW-B204, Washington, D.C. 20554, and serve
    with three copies: Pricing Policy Division, Wireline Competition
    Bureau, 445 12th Street, S.W., Room 6-C222, Washington, D.C. 20554,
    Attn: Julie Saulnier. Parties shall also serve with one copy: Qualex
    International, Portals II, 445 12th Street, S.W., Room CY-B402,
    Washington, D.C. 20554, (202) 863-2893.

## Paperwork Reduction Act {#paperwork-reduction-act .unnumbered}

41. This order designating issues for investigation contains no new or
    modified information collections subject to the Paperwork Reduction
    Act of 1995, Pub. Law 104-13.

# ORDERING CLAUSES {#ordering-clauses .unnumbered}

42. ACCORDINGLY, IT IS ORDERED that, pursuant to sections 4(i), 4(j),
    201-205, and 403 of the Communications Act, 47 U.S.C. §§ 154(i),
    154(j), 201-205, and 403, and pursuant to the authority delegated by
    sections 0.91 and 0.291 of the Commission's rules, 47 C.F.R. §§
    0.91, 0.291, the issues set forth in this Order ARE DESIGNATED FOR
    INVESTIGATION.

43. IT IS FURTHER ORDERED that Ameritech Operating Companies, Nevada
    Bell Telephone Company, Pacific Bell Telephone Company, Southern New
    England Telephone Companies, and Southwestern Bell Telephone Company
    SHALL BE parties to this proceeding.

44. IT IS FURTHER ORDERED that Ameritech Operating Companies, Nevada
    Bell Telephone Company, Pacific Bell Telephone Company, Southern New
    England Telephone Companies, and Southwestern Bell Telephone Company
    SHALL INCLUDE, in their direct case, a response to each request for
    information that they are required to answer by this Order.

    FEDERAL COMMUNICATIONS COMMISSION

    Tamara L. Preiss

    Chief, Pricing Policy Division

    Wireline Competition Bureau

[^1]: 47 U.S.C. §§ 204 and 205.

[^2]: Ameritech Operating Companies, Nevada Bell Telephone Company,
    Pacific Bell Telephone Company, Southern New England Telephone
    Companies, and Southwestern Bell Telephone Company, Transmittal Nos.
    1312, 20, 77, 772, and 2906, respectively, Tariffs FCC Nos. 2, 1, 1,
    39, and 73, respectively (Aug. 2, 2002).

[^3]: *Ameritech Operating Companies, Nevada Bell Telephone Company,
    Pacific Bell Telephone Company, Southern New England Telephone
    Companies, and Southwestern Bell Telephone Company,* Transmittal
    Nos. 1312, 20, 77, 772, and 2906, Tariffs FCC Nos. 2, 1, 1, 39, and
    73, Order, DA 02-2039 (WCB, rel. Aug. 16, 2002).

[^4]: In this order, we will use the term "SBC" in lieu of each
    tariff-filing entity subject to this proceeding i.e., Ameritech,
    Nevada Bell, Pacific Bell, SNET, and SWBT. The term "SBC" is also
    used in lieu of the term "telephone company" in the proposed tariff
    revisions.

[^5]: 47 U.S.C. §§ 201 and 202.

[^6]: *Investigation of Access and Divestiture Related Tariffs*, Phase I
    Order, CC Docket No. 83-1145, 97 FCC 2d 1082, 1169 (1984).

[^7]: In general, existing tariffs also provide that deposits may not
    exceed the actual or estimated rates and charges for service for a
    two-month period.

[^8]: *Annual 1987 Access Tariff Filings,* Memorandum Opinion and Order,
    2 FCC Rcd 280, 304-05 (1986). BellSouth apparently never implemented
    this provision.

[^9]: For rate-of-return carriers, uncollectibles are reflected in the
    rate base that they use to calculate the 11.25% allowed rate of
    return. An increase in uncollectibles will result in higher rates
    the following year. Upon a proper showing of an extraordinary rise
    in uncollectibles, rate-of-return carriers may file mid-term
    corrections to raise their rates to target an 11.25% rate of return.
    *See* 47 C.F.R. § 69.3(b).

