[Federal Register Volume 66, Number 123 (Tuesday, June 26, 2001)]
[Proposed Rules]
[Pages 33938-33941]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-15832]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 32

[CC Docket No. 00-199; DA 01-1403]


Phase 2 of the Comprehensive Review of the Accounting 
Requirements and ARMIS Reporting Requirements for Incumbent Local 
Exchange Carriers

AGENCY: Federal Communications Commission.

ACTION: Proposed rule; comments requested.

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SUMMARY: In this document the Commission is seeking supplemental 
comment in the Phase 2 Comprehensive Review of the Accounting and ARMIS 
Reporting Requirements for Incumbent Local Exchange Carriers. This 
document expressly seek comment on additions, consolidations, or 
eliminations of accounts on the attached list of Class A and Class B 
accounts. One of the goals of the comprehensive review proceeding is to 
update our accounting system based on changes in the marketplace and in 
technology.

DATES: Written comments by the public are due on or before July 16, 
2001, reply comments are due on or before July 26, 2001.

ADDRESSES: Federal Communications Commission, 445-12th Street, SW, TW-
A325, Washington, D.C. 20554.

FOR FURTHER INFORMATION CONTACT: Mika Savir, Accounting Safeguards 
Division, Common Carrier Bureau, at (202) 418-0384 or Andrew Mulitz, 
Accounting Safeguards Division, Common Carrier Bureau, at (202) 418-
0827.

SUPPLEMENTARY INFORMATION: On October 18, 2000, the Commission released 
a Notice of Proposed Rulemaking in CC Docket No. 00-199, 65 FR 67675 
(November 18, 2000), seeking comment on, inter alia, changes to our 
Part 32 Uniform System of Accounts (``USOA''). One of the goals in this 
comprehensive review proceeding is to update our accounting system 
based on changes in the marketplace and in technology. Based on our 
review of the specific accounts and comments filed in this proceeding, 
we now wish to focus the record on streamlining the Commission's Class 
A and Class B accounts, as shown in the attachment to this document. We 
expressly seek comment on additions, consolidations, or eliminations of 
accounts on this proposed list.
    Comments are due on the attached proposal July 16, 2001. Reply 
comments are due on or before July 26, 2001. Comments may be filed 
using the

[[Page 33939]]

Commission's Electronic Comment Filing System (ECFS) or by filing paper 
copies.
    Comments filed through the ECFS can be sent as an electronic file 
via the Internet to http://www.fcc.gov/e-file/ecfs.html>. Generally, 
only one copy of an electronic submission must be filed. If multiple 
docket or rulemaking numbers appear in the caption of this proceeding, 
however, commenters must transmit one electronic copy of the comments 
to each docket or rulemaking number referenced in the caption. In 
completing the transmittal screen, commenters should include their full 
name, Postal Service mailing address, and the applicable docket or 
rulemaking number. Parties may also submit an electronic comment by 
Internet e-mail. To get filing instructions for e-mail comments, 
commenters should send an e-mail to <a href="/cdn-cgi/l/email-protection#b9dcdadfcaf9dfdada97ded6cf"><span class="__cf_email__" data-cfemail="fa9f999c89ba9c9999d49d958c">[email protected]</span></a>, 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.
    Parties who choose to file by paper must file an original and four 
copies of each filing. If more than one docket or rulemaking number 
appear in the caption of this proceeding, commenters must submit two 
additional copies for each additional docket or rulemaking number. All 
filings must be sent to the Commission's Secretary, Magalie Roman 
Salas, Office of the Secretary, Federal Communications Commission, 445 
12th Street, S.W., Washington, D.C. 20554.
    Parties who choose to file by paper should also submit their 
comments on diskette. These diskettes should be submitted to: Ernestine 
Creech, Room 6-C317, Accounting Safeguards Division, 445 12th Street, 
S.W., Washington, D.C. 20554. Such a submission should be on a 3.5-inch 
diskette formatted in an IBM compatible format using Word or compatible 
software. The diskette should be accompanied by a cover letter and 
should be submitted in ``read only'' mode. The diskette should be 
clearly labeled with the commenter's name, proceeding (including the 
docket number, in this case CC Docket No. 00-199, type of pleading 
(comment or reply comment), date of submission, and the name of the 
electronic file on the diskette. The label should also include the 
following phrase ``Disk Copy--Not an Original.'' Each diskette should 
contain only one party's pleadings, preferably in a single electronic 
file. In addition, commenters must send diskette copies to the 
Commission's copy contractor, International Transcription Service, 
Inc., 1231 20th Street, N.W., Washington, D.C. 20037.

