WPC)] 2BUH[3|ce)CG Times (Scalable)#c P7P#"Sh5^18MSS888S8888SSSSSSSSSS88Jxir{icx{8Aui{x`xoYi{xxxl888SS8JSJSJ8SS..S.SSSS>A.SSxSSJJSJSSSSSS8SSSSSSSSS.xJxJxJxJxJorJiJiJiJiJ8.8.8.8.{SxSxSxSxS{S{S{S{SxSxJ{SxSxSxS{S`SxSxSxSrSrSrS{SiSiSiSiSxSxSxSxSxS{S{SS.SSSSz]SSuSiSiSk2g/a{S{SxSxSxoSoSZ?YSYSiSiSiS{S{S{S{SxxSkI8SS888WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNxxxSSS8JDDSSSSSS;SSSS;88VVS++SSffSSxSc]]8VS;"xxSxWxxS唔S88xfxxxxxxxxxxx8SxS]SxoS8SxJS`xlxxxxxxxxxxMxxxxxxofxGcxxxxxxxSxxxxxxxJxxxxJxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx8xxx8xxx8xxx8xxxxxxxxxxxxxxfi]f]oJiAlJ{SxJ8.uJo]]{JoSxJxf`SfSSiJxJofx]fffxi{8SxxxfJffff88SSSSx{SSSxxxf8`SJ8CG Times (Scalable)CG Times Bold (Scalable)CG Times Italic (Scalable)qXP2[ -', ZS CG Times (Scalable)CG Times Bold (Scalable) P7P#Univers (Scalable)CG Times (Scalable)HP LaserJet IIIP ROOM 812812HPLASIII.PRSC\  P6Q,\,vuqPxxl888SS8JSJSJ8SS..S.SSSS>A.SSxSSJJSJSSSSSS8SSSSSSSSS.xJxJxJxJxJorJiJiJiJiJ8.8.8.8.{SxSxSxSxS{S{S{S{SxSxJ{SxSxSxS{S`SxSxSxSrSrSrS{SiSiSiSiSxSxSxSxSxS{S{SS.SSSSz]SSuSiSiSk2g/a{S{SxSxSxoSoSZ?YSYSiSiSiS{S{S{S{SxxSkI8SS888WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNxxxSSS8JDDSSSSSS;SSSS;88VVS++SSffSSxSc]]8VS;"xxSxWxxS唔S88xfxxxxxxxxxxx8SxS]SxoS8SxJS`xlxxxxxxxxxxMxxxxxxofxGcxxxxxxxSxxxxxxxJxxxxJxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx8xxx8xxx8xxx8xxxxxxxxxxxxxxfi]f]oJiAlJ{SxJ8.uJo]]{JoSxJxf`SfSSiJxJofx]fffxi{8SxxxfJffff88SSSSx{SSSxxxf8`SJ8 yO- I. A. 1. a.(1)(a) i) a) 1. 1. 1. a.(1)(a) i) a)#X\  P6G;P#ke^WPIB<60*%7WEU؃vX tj2 X ZB3|X l<x/c81,c P7P=y.f81,f_ p^7l8wC;,[hXw P7XP7zC;,sXz_ p^7XSg9xS]?g9xSi+SS88WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN/>/>/>/x]SSSSx]x]x]x]xSxSx]SSxSxSf]xSxSxSxIxIxWxIx{nInInInISSSWS]a?/?]?9?]]WW]n/nKn9nCn/x]xx]x]SSxxIxIxI]?]?]?]WnUn9nax]x]x]x]x]x]xxWnInInIx]n9x]]?n9xSz+SS8-8WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN8HH"&H>XHH8HB8>HH^HH>"".2",2,2,"222N2222"&22H22,006"6."""""""""""2H,H,H,H,H,XAB,>,>,>,>,""""H2H2H2H2H2H2H2H2H2H2H,H2H1H2H2H282H,H,H,B,B,B6B,H?>,>,>,>,H2H2H2H6H2H6H2""2"""2F866H2>>(>">">H2;H2H2H2H2XHB"B"B"8&8&8&86>*>>.H2H2H2H2H2H2^HH6>,>,>,H2>"H28&>"H2?22!!WFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN$<<$.2",2222`2 LL2 LL2L"",,2d""7zC;,sXz_ p^7Xl@V"G($,hG P7hPlAH<!, ,< P7,Pz-b81,-b&_ x$&7X5hC:,%Xh*f9 xr G;XX }*i88,<ixP7Pd6jC:,DQXj9 xOG;X2!EK=]?1i"i~'^:LpddDDDdp4D48ddddddddddDDpppdLd||p|||D8DpdDddXdXDdp88d8pdddLL8pXdXLD,DpD4ppDDD4DDDDDDdDd8dddddXXXXXL8L8L8L8pddddpppp|Xdddd|Xd|ddddXXpXXXXXdddpdppL8LdLDLdpppd|8|h|D|L|8pppddLLLpLpLpLpp|l|8|ppppppp|p|L|L|Ld|DppL|D|d4ddC8CWddddddddddddddddddddddddddddddddddddddddNHxxHddLdddddd4><q*"xxxxWWxxxWWkkxxx:J2J2H2H2YHC2C26&6262?2?2?2J2J2J2J2^HH2@,!22!!!WddddddddddddddddddddddddddddddddddddddddddddddddxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHHH222!,))22X222YY2#2222Y#!!442Ydd22==Ld2d2H2;SS88Y!42^x#"ddddHHddd2Hdd4HHYYddd2YYddd Y2!!dddddH=dYHHHHHHHHHHx!d2H282YdHdC2!2H,29HNAddHHHHHHHHHHddddd.dHHHHdddddddddddddddddddHHddddddSC=NdHddd+;HHHHddddddHHH2HHdHHdddHHH,HHHH,HHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!HHH!HHH!HHH!HHHHHHHHHHHHHH=?8=8C,?'A,J2H,!F,C8[8J,C2H,H=92=22?,H,C=H8N===H?J!2HHH=,====!!2222HJ222HHH=!92,!d"Sh5^18PSS888S8888SSSSSSSSSS88Sddoxd`xx8Jo]oxdxdS]xdd]]888SS8SSJSJ.SS..J.xSSSS??.SJoJJ?JSJSSSSSS8SSSSSSSSS.dSdSdSdSdSooJdJdJdJdJ8.8.8.8.oSxSxSxSxSxSxSxSxS]JdSxSxSxS]JxSdSdSdSdSoSoSoSxSdSdSdSdSxSxSxSxSxSxSxSS/SSSSSSSoS]S]S]/]/doSoSxSxSodSdSS?SSSS]S]S]SxSxSxSxSo]S]?8SS888WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNxxxSSS8SMMSSSSSS;SSSS;88SSS..SSffSSxSYSS8SS;"xxSxSxxS哓S88xfxxxxxxxxxxx8SfS]SxoS8SxJS`xlxxxxxxxxxxMxxxxxxofxGcxxxxxxxSxxxxxxxJxxxxJxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx8xxx8xxx8xxx8xxxxxxxxxxxxxfff]f]oJfA]JxSxJ8.oJo]]oJoSxJxffSfSS]J]Joff]fffffx8Sx]]fJffff88SSSSfxSSS]]]f8`SJ82'] yP- X   ). X-  #XP\  P6Q[hXP#Federal Communications Commission`*(#DA 971244 ă  yxdddy )Պs` Before the Federal Communications Commission  yO-j:Washington, D.C. 20554 ă  Y!