Comprehensive Review of the Uniform System of Accounts; Jurisdictional Separations and Referral to the Federal-State Joint Board, 63581-63587 [2018-25803]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 83, Number 237 (Tuesday, December 11, 2018)]
[Rules and Regulations]
[Pages 63581-63587]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-25803]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 36

[WC Docket No. 14-130, CC Docket No. 80-286; FCC 18-141]


Comprehensive Review of the Uniform System of Accounts; 
Jurisdictional Separations and Referral to the Federal-State Joint 
Board

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Commission simplifies its jurisdictional 
separations rules, applying the separations processes previously 
reserved for smaller carriers to all carriers subject to those rules, 
and harmonizing the jurisdictional separations rules with the 
accounting rules. With this action, the Commission continues to 
modernize existing rules and eliminate outdated compliance 
requirements.

DATES: Effective date: January 1, 2019.

FOR FURTHER INFORMATION CONTACT: Christopher Koves, Pricing Policy 
Division, Wireline Competition Bureau at 202-418-8209 or by email at 
[email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order, WC Docket No. 14-130, CC Docket No. 80-286; FCC 18-141, 
adopted on October 16, 2018, and released on October 17, 2018. A full-
text version of this document can be obtained at the following internet 
address: https://www.fcc.gov/document/fcc-harmonizes-separations-rules-revised-accounting-rules.

Synopsis

I. Introduction

    1. In this Report and Order (Order), the Commission simplifies its 
part 36 jurisdictional separations rules to allow all carriers to use 
the simpler jurisdictional separations processes previously reserved 
for smaller carriers. In so doing, the Commission harmonizes its part 
36 rules with the Commission's previous amendments to its part 32 
accounting rules. The amendments the Commission adopts today to its 
part 36 rules further its goal of updating and modernizing its rules to 
eliminate outdated compliance burdens on carriers so that they can 
focus their resources on building modern networks that bring economic 
opportunity, job creation, and civic engagement to all Americans.

II. Background

    2. Jurisdictional separations is the third step in a four-step 
regulatory process. First, a rate-of-return carrier records its costs 
and revenues in various accounts using the Uniform System of Accounts 
(USOA) prescribed by the Commission's part 32 rules. Second, the 
carrier divides the costs and revenues in these accounts between 
regulated and nonregulated activities in accordance with part 64 of the 
Commission's rules, a step that helps ensure that the costs of 
nonregulated activities will not be recovered through regulated 
interstate rates. Third, the carrier separates the regulated costs and 
revenues between the intrastate and interstate jurisdictions using the 
part 36 rules. Finally, the carrier apportions the interstate regulated 
costs among the interexchange services and rate elements that form the 
cost basis for its exchange access tariff. Carriers subject to rate-of-
return regulation perform this apportionment in accordance with the 
Commission's part 69 rules.
    3. Historically, the part 32 rules divided incumbent local exchange 
carriers (LECs) into two classes for accounting purposes based on the 
amounts of their annual regulated revenues. Class A incumbent LECs were 
the larger carriers, and Class B incumbent LECs were the smaller 
carriers (most recently those with less than $157 million in annual 
regulated revenues). The Commission's former part 32 rules required 
Class A carriers to create and maintain a more granular set of accounts 
than it required of the 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.
    4. In the Part 32 Reform Order, 82 FR 20833, May 4, 2017, the 
Commission eliminated the historical distinction between Class A and 
Class B incumbent LECs in the part 32 rules. Now all carriers subject 
to part 32 are required to keep only the less onerous accounts 
previously kept by Class B incumbent LECs. Recognizing that the part 32 
accounting reforms had implications for the part 36 jurisdictional 
separations rules, which distinguish between Class A and Class B 
incumbent LECs, 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.
    5. In October 2017, after seeking public comment on how best to 
harmonize the part 32 and part 36 rules, the Joint Board released a 
Recommended Decision. In its Recommended Decision, the Joint Board 
recommended changes to part 36 including deleting rules pertaining to 
Class A accounts, deleting references to Class A and B accounts, and 
allowing former Class A carriers to select between the former Class A 
and B procedures for apportioning general support facilities costs. The 
Joint Board also recommended that the Commission make certain stylistic 
and typographical corrections to the part 36 rules. The Joint Board 
recommended that the part 36 revisions it proposed be effective as soon 
as practicable after January 1, 2018, the effective date of the Part 32 
Reform Order.
    6. In February 2018, the Commission released the Separations 
Harmonization NPRM, 83 FR 10817, March 13, 2018, which proposed 
amendments to part 36 consistent with the Recommended Decision. The 
Commission also sought comment on the effective date for any changes to 
part 36 to harmonize those rules with part 32 reforms. USTelecom filed 
the only comment on the merits, and it supports the proposals in the 
Separations Harmonization NPRM.

