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                            Before the
                FEDERAL COMMUNICATIONS COMMISSION
                      Washington, D.C. 20554

In the Matter of                )
                                )
United Telephone Companies'     )       File No. AAD 93-81
Permanent Cost Allocation Manual)
Waiver of Section 32.27         )
of the Commission's Rules       )
                                )


                             ORDER


     Adopted:  December 22, 1998        Released:  December 22, 1998

By the Chief, Accounting Safeguards Division:

     1. On June 30, 1993, the United Telephone Companies ("United") filed a petition for waiver of the
Commission's affiliate transactions rules, as codified in Section 32.27.  In its petition, United requests
permission to record at "less than fully distributed cost" in its cost allocation manual ("CAM") the costs for
services related to white pages publishing provided by three nonregulated affiliates to the incumbent local
exchange carrier ("ILEC").  In addition, United seeks permission to record at "no greater than market
rates" the costs for materials and supplies provided by the ILEC's purchasing affiliate.  Finally, United
seeks permission to record at "no less than market rates" the costs for current directory listing information.  

     2.  In its petition, United contends that recording transactions at "less than fully distributed cost" 
and "no greater than market rates" would benefit ratepayers by enabling the ILEC to obtain services in a
cost-effective manner.  United asserts that, by charging "no less than market rates" for directory listings
provided to a nonregulated affiliate, ratepayers will benefit from the increased gain reflected on the ILEC's
books of account.
     
     3.  Waiver of the Commission's rules is appropriate only if special circumstances warrant a
deviation from the general rule and such deviation will serve the public interest.  In addition, a waiver
request must be consistent with the principles underlying the rule for which a waiver is requested.  We
agree with United that, in this instance, recording these transactions at "less than fully distributed cost" and
"no greater than market rates" would benefit ratepayers by enabling the carrier to obtain services in a cost-
effective manner.  We likewise agree with United that, in this instance, recording the costs of directory
listing services at "no less than market rates" would appear to benefit ratepayers by reflecting an increased
gain on the ILEC's books of account.  Because United's proposed treatment appears to benefit ratepayer
interests, we grant its waiver request at this time.  We emphasize, however, that this waiver grant applies
only to those services specified in United's waiver request.  

     4.  Accordingly, IT IS ORDERED, pursuant to Sections 1, 4(i), 4(j), 201-205, and 218-220 of the
Communications Act of 1934, as amended, 47 U.S.C.  151, 154(i), 154(j), 201-205, and 218-220, and
Sections 0.91, 0.291, 1.3, 1.106, and 32.27 of the Commission's rules, 47 C.F.R.  0.91, 0.291, 1.3,
1.106, and 32.27, that the Petition for Waiver filed by the United Telephone Companies IS HEREBY
GRANTED.

     
                              FEDERAL COMMUNICATIONS COMMISSION
                    


                              Kenneth P. Moran
                                                            Chief, Accounting Safeguards Division