Comprehensive Review of the Uniform System of Accounts; Jurisdictional Separations and Referral to the Federal-State Joint Board, 10817-10822 [2018-04563]
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Federal Register / Vol. 83, No. 49 / Tuesday, March 13, 2018 / Proposed Rules
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Part 36
[WC Docket No. 14–130, CC Docket No. 14–
130; FCC 18–22]
Comprehensive Review of the Uniform
System of Accounts; Jurisdictional
Separations and Referral to the
Federal-State Joint Board
Federal Communications
Commission.
ACTION: Proposed rule.
AGENCY:
In this document, the Federal
Communications Commission
(Commission) seeks comment on its
proposal to adopt recommendations
from the Federal-State Joint Board on
Jurisdictional Separations and to amend
the Part 36 jurisdictional separations
rules accordingly. Acknowledging the
implications that reforms adopted in the
Part 32 Reform Order would have on the
Part 36 rules, the Commission referred
to the Federal-State Joint Board on
Jurisdictional Separations (Joint Board)
consideration of how and when to
modify Part 36 to ensure that it is
consistent with the Part 32 reforms. The
Joint Board issued its Recommended
Decision in October 2017. The
Commission proposes to adopt each of
the Joint Board’s recommendations
using, with minor exceptions, the
amendment language the Joint Board
suggested, and seeks comment on these
proposals.
DATES: Comments are due on or before
April 12, 2018. Reply comments are due
on or before April 27, 2018. If you
anticipate that you will be submitting
comments, but find it difficult to do so
within the period of time allowed by
this document, you should advise the
contact listed below as soon as possible.
ADDRESSES: You may submit comments,
identified by WC Docket Nos. 17–287,
11–42, and 09–197, by any of the
following methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• Federal Communications
Commission’s website: https://
fjallfoss.fcc.gov/ecfs2/. Follow the
instructions for submitting comments.
• People with Disabilities: Contact the
Commission to request reasonable
accommodations (accessible format
documents, sign language interpreters,
CART, etc.) by email: FCC504@fcc.gov
or phone: (202) 418–0530 or TTY: (202)
418–0432.
For detailed instructions for
submitting comments and additional
information on the rulemaking process,
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SUMMARY:
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see the SUPPLEMENTARY INFORMATION
section of this document.
FOR FURTHER INFORMATION CONTACT:
Edward Krachmer, Pricing Policy
Division, Wireline Competition Bureau,
at (202) 418–1540 or via email at
edward.krachmer@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a
summary of the Commission’s Notice of
Proposed Rulemaking, FCC 18–22,
released February 22, 2018. For a full
text copy of this document please go to
the following internet Address: https://
www.fcc.gov/document/fcc-proposesadopt-separations-joint-boardsrecommendations.
I. Introduction
1. In the Notice of Proposed
Rulemaking (NPRM), the Commission
takes steps to harmonize its rules
regarding jurisdictional separations to
reflect the Commission’s actions in
February 2017 to reduce and eliminate
unnecessary accounting rules. Today,
the Commission furthers its goal of
updating and modernizing the
Commission’s rules to minimize
outdated compliance burdens on
carriers and to free up scarce resources
that can accordingly be used to expand
modern networks that bring economic
opportunity, job creation and civic
engagement to all Americans.
2. In the Part 32 Reform Order, the
Commission amended its Part 32
Uniform System of Accounts (USOA) to
streamline or eliminate rules that had
outlived their utility. Recognizing that
those amendments had implications for
its Part 36 jurisdictional separations
rules, the Commission referred to the
Federal-State Joint Board on
Jurisdictional Separations (Joint Board)
consideration of how and when the Part
36 rules should be modified to reflect
the reforms adopted in the Part 32
Reform Order. The Commission asked
the Joint Board to consider how the Part
32 reforms ‘‘impact Part 36 and
consequently the rule changes necessary
to ensure the jurisdictional separations
rules are consistent’’ with changes to
Part 32. The Commission also asked that
the Joint Board ‘‘prepare a
recommended decision . . . regarding
how and when the Commission’s
jurisdictional separations rules should
be modified to reflect the issues in the
referral.’’ The Joint Board released its
Recommended Decision on October 27,
2017.
3. In this NPRM, the Commission
proposes to adopt each of the Joint
Board’s recommendations and to amend
the Part 36 rules consistent with those
recommendations. The Commission
invites comment on these proposals.
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II. Background
4. Jurisdictional separations are the
third step in a four-step regulatory
process used to establish tariffed rates
for interstate and intrastate regulated
services for incumbent local exchange
carriers (LECs). First, carriers record
their costs into various accounts in
accordance with the USOA prescribed
by Part 32 of the Commission’s rules.
Second, carriers divide the costs in
these accounts between regulated and
nonregulated activities in accordance
with Part 64 of the Commission’s rules.
This division ensures that the costs of
nonregulated activities will not be
recovered in regulated interstate service
rates. Third, carriers separate the
regulated costs between the intrastate
and interstate jurisdictions in
accordance with the Commission’s Part
36 separations rules. This process
begins with the carriers assigning
regulated costs to various investment
and expense categories. In certain
instances, carriers further disaggregate
costs among service categories. Finally,
carriers apportion the interstate
regulated costs among the interexchange
services and rate elements that form the
cost basis for their exchange access
tariffs. Carriers subject to rate-of-return
regulation perform this apportionment
in accordance with Part 69 of the
Commission’s rules.
5. Historically, Part 32 divided
incumbent LECs into two classes for
accounting purposes based on an
incumbent LEC’s annual regulated
revenues: Class A incumbent LECs
(currently those with regulated annual
revenues equal to or greater than $157
million) and Class B incumbent LECs
(currently those with less than $157
million in annual regulated revenues).
Part 32 required Class A carriers to
create and maintain substantially more
accounts than it required from smaller
Class B carriers. In all but one case,
Class A carrier accounts could be
grouped into sets that were represented
by single Class B carrier accounts—that
is, such Class A accounts consolidated
into, or ‘‘rolled up’’ into Class B
accounts.
6. The reforms adopted in the Part 32
Reform Order include the elimination of
Part 32’s distinction between Class A
and Class B incumbent LECs. Under the
new rules, effective January 1, 2018, all
carriers subject to Part 32 are required
to keep only the less onerous Class B
accounts.
7. At the request of the Commission,
the Joint Board considered the impact of
the Part 32 reforms on the Part 36 rules
and released a recommended decision.
In the Recommended Decision, the Joint
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Board recommends removing all of the
provisions in the Part 36 rules that deal
with Class A accounts, allowing former
Class A carriers (carriers with revenue
equal to or greater than $157 million for
calendar year 2016) to select between
the former Class A and former Class B
procedures for apportioning general
support facilities costs, and making
certain stylistic and typographical
corrections to the Part 36 rules.
III. Discussion
8. The Commission proposes to adopt
each of the Joint Board’s
recommendations and to amend the Part
36 rules using, with minor exceptions,
the language the Joint Board suggests.
The Commission invites comment on
these proposals. The Commission also
welcomes comment on whether it
should make other changes to the Part
36 rules to harmonize them with the
changes the Commission made to Part
32 in the Part 32 Reform Order.
9. First, the Commission proposes to
adopt the Joint Board’s recommendation
to remove from its Part 36 rules all the
provisions that deal with Class A
accounts, because carriers are no longer
be required to keep such accounts since
the revised Part 32 rules took effect on
January 1, 2018. Under this approach,
the Commission proposes to: (a) Delete
references to Class A accounts and the
phrase ‘‘Class B accounts’’ in Part 32
rules that contain parallel references to
Class A accounts and the Class B
accounts into which they roll up; (b)
delete references to current-year account
balances and modify references to Class
A carriers in other Part 36 rules; and (c)
delete references to Class A accounts in
sections 36.501 and 36.505 of the rules.
The Commission seeks comment on this
proposal as well as on whether there is
a different approach it should take in
harmonizing the Part 36 rules with the
newly amended Part 32 rules.
10. Second, the Commission proposes
to amend section 36.112, which
concerns the apportionment of general
support facilities costs. As the Joint
Board observes, this is the only Part 36
rule that provides different separations
procedures for Class A and Class B
carriers. Consistent with the Joint
Board’s recommendation, the
Commission proposes to allow former
Class A carriers (carriers with revenue
equal to or greater than $157 million for
calendar year 2016) to select between
these two procedures in apportioning
their general support facilities costs.
The Commission seeks comment on
permitting such selections. The
Commission also seeks comment on
whether each carrier should be
permitted to make an election only one
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time or be allowed to change the
approach it takes over time. What are
the practical consequences of permitting
carriers to make such elections?