III. Discussion

    7. In this Order, the Commission harmonizes its part 36 
jurisdictional separations rules with the changes to the part 32 
accounting rules that the Commission adopted in the Part 32 Reform 
Order. The Commission's amendments to part 36 implement the 
Commission's proposals in the Separations Harmonization NPRM to adopt, 
with minor exceptions, the Joint Board's recommendations and to amend 
the part 36 rules consistent with those recommendations. The Commission 
agrees with USTelecom that these rule changes do not risk undermining 
the primary purpose of the part 36 rules, which is to ``prevent 
incumbent LECs from recovering the same costs in the interstate and 
intrastate jurisdictions,'' and will instead ``simplify the accounting 
rules by removing unnecessary burdensome regulations that require 
carriers and ultimately consumers to incur unnecessary costs.''

[[Page 63582]]

    8. First, the Commission removes from its part 36 rules references 
to Class A accounts because carriers are no longer required to keep 
such accounts. As the Commission proposed, it: (a) Deletes references 
to Class A accounts and the phrase ``Class B accounts'' in part 36 
rules that contain parallel references to Class A accounts and the 
Class B accounts into which they roll up; (b) deletes references to 
current-year account balances and modify references to Class A carriers 
in other part 36 rules; and (c) deletes references to Class A accounts 
in Sec. Sec.  36.501 and 36.505 of the rules. As USTelecom explains, 
these revisions are ``necessary clean-up to ensure that both rule parts 
[i.e., parts 32 and 36] work together consistently'' and further the 
part 32 reforms by ``removing additional unnecessary and burdensome 
rules for carriers of all sizes.''
    9. Second, the Commission amends Sec.  36.112 to allow former Class 
A carriers (carriers with revenue equal to or greater than $157 million 
for calendar year 2016) to select between the legacy Class A and Class 
B procedures in apportioning their general support facilities costs. As 
the Commission observed in the Separations Harmonization NPRM, this is 
the only part 36 rule that provides different separations procedures 
for legacy Class A and B carriers. The Commission agrees with the Joint 
Board that requiring all carriers to use the method previously used 
only by Class B carriers would ``impose a compliance burden on current 
Class A carriers because they would have to change their well-
established manner of allocating general support expense.'' The 
Commission finds that both procedures provide reasonable methods for 
separating general support facilities costs and allowing legacy Class A 
carriers to select between these procedures will simplify compliance 
for carriers while having, at most, a de minimis effect on separations 
results. The Commission also agrees with USTelecom that it is 
reasonable to allow carriers the ``flexibility'' to ``adjust their 
selection[s] as their business needs change'' over time. Accordingly, 
the Commission allows legacy Class A carriers to choose between the 
procedures previously identified as Class A or Class B procedures in 
apportioning their general support facilities costs, and to adjust 
their selection when they chose to do so.
    10. Third, consistent with the Joint Board's recommendation and the 
Commission's proposals, the Commission corrects certain stylistic and 
typographical errors in part 36. As USTelecom explains, these 
ministerial corrections make the separations rules clearer.
    11. The Commission agrees with the Joint Board that its proposed 
revisions to part 36 should ``become effective as soon as practicable'' 
and with USTelecom's argument that adopting the Commission's proposed 
harmonizing changes to part 36 ``as soon as possible'' avoids 
potentially ``confusing'' and ``contradictory'' rules. The Commission 
also agrees with USTelecom that January 1, 2019 is the earliest 
practicable effective date for these changes, because it corresponds 
with the carriers' practices of keeping their USOA accounts on a 
calendar year basis and using their USOA accounting results for 
regulatory purposes. The Commission therefore selects January 1, 2019 
as the effective date of the rule changes it is adopting.