[^10]: 47 C.F.R. § 61.45(b).

[^11]: 47 C.F.R. § 61.45(d)(1)(vii).

[^12]: 47 C.F.R. § 61.45(d).

[^13]: *See, e.g., Ameritech Operating Companies,* Tariff FCC No. 2,
    1^st^ Revised Page 40 (effective June 14, 1988); *Southwestern Bell
    Telephone Company,* Tariff FCC No. 73, Original Page 2-56 to 61
    (effective July 1, 1992); *Southern New England Telephone Company*,
    Tariff FCC No. 39, Original Page 2-13 (effective Nov. 28, 1988);
    *Pacific Bell Telephone Company*, Tariff FCC No. 1, Original Page
    2-47 to 49 (effective May 12, 2000); *Nevada Bell Telephone
    Company,* Tariff FCC No. 1, Original Page 2-35 to 36 (effective Mar.
    3, 2001).

[^14]: *See Ameritech Operating Companies,* Tariff FCC No. 2, 1^st^
    Revised Page 40, Section 2.4.1(A).

[^15]: *See Ameritech Operating Companies,* Tariff FCC No. 2, 1^st^
    Revised Page 40, Section 2.4.1(A).

[^16]: *See, e.g., Ameritech Operating Companies,* Tariff FCC No. 2,
    3^rd^ Revised Page 27, Section 2.1.8(A) (effective June 6, 1998).

[^17]: *See, e.g., Ameritech Operating Companies,* Tariff FCC No. 2,
    Original Page 40.1 and Original Page 40.2.

[^18]: *See, e.g., Ameritech Operating Companies,* Tariff FCC No. 2,
    Original Page 40.1

[^19]: *See, e.g., Ameritech Operating Companies,* Tariff FCC No. 2,
    Original Page 40.1

[^20]: *See, e.g., Ameritech Operating Companies,* Tariff FCC No. 2,
    Original Page 40.2 and Original Page 40.3.

[^21]: *See, e.g.,* Ameritech Operating Companies, Tariff FCC No. 2,
    Original Page 40.3. The proposed tariff revisions distinguish
    between "the Telephone Company" and "the SBC Telephone Companies."
    Because we are using the term "SBC" in lieu of "the Telephone
    Company" we will use the term "the SBC Telephone Companies" to
    indicate this difference.

[^22]: *See, e.g.,* Ameritech Operating Companies, Tariff FCC No. 2,
    Original Page 40.1.

[^23]: *See, e.g.,* Ameritech Operating Companies, Tariff FCC No. 2,
    Original Page 40.1.

[^24]: *See, e.g.,* Ameritech Operating Companies, Tariff FCC No. 2,
    Original Page 40.3.

[^25]: *See, e.g.,* Ameritech Operating Companies, Tariff FCC No. 2,
    Original Page 40.3.

[^26]: *See, e.g.,* Ameritech Operating Companies, Tariff FCC No. 2,
    Original Page 40.2.

[^27]: Ameritech Operating Companies, Tariff FCC No. 2, Sections
    2.1.8(A)(1) and (2). Proposed Section 2.1.8(A) states that
    "\[e\]xcept for customers subject to a one month deposit
    requirement, the Telephone Company may initiate any or all of the
    following actions on fifteen (15) days written notice or on ten (10)
    days written notice as set forth in Section 2.4.1(A) and (B),
    electronically, or by Certified U.S. Mail . . . to the person
    designated by that customer to receive such notices of noncompliance
    (for customer subject to a one month deposit requirement, a ten (10)
    day notice interval shall apply)." *See* Ameritech Operating
    Companies, Tariff FCC No. 2, 4^th^ Revised Page 27.

[^28]: *See, e.g.,* Ameritech Operating Companies, Tariff FCC No. 2,
    Original Pages 40.1 and 40.3.