Initial Regulatory Flexibility Analysis

    As required by the Regulatory Flexibility Act (RFA), the Commission 
has prepared this Initial Regulatory Flexibility Analysis (IRFA) of any 
possible significant economic impact on small entities by the policies 
and rules proposed in this document. Written public comments are 
requested on this IRFA. Comments must be identified as responses to the 
IRFA and must be filed by the deadlines for comments on this document, 
which are set out in the document. The Commission will send a copy of 
this document, including this IRFA, to the Chief Counsel for Advocacy 
of the Small Business Administration. In addition, this document and 
IRFA (or summaries thereof) will be published in the Federal Register.

A. Need for, and Objectives of, the Proposed Rules

    The Commission has initiated this proceeding to determine whether 
it should streamline or modify the current accounting and reporting 
requirements. This document seeks comment on further reducing the 
accounting requirements for incumbent local exchange carriers.

B. Legal Basis

    The legal basis for the action as proposed for this rulemaking is 
contained in sections 4(i), 4(j), 11, 201(b), 303(r), and 403 of the 
Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 161, 
201(b), 303(r), and 403.

C. Description and Estimate of the Number of Small Entities to which 
the Proposed Action May Apply

    The RFA directs agencies to provide a description of, and, where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules, if adopted. To estimate the number of 
small entities that may be affected by the proposed rules, we first 
consider the statutory definition of ``small entity'' under the RFA. 
The RFA generally defines ``small entity'' as having the same meaning 
as the term ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' In addition, the term ``small business'' 
has the same meaning as the term ``small business concern'' under the 
Small Business Act, unless the Commission has developed one or more 
definitions that are appropriate to its activities. Under the Small 
Business Act, a ``small business concern'' is one that: (1) Is 
independently owned and operated; (2) is not dominant in its field of 
operation; and (3) meets any additional criteria established by the 
Small Business Administration (SBA).
    We have included small incumbent local exchange carriers (LECs) in 
this present RFA analysis. As noted above, a ``small business'' under 
the RFA is one that, inter alia, meets the pertinent small business 
size standard (e.g., a telephone communications business having 1,500 
or fewer employees), and ``is not dominant in its field of operation.'' 
The SBA's Office of Advocacy contends that, for RFA purposes, small 
incumbent LECs are not dominant in their field of operation because any 
such dominance is not ``national'' in scope. We have therefore included 
small incumbent LECs in this RFA analysis, although we emphasize that 
this RFA action has no effect on the Commission's analyses and 
determinations in other, non-RFA contexts.
    The SBA has developed a definition of small entities for telephone 
communications companies other than radiotelephone companies. The SBA 
has defined a small business for Standard Industrial Classification 
(SIC) categories 4812 (Radiotelephone Communications) and 4813 
(Telephone Communications, Except Radiotelephone) to be small entities 
when they have no more than 1,500 employees. The Census Bureau reports 
that, there were 2,321 such telephone companies in operation for at 
least one year at the end of 1992. All but 26 of the 2,321 non-
radiotelephone companies listed by the Census Bureau were reported to 
have fewer than 1,000 employees. Thus, even if all 26 of those 
companies had more than 1,500 employees, there would still be 2,295 
non-radiotelephone companies that might qualify as small entities or 
small incumbent LECs. It seems certain that some of these carriers are 
not independently owned and operated, but we are unable at this time to 
estimate with greater precision the number of wireline carriers that 
would qualify as small business concerns under SBA's definition. 
Consequently, we estimate that fewer than 2,295 small telephone 
communications companies other than radiotelephone companies are small 
entities or small incumbent LECs that may be affected by the proposed 
rules, if adopted.
    The proposed changes to the accounting requirements in this 
document, which are reductions in the Commission's accounting 
requirements, could affect all incumbent local exchange carriers. Some 
of these companies may be considered ``small entities'' under the SBA 
definition. Therefore, it is possible that some of the 2,295 small 
entity telephone companies

[[Page 33940]]

may be affected by the proposals in this document.

D. Description of Proposed Reporting, Recordkeeping, and Other 
Compliance Requirements

    This document seeks to further reduce accounting requirements for 
all incumbent local exchange companies. These proposals, if adopted, 
would result in fewer accounting requirements for all incumbent local 
exchange carriers, including small entities.

