Opinion ID: 2329066
Heading Depth: 2
Heading Rank: 2

Heading: The Development of Average Schedules

Text: Prior to divestiture, [6] the FCC did not adopt a formal jurisdictional separations procedure. Mid-Plains Tel. Co., 5 F.C.C.R. at 7050. Instead, the FCC allowed AT & T to use a cost allocation plan outlined in the Separations Manual, issued by the National Association of Regulatory Utility Commissioners (NARUC) in 1974, to determine each associated Bell Operating Company's costs of providing interstate service. Id. In 1983, the FCC codified the cost-based approach outlined in the Separations Manual as Part 36 of its rules, 47 C.F.R. §§ 36.1-36.741 (1992). Id. The FCC allowed AT & T to distribute its revenues to the smaller independent telephone companies, not by the Separations Manual, but instead by a system of settlements based on negotiated formulas which eventually became known as average schedules. Mid-Plains Tel. Co., 5 F.C.C.R. at 7050. These average schedules adopted generalized industry data to reflect the cost of a hypothetical exchange company. National Assoc. of Regulatory Util. Comm'nrs v. FCC, 737 F.2d 1095, 1127 (D.C.Cir.1984), cert. denied, 469 U.S. 1227, 105 S.Ct. 1224, 84 L.Ed.2d 364 (1985) (hereinafter NARUC v. FCC ). After divestiture and the codification of the Separations Manual, the FCC continued to allow small independent telephone companies, including Pine Tree, to estimate some or all of their costs through use of an `average schedule.' Id. The FCC's purpose in continuing the existing average schedule system was to avoid imposing the burden of developing cost information upon companies that may be too small to meet that burden. [7] Mid-Plains Tel. Co., 5 F.C.C.R. at 7051; see also Separations of Costs of Regulated Tel. Service from Costs of Nonregulated Activities, 2 F.C.C.R. 6283, 6316 n. 218 (1987) (Use of an average schedule eliminates the necessity of conducting expensive and burdensome cost studies.).