-In the Matter of: whh Xpp#XP\  P6Q[hXP#) ` ` , whh X)  Y-Local Exchange Carriershh X)  Y-Permanent Cost Allocation Manual X)  Y-for the Separation of Regulatedhh X) pp  Y-and Nonregulated Costshh X) ` ` , whh X)  Y -Cost Allocation Manual Revisions of:X)  Yi -Aliant Communications Co.hh X)pp9AAD 979  YR -ALLTEL Telephone Systemshh X)pp9AAD 973  Y; -Ameritech Operating Cos.hh X)pp9AAD 96119 and 974  Y$ -The Bell Atlantic Telephone CompaniesX)pp9AAD 975 and 9731  Y -BellSouth Corporationhh X)pp9AAD 96129  Y-Cincinnati Bell Telephone Co.hh X)pp9AAD 9683, 96118 and 976  Y-Citizens Telephone Co.hh X)pp9AAD 977  Y-GTE Telephone Operating Cos.hh X)pp9AAD 978  Y-Nevada Bell Telephone Co.hh X)pp9AAD 9692 and 9710  Y-NYNEX Telephone Companieshh X)pp9AAD 9684 , 9711, and 9732  Y-Pacific Bell Telephone Co.hh X)pp9AAD 9691 and 9712  Yl-Puerto Rico Telephone Co.hh X)pp9AAD 9685 and 9713  YU-Rochester Telephone Corp.hh X)pp9AAD 9714  Y>-Southern New England Telephone Co.X)pp9AAD 9715  Y'-Southwestern Bell Telephone Co.hh X)pp9AAD 9686, 9716, and 9742  Y-United and Central Telephone CompaniesX)pp9AAD 9687 and 9717  Y-US West, Inc. whh X)pp9AAD 9718  X-}  MEMORANDUM OPINION AND ORDER }  Y-X` hp x (#%'0*,.8135@8:,N(N(ZZ)"  X-Uniformity Order.8 {Oy- / 4#hxP7P##X\  P6G;sP#э Memorandum Opinion and Order, Implementation of Further Cost Allocation Uniformity, 8 FCC Rcd 4664  yOC-(1993) (CAM Uniformity Order).8 Finally, the CAMs must contain a description of the carrier's time reporting procedures including the methods used to allocate nonproductive time, such as  X-vacation and sick leave. " yO- / 4Ѝ 47 C.F.R. 64.903. Labor costs are a large portion of the costs allocated pursuant to the CAMs. For that reason, accurate time reporting is necessary to safeguard against cost misallocations.   X-7. ` ` ,Section 32.27 of the Commission's rules prescribes rules that govern  X-transactions between a carrier and its nonregulated affiliates.Fz yO -ԍ47 C.F.R.  32.27.F Section 32.27(b) protects ratepayers by requiring that when an unregulated affiliate transfers assets to or performs services for the carrier, those assets or services are not charged to the carrier's regulated operations at an inflated price. Similarly, when the carrier transfers assets to or performs services for an unregulated affiliate, section 32.27(c) ensures that the regulated operations are  X -compensated for the full value of such assets or services.\  yO- / 4.ԍ 47 U.S.C.  32.27(c). The current rule applies only to the sale of assets, but that treatment will be extended  {O- !9;to services when the rules adopted in the Commission's Accounting Safeguards Order become effective. See  Report  {Og-and Order, Accounting Safeguards Under the Telecommunications Act of 1996, 11 FCC Rcd 17539 (1996). These rules protect against subsidization of unregulated affiliates by regulated operations, which could be both anticompetitive and detrimental to ratepayers.  X -8. ` ` , Related Bureau Orders. On April 15, 1997, the Common Carrier Bureau  X -issued orders regarding implementation of the comparably efficient interconnection requirements applicable to the BOCs under the terms of the 1996 Act and of the  Xy-Commission's orders.y.  {OX- / 4ԍ Order, Implementation of the Pay Telephone Reclassification and Compensation Provisions of the  {O"- !9;Telecommunications Act of 1996, CC Docket No. 96128:  DA 97790 (Ameritech CEI Order); Order, DA 97791  yO- !9(Bell Atlantic CEI Order); Order, DA97792 (BellSouth CEI Order); Order, DA 97793 (NYNEX CEI Order);  {O- !9JOrder, DA 97794 (Pacific and Nevada CEI Order); Order, DA 97795 (SW Bell CEI Order); and Order, DA 97796  yO~-(US West CEI Order) (all released April 15, 1997). In those orders, the Bureau indicated that accounting issues raised in those proceedings would be addressed in the review of CAM revisions pertaining to payphone operations. The Accounting and Audits Division of the Common Carrier Bureau also issued a brief order that allowed the CAM revisions filed by the carriers to go into effect and indicated  X-that specific issues relating to the revisions would be addressed in a later order. {O#-ԍ Order, Cost Allocation Manual Changes Required by Payphone Deregulation, DA 97814 (April 15, 1997). "v,N(N(ZZ "  X-` ` , wD III. DISCUSSION ă  X- A. Quantification of CAM Changes  X-9. ` ` ,As a threshold matter, we note that the Commission's rules require that a carrier filing proposed changes to the cost apportionment tables in its CAM must include in  X_-its filing "a statement quantifying the impact of each change on regulated operations."J_ yO-ԍ47 C.F.R.  64.903(b).J Most of the carriers submitting CAM revisions in these proceedings have provided the requisite quantification, but five carriers have not quantified the impacts of the changes. Those carriers are Citizens, Nevada Bell, Rochester, Sprint, and US West. We therefore direct those carriers to refile their CAM revisions, including the quantification required by Section 64.903(b) of the Commission's rules, within 60 days of the date of this order.  X - B. Public Telephone Terminal Equipment  X- 10. ` ` , In accordance with the Payphone Order, carriers that do not transfer their payphone assets to a separate affiliate must reclassify all assets in Account 2351, Public  Xb-telephone terminal equipment, from a regulated cost pool to a nonregulated cost pool.TbX yOk-ԍ Payphone Order at  163.T APCC and ICSPC commented that several ILECs' CAMs do not indicate clearly whether the nonregulated cost pool containing public telephone terminal equipment costs, as recorded in  X-Account 2351, yO- / 4ԍ This account includes the original cost of coinless, coinoperated (including public and semipublic), credit card and pay telephones installed for use by the public. 47 C.F.R. 32.2351. also includes costs associated with booths, enclosures and pedestals. APCC and ICSPC maintain that these items should be deregulated, as well as the payphone equipment itself. They believe that some ILECs may record costs associated with booths, enclosures and pedestals in other Part 32 accounts. APCC and ICSPC request that the Commission require ILECs to amend their CAMs to specify in which accounts these costs are  X-recorded, and to specify the proposed accounting treatment for these costs.J@ yO-ԍAPCC/ICSPC Comments at 3.J   X|- 11.