IV. Procedural Matters

    12. Paperwork Reduction Act Analysis. This document does not 
contain new or modified information collection requirements 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.
    13. Congressional Review Act. The Commission will send a copy of 
this Report and Order to Congress and the Government Accountability 
Office pursuant to the Congressional Review Act, see 5 U.S.C. 
801(a)(1)(A).
    14. Final Regulatory Flexibility Act Analysis. The Regulatory 
Flexibility Act of 1980 (RFA) requires that an agency prepare a 
regulatory flexibility analysis for notice and comment rulemakings, 
unless the agency certifies that ``the rule will not, if promulgated, 
have a significant economic impact on a substantial number of small 
entities.'' Accordingly, the Commission has prepared a Final Regulatory 
Flexibility Analysis (FRFA) concerning the possible impact of the rule 
changes contained in the Report and Order on small entities.

V. Final Regulatory Flexibility Analysis

    15. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), the Commission has prepared this Final Regulatory 
Flexibility Analysis (FRFA) on the possible significant economic impact 
on small entities by this Report and Order (Order). An Initial 
Regulatory Flexibility Analysis (IRFA) was incorporated into the Notice 
of Proposed Rulemaking, 83 FR 10817 (Separations Harmonization NPRM). 
The Commission sought written public comment on the proposals in the 
Separations Harmonization NPRM, including comment on the IRFA. The 
Commission did not receive comments on the IRFA.

A. Need for, and Objectives of, the Order

    16. In this Report and Order (Order), the Commission amends its 
part 36 jurisdictional separations rules to harmonize them with the 
Commission's reforms to reduce and eliminate unnecessary or outdated 
part 32 accounting rules. 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). Carriers first record costs into various part 
32 accounts, which they then apportion into regulated and nonregulated 
costs pursuant to part 64, and further separate the regulated costs 
between intrastate and interstate jurisdictions pursuant to part 36.
    17. In the Part 32 Reform Order, the Commission amended its part 32 
Uniform System of Accounts (USOA) to streamline or eliminate 
unnecessary or outdated accounting rules. Recognizing that part 32 
reforms implicated part 36, the Commission asked the Federal-State 
Joint Board on Jurisdictional Separations (Joint Board) to prepare a 
recommended decision regarding the extent part 36 should be modified in 
light of the part 32 reforms. The Joint Board released its Recommended 
Decision in October 2017. In the Separations Harmonization NPRM, the 
Commission proposed and sought comment on adoption, with certain minor 
exceptions, of the Joint Board's recommendations and on amendments to 
part 36 consistent with those recommendations.
    18. The purpose of the part 36 amendments adopted in this Order are 
to ensure that part 36 is consistent with the part 32 reforms adopted 
in the Part 32 Reform Order. First, this Order removes unnecessary or 
outdated part 36 references to part 32 accounts that were eliminated by 
the Part 32 Reform Order. Second, this Order gives carriers the 
flexibility to select between two procedures for apportioning their 
general support facilities costs. Third, this Order makes certain 
stylistic and typographical corrections to part 36. Finally, the part 
36 amendments adopted in this Order will take effect on January 1, 
2019.

[[Page 63583]]

B. Summary of Significant Issues Raised by Comments in Response to the 
IRFA

    19. There were no comments that specifically addressed the proposed 
rules and policies presented in the Separations Harmonization NPRM 
IRFA.

C. Response to Comments by the Chief Counsel for Advocacy of the Small 
Business Administration

    20. Pursuant to the Small Business Jobs Act of 2010, which amended 
the RFA, the Commission is required to respond to any comments filed by 
the Chief Counsel of the Small Business Administration (SBA), and to 
provide a detailed statement of any change made to the proposed rules 
as a result of those comments. The Chief Counsel did not file any 
comments in response to the proposed rules in this proceeding.

