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A. a.(1)(a) i) a)DocumentgPleadingHeader for Numbered Pleading PaperE!n    X X` hp x (#%'0*,.8135@8:d<d<BBYYdBBddBYBdYzzzzBBBBqodYYYYYYYYYYY8888dddddddndddddddń\\\====ńpzfpfzQzGzQQQG3QzffQz\Qpp\p\\zQQzpfpppzG\pQpppp==\\\\\\\p=p\Q=2B90Z49I>"5^2BoddȦ8BBdr2B28ddddddddddBBrrrdzNdzoȐB8BtdBdoYoYBdo8Bo8odooYNBodddYO,Oh2BBBBPBdodddddȐYYYYYN8N8N8N8oddddooooddoddddzodddYYYYYdddooPoNoNBNoddȐoNNF2ldBddddddd<d<BBoodBBddBoBddzzzzzzzzzzBBBBozdddddddYYYYY8888dddddddndddddYdŐdȐYYCCCCzzzozoYzNoYdYC8YooYdYzzdzddoYoYzzozzzzzCdoozYzzzzCCddddzdddooozCsdYC"5^(1<wXRr?  x7.QXXxxxxxxxxxxxxxxxxxxxxxxxxxx8xxx8xxx8xxx8xxxxxxxxxxxxxfff]f]oJfA]JxSxJ8.oJo]]oJoSxJxffSfSS]J]Joff]fffffx8Sx]]fJffff88SSSSfxSSS]]]f8`SJ82RL# OR"5^*7FSS$77Sp*7*.SSSSSSSSSS77pppSffoxffxx7Jo]oxfxfS]xff]]A.AFS7SSJSJ.SS..J.xSSSSAA.SJoJJAC.CZ*7777C7SSfSfSfSfSfSooJfJfJfJfJ7.7.7.7.oSxSxSxSxSxSxSxSxS]JfSxSxSxS]JxSfSfSfSfSoJoJfJfJfJxSxSxSxSxSCS7S777SJxSoSAN:*WSASSSSSS.4}}S2~~S}277]]S77SS7]72N7[[pC`pSS`*7FSS$77Sp*7*.SSSSSSSSSS77pppSffoxffxx7Jo]oxfxfS]xff]]A.AFS7SSJSJ.SS..J.xSSSSAA.SJoJJAC.CZv7S]SS7S777]]:S7A7o]*ASSSS.S7~.Sp7~SC[227`W*724S}}}Sffffffoffff7777xoxxxxxpxxxxx]fSSSSSSSoJJJJJ....SSSSSSS[SSSSSJS"5^;B`ddBBBdBBBBddddddddddBBDZdzzzrBYozzdozzooBBBdddddYdY7dd77Y7ddddMM7dYYYMYdYDZBddddddddzdzdzdzdzdYzYzYzYzYB7B7B7B7dddddddddoYzddddoYdzdzdzdzdddzdzdzddddddddddddBddddMNdBddBd\\ddddddFdddFBBddd77ddzBdBFNBdo\\o;B`ddBBBdBBBBddddddddddBBDZdzzzrBYozzdozzooBBBdddddYdY7dd77Y7ddddMM7dYYYMYdYBdddddd7BBdddddzM7o;Bddddddddd\BdddFFdodBdFd\dzzzzzzzzzzBBBBozdddddddYYYYY7777ddddddddddddYd2R S' X   )d S' #&J\  P6Q &P#Federal Communications Commission`~(#cDA 972732 ă   yx}dddy )ՊQb Before the Federal Communications Commission  S'&2Washington, D.C. 20554 ă  X44#Xw P7XP#In the Matter of) ) United States Telephone Association 8{ )`(#' AAD 97103 Petition for Waiver of Part 32 of) the Commission's Rules)  Xb'j ORDER \  X 4X` hp x (#%'0*,.8135@8: ` ` 4.  For the reasons discussed below, we grant USTA's petition for a waiver to  xallow ILECs to record revenues from nonregulated payphone operations in Account 5280 until  xfinal action is taken through a rulemaking proceeding. We find merit in USTA's request because  xppayphone revenues will still be directly assigned as nonregulated and whether they are recorded  xin Account 5010 or Account 5280 does not affect our ability to track these nonregulated revenues.  X'  X4  i` ` 5.  Section 32.23(c) of the Commission's rules prescribes specific accounting  xinstructions to be followed by carriers when a nonregulated activity involves the common or joint  xuse of assets or services in the provision of both regulated and nonregulated products and  xservices. This rule requires that nonregulated revenue, not provided for elsewhere in Part 32 and  X 4 xnot qualifying for incidental treatment as provided in section 32.4999(l),K d  yO$'ԍ47 C.F.R.  32.4999(l).K be recorded in separate subsidiary record categories of Account 5280. " 0*&&,,"Ԍ X4 iԙ` ` 6.  In our  #WF  #WF Payphone CAM Order #WF  #WF , #Xw P7XP#we directed ILECs to record nonregulated  xrevenues from payphone services in Account 5010 because this was an existing Part 32 account  X4 xused solely for public telephone revenues. #Xu&_ x$&7 >wXX## Xw P7XP#USTA argues in its petition for waiverF  yO5'ԍUSTA Petition at 17.F that recording  X4 xlnonregulated revenues from payphone services in Account 5010 isolates these revenues in a  xsingle productspecific account. As a result, ILECs' payphone revenues would be disclosed to  xlthe public through the Commission's Automated Reporting Management Information System  xN("ARMIS") reports, while their competitors' payphone revenues remain undisclosed, thus potentially causing a competitive imbalance.  X4  X4 i` ` 7.  We believe that USTA's petition for waiver establishes the special  x'circumstances that warrant the grant of waivers. USTA has shown that ILECs may be  xcompetitively harmed if they are required to continue to record payphone revenues in Account  x5010. Moreover, USTA has shown that the public interest will continue to be served even if the  xwaiver is granted because the Commission will still be able to adequately monitor payphone  X 4 xcrevenues. When the Commission's joint cost rules were established,u & X {O!' " ԍSeparation of Costs of Regulated Telephone Service from Costs of Nonregulated Activities, Report and  {O' x Order, CC Docket No. 86111, 2 FCC Rcd 1298 (Joint Cost Order) recon., 2 FCC Rcd 6283 (1987) (Joint Cost  {O' x Reconsideration Order), further recon., 3 FCC Rcd 6701 (1988) (Further Reconsideration