` ` ,In reply, several ILECs state that they record costs associated with booths,  Xe-enclosures, and pedestals in Account 2351.'Xe yO#- / 4ԍ Ameritech Further Reply Comments at 23; Bell Atlantic Reply Comments at 12; GTE Reply Comments  !9yat 23; NYNEX Reply Comments at 23; Pacific/Nevada Reply Comments at 2; and Southwestern Bell Reply Comments at 3.' They also maintain that their CAM filings comply with the Commission's cost allocation rules, which do not require carriers to include"N ,N(N(ZZ"  X-detailed Part 32 account descriptions in their CAMs.: {Oy-ԍId.: Further, they state that as required by the Commission in RAO 10, carriers have on file with the Commission their complete property record retirement lists, which show that they record costs associated with booths,  X-enclosures, and pedestals in Account 2351.- Z yO- / 4ԍAmeritech Further Reply Comments at 34, GTE Reply Comments at 3, and Pacific/Nevada Reply  yO- !9Comments at 2. RAO 10 refers to Responsible Accounting Officer Letter No. 10, released December 23, 1987, by  yOV- !9the Chief of the Accounting and Audits Division. RAO 10 required large carriers (those defined as Class A carriers in Part 32 of the Commission's rules) to submit an updated list of retirement units by Part 32 account.-  X- 12. ` ` , Discussion. As specified in RAO 6, ILECs must record costs associated with  Xv-booths, enclosures, and pedestals in Account 2351.XvB yOi - / 4=ԍSee Responsible Accounting Officer letter No. 6 ("RAO 6"), Part 32, Uniform System of Accounts for Class  yO1- !9iA and Class B Carriers Item Lists issued by the Chief, Accounting and Audits Division on June 26, 1987. RAO  yO-6 specifically mentions booths, enclosures and pedestals as items to be included in Account 2351.  Our rules do not, however, require carriers to include detailed account descriptions in their CAMs. Moreover, all ILECs addressing this issue have indicated that they do, in fact, record the costs of payphone booths, enclosures, and pedestals in Account 2351. We therefore shall not require carriers to revise their CAMs to indicate where such costs are recorded.  X -   13. ` ` ,In our review of Account 2351 in the CAMs, we find that three carriers, Puerto  X -Rico, U S West, and Sprint, still have regulated cost pools for this account. As stated  X -previously, the Payphone Order requires that all investment recorded in Account 2351 must be classified as nonregulated. We therefore direct Puerto Rico, U S West, and Sprint to assign no costs to the regulated cost pools of this account after the effective date for deregulation of payphone service and to remove the regulated cost pools for this account in their next CAM  Xb-revisions.` ` ,  X4- C. ` ` ,Public Telephone Revenue  X- 14. ` ` ,Account 5010, Public telephone revenue, is the account prescribed in Part 32 for revenues received from payphone service. With the deregulation of payphones, all revenues recorded in Account 5010 on a going forward basis must be classified as nonregulated. In reviewing the CAM revisions submitted by the ILECs, we find that several  X-carriers still have regulated cost pools in Account 5010.b  yO"- / 4ԍAliant, Bell Atlantic, Cincinnati, Nevada, NYNEX, Pacific, Nevada, Rochester, Sprint, and US West all continue to show regulated cost pools for this account. In addition, one commenter, APCC, points out that Ameritech's CAM reflects nonregulated cost pools in several revenue accounts in addition to Account 5010, Public telephone revenue, and that Ameritech determines the amounts of nonregulated revenues to be allocated to those accounts through a"e ,N(N(ZZ"  X-"'revenue analysis.'"b yOy-ԍAPCC Comments (AAD 96119, Dec. 16, 1996) at 24.b These other accounts include Accounts 5081, 5083, 5084, 5100, 5262,  X-and 5263.