D. Description and Estimate of the Number of Small Entities To Which 
Rules May Apply

    21. 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.
    22. Incumbent Local Exchange Carriers. The rules adopted in this 
Order affect the tariffed rates for interstate and intrastate regulated 
services for incumbent local exchange carriers (LECs). 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.
    23. 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 its proposals 
concerning the part 36 rules will affect all incumbent LECs, some 
entities employing 1,500 or fewer employees may be affected by the rule 
changes adopted in this Order. The Commission has therefore included 
small incumbent LECs in this RFA analysis, although the Commission 
emphasizes that this RFA action has no effect on the Commission's 
analyses and determinations in other, non-RFA contexts. The Order 
adopts changes to part 36 that should result in reduced regulatory 
burdens on incumbent LECs. The Commission notes, however, that the 
reforms adopted in this Order are focused on incumbent LECs with 
regulated annual revenues equal to or above $157 million, a group that 
likely excludes many small incumbent LECs.

E. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements

    24. None.

F. Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    25. 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.
    26. As discussed above, the purpose of this Order 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. In the Separations 
Harmonization NPRM, the Commission sought comment on the effects its 
part 36 proposals would have on small entities, and whether any rules 
adopted should apply differently to small entities. The Commission 
requested that commenters 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.
    27. The rules adopted in this Order will ease the administrative 
burden of regulatory compliance for incumbent LECs, including any small 
incumbent LECs those rules 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 
amendments to part 36 adopted in this Order would carry forward those 
reductions into the jurisdictional separations process. The rules 
adopted in this Order apply solely to incumbent LECs and result in 
reduced regulatory burdens. The Commission therefore certifies that 
this Order will not have a significant impact on small entities.

G. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Final Rules

    28. None.

H. Report to Congress

    29. The Commission will send a copy of the Order, including this 
FRFA, in a report to be sent to Congress and the Government 
Accountability Office pursuant to the Small Business Regulatory 
Enforcement Fairness Act of 1996. In addition, the Commission will send 
a copy of the Order, including the FRFA, to the Chief Counsel for 
Advocacy of the Small Business Administration. A copy of the Order and 
FRFA (or summaries thereof) will also be published in the Federal 
Register.

VI. Ordering Clauses

    30. Accordingly, It is ordered that, pursuant to the authority 
contained in sections 1, 2, 4(i) and (j), 201, 205, 220, 221(c), 254, 
303(r), 403, and 410 of the Communications Act of 1934, as amended, 47 
U.S.C. 151, 152, 154(i) and (j), 201, 205, 220, 221(c), 303(r), 403, 
410, this Report and Order IS ADOPTED.
    31. It is further ordered that, pursuant to the authority contained 
in sections 1, 2, 4(i) and (j), 201, 205, 220, 221(c), 254, 303(r), 
403, and 410 of the

[[Page 63584]]

Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i) and 
(j), 201, 205, 220, 221(c), 254, 303(r), 403, 410, part 36 of the 
Commission's rules, 47 CFR part 36, Is amended, and such rule 
amendments shall be effective on January 1, 2019.
    32. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, SHALL SEND a 
copy of this Report and Order, including the Final Regulatory 
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small 
Business Administration.
    33. It is further ordered that the Commission SHALL SEND a copy of 
this Report and Order to Congress and the Government Accountability 
Office pursuant to the Congressional Review Act.

List of Subjects in 47 CFR Part 36

    Communications common carriers, Reporting and recordkeeping 
requirements, Telephone, Uniform System of Accounts.

Federal Communications Commission.
Katura Jackson,
Federal Register Liaison, Office of the Secretary.

Final Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 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 is revised to read as follows:

    Authority: 47 U.S.C. 151, 152, 154(i) and (j), 201, 205, 220, 
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 either the method 
in paragraph (a)(1) of this section or the method in paragraph (a)(2) 
of this section, 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:

                       Table 1 to Paragraph (a)(1)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
                         Plant Specific Expenses
------------------------------------------------------------------------
Central Office Switching Expenses......  Account 6210.
Operators Systems Expenses.............  Account 6220.
Central Office Transmission Expenses...  Account 6230.
Information Origination/Termination      Account 6310.
 Expenses.
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.
------------------------------------------------------------------------

    (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.

0
3. Amend Sec.  36.121 by revising the table in paragraph (a) and the 
first sentence in paragraph (c)(1)(i) to read as follows:


Sec.  36.121   General.