11. Additionally, consistent with the
Joint Board’s recommendations, the
Commission’s proposed rule changes
include certain stylistic and
typographical corrections to the Part 36
rules. For example, the Commission
proposes to correct a spelling error in
section 36.126(b) and to hyphenate the
adjective ‘‘twelve month’’ throughout
Part 36. In addition to adopting these
corrections, are there other ministerial
corrections that the Commission should
make to those rules?
12. The Commission also seeks
comment on the timing for making these
changes to its Part 36 rules. The changes
to its Part 32 rules took effect January
1, 2018. Should the Commission make
harmonizing changes to its Part 36 rules
as soon as practicable, as the Joint Board
recommends? Should the Commission
make changes effective January 1, 2019?
The Commission asks commenters to
explain the implications of different
effective dates for any changes it makes
to harmonize its Part 36 rules with its
newly revised Part 32 rules.
IV. Procedural Matters
A. Comment Filing Procedures
13. Pursuant to sections 1.415 and
1.419 of the Commission’s rules, 47 CFR
1.415, 1.419, interested parties may file
comments and reply comments on or
before the dates indicated on the first
page of this document. Comments may
be filed using the Commission’s
Electronic Comment Filing System
(ECFS). See Electronic Filing of
Documents in Rulemaking Proceedings,
63 FR 24121 (1998).
• Electronic Filers: Comments may be
filed electronically using the internet by
accessing the ECFS: https://apps.fcc.gov/
ecfs/.
• Paper Filers: Parties who choose to
file by paper must file an original and
one copy of each filing. If more than one
docket or rulemaking number appears in
the caption of this proceeding, filers
must submit two additional copies for
each additional docket or rulemaking
number.
• Filings can be sent by hand or
messenger delivery, by commercial
overnight courier, or by first-class or
overnight U.S. Postal Service mail. All
filings must be addressed to the
Commission’s Secretary, Office of the
Secretary, Federal Communications
Commission.
• All hand-delivered or messengerdelivered paper filings for the
Commission’s Secretary must be
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delivered to FCC Headquarters at 445
12th St. SW, Room TW–A325,
Washington, DC 20554. The filing hours
are 8:00 a.m. to 7:00 p.m. All hand
deliveries must be held together with
rubber bands or fasteners. Any
envelopes and boxes must be disposed
of before entering the building.
• Commercial overnight mail (other
than U.S. Postal Service Express Mail
and Priority Mail) must be sent to 9050
Junction Drive, Annapolis Junction, MD
20701.
• U.S. Postal Service first-class,
Express, and Priority mail must be
addressed to 445 12th Street SW,
Washington DC 20554.
People with Disabilities: To request
materials in accessible formats for
people with disabilities (braille, large
print, electronic files, audio format),
send an email to fcc504@fcc.gov or call
the Consumer & Governmental Affairs
Bureau at 202–418–0530 (voice), 202–
418–0432 (tty).
B. Ex Parte Presentations
14. The proceeding this FNPRM
initiates shall be treated as a ‘‘permitbut-disclose’’ proceeding in accordance
with the Commission’s ex parte rules.
Persons making ex parte presentations
must file a copy of any written
presentation or a memorandum
summarizing any oral presentation
within two business days after the
presentation (unless a different deadline
applicable to the Sunshine period
applies). Persons making oral ex parte
presentations are reminded that
memoranda summarizing the
presentation must (1) list all persons
attending or otherwise participating in
the meeting at which the ex parte
presentation was made, and (2)
summarize all data presented and
arguments made during the
presentation. If the presentation
consisted in whole or in part of the
presentation of data or arguments
already reflected in the presenter’s
written comments, memoranda or other
filings in the proceeding, the presenter
may provide citations to such data or
arguments in his or her prior comments,
memoranda, or other filings (specifying
the relevant page and/or paragraph
numbers where such data or arguments
can be found) in lieu of summarizing
them in the memorandum. Documents
shown or given to Commission staff
during ex parte meetings are deemed to
be written ex parte presentations and
must be filed consistent with rule
1.1206(b). In proceedings governed by
rule 1.49(f) or for which the
Commission has made available a
method of electronic filing, written ex
parte presentations and memoranda
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summarizing oral ex parte
presentations, and all attachments
thereto, must be filed through the
electronic comment filing system
available for that proceeding, and must
be filed in their native format (e.g., .doc,
.xml, .ppt, searchable .pdf). Participants
in this proceeding should familiarize
themselves with the Commission’s ex
parte rules.
C. Paperwork Reduction Act
15. This document does not contain
proposed information collection(s)
subject to the Paperwork Reduction Act
of 1995 (PRA), Public Law 104–13. In
addition, therefore, it does not contain
any new or modified information
collection burden for small business
concerns with fewer than 25 employees,
pursuant to the Small Business
Paperwork Relief Act of 2002, Public
Law 107–198, see 44 U.S.C. 3506(c)(4).
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D. Initial Regulatory Flexibility Act
Analysis
16. As required by the Regulatory
Flexibility Act of 1980 (RFA), the
Commission has prepared an Initial
Regulatory Flexibility Analysis (IRFA)
for this Notice of Proposed Rulemaking,
of the possible significant economic
impact on small entities of the policies
and rules addressed in this document.
The IRFA is set forth in Appendix C.
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 the NPRM indicated on
the first page of this document. The
Commission’s Consumer and
Governmental Affairs Bureau, Reference
Information Center, will send a copy of
this Notice of Proposed Rulemaking,
including the IRFA, to the Chief
Counsel for Advocacy of the Small
Business Administration (SBA).
V. Initial Regulatory Flexibility
Analysis
17. As required by the Regulatory
Flexibility Act of 1980, as amended
(RFA), the Commission has prepared
this Initial Regulatory Flexibility
Analysis (IRFA) of the possible
significant economic impact on small
entities by the proposals in this Notice
of Proposed Rulemaking (Notice).
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 and reply comments on the
Notice provided above. The
Commission will send a copy of the
Notice, including this IRFA, to the Chief
Counsel for Advocacy of the Small
Business Administration (SBA). In
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addition, the Notice and the IRFA (or
summaries thereof) will be published in
the Federal Register.
A. Need for, and Objectives of, the
Proposed Rules
18. In the Part 32 Reform Order, the
Commission amended its Part 32
Uniform System of Accounts (USOA) to
streamline or eliminate rules that had
outlived their utility. Recognizing that
those amendments had implications for
its Part 36 jurisdictional separations
rules, the Commission referred to the
Federal-State Joint Board on
Jurisdictional Separations (Joint Board)
consideration of how and when the Part
36 rules should be modified to reflect
the reforms adopted in the Part 32
Reform Order. The Commission asked
the Joint Board to consider how those
reforms ‘‘impact Part 36 and
consequently the rule changes necessary
to ensure the jurisdictional separations
rules are consistent’’ with changes to
Part 32. The Commission also asked that
the Joint Board ‘‘prepare a
recommended decision . . . regarding
how and when the Commission’s
jurisdictional separations rules should
be modified to reflect the issues in the
referral.’’ The Joint Board released its
Recommended Decision on October 27,
2017. In this Notice of Proposed
Rulemaking (Notice), the Commission
invites comment on that Recommended
Decision and, in particular, on the
proposed amendments to the Part 36
rules recommended by the Joint Board.
The purpose of those proposed
amendments is to ensure that the Part
36 rules are consistent with the
amendments to the Part 32 rules
adopted in the Part 32 Reform Order.
B. Legal Basis
19. The legal basis for the Notice of
Proposed Rulemaking is contained in
sections 1, 2, 4(i), 201–205, 215, 218,
220, and 410 of the Communications
Act of 1934, as amended.
C. Description and Estimate of the
Number of Small Entities to Which
Rules May Apply
20. 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. The RFA
generally defines the term ‘‘small
entity’’ as having the same meaning as
the terms ‘‘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. A ‘‘small
business concern’’ is one which: (1) Is
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independently owned and operated; (2)
is not dominant in its field of operation;
and (3) satisfies any additional criteria
established by the Small Business
Administration (SBA). Nationwide,
there are a total of approximately 27.9
million small businesses, according to
the SBA.
21. Incumbent Local Exchange
Carriers. Neither the Commission nor
the SBA has developed a small business
size standard specifically for providers
of incumbent local exchange services.
The closest applicable size standard
under the SBA rules is for Wired
Telecommunications Carriers. Under
the SBA definition, a carrier is small if
it has 1,500 or fewer employees.