`XX yO- / 4zԍ These accounts are the following: 5081 End user revenue; 5082 Switched access revenue; 5084 State  !9access revenue; 5100 Long distance message revenue; 5262 Customer operations revenue; and 5263 Plant  yO-operations revenue.` APCC believes the Commission should require Ameritech to provide more detailed explanation as to why it is reassigning revenues from regulated to nonregulated cost  X-pools in these accounts. U x yO -ԍAPCC Comments at 34.U  X-15. ` ` ,In reply, Ameritech states that its CAM complies with the requirements set  Xv-forth in the Payphone Order relating to CAM revisions, and that its revisions are consistent  X_-with the Commission's cost allocation rules.O!_ yO-ԍAmeritech Reply Comments at 3.O Ameritech explains that it uses a study to allocate nonregulated revenues associated with payphone service to various revenue accounts,  X1-including Account 5010.D"1 {Oz-ԍ Id. at 45.D    X -16. ` ` , Discussion. Ameritech's creation of nonregulated cost pools in revenue  X -accounts other than Account 5010 reflects a misunderstanding of the Payphone Order. The cost allocation treatment described by Ameritech seems to be premised on the assumption that  X -all telecommunications services provided to payphone users have been deregulated. That  X -assumption is incorrect. The Payphone Order deregulated only the provision of payphone  X-CPE and local coin payphone service.c#*  {Ok-ԍSee also discussion in  20, infra.c Accordingly, only revenues from those services should be classified as nonregulated, and those revenues, in accordance with the Commission's rules, must be recorded in Account 5010.  X4-17. ` ` ,We therefore direct Ameritech and all other carriers required to file CAMs to use only Account 5010 to record revenues from nonregulated payphone service, as described above, and to remove nonregulated cost pools from Accounts 5081, 5083, 5084, 5100, 5262,  X-and 5263 and any other revenue account other than Account 5010. In addition, we direct that  X-carriers who still have regulated cost pools in Account 5010 assign no revenues to those regulated cost pools after the effective date for deregulation of payphone service, and that they remove the regulated pools from Account 5010 in their next CAM revisions.  X- " #,N(N(ZZo" D. Inmate Calling Service Revenues and Uncollectibles  X-  X- 18.` ` , APCC and ICSPC claim that ILECs should be required to amend their CAMs to make clear that they identify revenues, including uncollectible revenues, from inmate  X-calling service (ICS) calls as nonregulated revenue.{$ yO-#X\  P6G;sP#э APCC/ICSPC Comments at 45.{ They claim that ICS calls generate an extraordinarily high percentage of uncollectibles, and that if uncollectible revenues from ICS calls are not identified as nonregulated, regulated services could subsidize ICS, in violation of Section 276(a)(1) of the 1996 Act. Finally, APCC and ICSPC allege that the ILECs providing billing service to independent ICS providers charge them for the actual uncollectibles from their payphones, but do not follow the same policy for their own ICS operations. APCC and ICSPC maintain that this different treatment of uncollectibles results in discrimination against independent payphone owners and, hence, violates Section 276(a)(2)  X -of the 1996 Act.o% X {O-#X\  P6G;sP#э Id. at 5.o  X -19. ` ` , In reply comments, Bell Atlantic states that it properly allocates uncollectibles based on the ratios of gross regulated and nonregulated revenues within each class of  X-activities.