    (a) * * *

                        Table 1 to Paragraph (a)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Central Office Switching...............  Account 2210.
Operator Systems.......................  Account 2220.
Central Office Transmission............  Account 2230.
------------------------------------------------------------------------

* * * * *
    (c) * * *
    (1) * * *
    (i) The cost of power equipment used by one category is assigned 
directly to that category, e.g., 130-volt power supply provided for 
circuit equipment. * * *
* * * * *

0
4. Amend Sec.  36.124 by revising the first sentence in paragraph (a) 
and paragraph (c) to read as follows:


Sec.  36.124   Tandem switching equipment--Category 2.

    (a) Tandem switching equipment is contained in Account 2210. * * *
* * * * *
    (c) Effective July 1, 2001, through December 31, 2018, study areas 
subject

[[Page 63585]]

to price cap regulation, pursuant to Sec.  61.41 of this chapter, shall 
assign the average balance of Account 2210 to Category 2, Tandem 
Switching Equipment based on the relative percentage assignment of the 
average balance of Account 2210 (or, if Accounts 2211, 2212, and 2215 
were required to be maintained at the applicable time, the average 
balances of Accounts 2211, 2212, and 2215) to Category 2, Tandem 
Switching Equipment during the twelve-month period ending December 31, 
2000.
* * * * *


Sec.  [thinsp]36.125  [Amended]

0
5. Amend Sec.  36.125 as follows:
0
a. In the introductory text of paragraph (a):
0
i. Remove ``accounts 2210, 2211, and 2212'' and add in its place 
``account 2210''; and
0
ii. Add a comma before ``transmitters,'' after ``directors'', and 
before ``switching equipment, TWX''.
0
b. In paragraph (h):
0
i. Remove the reference to ``balances of Accounts 2210, 2211, and 
2212'' and add in its place ``balance of Account 2210''; and
0
ii. Remove the reference to ``balances of Account 2210, 2211, 2212 and 
2215'' and add in its place ``balance of Account 2210 (or, if Accounts 
2211, 2212, and 2215 were required to be maintained at the applicable 
time, the average balances of Accounts 2211, 2212, and 2215)''.


Sec.  [thinsp]36.126  [Amended]

0
6. Amend Sec.  36.126 as follows:
0
a. In the introductory text of 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 the word 
``equiment'' and add in its place ``equipment''.
0
c. In paragraphs (b)(5) and (6):
0
i. Remove the first reference to ``balances of Accounts 2230 through 
2232'' and add in its place ``balance of Account 2230''; and
0
ii. Remove the second reference to ``balances of Accounts 2230 through 
2232'' and add in its place ``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.  36.154(b) by removing the word ``jurisdication'' and 
adding in its place ``jurisdiction''.


Sec.  36.201  [Amended]

0
8. Amend Sec.  36.201 by:
0
a. Redesignating paragraph (a) as undesignated introductory text; and
0
b. In the table, removing ``(Class B telephone companies); Basic area 
revenue--Account 5001 (Class A telephone companies)''.


Sec.  [thinsp]36.211  [Amended]

0
9. Amend Sec.  36.211 by:
0
a. Redesignating paragraph (a) as undesignated introductory text; and
0
b. In the table:
0
i. Removing ``Basic local service revenue (Class B telephone 
companies)'' and adding ``Basic Local Service Revenue'' in its place; 
and
0
ii. Removing the entry for ``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.