[^29]: *See, e.g.,* Ameritech Operating Companies, Tariff FCC No. 2,
    Transmittal No. 772, Description and Justification at 7.

[^30]: *See, e.g., id.* at 7-8.

[^31]: Ameritech Operating Companies, Nevada Bell Telephone Company,
    Pacific Bell Telephone Company, Southern New England Telephone
    Companies, and Southwestern Bell Telephone Company, Transmittal Nos.
    1312, 20, 77, 772, and 2906, respectively, Tariffs FCC Nos. 2, 1, 1,
    39, and 73, respectively, Petition of AT&T Corp. (Aug. 9, 2002)
    (*AT&T Petition*); WorldCom Petition to Reject or, in the
    Alternative, Suspend and Investigate (Aug. 9, 2002) (*WorldCom
    Petition*); Petition to Reject or, Alternatively, to Suspend and
    Investigate of ALTS, CompTel, Grande Communications Networks, Inc.,
    Ionex Telecommunications, Inc., KMC Telecom Holdings, Inc., NuVox,
    Inc., Sage Telecom, Inc., Talk America, Inc., and XO Communications,
    Inc. (Aug. 9, 2002) (*ALTS* *Joint Petition*); Petition to Reject or
    Suspend and Investigate Proposed Tariff Revisions of ASCENT, ATX
    Communications, Inc., Focal Communications Corp., Level 3
    Communications, LLC, Pac-West Telecomm, Inc., US LEC Corp., and U.S.
    Telepacific Corp. (*ASCENT Joint Petition*).

[^32]: Ameritech Operating Companies, Pacific Bell Telephone Company,
    Southern New England Telephone Companies, and Southwestern Bell
    Telephone Company, Transmittal Nos. 1312, 77, 772, and 2906,
    respectively, Tariffs FCC Nos. 2, 1, 39, and 73, respectively,
    Petition of Sprint to Reject or Alternatively Suspend and
    Investigate (Aug. 9, 2002) (*Sprint Petition*).

[^33]: Ameritech Operating Companies, Pacific Bell Telephone Company,
    and Southwestern Bell Telephone Company, Transmittal Nos. 1312, 77,
    and 2906, respectively, Tariffs FCC Nos. 2, 1, and 73, respectively,
    Petition of MPower Communications Corp. to Reject or Alternatively
    Suspend and Investigate (Aug. 9, 2002) *(MPower Petition*).

[^34]: Southwestern Bell Telephone Company, Transmittal No. 2906, Tariff
    FCC No. 73, Petition of Nextel Communications, Inc. to Reject or
    Alternatively Suspend and Investigate (Aug. 9. 2002) (*Nextel
    Petition*).

[^35]: Ameritech Operating Companies, Nevada Bell Telephone Company,
    Pacific Bell Telephone Company, Southern New England Telephone
    Companies, and Southwestern Bell Telephone Company, Transmittal Nos.
    1312, 20, 77, 772, and 2906, respectively, Tariffs FCC Nos. 2, 1, 1,
    39, and 73, respectively, SBC Opposition to Petition to Reject or,
    in the Alternative, Suspend and Investigate (Aug. 16, 2002).

[^36]: *See, e.g.,* Ameritech Operating Companies, Tariff FCC No. 2,
    Original Page 40.1.

[^37]: *See, e.g.,* Ameritech Operating Companies, Tariff FCC No. 2,
    Original Page 40.1.

[^38]: *See, e.g.,* Ameritech Operating Companies, Tariff FCC No. 2,
    Original Page 40.3.

[^39]: *See, e.g.,* Ameritech Operating Companies, Tariff FCC No. 2,
    Original Page 40.3.

[^40]: *See, e.g.,* Ameritech Operating Companies, Tariff FCC No. 2,
    Original Page 40.2.

[^41]: *See, e.g.,* Ameritech Operating Companies*,* Tariff FCC No. 2,
    Original Page 40.2 and Original Page 40.3.

[^42]: *See, e.g.,* Ameritech Operating Companies, Tariff FCC No. 2,
    Original Page 40.3.