According to the FCC’s Telephone
Trends Report data, 1,307 incumbent
local exchange carriers (LECs) reported
that they were engaged in the provision
of local exchange services. Of these
1,307 carriers, an estimated 1,006 have
1,500 or fewer employees and 301 have
more than 1,500 employees.
Consequently, the Commission
estimates that most incumbent LECs are
small entities that may be affected by
the rules and policies adopted herein.
22. The Commission has included
small incumbent LECs in this 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. Because the
Commission’s proposals concerning the
Part 36 rules will affect all incumbent
LECs, some entities employing 1,500 or
fewer employees may be affected by the
proposals made in this Notice. The
Commission has therefore included
small incumbent LECs in this RFA
analysis, although it emphasizes that
this RFA action has no effect on the
Commission’s analyses and
determinations in other, non-RFA
contexts. The Commission notes,
however, that proposals in the Notice
are focused on incumbent LECs with
regulated annual revenues equal to or
above $157 million, a group that
excludes many small incumbent LECs.
D. Description of Projected Reporting,
Recordkeeping, and Other Compliance
Requirements
23. None.
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E. Steps Taken To Minimize Significant
Economic Impact on Small Entities, and
Significant Alternatives Considered
24. The RFA requires an agency to
describe any significant alternatives that
it has considered in reaching its
proposed approach, which may include
(among others) the following four
alternatives: (1) The establishment of
differing compliance and 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 part thereof, for
small entities.
25. As discussed above, the purpose
of the proposals in this Notice is to
ensure that the Part 36 rules are
consistent with the amendments to the
Part 32 rules adopted in the Part 32
Reform Order. The Commission seeks
comment on the effects its proposals
would have on small entities, and
whether any rules that it adopts should
apply differently to small entities. The
Commission requests commenters to
consider the costs and burdens of
possible rule amendments on small
incumbent LECs and whether such
amendments would disproportionately
affect specific types of carriers or
ratepayers.
26. The Commission believes that the
proposed rules would ease the
administrative burden of regulatory
compliance for incumbent LECs,
including any small incumbent LECs
those rules might affect. The Part 32
Reform Order reduced the number of
Part 32 accounts that incumbent LECs
with regulated annual revenues equal to
or above $157 million are required to
keep, and the proposed amendments to
Part 36 would carry forward those
reductions into the jurisdictional
separations process. If those
amendments can be said to have any
effect under the RFA, it is to reduce a
regulatory compliance burden for small
incumbent LECs.
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F. Federal Rules That May Duplicate,
Overlap, or Conflict With the Proposed
Rules
27. None.
VI. Ordering Clauses
28. Accordingly, it is ordered that,
pursuant to the authority contained in
sections 1, 2, 4(i), 201–205, 215, 218,
220, and 410 of the Communications
Act of 1934, as amended, 47 U.S.C. 151,
152, 154(i), 201–205, 215, 218, 220, 410,
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this Notice of Proposed Rulemaking is
adopted.
29. It is further ordered that the
Commission’s Consumer and
Governmental Affairs Bureau, Reference
Information Center, shall send a copy of
this Notice of Proposed Rulemaking,
including the Initial Regulatory
Flexibility Analysis, to the Chief
Counsel for Advocacy of the Small
Business Administration.
List of Subjects in 47 CFR Part 36
Communications common carriers;
Reporting and recordkeeping
requirements; Telephone; Uniform
system of accounts.
Federal Communications Commission.
Marlene H. Dortch,
Secretary, Office of the Secretary.
Proposed Rules
For the reasons discussed in the
preamble, the Federal Communications
Commission proposes to amend 47 CFR
part 36 as follows:
PART 36—JURISDICTIONAL
SEPARATIONS PROCEDURES;
STANDARD PROCEDURES FOR
SEPARATING
TELECOMMUNICATIONS PROPERTY
COSTS, REVENUES, EXPENSES,
TAXES AND RESERVES FOR
TELECOMMUNICATIONS COMPANIES
1. The authority citation for part 36
continues to read as follows:
■
Authority: 47 U.S.C. 151, 154(i) and (j),
205, 221(c), 254, 303(r), 403, 410, and 1302
unless otherwise noted.
■
2. Revise § 36.112 to read as follows:
§ 36.112
Apportionment procedure.
(a) The costs of the general support
facilities of local exchange carriers that
had annual revenues from regulated
telecommunications operations equal to
or greater than $157 million for calendar
year 2016 are apportioned among the
operations on the basis of one of the
following, at the election of the local
exchange carrier:
(1) The separation of the costs of the
combined Big Three Expenses which
include the following accounts:
Plant Specific Expenses
Central Office Switching Expenses—
Account 6210
Operators Systems Expenses—Account
6220
Central Office Transmission Expenses—
Account 6230
Information Origination/Termination
Expenses—Account 6310
Cable and Wire Facilities Expenses—
Account 6410
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Plant Non-Specific Expenses
Network Operations Expenses—
Account 6530
Customer Operations Expenses
Marketing—Account 6610
Services—Account 6620; or
(2) The separation of the costs of
Central Office Equipment, Information
Origination/Termination Equipment,
and Cable and Wire Facilities,
combined.
(b) The costs of the general support
facilities of local exchange carriers that
had annual revenues from regulated
telecommunications operations less
than $157 million for calendar year
2016 are apportioned among the
operations on the basis of the separation
of the costs of Central Office Equipment,
Information Origination/Termination
Equipment, and Cable and Wire
Facilities, combined.
§ 36.121
[Amended]
3. Amend § 36.121 as follows:
a. Revise paragraph (a); and
b. In paragraph (c)(1)(i), remove ‘‘130
volt’’ and add, in its place, ‘‘130-volt’’.
The revision reads as follows:
■
■
■
§ 36.121
General.
(a) The costs of central office
equipment are carried in the following
accounts:
Central Office Switching Account—
2210.
Operator Systems Account—2220.
Central Office—Transmission
Account—2230.
*
*
*
*
*
§ 36.124
[Amended]
4. Amend § 36.124 as follows:
a. In paragraph (a), remove ‘‘Accounts
2210, 2211, and 2212’’ and add, in its
place, ‘‘Account 2210’’.
■ b. In paragraph (c), remove ‘‘assign the
average balances of Accounts 2210,
2211, and 2212’’ and add, in its place,
‘‘assign the average balance of Account
2210’’; and remove ‘‘assignment of the
average balances of Accounts 2210,
2211, and 2212,’’ and add, in its place,
‘‘assignment of the average balance of
Account 2210 (or, if Accounts 2211 and
2212 were required to be maintained at
the applicable time, the average
balances of Accounts 2211 and 2212)’’.
■
■
§ 36.125
[Amended]
5. Amend § 36.125 as follows:
a. In paragraph (a), remove ‘‘Accounts
2210, 2211, and 2212’’ and add, in its
place, ‘‘Account 2210’’; remove ‘‘e.g.
transmitters,’’ and add, in its place,
‘‘e.g., transmitters,’’; remove ‘‘directors’’
and, add in its place, ‘‘directors,’’; and
remove ‘‘e.g. switching’’ and add, in its
place, ‘‘e.g., switching’’.
■
■
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b. In paragraph (h), remove ‘‘assign
the average balances of Accounts 2210,
2211, and 2212’’ and add, in its place,
‘‘assign the average balance of Account
2210’’; and remove ‘‘assignment of the
average balances of Accounts 2210,
2211, and 2212,’’ and add, in its place,
‘‘assignment of the average balance of
Account 2210 (or, if Accounts 2211 and
2212 were required to be maintained at
the applicable time, the average
balances of Accounts 2211 and 2212)’’.
7. Amend § 36.154 by removing
‘‘jurisdication’’ and adding, in its place,
‘‘jurisdiction’’.
a. Redesignate paragraph (a) as an
undesignated paragraph; and
■ b. In the table:
■ i. Remove ‘‘(Class B Telephone
Companies); Accounts 6112, 6113, 6114,
6121, 6122, 6123, and 6124 (Class A
Telephone Companies)’’;
■ ii. Remove ‘‘Accounts 6210, 6220,
6230 (Class B Telephone Companies);
Accounts 6211, 6212, 6220, 6231, and
6232 (Class A Telephone Companies)’’
and add, in its place, ‘‘Accounts 6210,
6220, and 6230’’;
■ iii. Remove ‘‘(Class B Telephone
Companies); Accounts 6311, 6341, 6351,
and 6362 (Class A Telephone
Companies)’’;
■ iv. Remove ‘‘(Class B Telephone
Companies); Accounts 6411, 6421, 6422,
6423, 6424, 6426, 6431, and 6441 (Class
A Telephone Companies)’’;
■ v. Remove ‘‘(Class B Telephone
Companies); Accounts 6511 and 6512
(Class A Telephone Companies)’’;
■ vi. Remove ‘‘(Class B Telephone
Companies); Accounts 6531, 6532, 6533,
6534, and 6535 (Class A Telephone
Companies)’’;
■ vii. Remove ‘‘(Class B Telephone
Companies); Accounts 6611 and 6613
(Class A Telephone Companies)’’;
■ viii. Remove ‘‘Local Bus. Office’’ and
add, in its place, ‘‘Local Business
Office’’; and
■ ix. Remove ‘‘(Class B Telephone
Companies); Accounts 7210, 7220, 7230,
7240, and 7250 (Class A Telephone
Companies)’’.