* * * * *

0
11. Amend Sec.  36.301 by:
0
a. Redesignating paragraph (a) as undesignated introductory text; and
0
b. In the table:
0
i. Removing the entry ``Network Support/General Support Expenses--
Accounts 6110 and 6120 (Class B Telephone Companies); Accounts 6112, 
6113, 6114, 6121, 6122, 6123, and 6124 (Class A Telephone Companies)'' 
and adding an entry for ``Network Support/General Support Expenses--
Accounts 6110 and 6120'' in its place;
0
ii. Removing the entry ``Central Office Expenses--Accounts 6210, 6220, 
6230 (Class B Telephone Companies); Accounts 6211, 6212, 6220, 6231, 
and 6232 (Class A Telephone Companies)'' and adding an entry for 
``Central Office Expenses--Accounts 6210, 6220, 6230'' in its place;
0
iii. Removing the entry ``Information Origination/Termination 
Expenses--Account 6310 (Class B Telephone Companies); Accounts 6311, 
6341, 6351, and 6362 (Class A Telephone Companies)'' and adding an 
entry for ``Information Origination/Termination Expenses--Account 
6310'' in its place;
0
iv. Removing the entry ``Cable and Wire Facilities Expenses--Account 
6410 (Class B Telephone Companies); Accounts 6411, 6421, 6422, 6423, 
6424, 6426, 6431, and 6441 (Class A Telephone Companies)'' and adding 
an entry for ``Cable and Wire Facilities Expenses--Account 6410'' in 
its place;
0
v. Removing the entry ``Other Property Plant and Equipment Expenses--
Account 6510 (Class B Telephone Companies); Accounts 6511 and 6512 
(Class A Telephone Companies)'' and adding an entry for ``Other 
Property Plant and Equipment Expenses--Account 6510'' in its place;
0
vi. Removing the entry ``Network Operations Expenses--Account 6530 
(Class B Telephone Companies); Accounts 6531, 6532, 6533, 6534, and 
6535 (Class A Telephone Companies)'' and adding an entry for ``Network 
Operations Expenses--Account 6530'' in its place;
0
vii. Removing the entry ``Marketing--Account 6610 (Class B Telephone 
Companies); Accounts 6611 and 6613 (Class A Telephone Companies)'' and 
adding an entry for ``Marketing--Account 6610'' in its place; and
0
viii. Removing the entry ``Operating Taxes--Account 7200 (Class B 
Telephone Companies); Accounts 7210, 7220, 7230, 7240, and 7250 (Class 
A Telephone Companies)'' and adding an entry for ``Operating Taxes--
Account 7200'' in its place.
    The additions read as follows:


Sec.  [thinsp]36.301   Section arrangement.

------------------------------------------------------------------------
 
------------------------------------------------------------------------
 
                              * * * * * * *
Plant Specific Operations Expenses:
 
                              * * * * * * *
Network Support/General Support Expenses--Accounts               36.311.
 6110 and 6120....................................
Central Office Expenses--Accounts 6210, 6220, 6230               36.321.
Information Origination/Termination Expenses--                   36.331.
 Account 6310.....................................
Cable and Wire Facilities Expenses--Account 6410..               36.341.
Plant Nonspecific Operations Expenses:
 
                              * * * * * * *
Other Property Plant and Equipment Expenses--                    36.352.
 Account 6510.....................................
Network Operations Expenses--Account 6530.........               36.353.

[[Page 63586]]

 
 
                              * * * * * * *
Customer Operations Expenses:
 
                              * * * * * * *
Marketing--Account 6610...........................               36.372.
 
                              * * * * * * *
Corporate Operations Expenses:
 
                              * * * * * * *
Operating Taxes--Account 7200.....................    36.411 and 36.412.
 
                              * * * * * * *
------------------------------------------------------------------------


0
12. Amend Sec.  36.302 by revising paragraphs (c)(1) introductory text 
and (c)(1)(i) to read as follows:


Sec.  [thinsp]36.302   General.

    (c) * * *
    (1) Subsidiary Record Categories (SRCs) for Salaries and Wages, 
Benefits and Other Expenses are applicable to all of the expense 
accounts except for:
    (i) SRCs for access expenses are maintained to identify interstate 
and state access expense and billing and collection expense for 
carrier's carrier.
* * * * *

0
13. Amend Sec.  36.310 by revising the table in paragraph (a) to read 
as follows:


Sec.  [thinsp]36.310   General.

    (a) * * *

                        Table 1 to Paragraph (a)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
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      Account 6310.
 Expenses.
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 by revising the section heading, the table in 
paragraph (a), and paragraph (b) to read as follows:


Sec.  [thinsp]36.321   Central office expenses--Accounts 6210, 6220, 
and 6230.

    (a) * * *

                        Table 1 to Paragraph (a)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Central Office Switching Expense.......  Account 6210.
Operator Systems Expense...............  Account 6220.
Central Office Transmission Expense....  Account 6230.
------------------------------------------------------------------------

    (b) The expenses in these accounts are apportioned among the 
operations on the basis of the separation of the investments in central 
office equipment--Accounts 2210, 2220 and 2230, combined.