|& yO+-#X\  P6G;sP#эBell Atlantic Reply Comments at 23.| GTE explains that the Commission's Payphone Order and Payphone  Xy-Reconsideration Order require that the provision of payphone equipment be deregulated, but that "operator service or intraLATA toll revenue from inmate collect calls handled by GTE are regulated revenues and should definitely not be identified as nonregulated operating  X4-revenue."'4z {O_-#X\  P6G;sP#эGTE Reply Comments at 24. See also NYNEX Reply Comments at 34. GTE also disputes the allegations of discriminatory treatment, pointing out that uncollectibles are not billed by GTE on behalf of its ICS operation, so none can be charged  X-back to its ICS operation.g(  {O-#X\  P6G;sP#эId. at 4.g  X-20.` ` , Discussion. We do not believe that ILECs should classify revenues from collect ICS calls as nonregulated. In the payphone proceeding, the Commission focused upon  X-the deregulation of local coin payphone rates,) {O!-ԍ#X\  P6G;sP#See Payphone Order at  5761. but did not initiate action to deregulate non X-coin payphone calls. As the Common Carrier Bureau concluded in its CEI orders, there is no  X|-support in the Payphone Order or the Payphone Reconsideration Order for the contention that BOCs or other ILECs are required to provide collect calling as a nonregulated service when  XN-used with inmate payphones.*N0  {O/'-#X\  P6G;sP#эSee, e.g., US West CEI Order at  88. Because it is appropriate for ILECs to continue to treat inmate"N *,N(N(ZZ" collect calling as a regulated service, we reject the argument advanced by APCC and ICSPC that the uncollectibles associated with inmate collect calling must be included in nonregulated cost pools. For that reason, we need not reach the issue of how ILECs should identify uncollectibles for collect calls placed over ICS facilities. Finally, we decline to address the discrimination argument raised by APCC and ICSPC. That contention, premised upon APCC and ICSPC's representation that some ILECs charge independent ICS providers for actual uncollectibles, bears no direct relationship to the CAMs under consideration in these proceedings.  X1- E. Transfer of Payphone Assets to a Separate Nonregulated Affiliate  X -21. ` ` ,BellSouth and SNET are the only carriers at this time that have elected to transfer their payphone operation to a separate nonregulated affiliate. APCC and SPCC filed comments on BellSouth's CAM revisions and BellSouth filed a reply. APCC requests that BellSouth refile its CAM, "quantifying the impact on its regulated operations, of all  X -transactions it anticipates with BellSouth Public Communications."b+  yO -ԍ APCC comments (AAD 96129, Jan. 13, 1997) at 3.b In addition, APCC asks that BellSouth be required to quantify the impact on its regulated operations of the transfer of the regulated payphone assets to BellSouth's unregulated subsidiary, in order to ensure that BellSouth has conformed with the affiliate transaction rules, which require that the transfer  XK-"be at the higher of net book or fair market value."J,KX {OT-ԍ Id. at 34.J SPCC argues that "the Commission should require BellSouth to show all relevant details of its proposed relationship with BSPC," including both the valuation of transferred assets and a description of services that BellSouth  X-will provide to BSPC.H- yO-ԍ SPCC Comments at 34.H  X-22. ` ` , In reply, BellSouth maintains that "[t]he criticisms of APCC and SPCC are  X-premature."Q.z yO-ԍ BellSouth Reply Comments at 2.Q BellSouth explains that Section V of its CAM does not require advance notice of anticipated affiliate transactions, and that when transactions between BellSouth and BSPC are finalized, BellSouth will report them in Section V of its CAM in compliance with Section  X|-64.903 of the Commission's rules.