[^43]: *See, e.g.,* Southwestern Bell Telephone Company Tariff FCC No.
    73, Transmittal No. 2906, Original Page 2-55.1.

[^44]: *See, e.g.,* Ameritech Operating Companies, Tariff FCC No. 2,
    Original Page 40.1.

[^45]: *See, e.g.,* Southwestern Bell Telephone Company Tariff FCC No.
    73, Transmittal No. 2906, Original Page 2-55.2.

[^46]: AT&T and WorldCom allege that SBC's tariff filing violates a
    Commission prescription from 1984. *See* *supra*, note 6; AT&T
    Petition at 5-10; WorldCom Petition at 6-8. Even if these parties
    are correct, a tariff investigation is a valid means of reviewing a
    Commission prescription. *Pacific Northwest Bell Telephone Company*,
    Revisions to Tariff FCC No. 9, Transmittal No. 159, Memorandum
    Opinion and Order (rel. Oct. 11, 1985).

[^47]: 47 U.S.C. §§ 201(b) and 202(a). *See, e.g*., AT&T Petition at
    11-16; Nextel Petition at 4-7; MPower Petition at 1-6; ASCENT
    Petition at 2-5.

[^48]: 47 C.F.R. §§ 61.2, 61.54. *See, e.g*., AT&T Petition at 11-16;
    Nextel Petition at 4-7; MPower Petition at 1-6; Sprint Petition at
    1-4.

[^49]: ALTS Petition at 10-11; ASCENT Joint Petition at 8; WorldCom
    Petition at 13.

[^50]: ALTS Petition at 8; ASCENT Joint Petition at 4; Nextel Petition
    at 5; Sprint Petition at 7; WorldCom Petition at 8-9.

[^51]: ALTS Petition at 2.

[^52]: *See* AT&T Petition at 12. *See, e.g.,* Southwestern Bell
    Telephone Company Tariff FCC No. 73, Transmittal No. 2906, Original
    Page 2-55.3.

[^53]: *See* AT&T Petition at 13. *See, e.g*., Southwestern Bell
    Telephone Company Tariff FCC No. 73, Transmittal No. 2906, Original
    Page 2-55.1.

[^54]: *See, e.g.,* Southwestern Bell Telephone Company Tariff FCC No.
    73, Transmittal No. 2906, Original Page 2-55.3.

[^55]: *See, e.g.,* 11 U.S.C. §§ 361(explaining what constitutes
    "adequate protection" under sections 362, 363 and 364 of the
    Bankruptcy Code), 366, and 547.

[^56]: *See, e.g*., WorldCom Petition at 8-9; ALTS Joint Petition at 10.

[^57]: WorldCom Petition at 8-9.

[^58]: We clarify that all information and data requested in this order
    should be provided separately for each tariff-filing entity i.e.,
    Ameritech, Nevada Bell, Pacific Bell, SNET, and SWBT.

[^59]: *See, e.g.,* 11 U.S.C. § 366.

[^60]: *See supra,* para. 11*. See also, e.g*., Southwestern Bell
    Telephone Company Tariff FCC No. 73, Transmittal No. 2906, Original
    Pages 2-55.3.

[^61]: *See, e.g*., Southwestern Bell Telephone Company Tariff FCC No.
    73, Transmittal No. 2906, Original Pages 2-55.2 and 2-55.3.

[^62]: 47 U.S.C. § 202(a).

[^63]: *See, e.g*., Southwestern Bell Telephone Company Tariff FCC No.
    73, Transmittal No. 2906, Original Pages 2-55.1 and Original Page
    2-55.3.

[^64]: *See, e.g*., Southwestern Bell Telephone Company Tariff FCC No.
    73, Transmittal No. 2906, Original Pages 2-55.3.