§ 36.201
§ 36.302
■
§ 36.126
[Amended]
6. Amend § 36.126 as follows:
a. In paragraph (a), remove ‘‘Accounts
2230 through 2232 respectively’’ and
add, in its place, ‘‘Account 2230’’.
■ b. In the introductory text of
paragraph (b), remove ‘‘equiment’’ and
add, in its place, ‘‘equipment’’.
■ c. In paragraphs (b)(5) and (6), remove
‘‘assign the average balances of
Accounts 2230 through 2232’’ and add,
in its place, ‘‘assign the average balance
of Account 2230’’; and remove
‘‘assignment of the average balances of
Accounts 2230 through 2232’’ and add,
in its place, ‘‘assignment of the average
balance of Account 2230 (or, if
Accounts 2231 and 2232 were required
to be maintained at the applicable time,
the average balances of Accounts 2231
and 2232)’’.
■
■
§ 36.154
[Amended]
■
[Amended]
8. Amend § 36.201 as follows:
a. Redesignate paragraph (a) as an
undesignated paragraph; and
■ b. In the table, remove ‘‘(Class B
telephone companies); Basic area
revenue—Account 5001 (Class A
telephone companies)’’.
■
■
§ 36.211
§ 36.310
9. Amend § 36.211 as follows:
a. Redesignate paragraph (a) as an
undesignated paragraph; and
■ b. In the table:
■ i. Remove ‘‘Basic local service
revenue (Class B telephone companies)’’
and add, in its place, ‘‘Basic Local
Service Revenue’’; and
■ ii. Remove the entry ‘‘Basic Area
Revenue (Class A telephone
companies)’’.
■ 10. Amend § 36.212 by revising the
section heading to read as follows:
amozie on DSK30RV082PROD with PROPOSALS
§ 36.212 Basic local services revenue—
Account 5000.
*
§ 36.301
■
*
*
*
[Amended]
11. Amend § 36.301 as follows:
VerDate Sep<11>2014
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Jkt 244001
[Amended]
12. Amend § 36.302 in the
introductory text to paragraph (c)(1) and
in paragraph (c)(1)(i), by removing
‘‘SRC’’ and adding, in its place, ‘‘SRCs’’.
■ 13. Amend § 36.310 by revising
paragraph (a) to read as follows:
■
[Amended]
■
■
*
■
General.
(a) Plant specific operations expenses
include the following accounts:
Network Support Expenses. Account
6110
General Support Expenses. Account
6120
Central Office Switching Expenses.
Account 6210
Operator System Expenses. Account
6220
Central Office Transmission Expenses.
Account 6230
Information Origination/Termination
Expenses. Account 6310
Cable and Wire Facilities Expenses.
Account 6410
*
*
*
*
*
■ 14. Amend § 36.311 by revising the
section heading to read as follows:
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§ 36.311 Network Support/General
Support Expenses—Accounts 6110 and
6120.
*
*
*
*
*
15. Amend § 36.321 as follows:
■ a. Revise the section heading;
■ b. Remove, from the table in
paragraph (a), ‘‘(Class B telephone
companies); Accounts 6211 and 6212
(Class A telephone companies)’’ and
‘‘(Class B telephone companies);
Accounts 6231 and 6232 (Class A
telephone companies)’’; and
■ c. Remove, from paragraph (b),
‘‘equipment. Accounts’’ and adding, in
its place, ‘‘equipment—Accounts’’.
The revision reads as follows:
■
§ 36.321 Central office expenses—
Accounts 6210, 6220, and 6230.
*
*
*
*
*
16. Amend § 36.331 by revising the
section heading to read as follows:
■
§ 36.331 Information origination/
termination expenses—Account 6310.
*
*
*
*
*
17. Amend § 36.341 by revising the
section heading to read as follows:
■
§ 36.341 Cable and wire facilities
expenses—Account 6410.
*
*
§ 36.351
*
*
*
[Amended]
18. Amend § 36.351 as follows:
a. Redesignate paragraph (a) as an
undesignated paragraph; and
■ b. In the table:
■ i. Remove ‘‘(Class B telephone
companies); Accounts 6511 and 6512
(Class A telephone companies)’’; and
■ ii. Remove ‘‘(Class B telephone
companies); Accounts 6531, 6532, 6533,
6534, and 6535 (Class A telephone
companies)’’.
■ 19. Amend § 36.352 by revising the
section heading to read as follows:
■
■
§ 36.352 Other property plant and
equipment expenses—Account 6510.
*
*
*
*
*
20. Amend § 36.353 by revising the
section heading to read as follows:
■
§ 36.353 Network operations expenses—
Account 6530.
*
*
§ 36.371
*
*
*
[Amended]
21. Amend § 36.371 in the table by
removing ‘‘(Class B telephone
companies); Accounts 6611 and 6613
(Class A telephone companies)’’.
■ 22. Amend § 36.372 by revising the
section heading to read as follows:
■
§ 36.372
*
E:\FR\FM\13MRP1.SGM
*
Marketing—Account 6610.
*
13MRP1
*
*
10822
§ 36.375
Federal Register / Vol. 83, No. 49 / Tuesday, March 13, 2018 / Proposed Rules
[Amended]
■
c. Revise the final entry in the list.
The revisions read as follows:
23. Amend § 36.375 in paragraphs
(b)(4) and (5), by removing ‘‘through
(4)’’ and adding, in its place, ‘‘through
(3)’’.
§ 36.411
§ 36.392
Provision for Deferred Operating
Income Taxes
■
[Amended]
24. Amend § 36.392(c) as follows:
a. Remove ‘‘(Class B Telephone
Companies); Accounts 6211 and 6212
(Class A Telephone Companies)’’;
■ b. Remove ‘‘(Class B Telephone
Companies); Accounts 6231 and 6232
(Class A Telephone Companies)’’;
■ c. Remove ‘‘(Class B Telephone
Companies); Accounts 6311, 6341, 6351,
and 6362 (Class A Telephone
Companies)’’;
■ d. Remove ‘‘(Class B Telephone
Companies); Accounts 6411, 6421, 6422,
6423, 6424, 6426, 6431, and 6441 (Class
A Telephone Companies)’’;
■ e. Remove ‘‘(Class B Telephone
Companies); Accounts 6531, 6532, 6533,
6534, and 6535 (Class A Telephone
Companies)’’ and
■ f. Remove ‘‘(Class B Telephone
Companies); Accounts 6611 and 6613
(Class A Telephone Companies)’’.
■ 25. Amend § 36.411 as follows:
■ a. Revise the section heading;
■ b. Redesignate paragraph (a) as an
undesignated paragraph
amozie on DSK30RV082PROD with PROPOSALS
■
■
VerDate Sep<11>2014
16:40 Mar 12, 2018
Jkt 244001
*
■
*
Operating taxes—Account 7200.
*
*
*
26. Amend § 36.501 as follows:
§ 36.501
[Amended]
Remove ‘‘(Class B Telephone
Companies); Account 3410 (Class A
Telephone Companies)’’.
■ 27. Amend § 36.505 as follows:
■ a. Revise the section heading;
■ b. Redesignate paragraph (a) as an
undesignated paragraph.
The revision reads as follows:
§ 36.505 Accumulated amortization—
Tangible—Account 3400.