E. Steps Taken to Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    The RFA requires an agency to describe any significant alternatives 
that it has considered in reaching its proposed approach, which may 
include the following four alternatives (among others): (1) the 
establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities. 5 U.S.C. 603(c).
    The rule changes proposed in this document are reductions in our 
accounting requirements for all incumbent local exchange carriers. Our 
proposals, if adopted, would streamline the accounting rules and would 
significantly lessen regulatory requirements for all carriers, 
including small entities. This should produce a significant economic 
benefit to small entities. Alternatives considered for small entities 
subject to our accounting and reporting requirements were to maintain 
our current rules or to consider changes proposed in this document on a 
case-by-case basis in ongoing proceedings where related accounting 
changes may properly be considered within the scope of such 
proceedings. Streamlining our current rules will reduce regulatory 
burdens on carriers, including small entities.

F. Federal Rules that May Duplicate, Overlap, or Conflict With the 
Proposed Rule

    None.

Federal Communications Commission.
Kenneth P. Moran,
Chief, Accounting Safeguards Division, Common Carrier Bureau.

Attachment A

Part 32 Class Accounts (Proposed)

1120  Cash and equivalents
1170  Receivables
1171  Allowances for doubtful accounts
1220  Inventories
    --Materials and supplies
    --Property held for sale or lease
1280  Prepayments
1350  Other current assets
1406  Nonregulated investments
    --Permanent investment
    --Receivable/payable
    --Current net income or loss
1410  Noncurrent assets
1437  Deferred tax regulatory asset
1438  Other deferred charges
1500  Other jurisdictional assets--net
2001  Telecommunications plant in service
2002  Property held for future telecommunications use
2003  Telecommunications plant under construction
2005  Telecommunications plant adjustment
2006  Nonoperating plant
2007  Goodwill
2111  Land
2112  Motor vehicles
2113  Aircraft
2114  Tools and other work equipment
2121  Buildings
2122  Furniture
2123  Office equipment
    --Office support equipment
    --Company communications equipment
2124  General purpose computers
2211  Non-digital switching
2212  Digital electronic switching
    --Circuit
    --Packet
2213  Optical switching
    --Circuit
    --Packet
2220  Operator system
2231  Radio system
2232  Circuit equipment
    --Electronic
    --Optical
2311  Station apparatus
2321  Customer premises wiring
2341  Large private branch exchanges
2351  Public telephone terminal equipment
2362  Other terminal equipment
2411  Poles
2421  Aerial cable
    --Nonmetallic cable
    --Metallic cable
2422  Underground cable
    --Nonmetallic cable
    --Metallic cable
2423  Buried cable
    --Nonmetallic cable
    --Metallic cable
2426  Intrabuilding network cable
    --Nonmetallic cable
    --Metallic cable
2431  Aerial wire
2441  Conduit systems
2681  Capital leases
2682  Leasehold improvements
2690  Intangibles
    --Network Software
    --Other
3100  Accumulated depreciation
3200  Accumulated depreciation--held for future telecommunications use
3300  Accumulated depreciation--nonoperating
3410  Accumulated amortization--capitalized leases
4000  Current accounts and notes payable
4070  Income taxes--accrued
4080  Other taxes--accrued
4100  Net current deferred operating income taxes
4110  Net current deferred nonoperating income taxes
4130  Other current liabilities
4200  Long term debt and funded debt
4300  Other long-term liabilities and deferred credits
4320  Unamortized operating investment tax credits--net
4330  Unamortized nonoperating investment taxcredits--net
4340  Net noncurrent deferred operating income taxes
4341  Net deferred tax liability adjustments
4350  Net noncurrent deferred nonoperating income taxes
4361  Deferred tax regulatory liability
4370  Other jurisdictional liabilities & deferred credits--net
4510  Capital stock
4520  Additional paid-in-capital
4530  Treasury stock
4540  Other Capital
4550  Retained earnings
5000  Basic local service revenue
5080  Network access revenue
5081  End user revenue
5082  Switched access revenue
5083  Special access revenue
5086  Interconnection revenue
    --UNE revenue
    --Resale revenue
    --Reciprocal Compensation revenue
    --Other Interconnection revenue
5090  USF support revenue
5105  Long distance message revenue
5200  Miscellaneous revenue
5280  Nonregulated operating revenue
5300  Uncollectible revenue
6112  Motor vehicle expense
6113  Aircraft expense

[[Page 33941]]