[^65]: *See, e.g*., Southwestern Bell Telephone Company Tariff FCC No.
    73, Transmittal No. 2906, Original Pages 2-55.2 and 2-55.4. Section
    2.5.2(A) states that "\[s\]imple interest, established at the
    interest rate of the most current November 30^th^ . . . one year
    Treasury Bill rate, will accrue on cash deposits held 30 days or
    more, beginning thirty (30) days after receipt of the deposit.
    Interest will not accrue on amounts guaranteed by a bank letter of
    credit, third party guaranty agreement, or to any prepayment. The
    interest on the deposit shall be applied as a credit to the
    customer's account beginning one year after the cash deposit is
    received and every 12 months thereafter."

[^66]: *Investigation of Access and Divestiture Related Tariffs,* CC
    Docket 83-1145 (Phase I), Memorandum Opinion and Order, 97 FCC 2^nd^
    1082, 1169, Appendix D (1984).

[^67]: *Id*.

[^68]: *Id*.

[^69]: *See, e.g*., Southwestern Bell Telephone Company Tariff FCC No.
    73, Transmittal No. 2906, Original Pages 2-55.3.

[^70]: *See, e.g*., Southwestern Bell Telephone Company Tariff FCC No.
    73, Transmittal No. 2906, Original Pages 2-55.3.

[^71]: *See, e.g*., Southwestern Bell Telephone Company Tariff FCC No.
    73, Transmittal No. 2906, Original Pages 2-55.4.

[^72]: *See, e.g*., Southwestern Bell Telephone Company Tariff FCC No.
    73, Transmittal No. 2906, Original Pages 2-55.2 and Original Page
    2-55.4.

[^73]: *See, e.g*., Southwestern Bell Telephone Company Tariff FCC No.
    73, Transmittal No. 2906, 6^th^ Revised Page 2-20, 2-21 and 2-22.
    Proposed Section 2.1.6(A) states that "\[e\]xcept for customers
    subject to a one month deposit requirement, the Telephone Company
    may initiate any or all of the following actions on fifteen (15)
    days written notice or on ten (10) days written notice as set forth
    in Section 2.5.2(A) and (B), electronically, or by Certified U.S.
    Mail . . . to the person designated by that customer to receive such
    notices of noncompliance (for customer subject to a one month
    deposit requirement, a ten (10) day notice interval shall apply)."

[^74]: *See, e.g*., Southwestern Bell Telephone Company Tariff FCC No.
    73, Transmittal No. 2906, Original Pages 2-55.1.

[^75]: *See, e.g*., Southwestern Bell Telephone Company Tariff FCC No.
    73, Transmittal No. 2906, 3^rd^ Revised Page 2-62 Section 2.5.3
    states that "all bills are due when rendered and shall be paid no
    later than 30 days of the bill date or by next bill date . . . which
    ever is sooner. For those customers subject to Section 2.5.2(B),
    bills are due 21 days after the bill is sent or posted
    electronically."

[^76]: *See, e.g.,* AT&T petition at 5; ALTS Petition at 17-18; Sprint
    Petition at 10.

[^77]: *See* ASCENT Joint Petition at 13; Sprint at 9.

[^78]: *See Annual 1987 Access Tariff Filings,* Memorandum Opinion and
    Order, 2 FCC Rcd at 304-05.

[^79]: *See, e.g*., Southwestern Bell Telephone Company Tariff FCC No.
    73, Transmittal No. 2906, Original Pages 2-55.2.

[^80]: *See, e.g.,* Ameritech Operating Companies, Tariff FCC No. 2,
    Original Page 40.4.

[^81]: *Id.*

[^82]: *RCA Communications, Inc., Revisions to FCC Tariff Nos. 1 and 2,*
    CC Docket No. 80-766, Transmittal Nos. 191 and 273, Memorandum
    Opinion and Order, 94 FCC 2d 1338 (1983). *See, e.g.,* ALTS Petition
    at 16; WorldCom Petition at 13-16.

[^83]: WorldCom Petition at 13-17.

[^84]: WorldCom Petition at 16-18.

[^85]: WorldCom Petition at 18.

[^86]: *See* 47 C.F.R. §1.1206(b)(2), as revised.