§§ 36.3, 36.123, 36.124(c) and (d); 36.125(h)
and (i); 36.126(b)(5) and (6); 36.126(c)(4),
(e)(4), and (f)(2); 36.141(c); 36.142(c);
36.152(d); 36.157(b); 36.191(d); 36.374(b);
36.375(b)(4); 36.377 introductory text and
(a)(1)(ix), (2)(vii), (3)(vii), (4)(vii), (5)(vii), and
(6)(vii); 36.378(b)(1); 36.379(b)(1);
36.380(d) and (e); 36.381(c); and
36.382(a) [Amended]
a. §§ 36.3(a) and (b);
■ b. §§ 36.123(a)(5) and (6);
■ c. §§ 36.124(c) and (d);
■ d. §§ 36.125(h) and (i);
■ e. § 36.126(b)(5) and (6);
■ f. §§ 36.126(c)(4), (e)(4), and (f)(2);
■ g. § 36.141(c);
■ h. § 36.142(c);
■ i. § 36.152(d);
■ j. § 36.157(b);
■ k. § 36.191(d);
■ l. § 36.374(b);
■ m. § 36.375(b)(4);
■ n. §§ 36.377 introductory text and
(a)(1)(ix), (2)(vii), (3)(vii), (4)(vii),
(5)(vii), and (6)(vii);
■ o § 36.378(b)(1);
■ p. § 36.379(b)(1);
■ q. §§ 36.380(d) and (e);
■ r. § 36.381(c); and
■ s. § 36.382(a).
■
[FR Doc. 2018–04563 Filed 3–12–18; 8:45 am]
BILLING CODE 6712–01–P
28. Remove the term ‘‘twelve-month’’
and add in its place ‘‘twelve-month’’ in:
■
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]]>Agencies
[Federal Register Volume 83, Number 49 (Tuesday, March 13, 2018)]
[Proposed Rules]
[Pages 10817-10822]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-04563]
[[Page 10817]]
=======================================================================
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 36
[WC Docket No. 14-130, CC Docket No. 14-130; FCC 18-22]
Comprehensive Review of the Uniform System of Accounts;
Jurisdictional Separations and Referral to the Federal-State Joint
Board
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: In this document, the Federal Communications Commission
(Commission) seeks comment on its proposal to adopt recommendations
from the Federal-State Joint Board on Jurisdictional Separations and to
amend the Part 36 jurisdictional separations rules accordingly.
Acknowledging the implications that reforms adopted in the Part 32
Reform Order would have on the Part 36 rules, the Commission referred
to the Federal-State Joint Board on Jurisdictional Separations (Joint
Board) consideration of how and when to modify Part 36 to ensure that
it is consistent with the Part 32 reforms. The Joint Board issued its
Recommended Decision in October 2017. The Commission proposes to adopt
each of the Joint Board's recommendations using, with minor exceptions,
the amendment language the Joint Board suggested, and seeks comment on
these proposals.
DATES: Comments are due on or before April 12, 2018. Reply comments are
due on or before April 27, 2018. If you anticipate that you will be
submitting comments, but find it difficult to do so within the period
of time allowed by this document, you should advise the contact listed
below as soon as possible.
ADDRESSES: You may submit comments, identified by WC Docket Nos. 17-
287, 11-42, and 09-197, by any of the following methods:
Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments.
Federal Communications Commission's website: https://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting
comments.
People with Disabilities: Contact the Commission to
request reasonable accommodations (accessible format documents, sign
language interpreters, CART, etc.) by email: [email protected] or phone:
(202) 418-0530 or TTY: (202) 418-0432.
For detailed instructions for submitting comments and additional
information on the rulemaking process, see the SUPPLEMENTARY
INFORMATION section of this document.
FOR FURTHER INFORMATION CONTACT: Edward Krachmer, Pricing Policy
Division, Wireline Competition Bureau, at (202) 418-1540 or via email
at [email protected].
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Proposed Rulemaking, FCC 18-22, released February 22, 2018. For a
full text copy of this document please go to the following internet
Address: https://www.fcc.gov/document/fcc-proposes-adopt-separations-joint-boards-recommendations.
I. Introduction
1. In the Notice of Proposed Rulemaking (NPRM), the Commission
takes steps to harmonize its rules regarding jurisdictional separations
to reflect the Commission's actions in February 2017 to reduce and
eliminate unnecessary accounting rules. Today, the Commission furthers
its goal of updating and modernizing the Commission's rules to minimize
outdated compliance burdens on carriers and to free up scarce resources
that can accordingly be used to expand modern networks that bring
economic opportunity, job creation and civic engagement to all
Americans.
2. In the Part 32 Reform Order, the Commission amended its Part 32
Uniform System of Accounts (USOA) to streamline or eliminate rules that
had outlived their utility. Recognizing that those amendments had
implications for its Part 36 jurisdictional separations rules, the
Commission referred to the Federal-State Joint Board on Jurisdictional
Separations (Joint Board) consideration of how and when the Part 36
rules should be modified to reflect the reforms adopted in the Part 32
Reform Order. The Commission asked the Joint Board to consider how the
Part 32 reforms ``impact Part 36 and consequently the rule changes
necessary to ensure the jurisdictional separations rules are
consistent'' with changes to Part 32. The Commission also asked that
the Joint Board ``prepare a recommended decision . . . regarding how
and when the Commission's jurisdictional separations rules should be
modified to reflect the issues in the referral.'' The Joint Board
released its Recommended Decision on October 27, 2017.
3. In this NPRM, the Commission proposes to adopt each of the Joint
Board's recommendations and to amend the Part 36 rules consistent with
those recommendations. The Commission invites comment on these
proposals.
II. Background
4. Jurisdictional separations are the third step in a four-step
regulatory process used to establish tariffed rates for interstate and
intrastate regulated services for incumbent local exchange carriers
(LECs). First, carriers record their costs into various accounts in
accordance with the USOA prescribed by Part 32 of the Commission's
rules. Second, carriers divide the costs in these accounts between
regulated and nonregulated activities in accordance with Part 64 of the
Commission's rules. This division ensures that the costs of
nonregulated activities will not be recovered in regulated interstate
service rates. Third, carriers separate the regulated costs between the
intrastate and interstate jurisdictions in accordance with the
Commission's Part 36 separations rules. This process begins with the
carriers assigning regulated costs to various investment and expense
categories. In certain instances, carriers further disaggregate costs
among service categories. Finally, carriers apportion the interstate
regulated costs among the interexchange services and rate elements that
form the cost basis for their exchange access tariffs. Carriers subject
to rate-of-return regulation perform this apportionment in accordance
with Part 69 of the Commission's rules.
5. Historically, Part 32 divided incumbent LECs into two classes
for accounting purposes based on an incumbent LEC's annual regulated
revenues: Class A incumbent LECs (currently those with regulated annual
revenues equal to or greater than $157 million) and Class B incumbent
LECs (currently those with less than $157 million in annual regulated
revenues). Part 32 required Class A carriers to create and maintain
substantially more accounts than it required from smaller Class B
carriers. In all but one case, Class A carrier accounts could be
grouped into sets that were represented by single Class B carrier
accounts--that is, such Class A accounts consolidated into, or ``rolled
up'' into Class B accounts.
6. The reforms adopted in the Part 32 Reform Order include the
elimination of Part 32's distinction between Class A and Class B
incumbent LECs. Under the new rules, effective January 1, 2018, all
carriers subject to Part 32 are required to keep only the less onerous
Class B accounts.
7. At the request of the Commission, the Joint Board considered the
impact of the Part 32 reforms on the Part 36 rules and released a
recommended decision. In the Recommended Decision, the Joint
[[Page 10818]]
Board recommends removing all of the provisions in the Part 36 rules
that deal with Class A accounts, allowing former Class A carriers
(carriers with revenue equal to or greater than $157 million for
calendar year 2016) to select between the former Class A and former
Class B procedures for apportioning general support facilities costs,
and making certain stylistic and typographical corrections to the Part
36 rules.
III. Discussion
8. The Commission proposes to adopt each of the Joint Board's
recommendations and to amend the Part 36 rules using, with minor
exceptions, the language the Joint Board suggests. The Commission
invites comment on these proposals. The Commission also welcomes
comment on whether it should make other changes to the Part 36 rules to
harmonize them with the changes the Commission made to Part 32 in the
Part 32 Reform Order.
9. First, the Commission proposes to adopt the Joint Board's
recommendation to remove from its Part 36 rules all the provisions that
deal with Class A accounts, because carriers are no longer be required
to keep such accounts since the revised Part 32 rules took effect on
January 1, 2018. Under this approach, the Commission proposes to: (a)
Delete references to Class A accounts and the phrase ``Class B
accounts'' in Part 32 rules that contain parallel references to Class A
accounts and the Class B accounts into which they roll up; (b) delete
references to current-year account balances and modify references to
Class A carriers in other Part 36 rules; and (c) delete references to
Class A accounts in sections 36.501 and 36.505 of the rules. The
Commission seeks comment on this proposal as well as on whether there
is a different approach it should take in harmonizing the Part 36 rules
with the newly amended Part 32 rules.