[/|  {O7"-ԍ Id., citing 47 C.F.R.  64.903.[ BellSouth also states that the information sought by SPCC and APCC is competitively sensitive and beyond the scope of the Commission's CAM filing requirements, which do not require that BellSouth report in its CAM a quantification of the gain or loss on the sale of fixed assets, such as the payphone assets transferred to BSPC  X -by BellSouth.D0  {Om'-ԍ Id. at 23.D BellSouth argues that the Commission "gains assurance of compliance with"  . 0,N(N(ZZ" the asset transfer rules through the independent audit required by 47 C.F.R.  64.904, and  X-through the Commission's own staff audits."B1 {Ob-ԍ Id. at 3.B  X-23. ` ` , Discussion. BellSouth has, in fact, quantified the changes in its cost  X-apportionment tables as a result of reclassifying payphone operations as nonregulated.2Z {O-ԍSee Bell South Corporation, "Transmittal Letter Matrix CAM Changes" (filed November 25, 1996). Moreover, there is no requirement that carriers quantify in their CAMs the the gain or loss on fixed assets transferred to nonregulated affiliates.  XH-24. ` ` ,Although the Commission's rules require that proposed changes in the statement concerning affiliate transactions "be quantified in $100,000 increments at the  X -account level,"J3  yO-ԍ47 C.F.R.  64.903(b).J BellSouth argues that "[a]t the time of BellSouth's CAM filing, internal business planning had not advanced to the point where future transactions between BST and  X -BSPC could be identified and quantified."O4 | yO-ԍBellSouth Reply Comments at 2.O While BellSouth presents a reasonable explanation for the absence of this quantification in its November 25, 1996, CAM filing, we observe that more than six months have elapsed since that time, affording adequate opportunity to identify and quantify future transactions between BellSouth and its affiliate. Accordingly, we shall require that within 60 days, BellSouth must provide the quantification  Xy-required by Section 64.903 of the Commission's rules,J5y  yO6-ԍ47 C.F.R.  64.903(b).J rather than waiting until the  Xb-transactions are finalized, as BellSouth proposes.O6b yO-ԍBellSouth Reply Comments at 2.O  X4-( IV. ORDERING CLAUSES ă  X-25. ` ` ,Accordingly, IT IS ORDERED, pursuant to Section 4(i) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i), and Section 0.291 of the Commission's rules, 47 C.F.R.  0.291, that the Cost Allocation Manual revisions filed by Aliant Communications Co, ALLTEL Telephone Systems, Ameritech Operating Cos., the Bell Atlantic Telephone Companies, BellSouth Corporation, Cincinnati Bell Telephone Co., Citizens Telephone Co., GTE Telephone Operating Cos., Nevada Bell Telephone Co., NYNEX Telephone Companies, Pacific Bell Telephone Co., Puerto Rico Telephone Co., Rochester Telephone Corp., Southern New England Telephone Co., Southwestern Bell Telephone Co., United and Central Telephone Companies, and US West, Inc., ARE APPROVED, subject to the conditions noted in this Order. "  , 6,N(N(ZZ"Ԍ X-26.` ` ,IT IS FURTHER ORDERED, that any required "S   "S revisions of Cost Allocation Manuals shall be submitted within 60 days of the release date of this Order. ` ` , whh FEDERAL COMMUNICATIONS COMMISSION ` ` , whh Kenneth P. Moran ` ` , whh Chief, Accounting and Audits Division ` ` , whh Common Carrier Bureau