Order), aff'd sub nom Southwestern Bell Corp. v. FCC, 896 F.2d 1378 (D.C. Cir. 1990).u the Commission found no  x&reason to require the separate identification of productspecific revenue accounts for nonregulated  xservices. Rather, the Commission determined that its monitoring efforts with respect to  x nonregulated activities would be more than satisfied by only collecting information on an  x aggregate basis. Thus, the Commission created Account 5280 for carriers to record nonregulated  xoperating revenues. Because it has no need to isolate nonregulated revenues by product line, the  xCommission allowed these revenues to be recorded in Account 5280. We see no need to account  X#4 xfor payphone revenues differently than other nonregulated revenues.X#F yO' " ԍWe note that there are some nonregulated operating revenues recorded in Account 5230, Directory revenues.  x Account 5230 also includes regulated operating revenues. In its petition for rulemaking, USTA asserts that all nonregulated revenues, even those recorded in Account 5230, should be recorded in Account 5280.  Accordingly, we grant  xMUSTA's request for a waiver to allow ILECs to record payphone revenues in Account 5280 rather  xlthan Account 5010. This waiver will remain in effect until the Commission rules on USTA's September 16, 1997, petition for rulemaking.  Xt4 iK ` ` 8.  APCC and Nextlink assert that segregating payphone revenues in Account  XQ4 x5010 is necessary to prevent improper cost allocation and subsidization.^Qf  yOh"'ԍNextlink Comments at 34; APCC Comments at 2.^ APCC and Nextlink  X.4 xalso challenge USTA's petition for waiver on the grounds that Account 5010 contains both". 0*&&,,"  xregulated and nonregulated payphone revenues, including revenues from regulated intraLATA  X4toll._ yOV'ԍNextlink Comments at 23; APCC Comments at 2. _  X4  i` ` 9.  The Commission's Payphone Order required Bell Operating Companies  x("BOCs") and ILECs providing payphone service to follow the nonstructural safeguards described  XS4 xIin Computer III in order to provide sufficient protection against the possibility that nonregulated  X24 xpayphone service could be subsidized by regulated services.j2X yO; 'ԍPayphone Order, 11 FCC Rcd 21237 at paras. 157, 199, 210.j In the Accounting Safeguards  X4 xOrder, the Commission stated that the Computer III safeguards included the Part 64 cost  x allocation rules and that these safeguards should be applied to carriers providing payphone service  X4 xon a nonregulated basis. {Of ' " ԍAccounting Safeguards Under the Telecommunications Act of 1996, Report and Order, 11 FCC Rcd 17539  {O0'at para. 100 (1996)("Accounting Safeguards Order"). We believe that the Commission's Part 64 cost allocation rules and  xother safeguards applicable to ILECs' payphone operations are more than sufficient to detect  x+improper cost allocations and subsidizations. Again, we see no reason to treat nonregulated payphone revenues any differently than any other type of nonregulated revenue.  #WF   X 4 i #WF ` `  10.  In addition, APCC's and Nextlink's assertion that Account 5010 contains  X 4 xboth regulated and nonregulated revenue is incorrect. As required by Section 32.5010,H D yO'ԍ47 C.F.R.  32.5010.H Account  x5010 contains message revenue (e.g. coin paid) from public and semipublic telephone service  xprovided within the basic service area. Revenues from services such as intraLATA toll, while  xVregulated, are not recorded in Account 5010. Rather, they are recorded in Account 5100, Long  xdistance message revenue. As a result, we reject APCC's and Nextlink's requests to deny USTA's petition for waiver.  X'"+ III. ORDERING CLAUSES  X4\  X4 iX` `  11.  Accordingly, IT IS ORDERED, pursuant to Sections 4(i), 5(c) and 218220  xof the Communications act of 1934, as amended, 47 U.S.C.  154(i), 155(c) and 218220 and  Xz4 xSections 0.91, 0.291 and 1.3 of the Commission's Rules, 47 C.F.R.  0.91, 0.291 and 1.3, that  xUSTA's petition for waiver to allow ILECs to record payphone revenues in Part 32 Account 5280 IS GRANTED.  X' "0*&&,,u"  X4 i ` `  12.  IT IS FURTHER ORDERED, pursuant to Sections 4(i), 5(c) and 218220  xof the Communications act of 1934, as amended, 47 U.S.C.  154(i), 155(c) and 218220 and  xSections 0.91, 0.291 and 1.3 of the Commission's Rules, 47 C.F.R.  0.91, 0.291 and 1.3, to the  xextent discussed in the paragraphs three through eight above that this waiver will expire when the Commission acts on USTA's petition for rulemaking. ` `  hhCqFEDERAL COMMUNICATION COMMISSION ` `  hhCqKenneth P. Moran ` `  hhCqChief, Accounting and Audits Division