10. Second, the Commission proposes to amend section 36.112, which
concerns the apportionment of general support facilities costs. As the
Joint Board observes, this is the only Part 36 rule that provides
different separations procedures for Class A and Class B carriers.
Consistent with the Joint Board's recommendation, the Commission
proposes to allow former Class A carriers (carriers with revenue equal
to or greater than $157 million for calendar year 2016) to select
between these two procedures in apportioning their general support
facilities costs. The Commission seeks comment on permitting such
selections. The Commission also seeks comment on whether each carrier
should be permitted to make an election only one time or be allowed to
change the approach it takes over time. What are the practical
consequences of permitting carriers to make such elections?
11. Additionally, consistent with the Joint Board's
recommendations, the Commission's proposed rule changes include certain
stylistic and typographical corrections to the Part 36 rules. For
example, the Commission proposes to correct a spelling error in section
36.126(b) and to hyphenate the adjective ``twelve month'' throughout
Part 36. In addition to adopting these corrections, are there other
ministerial corrections that the Commission should make to those rules?
12. The Commission also seeks comment on the timing for making
these changes to its Part 36 rules. The changes to its Part 32 rules
took effect January 1, 2018. Should the Commission make harmonizing
changes to its Part 36 rules as soon as practicable, as the Joint Board
recommends? Should the Commission make changes effective January 1,
2019? The Commission asks commenters to explain the implications of
different effective dates for any changes it makes to harmonize its
Part 36 rules with its newly revised Part 32 rules.
IV. Procedural Matters
A. Comment Filing Procedures
13. Pursuant to sections 1.415 and 1.419 of the Commission's rules,
47 CFR 1.415, 1.419, interested parties may file comments and reply
comments on or before the dates indicated on the first page of this
document. Comments may be filed using the Commission's Electronic
Comment Filing System (ECFS). See Electronic Filing of Documents in
Rulemaking Proceedings, 63 FR 24121 (1998).
Electronic Filers: Comments may be filed electronically
using the internet by accessing the ECFS: https://apps.fcc.gov/ecfs/.
Paper Filers: Parties who choose to file by paper must
file an original and one copy of each filing. If more than one docket
or rulemaking number appears in the caption of this proceeding, filers
must submit two additional copies for each additional docket or
rulemaking number.
Filings can be sent by hand or messenger delivery, by
commercial overnight courier, or by first-class or overnight U.S.
Postal Service mail. All filings must be addressed to the Commission's
Secretary, Office of the Secretary, Federal Communications Commission.
All hand-delivered or messenger-delivered paper filings
for the Commission's Secretary must be delivered to FCC Headquarters at
445 12th St. SW, Room TW-A325, Washington, DC 20554. The filing hours
are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together
with rubber bands or fasteners. Any envelopes and boxes must be
disposed of before entering the building.
Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9050 Junction Drive,
Annapolis Junction, MD 20701.
U.S. Postal Service first-class, Express, and Priority
mail must be addressed to 445 12th Street SW, Washington DC 20554.
People with Disabilities: To request materials in accessible
formats for people with disabilities (braille, large print, electronic
files, audio format), send an email to [email protected] or call the
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (tty).
B. Ex Parte Presentations
14. The proceeding this FNPRM initiates shall be treated as a
``permit-but-disclose'' proceeding in accordance with the Commission's
ex parte rules. Persons making ex parte presentations must file a copy
of any written presentation or a memorandum summarizing any oral
presentation within two business days after the presentation (unless a
different deadline applicable to the Sunshine period applies). Persons
making oral ex parte presentations are reminded that memoranda
summarizing the presentation must (1) list all persons attending or
otherwise participating in the meeting at which the ex parte
presentation was made, and (2) summarize all data presented and
arguments made during the presentation. If the presentation consisted
in whole or in part of the presentation of data or arguments already
reflected in the presenter's written comments, memoranda or other
filings in the proceeding, the presenter may provide citations to such
data or arguments in his or her prior comments, memoranda, or other
filings (specifying the relevant page and/or paragraph numbers where
such data or arguments can be found) in lieu of summarizing them in the
memorandum. Documents shown or given to Commission staff during ex
parte meetings are deemed to be written ex parte presentations and must
be filed consistent with rule 1.1206(b). In proceedings governed by
rule 1.49(f) or for which the Commission has made available a method of
electronic filing, written ex parte presentations and memoranda
[[Page 10819]]
summarizing oral ex parte presentations, and all attachments thereto,
must be filed through the electronic comment filing system available
for that proceeding, and must be filed in their native format (e.g.,
.doc, .xml, .ppt, searchable .pdf). Participants in this proceeding
should familiarize themselves with the Commission's ex parte rules.
C. Paperwork Reduction Act
15. This document does not contain proposed information
collection(s) subject to the Paperwork Reduction Act of 1995 (PRA),
Public Law 104-13. In addition, therefore, it does not contain any new
or modified information collection burden for small business concerns
with fewer than 25 employees, pursuant to the Small Business Paperwork
Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4).
D. Initial Regulatory Flexibility Act Analysis
16. As required by the Regulatory Flexibility Act of 1980 (RFA),
the Commission has prepared an Initial Regulatory Flexibility Analysis
(IRFA) for this Notice of Proposed Rulemaking, of the possible
significant economic impact on small entities of the policies and rules
addressed in this document. The IRFA is set forth in Appendix C.
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 the NPRM indicated on the first page of this document.
The Commission's Consumer and Governmental Affairs Bureau, Reference
Information Center, will send a copy of this Notice of Proposed
Rulemaking, including the IRFA, to the Chief Counsel for Advocacy of
the Small Business Administration (SBA).
V. Initial Regulatory Flexibility Analysis
17. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA), the Commission has prepared this Initial Regulatory
Flexibility Analysis (IRFA) of the possible significant economic impact
on small entities by the proposals in this Notice of Proposed
Rulemaking (Notice). 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 and reply comments on the Notice
provided above. The Commission will send a copy of the Notice,
including this IRFA, to the Chief Counsel for Advocacy of the Small
Business Administration (SBA). In addition, the Notice and the IRFA (or
summaries thereof) will be published in the Federal Register.
A. Need for, and Objectives of, the Proposed Rules
18. In the Part 32 Reform Order, the Commission amended its Part 32
Uniform System of Accounts (USOA) to streamline or eliminate rules that
had outlived their utility. Recognizing that those amendments had
implications for its Part 36 jurisdictional separations rules, the
Commission referred to the Federal-State Joint Board on Jurisdictional
Separations (Joint Board) consideration of how and when the Part 36
rules should be modified to reflect the reforms adopted in the Part 32
Reform Order. The Commission asked the Joint Board to consider how
those reforms ``impact Part 36 and consequently the rule changes
necessary to ensure the jurisdictional separations rules are
consistent'' with changes to Part 32. The Commission also asked that
the Joint Board ``prepare a recommended decision . . . regarding how
and when the Commission's jurisdictional separations rules should be
modified to reflect the issues in the referral.'' The Joint Board
released its Recommended Decision on October 27, 2017. In this Notice
of Proposed Rulemaking (Notice), the Commission invites comment on that
Recommended Decision and, in particular, on the proposed amendments to
the Part 36 rules recommended by the Joint Board. The purpose of those
proposed amendments is to ensure that the Part 36 rules are consistent
with the amendments to the Part 32 rules adopted in the Part 32 Reform
Order.
B. Legal Basis
19. The legal basis for the Notice of Proposed Rulemaking is
contained in sections 1, 2, 4(i), 201-205, 215, 218, 220, and 410 of
the Communications Act of 1934, as amended.
C. Description and Estimate of the Number of Small Entities to Which
Rules May Apply
20. 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. The RFA generally defines
the term ``small entity'' as having the same meaning as the terms
``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. A ``small business concern'' is one which: (1) Is independently
owned and operated; (2) is not dominant in its field of operation; and
(3) satisfies any additional criteria established by the Small Business
Administration (SBA). Nationwide, there are a total of approximately
27.9 million small businesses, according to the SBA.
21. Incumbent Local Exchange Carriers. Neither the Commission nor
the SBA has developed a small business size standard specifically for
providers of incumbent local exchange services. The closest applicable
size standard under the SBA rules is for Wired Telecommunications
Carriers. Under the SBA definition, a carrier is small if it has 1,500
or fewer employees. According to the FCC's Telephone Trends Report
data, 1,307 incumbent local exchange carriers (LECs) reported that they
were engaged in the provision of local exchange services. Of these
1,307 carriers, an estimated 1,006 have 1,500 or fewer employees and
301 have more than 1,500 employees. Consequently, the Commission
estimates that most incumbent LECs are small entities that may be
affected by the rules and policies adopted herein.