6114  Tools and other work equipment expense
6121  Land & building expense
6122  Furniture & artworks expense
6123  Office equipment expense
6124  General purpose computers expense
6210  Central office switching expenses
6211  Non-digital expense
6212  Digital electronic expense
    --Circuit
    --Packet
6213  Optical expense
    --Circuit
    --Packet
6220  Operator systems expense
6231  Radio systems expense
6232  Circuit equipment expense
    --Electronic
    --Optical
6311  Station apparatus expense
6341  Large private branch exchange expense
6351  Public telephone terminal equipment expense
6362  Other terminal equipment expense
6411  Poles expense
6421  Aerial cable expense
    --Nonmetallic cable
    --Metallic cable
6422  Underground cable expense
    --Nonmetallic cable
    --Metallic cable
6423  Buried cable expense
    --Nonmetallic cable
    --Metallic cable
6426  Intrabuilding network cable expense
    --Nonmetallic cable
    --Metallic cable
6431  Aerial wire expense
6441  Conduit systems expense
6510  Property held for future telecommunications use expense
6512  Provisioning expense
6531  Power expense
6532  Network administration expense
6533  Testing expense
6534  Plant operations administration expense
6535  Engineering expense
6540  Access expense
6551  Interconnection expense
    --UNE expense
    --Resale expense
    --Reciprocal Compensation expense
    --Other interconnection expense
6554  USF support expense
6560  Depreciation & amortization expenses
6610  Marketing
6620  Customer services
6720  General and administrative
7100  Other operating income & expenses
7200  Operating taxes
7210  Operating investment tax credits net
7220  Operating federal income taxes
7230  Operating state and local income taxes
7240  Operating other taxes
7250  Provision for deferred operating income taxes--net
7300  Nonoperating income & expense
7400  Nonoperating taxes
7500  Interest and related items
7600  Extraordinary items--net
7910  Income effect of jurisdictional ratemaking differences--net
7990  Nonregulated net income
Account Total--178

Attachment B

Part 32 Class B  Accounts (Proposed)

1120  Cash and equivalents
1170  Receivables
1171  Allowance for doubtful accounts
1220  Inventories
    --Materials and supplies
    --Property held for sale or lease
1280  Prepayments
1350  Other current assets
1406  Nonregulated investments
    --Permanent investment
    --Receivable/payable
    --Current net income or loss
1410  Other noncurrent assets
1437  Deferred tax regulatory asset
1438  Other deferred charges
1500  Other jurisdictional assets--net
2001  Telecommunications plant in service
2002  Property held for future telecommunications use
2003  Telecommunications plant under construction
2005  Telecommunications plant adjustment
2006  Nonoperating plant
2007  Goodwill
2110  Land and support assets
2210  Central Office--Switching
2220  Operator systems
2230  Central office--Transmission
2310  Information origination/termination
2410  Cable and wire facilities
2680  Amortizable tangible assets
2690  Intangibles
3100  Accumulated depreciation
3200  Accumulated depreciation--Held for future telecommunications use
3300  Accumulated depreciation--nonoperating
3410  Accumulated amortization--capital leases
4000  Current accounts and notes payable
4070  Income taxes--accrued
4080  Other taxes--accrued
4100  Net current deferred operating income taxes
4110  Net current deferred operating income taxes
4130  Other current liabilities
4200  Long term funded debt
4300  Other long-term liabilities and deferred credits
4320  Unamortized operating investment tax credits--net
4330  Unamortized nonoperating investment tax credits--net
4340  Net noncurrent deferred operating income taxes
4341  Net deferred tax liability adjustments
4350  Net noncurrent deferred nonoperating income taxes
4361  Deferred tax regulatory liability
4370  Other jurisdictional liabilities and deferred credits--net
4510  Capital stock
4520  Additional paid-in-capital
4530  Treasury stock
4540  Other capital
4550  Retained earnings
5000  Basic local service revenue
5080  Network access revenue
5081  End user revenue
5082  Switched access revenue
5083  Special access revenue
5086  Interconnection revenue
5090  USF support revenue
5105  Long distance message revenue
5200  Miscellaneous revenue
5280  Nonregulated operating revenue
5300  Uncollectible revenue
6110  Network support expense
6120  General support expenses
6210  Central office switching expense
6220  Operator system expense
6230  Central office transmission expenses
6310  Information origination/termination expense
6410  Cable and wire facilities expenses
6510  Other property, plant and equipment expenses
6530  Network operations expenses
6540  Access expense
6551  Interconnection expense
6554  USF support expense
6560  Depreciation and amortization expenses
6610  Marketing
6620  Services
6720  General and administrative
7100  Other operating income and expense
7200  Operating taxes
7300  Nonoperating taxes
7500  Interest and related items
7600  Extraordinary items
7910  Income effect of jurisdictional ratemaking deferrences--net
7990  Nonregulated net income

Account Totals--89
[FR Doc. 01-15832 Filed 6-25-01; 8:45 am]
BILLING CODE 6712-01-P


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