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.

* * * * *

0
18. Revise Sec.  36.351 to read as follows:


Sec.  [thinsp]36.351   General.

    Plant nonspecific operations expenses include the following 
accounts:

                        Table 1 to Sec.   36.351
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Other Property Plant and Equipment       Account 6510.
 Expenses.
Network Operations Expenses............  Account 6530.
Access Expenses........................  Account 6540.
Depreciation and Amortization Expenses.  Account 6560.
------------------------------------------------------------------------


[[Page 63587]]


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.

* * * * *


Sec.  [thinsp]36.375  [Amended]

0
23. Amend Sec.  36.375(b)(4) and (5) by removing ``through (4)'' and 
adding in its place ``through (3)''.


Sec.  36.377  [Amended]

0
24. Amend Sec.  36.377 by adding a reserved paragraph (b).

0
25. Amend Sec.  36.392 by revising paragraph (c) to read as follows:


Sec.  [thinsp]36.392   General and administrative--Account 6720.

* * * * *
    (c) The expenses in this account are apportioned among the 
operations on the basis of the separation of the cost of the combined 
Big Three Expenses which include the following accounts:

                        Table 1 to Paragraph (c)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
                         Plant Specific Expenses
------------------------------------------------------------------------
Central Office Switching Expenses......  Account 6210.
Operators Systems Expenses.............  Account 6220.
Central Office Transmission Expenses...  Account 6230.
Information Origination/Termination      Account 6310.
 Expenses.
Cable and Wire Facilities Expense......  Account 6410.
------------------------------------------------------------------------
                       Plant Non-Specific Expenses
------------------------------------------------------------------------
Network Operations Expenses............  Account 6530.
------------------------------------------------------------------------
                      Customer Operations Expenses
------------------------------------------------------------------------
Marketing..............................  Account 6610.
Services...............................  Account 6620.
------------------------------------------------------------------------


0
26. Revise Sec.  36.411 to read as follows:


Sec.  [thinsp]36.411   Operating taxes--Account 7200.

    This account includes the taxes arising from the operations of the 
company, i.e.:
    (a) Operating Investment Tax Credits.
    (b) Operating Federal Income Taxes.
    (c) Operating State and Local Income Taxes.
    (d) Operating Other Taxes.
    (e) Provision for Deferred Operating Income Taxes.


Sec.  [thinsp]36.501  [Amended]

0
27. Amend Sec.  36.501, in the table, by removing ``(Class B Telephone 
Companies); Account 3410 (Class A Telephone Companies)''.


Sec.  36.505  [Amended]

0
28. Amend Sec.  36.505 as follows:
0
a. Revise the section heading; and
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, 36.125, 36.126, 36.141, 36.142, 
36.152, 36.157, 36.191, 36.374, 36.375, 36.377, 36.378, 36.379, 36.380, 
36.381, and 36.382  [Amended]

0
29. In addition to the amendments set forth above, in 47 CFR part 36, 
remove the words ``twelve month'' and add in their place the words 
``twelve-month'' in the following places:
0
a. Section 36.3(a) and (b);
0
b. Section 36.123(a)(5) and (6);
0
c. Section 36.124(d);
0
d. Section 36.125(h) and (i);
0
e. Section 36.126(b)(5) and (6), (c)(4), (e)(4), and (f)(2);
0
f. Section 36.141(c);
0
g. Section 36.142(c);
0
h. Section 36.152(d);
0
i. Section 36.157(b);
0
j. Section 36.191(d);
0
k. Section 36.374(b);
0
l. Section 36.375(b)(4);
0
m. Section 36.377(a) introductory text, (a)(1)(ix), (a)(2)(vii), 
(a)(3)(vii), (a)(4)(vii), (a)(5)(vii), and (a)(6)(vii);
0
n. Section 36.378(b)(1);
0
o. Section 36.379(b)(1);
0
p. Section 36.380(d) and (e);
0
q. Section 36.381(c); and
0
r. Section 36.382(a).

[FR Doc. 2018-25803 Filed 12-10-18; 8:45 am]
 BILLING CODE 6712-01-P