22. The Commission has included small incumbent LECs in this 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. Because the Commission's
proposals concerning the Part 36 rules will affect all incumbent LECs,
some entities employing 1,500 or fewer employees may be affected by the
proposals made in this Notice. The Commission has therefore included
small incumbent LECs in this RFA analysis, although it emphasizes that
this RFA action has no effect on the Commission's analyses and
determinations in other, non-RFA contexts. The Commission notes,
however, that proposals in the Notice are focused on incumbent LECs
with regulated annual revenues equal to or above $157 million, a group
that excludes many small incumbent LECs.
D. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements
23. None.
[[Page 10820]]
E. Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
24. The RFA requires an agency to describe any significant
alternatives that it has considered in reaching its proposed approach,
which may include (among others) the following four alternatives: (1)
The establishment of differing compliance and 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 part thereof, for small
entities.
25. As discussed above, the purpose of the proposals in this Notice
is to ensure that the Part 36 rules are consistent with the amendments
to the Part 32 rules adopted in the Part 32 Reform Order. The
Commission seeks comment on the effects its proposals would have on
small entities, and whether any rules that it adopts should apply
differently to small entities. The Commission requests commenters to
consider the costs and burdens of possible rule amendments on small
incumbent LECs and whether such amendments would disproportionately
affect specific types of carriers or ratepayers.
26. The Commission believes that the proposed rules would ease the
administrative burden of regulatory compliance for incumbent LECs,
including any small incumbent LECs those rules might affect. The Part
32 Reform Order reduced the number of Part 32 accounts that incumbent
LECs with regulated annual revenues equal to or above $157 million are
required to keep, and the proposed amendments to Part 36 would carry
forward those reductions into the jurisdictional separations process.
If those amendments can be said to have any effect under the RFA, it is
to reduce a regulatory compliance burden for small incumbent LECs.
F. Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules
27. None.
VI. Ordering Clauses
28. Accordingly, it is ordered that, pursuant to the authority
contained in sections 1, 2, 4(i), 201-205, 215, 218, 220, and 410 of
the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i),
201-205, 215, 218, 220, 410, this Notice of Proposed Rulemaking is
adopted.
29. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Notice of Proposed Rulemaking, including the Initial
Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of
the Small Business Administration.
List of Subjects in 47 CFR Part 36
Communications common carriers; Reporting and recordkeeping
requirements; Telephone; Uniform system of accounts.
Federal Communications Commission.
Marlene H. Dortch,
Secretary, Office of the Secretary.
Proposed Rules
For the reasons discussed in the preamble, the Federal
Communications Commission proposes to amend 47 CFR part 36 as follows:
PART 36--JURISDICTIONAL SEPARATIONS PROCEDURES; STANDARD PROCEDURES
FOR SEPARATING TELECOMMUNICATIONS PROPERTY COSTS, REVENUES,
EXPENSES, TAXES AND RESERVES FOR TELECOMMUNICATIONS COMPANIES
0
1. The authority citation for part 36 continues to read as follows:
Authority: 47 U.S.C. 151, 154(i) and (j), 205, 221(c), 254,
303(r), 403, 410, and 1302 unless otherwise noted.
0
2. Revise Sec. 36.112 to read as follows:
Sec. 36.112 Apportionment procedure.
(a) The costs of the general support facilities of local exchange
carriers that had annual revenues from regulated telecommunications
operations equal to or greater than $157 million for calendar year 2016
are apportioned among the operations on the basis of one of the
following, at the election of the local exchange carrier:
(1) The separation of the costs of the combined Big Three Expenses
which include the following accounts:
Plant Specific Expenses
Central Office Switching Expenses--Account 6210
Operators Systems Expenses--Account 6220
Central Office Transmission Expenses--Account 6230
Information Origination/Termination Expenses--Account 6310
Cable and Wire Facilities Expenses--Account 6410
Plant Non-Specific Expenses
Network Operations Expenses--Account 6530
Customer Operations Expenses
Marketing--Account 6610
Services--Account 6620; or
(2) The separation of the costs of Central Office Equipment,
Information Origination/Termination Equipment, and Cable and Wire
Facilities, combined.
(b) The costs of the general support facilities of local exchange
carriers that had annual revenues from regulated telecommunications
operations less than $157 million for calendar year 2016 are
apportioned among the operations on the basis of the separation of the
costs of Central Office Equipment, Information Origination/Termination
Equipment, and Cable and Wire Facilities, combined.
Sec. 36.121 [Amended]
0
3. Amend Sec. 36.121 as follows:
0
a. Revise paragraph (a); and
0
b. In paragraph (c)(1)(i), remove ``130 volt'' and add, in its place,
``130-volt''.
The revision reads as follows:
Sec. 36.121 General.
(a) The costs of central office equipment are carried in the
following accounts:
Central Office Switching Account--2210.
Operator Systems Account--2220.
Central Office--Transmission Account--2230.
* * * * *
Sec. [thinsp]36.124 [Amended]
0
4. Amend Sec. 36.124 as follows:
0
a. In paragraph (a), remove ``Accounts 2210, 2211, and 2212'' and add,
in its place, ``Account 2210''.
0
b. In paragraph (c), remove ``assign the average balances of Accounts
2210, 2211, and 2212'' and add, in its place, ``assign the average
balance of Account 2210''; and remove ``assignment of the average
balances of Accounts 2210, 2211, and 2212,'' and add, in its place,
``assignment of the average balance of Account 2210 (or, if Accounts
2211 and 2212 were required to be maintained at the applicable time,
the average balances of Accounts 2211 and 2212)''.
Sec. [thinsp]36.125 [Amended]
0
5. Amend Sec. 36.125 as follows:
0
a. In paragraph (a), remove ``Accounts 2210, 2211, and 2212'' and add,
in its place, ``Account 2210''; remove ``e.g. transmitters,'' and add,
in its place, ``e.g., transmitters,''; remove ``directors'' and, add in
its place, ``directors,''; and remove ``e.g. switching'' and add, in
its place, ``e.g., switching''.
[[Page 10821]]
0
b. In paragraph (h), remove ``assign the average balances of Accounts
2210, 2211, and 2212'' and add, in its place, ``assign the average
balance of Account 2210''; and remove ``assignment of the average
balances of Accounts 2210, 2211, and 2212,'' and add, in its place,
``assignment of the average balance of Account 2210 (or, if Accounts
2211 and 2212 were required to be maintained at the applicable time,
the average balances of Accounts 2211 and 2212)''.
Sec. [thinsp]36.126 [Amended]
0
6. Amend Sec. 36.126 as follows:
0
a. In paragraph (a), remove ``Accounts 2230 through 2232 respectively''
and add, in its place, ``Account 2230''.
0
b. In the introductory text of paragraph (b), remove ``equiment'' and
add, in its place, ``equipment''.
0
c. In paragraphs (b)(5) and (6), remove ``assign the average balances
of Accounts 2230 through 2232'' and add, in its place, ``assign the
average balance of Account 2230''; and remove ``assignment of the
average balances of Accounts 2230 through 2232'' and add, in its place,
``assignment of the average balance of Account 2230 (or, if Accounts
2231 and 2232 were required to be maintained at the applicable time,
the average balances of Accounts 2231 and 2232)''.
Sec. 36.154 [Amended]
0
7. Amend Sec. [thinsp]36.154 by removing ``jurisdication'' and adding,
in its place, ``jurisdiction''.
Sec. [thinsp]36.201 [Amended]
0
8. Amend Sec. 36.201 as follows:
0
a. Redesignate paragraph (a) as an undesignated paragraph; and
0
b. In the table, remove ``(Class B telephone companies); Basic area
revenue--Account 5001 (Class A telephone companies)''.
Sec. [thinsp]36.211 [Amended]
0
9. Amend Sec. 36.211 as follows:
0
a. Redesignate paragraph (a) as an undesignated paragraph; and
0
b. In the table:
0
i. Remove ``Basic local service revenue (Class B telephone companies)''
and add, in its place, ``Basic Local Service Revenue''; and
0
ii. Remove the entry ``Basic Area Revenue (Class A telephone
companies)''.
0
10. Amend Sec. 36.212 by revising the section heading to read as
follows:
Sec. [thinsp]36.212 Basic local services revenue--Account 5000.
* * * * *
Sec. [thinsp]36.301 [Amended]
0
11. Amend Sec. 36.301 as follows:
0
a. Redesignate paragraph (a) as an undesignated paragraph; and
0
b. In the table:
0
i. Remove ``(Class B Telephone Companies); Accounts 6112, 6113, 6114,
6121, 6122, 6123, and 6124 (Class A Telephone Companies)'';
0
ii. Remove ``Accounts 6210, 6220, 6230 (Class B Telephone Companies);
Accounts 6211, 6212, 6220, 6231, and 6232 (Class A Telephone
Companies)'' and add, in its place, ``Accounts 6210, 6220, and 6230'';
0
iii. Remove ``(Class B Telephone Companies); Accounts 6311, 6341, 6351,
and 6362 (Class A Telephone Companies)'';
0
iv. Remove ``(Class B Telephone Companies); Accounts 6411, 6421, 6422,
6423, 6424, 6426, 6431, and 6441 (Class A Telephone Companies)'';
0
v. Remove ``(Class B Telephone Companies); Accounts 6511 and 6512
(Class A Telephone Companies)'';
0
vi. Remove ``(Class B Telephone Companies); Accounts 6531, 6532, 6533,
6534, and 6535 (Class A Telephone Companies)'';
0
vii. Remove ``(Class B Telephone Companies); Accounts 6611 and 6613
(Class A Telephone Companies)'';
0
viii. Remove ``Local Bus. Office'' and add, in its place, ``Local
Business Office''; and
0
ix. Remove ``(Class B Telephone Companies); Accounts 7210, 7220, 7230,
7240, and 7250 (Class A Telephone Companies)''.
Sec. [thinsp]36.302 [Amended]
0
12. Amend Sec. 36.302 in the introductory text to paragraph (c)(1) and
in paragraph (c)(1)(i), by removing ``SRC'' and adding, in its place,
``SRCs''.
0
13. Amend Sec. 36.310 by revising paragraph (a) to read as follows:
Sec. [thinsp]36.310 General.
(a) Plant specific operations expenses include the following
accounts:
Network Support Expenses. Account 6110
General Support Expenses. Account 6120
Central Office Switching Expenses. Account 6210
Operator System Expenses. Account 6220
Central Office Transmission Expenses. Account 6230
Information Origination/Termination Expenses. Account 6310
Cable and Wire Facilities Expenses. Account 6410
* * * * *
0
14. Amend Sec. 36.311 by revising the section heading to read as
follows:
Sec. [thinsp]36.311 Network Support/General Support Expenses--
Accounts 6110 and 6120.
* * * * *
0
15. Amend Sec. 36.321 as follows:
0
a. Revise the section heading;
0
b. Remove, from the table in paragraph (a), ``(Class B telephone
companies); Accounts 6211 and 6212 (Class A telephone companies)'' and
``(Class B telephone companies); Accounts 6231 and 6232 (Class A
telephone companies)''; and
0
c. Remove, from paragraph (b), ``equipment. Accounts'' and adding, in
its place, ``equipment--Accounts''.
The revision reads as follows:
Sec. [thinsp]36.321 Central office expenses--Accounts 6210, 6220,
and 6230.
* * * * *
0
16. Amend Sec. 36.331 by revising the section heading to read as
follows:
Sec. [thinsp]36.331 Information origination/termination expenses--
Account 6310.
* * * * *
0
17. Amend Sec. 36.341 by revising the section heading to read as
follows:
Sec. [thinsp]36.341 Cable and wire facilities expenses--Account
6410.
* * * * *
Sec. [thinsp]36.351 [Amended]
0
18. Amend Sec. 36.351 as follows:
0
a. Redesignate paragraph (a) as an undesignated paragraph; and
0
b. In the table:
0
i. Remove ``(Class B telephone companies); Accounts 6511 and 6512
(Class A telephone companies)''; and
0
ii. Remove ``(Class B telephone companies); Accounts 6531, 6532, 6533,
6534, and 6535 (Class A telephone companies)''.
0
19. Amend Sec. 36.352 by revising the section heading to read as
follows:
Sec. [thinsp]36.352 Other property plant and equipment expenses--
Account 6510.
* * * * *
0
20. Amend Sec. 36.353 by revising the section heading to read as
follows:
Sec. [thinsp]36.353 Network operations expenses--Account 6530.
* * * * *
Sec. [thinsp]36.371 [Amended]
0
21. Amend Sec. 36.371 in the table by removing ``(Class B telephone
companies); Accounts 6611 and 6613 (Class A telephone companies)''.
0
22. Amend Sec. 36.372 by revising the section heading to read as
follows:
Sec. [thinsp]36.372 Marketing--Account 6610.
* * * * *
[[Page 10822]]
Sec. [thinsp]36.375 [Amended]
0
23. Amend Sec. 36.375 in paragraphs (b)(4) and (5), by removing
``through (4)'' and adding, in its place, ``through (3)''.
Sec. [thinsp]36.392 [Amended]
0
24. Amend Sec. 36.392(c) as follows:
0
a. Remove ``(Class B Telephone Companies); Accounts 6211 and 6212
(Class A Telephone Companies)'';
0
b. Remove ``(Class B Telephone Companies); Accounts 6231 and 6232
(Class A Telephone Companies)'';
0
c. Remove ``(Class B Telephone Companies); Accounts 6311, 6341, 6351,
and 6362 (Class A Telephone Companies)'';
0
d. Remove ``(Class B Telephone Companies); Accounts 6411, 6421, 6422,
6423, 6424, 6426, 6431, and 6441 (Class A Telephone Companies)'';
0
e. Remove ``(Class B Telephone Companies); Accounts 6531, 6532, 6533,
6534, and 6535 (Class A Telephone Companies)'' and
0
f. Remove ``(Class B Telephone Companies); Accounts 6611 and 6613
(Class A Telephone Companies)''.
0
25. Amend Sec. 36.411 as follows:
0
a. Revise the section heading;
0
b. Redesignate paragraph (a) as an undesignated paragraph
0
c. Revise the final entry in the list.
The revisions read as follows:
Sec. [thinsp]36.411 Operating taxes--Account 7200.
* * * * *
Provision for Deferred Operating Income Taxes
0
26. Amend Sec. 36.501 as follows:
Sec. [thinsp]36.501 [Amended]
Remove ``(Class B Telephone Companies); Account 3410 (Class A
Telephone Companies)''.
0
27. Amend Sec. 36.505 as follows:
0
a. Revise the section heading;
0
b. Redesignate paragraph (a) as an undesignated paragraph.
The revision reads as follows:
Sec. [thinsp]36.505 Accumulated amortization--Tangible--Account
3400.
Sec. Sec. 36.3, 36.123, 36.124(c) and (d); 36.125(h) and (i);
36.126(b)(5) and (6); 36.126(c)(4), (e)(4), and (f)(2); 36.141(c);
36.142(c); 36.152(d); 36.157(b); 36.191(d); 36.374(b); 36.375(b)(4);
36.377 introductory text and (a)(1)(ix), (2)(vii), (3)(vii), (4)(vii),
(5)(vii), and (6)(vii); 36.378(b)(1); 36.379(b)(1); 36.380(d) and (e);
36.381(c); and 36.382(a) [Amended]
0
28. Remove the term ``twelve-month'' and add in its place ``twelve-
month'' in:
0
a. Sec. Sec. 36.3(a) and (b);
0
b. Sec. Sec. 36.123(a)(5) and (6);
0
c. Sec. Sec. 36.124(c) and (d);
0
d. Sec. Sec. 36.125(h) and (i);
0
e. Sec. 36.126(b)(5) and (6);
0
f. Sec. Sec. 36.126(c)(4), (e)(4), and (f)(2);
0
g. Sec. 36.141(c);
0
h. Sec. 36.142(c);
0
i. Sec. 36.152(d);
0
j. Sec. 36.157(b);
0
k. Sec. 36.191(d);
0
l. Sec. 36.374(b);
0
m. Sec. 36.375(b)(4);
0
n. Sec. Sec. 36.377 introductory text and (a)(1)(ix), (2)(vii),
(3)(vii), (4)(vii), (5)(vii), and (6)(vii);
0
o Sec. 36.378(b)(1);
0
p. Sec. 36.379(b)(1);
0
q. Sec. Sec. 36.380(d) and (e);
0
r. Sec. 36.381(c); and
0
s. Sec. 36.382(a).
[FR Doc. 2018-04563 Filed 3-12-18; 8:45 am]
BILLING CODE 6712-01-P
